Although once idolized for his feats on the football field and later respected as an affable, Cheshire-grinned news and sports correspondent, these days Tiki Barber is making a lot of folks very unhappy. The short list presumably includes:

1. Ginny, Tiki’s wife of 11 years whom he allegedly left for a twenty-something year old intern while Ginny was eight months pregnant with twins;

2. NBC, the network which hired Tiki as a contributor on The Today Show, as well as an analyst on its weekly Sunday Night Football telecast, following his retirement from the NFL; and, perhaps even,

3. Tiki’s identical twin brother, Ronde, who has undoubtedly found himself at the wrong end of misdirected glares from Ginny sympathizers.

A recent addition to the list is Tricera Revolution, Inc., corporate owner and operator of Flywheel Sports, a self-described “specialized and state-of-the-art” chain of indoor cycling studios in the New York area. Earlier this month, Tricera filed a lawsuit against the former New York Giants running back, as well as his business agent and LLC, seeking rescission of an October 2009 agreement with Tiki. Under the terms of the contract, Tiki purportedly agreed to be the “face” of the Flywheel Sports brand in exchange for, among other things, 10,000 shares of stock in Tricera. The suit alleges that Tiki fraudulently induced Tricera to enter into the contract by “cultivating a false appearance that [he] and his wife were happily married,” and also breached the contract by failing to promote the brand.

From a legal standpoint, I find the fraudulent inducement claim particularly, well, puzzling. In New York and in most other places (the complaint does not appear to attach the contract or specify whether its choice of law provision provides for New York law or the law of another State), the legal elements of a claim of fraudulent inducement are the plaintiff’s knowingly false representation of material fact and justifiable reliance thereon by the defendant to its detriment. Thus, if one closely adheres to the letter of the law, it is difficult to fathom how Tiki could be liable for such a claim based on the alleged facts.

As an initial matter, the complaint fails to allege a misrepresentation. Instead, the complaint simply says that Tiki “cultivat[ed] a false appearance” that he and his wife were “happily married” by, among other things, “hugging and kissing and posing for hundreds of photographs and video clips together” at events. Come on. In my view, this is tantamount to a candidate showing up for a legal interview in a Stanford Law School t-shirt and, after hiring the candidate and subsequently learning the candidate did not attend law school at all, having the employer claim it was fraudulently induced into entering into an employment agreement with the candidate. Hugs and kisses — like t-shirts — are not actionable misrepresentations.

Other facts alleged in the complaint are equally unconvincing in terms of establishing liability. For example, Tricera pleads that Barber and his wife have been separated since “late-2009.” This, however, says nothing about the state of the Barber marriage prior to the inking of Tiki’s deal with Tricera in October 2009, which is the only relevant period in terms of the fraudulent inducement claim. Thus, without Tiki’s having made a statement regarding the status of his marital relationship at the time he entered into the deal, I fail to see how Tricera gets anywhere.

Well, you might say, what about Tiki’s obligation to affirmatively disclose the affair to Tricera? My response: what duty? Arguably, Tiki may have had an ethical or moral duty to be forthcoming to Tricera (or to refrain from engaging in an extramarital affair, for that matter), but this is not the same thing as having a legal duty of disclosure. Generally speaking, the law imposes duties of affirmative disclosure only within the context of certain types of special relationships (e.g., fiduciary or confidential relationships). Unfortunately for Tricera, this isn’t one of them.

As for its breach of contract claim, Tricera must prove that it suffered damages as a proximate result of Tiki’s alleged breaches. It is one thing for Tricera to seek damages for the money it spent on marketing and promotional materials for Tiki. However, proving that people actually turned in their cycling memberships (or, alternatively, joined a different cycling studio up the block) because of Tiki’s alleged behavior is a substantially more difficult task. Even if Tricera could establish that the alleged affair negatively impacted its bottom line, Tricera has a legal obligation to mitigate its damages. Of course, where is Tricera going to find another bald African American NFL player of the same age, height and weight, who also possesses a million-dollar grin? Can someone please give Tricera Ronde’s number?!

[This article originally appeared at The Huffington Post.]

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There has long been a debate regarding whether or not student athletes at the college level should receive financial compensation beyond their scholarships. Major universities make tens of millions of dollars from their athletic programs, but the athletes who generate all of that revenue get none of it. While there are numerous arguments on both sides of this debate — the merits of which I’ll leave for others to dispute — there does not seem to be any reason why a third party should be permitted to profit off of the student athlete. That is exactly what numerous current and former student athletes contend Electronic Arts has been doing for years and they have filed a class action lawsuit in response.

Each year, Electronic Arts releases its popular NCAA Football video game. Pursuant to agreements with the NCAA, Electronic Arts obtains the right to use the names of all of the major college football programs in its game. NCAA regulations prohibit the student athletes from profiting from the exploitation of their names and likeness and the NCAA has no ability to license Electronic Arts these rights. However, that has not stopped Electronic Arts. Each team in Electronic Arts’ game is populated with players that bear a striking resemblance to the actual players on the team. For example, if you chose to play Texas in last year’s version of the game, your quarterback would bear the same number as Colt McCoy. The virtual Texas quarterback would also share the same skin color, height, weight, throwing arm and even home state of Mr. McCoy. The only thing missing is “McCoy” on the back of the virtual jersey, but I for one believe that there really is no doubt that it is Colt McCoy being depicted in the game.

Electronic Arts’ NCAA football game is potentially a problem because every one of us enjoys what is referred to in legal jargon as a right of publicity. This means that no one has the right to use your name, likeness or identity for commercial purposes without your permission. The right of publicity is a derivative of your overall right to privacy. In other words, because you have a constitutional right to privacy, you also have a right to not have your face plastered over billboards and on the side of buses. While fame is not a prerequisite to assert a claim for a violation of your right of publicity, the more famous you are, the more the use of your name or likeness is worth.

In order to establish that your right of publicity has been violated, it is not necessary that your exact image or likeness be used, but the public viewing the advertisement must be able to identify you. In a case that is remarkably similar, a cigarette manufacturer used an image of race car driver Lothar Motschenbacher in front of his race car in a commercial. Although Motschenbacher’s face was not recognizable in the advertisement, the car bore virtually all of the same unique markings of Motschenbacher’s car except for a change to the racing number and the addition of a spoiler. The court ruled that Motschenbacher could pursue his claim. In another famous case, Samsung used the image of a robot dressed in a wig, gown and jewelry that resembled Vanna White’s style. The robot was positioned by a game board, which was recognizable as the Wheel of Fortune set. The court ruled that Vanna White could pursue her claim for a violation of her right of publicity. Bette Midler and Tom Waits even successfully pursued claims for a violation of their right of publicity based on the use of imitations of their voice in commercials.

Given the results in favor of Mr. Motschenbacher and Ms. White, it seems that the student athletes have a very strong case against Electronic Arts. There is no doubt that the public who is familiar with college football can readily identify the characters in the game as being virtual representations of their favorite players on the gridiron each Saturday. Of course, if the student athletes win a monetary recovery on top of injunctive relief, that could give rise to a whole new set of issues with the NCAA regarding its policy that the student athletes not profit from the exploitation of their likeness, but that’s an article for another day.

[This article originally appeared at The Huffington Post.]

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It looks like we’re all going to have to wait a little while longer to purchase our Rachael Ray lasers. At the very least, we’re not going to be able to order them online any time soon.

Cybersquatting is a practice as old as the Internet. It generally involves one party, the squatter, using the trademark or personal name of a well-known brand or person to register a website domain name. The squatter seeks to profit from the domain name by either ransoming the domain to the rightful owner or by exploiting individuals who inadvertently wind up at the fake website. There are a few variations of cybersquatting, one of the most common of which is typosquatting. A typosquatter registers the misspelled trademark or personal name of a well-known brand or person. Then, when a careless web surfer types the misspelled name into their browser, he or she is directed to the typosquatter’s website (which invariably contains an advertisement or malware).

Ultimately cybersquatting is a form of trademark infringement or trademark dilution, and there are a number of ways that trademark owners deal with cybersquatters. In 1999, Congress passed the Anticybersquatting Consumer Protection Act which established a new cause of action designed to address this practice. “A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person…” The problem with using the Act against cybersquatters is the Act requires the injured party to initiate a lawsuit in federal court, which is never a cheap process. Using the federal courts to protect domain names is especially problematic because most squatters are “judgment proof,” a term used to describe defendants who simply do not have the money or assets to pay a judgment entered against them. In other words, even if you win your case against the squatter, you might not be able to collect any damages. Another big problem with cybersquatter lawsuits is that the squatters are often located abroad.

In order to avoid some of these problems, ICANN, the entity responsible for managing domain names, has established the Uniform Domain Name Resolution Policy or “UDNRP.” The UNDRP is a non-binding arbitration process that allows trademark holders to resolve domain disputes much more cheaply than prosecuting a federal lawsuit. The UDNRP generally requires the trademark holder to show that the squatter’s domain (a) is confusingly similar to the holder’s trademark; (2) is controlled by a third-party; and (c) is being used in bad faith.

What does any of this have to do with Rachael Ray? Ms. Ray recently instituted an UDNRP arbitration proceeding against an Indian company that had registered www.rachelray.com (note the missing “a”). Ms. Ray contended that the disputed domain was being used to, “redirect customers to a website that offers ‘Rachael Ray’ cookware and… attempts ultimately to obtain personal contact information about Internet users undoubtedly looking for the [Ms. Ray's] website.”

The arbitration panel issued its decision a few days ago, and it is noteworthy because of the convoluted defense advanced by the squatter. The company claimed that it selected the name “Rachel Ray” for its business “because the daughter of the technical partner of the original firm was named ‘Rachel,’” and because the business manufactured laser rays. The company would have used the name “Rachel Lazer,” it claimed, but “for reasons related to the practice of numerology, there was a decision to switch to ‘Rachel Ray.’” The arbitration panel quickly dismissed this explanation, noting that the squatter could not show any evidence that it ever manufactured or sold lasers. “[T]he Panel discerns an obvious omission in Respondent’s business presentation: there is no reference to sales volume or revenue in connection with its products. The Respondent presents to the Panel only a paper facade of activity.”

[This article originally appeared at The Huffington Post.]

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For weeks now, soccer fans have been captivated by the World Cup, tuning in at odd hours to cheer for their respective teams. But given the ridiculous amounts of money involved in professional sports, stories of athletic prowess and come-back victories have been sharing the headlines with stories of the legal and business aspects of the event. So while the action on the field will keep sports pundits busy debating the wisdom of decisions by coaches and players and predicting what will happen next, the action off the field could keep a very different group of people — law school professors and their students — debating similar issues.

Let’s start with the Orange Dress scandal. The scandal arose when more than thirty women attended a World Cup match wearing bright orange dresses. Although the dresses contained no branding, they are reportedly part of a marketing campaign by the Dutch brewing company Bavaria pursuant to which the dresses have been featured on the company’s packaging and television ads and even given away free with beer purchases. Apparently aware of Bavaria’s campaign and obviously committed to protecting Budweiser (who paid quite a bit more than the cost of 30 orange dresses and 30 tickets to be an official sponsor of the World Cup), FIFA ejected the women from the match. While some of the women were held and questioned, all charges were dropped.

The most obvious legal issue that arises from the Orange Dress scandal is whether Budweiser has any recourse against FIFA or Bavaria for Bavaria’s attempt to promote its product at the World Cup. Claims against FIFA seem unlikely given its practically immediate decision to remove the women (and thus any implied advertising) from the venue. Claims against Bavaria by FIFA or Budweiser also seem unlikely. While Budweiser undoubtedly has exclusivity in its sponsorship agreement with FIFA (presumably at least as the exclusive alcoholic beverage sponsor), did Bavaria really do anything to impinge on those rights? Sending women wearing orange dresses to a match would not seem to damage Budweiser. But, if there is a known association between the orange dresses and Bavaria, then it is not simply about women wearing orange dresses. The question is whether Bavaria knew of Budweiser’s exclusive rights and intentionally interfered with those rights.

Another issue that arises from the scandal is how to balance the need to protect one’s rights against the potentially negative consequences that can flow from taking action. In this age of instant access to information, this issue is frequently faced and debated by lawyers and their clients. Here, FIFA very quickly chose to protect Budweiser, and ejected the women from the venue. A likely unintended consequence of that choice was that the ejection received extensive coverage, which resulted in millions of people reading about the orange dresses and Bavaria. If FIFA had not ejected the women, it is probably safe to assume that far fewer people would now be familiar with Bavaria’s beer and their orange dress campaign. But maybe Budweiser would have taken issue with FIFA’s failure to protect its rights. Weighing the benefits and risks of taking action can be difficult, but is always necessary.

Another World Cup story which raises an interesting legal issue is the apparent unraveling of the French team, and the reported loss of certain of their sponsors. The team’s downfall apparently began with an altercation between the French coach and the striker Nicolas Anelka during a loss to Mexico, which resulted in Anelka being sent home. In support of their teammate, the French team boycotted their next training session, and eventually were eliminated from the tournament. While it has been reported that sponsors will now no longer support the French team, it is unclear whether the sponsors have terminated the sponsorship contracts in their entirety or are simply attempting to distance themselves publicly from the team.

For instance, sponsor Credit Agricole has announced that it has cancelled its television campaign with the team and fast-food company Quick has announced that it will stop using advertisements featuring Anelka. If the endorsement contracts are still intact, but the sponsors have simply elected not to run advertisements featuring the team or a particular athlete, then legal battles may not ensue. As a sponsor, Credit Agricole undoubtedly obtained the right to use the French team in its advertising. It also, however, undoubtedly retained the right not to do so. In other words, one would certainly assume that the sponsorship contract allows Credit Agricole to decide, in its sole discretion, how and when to use the French team in its print or television advertising. The same would presumably be true for any endorsement deal between Quick and Anelka.

If, on the other hand, sponsors have terminated the sponsorship contracts entirely, then legal battles may ensue. A sponsor can certainly attach conditions to its sponsorship, and appropriate conditions could include the team or athlete maintaining a certain ranking. After all, the purpose of the sponsorship is to obtain exposure for the sponsor’s products. If a team or athlete is not highly ranked, then such exposure is much more limited and much less valuable. Sponsors also may include morals clauses in their agreements, which allow the sponsor to terminate the contract if the team or athlete engages in activities which are immoral or illegal or which bring the athlete into public disrepute or scandal.

Whether or not the French team or Anelka have an action against any of their former sponsors will depend on the precise language of the particular contracts. However, unless the agreements contained broad language allowing termination, the companies may have a hard time justifying a termination. A professional athlete screaming at his coach during a critical match is certainly childish and unprofessional, but it does not seem to constitute immoral conduct and certainly is not illegal. The same is true for a team boycotting practice because the coach sent home one of their teammates.

Only time will tell whether either of the above scandals will lead to litigation between the interested parties. However, both stories certainly provide colorful and interesting fact patterns which may appear on future law school exams.

[This article originally appeared at The Huffington Post.]

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Let’s imagine that you and your eighteen-year-old girlfriend get bored one day and decide to make a sex tape. Let’s further imagine that your ex-girlfriend eventually breaks up with you but (thankfully) forgets to demand that you destroy the tape. Six years later the ex-girlfriend becomes a reality show star, and the sex tape sitting in your closet is now potentially worth hundreds of thousands of dollars. Can you sell it without getting her consent? Can you release it on the Internet without getting sued by her?

The above “hypothetical” is of course based upon the real-life situation faced by Kendra Wilkinson’s ex-boyfriend, Justin Frye, who reportedly ended up selling a sex tape with Kendra to Vivid Entertainment for $100,000. Kendra has been widely quoted as supposedly being despondent over the release of the tape, stating on her show that “It broke my heart because how can [someone] do that when I have a baby? It just sucks. It’s the hardest thing to deal with right now.”

Most bloggers have been skeptical (to say the least) of Kendra’s protestations and with good reason. Kendra had to consent to the release of the tape in order for a well-established company, like Vivid, to release it legally. California and most states have passed specific laws protecting a person’s “right of publicity,” meaning their right to control and license their image for commercial purposes. The law also recognizes the tort of invasion of privacy. Courts have held that celebrities have a right to keep their sexual life private, and will grant injunctions to celebrities who show a threatened violation of their right of sexual privacy.

If Kendra had objected to release of her sex tape, she could have sought an injunction preventing Vivid or Frye from ever releasing the tape under either a right of publicity or a right of sexual privacy theory. I have no doubt that a court would have granted such an injunction. The fact that she did not obtain the injunction demonstrates that she must have entered into an agreement with Vivid. And, in fact, Radar Online has reported that Kendra has already received $680,000 from Vivid and will get up to 50% of profits from the tape in the future.

So, the bottom line is that if you ever find yourself lucky enough to be in possession of a celebrity sex tape, you are going to need the celebrity’s consent before you can sell or release it. The good news is that both you and the celebrity stand to make a lot of money if you can convince them to consent.

[This article originally appeared at The Huffington Post.]

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The Ninth Circuit Court of Appeals recently heard arguments in a case brought by a tattoo artist against the City of Hermosa Beach (a Los Angeles beach community) claiming that the City’s ban on tattoo parlors violated his free speech rights under the First Amendment. The artist, Johnny Anderson, asserts that his tattoos are visual and verbal expressions which are no different than other art forms such as paintings and drawings which have found protection under the First Amendment. The City’s brief flatly rejects Anderson’s claim and takes the position that tattoos “historically, or even today” have never been a “significant medium of communication of ideas.” The City’s position on the communicative nature of tattoos seems untenable in today’s society. The tattoo at the base of Angelina Jolie’s neck which reads “know your rights” seems obviously intended to communicate a message, and has been seen by millions of people around the world in publicity and paparazzi photographs. Kobe Bryant’s tattoo of his wife’s name with a crown and Victoria Beckham’s tattoo of a Hebrew verse from the Song of Solomon (”I am my love’s and my love is mine”) likewise seem obviously intended to communicate messages about their relationships with their respective spouses. Kobe Bryant and Victoria Beckham’s tattoos, like Angelina Jolie’s, have been seen by numerous people around the world in print and on television.

The communicative nature of tattoos in today’s society is not limited to celebrities. Tattoos today are not covered up as they may have been in years passed. People of all walks of life can be seen displaying tattoos of all types at shopping malls, in restaurants and numerous other public places, including the ocean front bike path and plaza in Hermosa Beach. It seems hard to argue that a person publicly displaying a large tattoo saying “I love Mom” is not trying to communicate a message. It is equally hard to say that a person seeing such a tattoo would not understand that the wearer is conveying that he has great love for his mother and that she is an extremely important person in his life.

Ultimately, however, the Ninth Circuit does not need to decide whether tattoos are communicative in nature or are themselves art in order to resolve Anderson’s case. The First Amendment protects what we traditionally think of as speech, as well as certain “expressive conduct.” To qualify as protected speech under the First Amendment, conduct must, in legal parlance, be “sufficiently imbued with elements of communication.” Spence v. Washington, 418 U.S. 405, 409, 94 S.Ct. 2727, 41 L.Ed.2d 842 (1974). In deciding whether particular conduct is sufficiently communicative to qualify for First Amendment protection, courts look to whether there was an intent to convey a particularized message and whether there is a great likelihood that the message would be understood by those who viewed it. Applying these factors, courts have found such diverse conduct as displaying an American flag upside down with a peace symbol affixed, picketing, and wearing a sign on the back of a jacket to be protected speech.

In Anderson’s case, the problem is that he is not the one wearing the tattoos created in his shop (or at least not for the most part). Anderson’s conduct, for purposes of a First Amendment analysis, is the physical act of creating and inking tattoos on his customers. Thus, any intent to convey a particular message would be the intent of the person on whom the tattoo is inked, not Anderson. The trial court found this to be a critical factor in dismissing Anderson’s claim. As the trial court stated, “[t]he very nature of the tattoo artist is to custom-tailor a different or unique message for each customer to wear on the skin.” The trial court also noted that it was the customer who “has ultimate control over which design she wants tattooed on her skin.” It seems likely that the Ninth Circuit will similarly separate Anderson’s conduct (the physical creation and placement of tattoos on his customers) from any message the customers may intend or convey by their tattoos and may resolve the case without deciding the issue of whether tattoos in and of themselves are entitled to protection under the First Amendment. In fact, that is exactly what a federal district court in Minnesota did in rejecting a tattoo artist’s claim that the Minnesota State Fair’s refusal to rent him space at the fair violated his First Amendment rights. The Minnesota court found the question of whether tattoos are an art form to be “intriguing,” but ultimately irrelevant to its decision that the artist’s conduct (which the court described as “the actual process of tattooing, as opposed to whether the image conveyed by the tattoo itself”) was not sufficiently communicative to qualify as protected speech.

As a general matter, courts prefer to avoid advisory opinions and reach only those issues which are necessary to a decision. In Anderson’s case, the issue is whether the challenged ordinance, which prohibits opening any tattoo parlors in the City of Hermosa Beach, violates the First Amendment. The Ninth Circuit can resolve this issue by narrowly focusing on the nature of Anderson’s conduct as a tattoo artist without ever reaching the more interesting question of whether tattoos in and of themselves are protected under the First Amendment. If what Hermosa Beach had done was pass an ordinance limiting the type of tattoos an artist could create, or what tattoos inked on an individual could say, the district court and the Ninth Circuit may very well find tattoos to be sufficiently communicative in nature. When you think about it, as a practical matter, the only difference between a tattoo and a sign worn on the back of a jacket is that the tattoo is permanent (at least until lasered off). For purposes of a First Amendment analysis, that is a difference which shouldn’t matter.

[This article originally appeared at The Huffington Post.]

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In the wake of Mother’s Day this past weekend, some may be comforted to know that they probably can’t be held liable — at least not in a Court of law — for insulting their mother-in-law no matter how offensive their insults. As was reported in the news, in March of 2009, comedian Sunda Croonquist was sued in the New Jersey Superior Court by her mother-in-law, Ruth Zafrin, and sister and brother-in-law, Shelley and Neil Edelman, for essentially mocking her Jewish in-laws in a stand-up comedy routine and website. Croonquist’s husband, attorney Mark Zafrin (who is Ruth’s son and Shelley’s brother), chose his wife’s side and defended the suit.

By way of background, Croonquist, who was born in Patterson, New Jersey, to an African-American mother and Swedish father and raised Catholic, apparently converted to Judaism when she married Zafrin approximately twelve years ago. However, it has long been part of Croonquist’s comedy routine to describe rather caustically the difficulties she has had dealing with her in-laws as a bi-racial woman integrating into a Jewish family. Although many may find Croonquist’s shtick funny, her in-laws aren’t laughing.

Indeed, the Complaint they filed against Croonquist alleges that the comedian has made numerous unflattering and false statements about them which have subjected them to public ridicule. For example, they accuse Croonquist of referring to Shelley Edelman as a “dumb,” “Jewish broad” and comparing her voice to a “cat in heat.” They also claim Croonquist has labeled Shelley as “someone who makes racist remarks,” and accused her mother-in-law, Ruth Zafrin, of being a “racist” who treats her other grandchildren better than Croonquist’s own kids “probably because they’re white, they’re better in her eyes.”

In an attempt to put a stop to Croonquist’s insults and alleged falsehoods, her in-laws filed a Complaint against her for false light, defamation, intentional and negligent infliction of emotional distress, and unjust enrichment and sought injunctive relief. The Complaint was removed to federal district court in New Jersey, and just last week — only eight days before Mother’s Day — was dismissed for failing to state an actionable claim against Croonquist.

In a well-reasoned, twenty-one page opinion, United States District Court Judge Mary L. Cooper held that Croonquist’s “challenged statements all constitute statements of opinion rather than fact, and thus are not defamatory” under any applicable law. Although it seems obvious that the First Amendment would protect Croonquist from any liability for expressing her dislike for her in-laws or mocking the way they sound, the more interesting question is whether she can accuse her mother- and sister-in-law of being racist with legal impunity.

Although the Court recognized that the “defendant’s characterization of Ms. Edelman and Ms. Zafrin as racist are closer to the type of statement that would subject the plaintiffs to ill will and ridicule among ‘right thinking persons,’” the Court ultimately found that the challenged statements “express[ed] the defendant’s non-actionable opinion that Ms. Edelman and Ms. Zafrin are racists.” The Court emphasized that the Complaint pled Croonquist’s articulated basis for her opinion which stemmed from her personal experiences with her in-laws. As such, the Court found that “defendant’s characterization, in context, appears personal to her and does not imply that the plaintiffs believe in the subjugation of an entire race.”

Notably, however, the Court granted the plaintiffs leave to file an amended complaint by May 31, 2010. As such, it’s at least still possible (albeit improbable) that the plaintiffs will be able to state a claim against Croonquist. Accordingly, at least for now, it remains to be seen who will have the last laugh in this rather unusual family squabble.

[This article originally appeared at The Huffington Post.]

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Okay, this is not actually an instructional guide on extorting celebrities. I just found the title catchy. But as I was reading the recent story of “David Boreanaz and the Case of the Mysterious Mistress,” it struck me that some are either still ignorant of the nature and dangers of extortion claims, even in the wake of the David Letterman scandal, or they just don’t care. The truth is that shacking up with a celeb and demanding a monetary settlement shortly thereafter may sound like a nice way to make a quick buck, but it’s also a risky, and often illegal, pursuit.

To be clear, I have no opinion on the merits in David Boreanaz’s case. I don’t know the participants, I’m not counsel to either of them, and I was not present during their telephone calls. I know only what their lawyers have said to the press—they had an affair, it ended, and she asked for “six figures.”

For all we know, Mistress X may have had a legitimate basis for demanding all this money. Her lawyer has said that there are “claims” against Boreanaz. Maybe, for example, Mistress X sold him an Audi R8 and never got paid, or maybe she remodeled his kitchen and got stiffed on the bill. But if hypothetically speaking—and I stress the words “if” and “hypothetically” because I wasn’t there—Mistress X demanded to be paid “six figures” or else she would publicize their affair—and I’m not saying she did, because again, I wasn’t there—that would be a serious problem.

Extortion, to paraphrase California Penal Code § 518, is the obtaining of “property” consensually but with the use of “force or fear.” Although the classic example of extortion is a threat to report a crime unless money is paid, extortion also includes threats to “disgrace” another or to expose a “secret.” Importantly, it is no defense that the person being extorted is guilty as charged. If you induce a pay-off by threatening to expose disgraceful, embarrassing secrets about someone, that can constitute extortion whether or not the ugly details are true.

In my practice, I have found that the line between a permissible settlement demand and extortion can be less than crystal clear. It is not uncommon to correspond with an opposing party or attorney before a case is filed demanding a payment of money to settle a claim. And in many cases, the participants and lawyers are acutely aware that the filing of litigation will expose some embarrassing and compromising facts about the defendant—facts that said defendant would prefer remain private. In those instances, a little bit of carelessness can result in a settlement demand that rings of extortion—”pay us money or we’ll file a complaint, and you know it’s going to make the front cover of Variety!” I’ve heard stories of lawyers being jailed for mishandling pre-filing settlement discussions so badly that they were guilty of extortion. These may be urban legends, but I’m not taking chances. If you get a demand letter from me, I’ll have chosen my words carefully.

This is not to say that an artfully drafted demand is a cure-all. Even without an explicit threat, a demand for money could appear extortionate, especially where the alleged extorter lacked a genuine basis for demanding cash in the first place.

So here’s a thought. If you find yourself with a legitimate claim against someone—perhaps a celeb that you’ve been having an illicit affair with—just file a complaint. Forget this self-help stuff, where you demand a boatload of cash with clumsy comments like, “you know what it will be like if this goes public.” Conversely, if you don’t have a genuine claim—you’ll know that’s the case if you can’t conceive of why someone would pay you money except to avoid the press—exercise some discretion, and find yourself a new “get rich quick” scheme.

[This article originally appeared at The Huffington Post.]

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By now everyone knows what occurred last month regarding Gizmodo’s decision to purchase an Apple prototype iPhone: Gizmodo posted several offers to access unreleased Apple products so it could post the information on its tech gossip website. Shortly thereafter an Apple employee carelessly left a next generation iPhone prototype at a bar where he was celebrating his birthday. An anonymous individual found the iPhone at the bar and sold it to Gizmodo for $5,000 in cash. Gizmodo then spent seven days examining the iPhone before posting information about the prototype on its website. Gizmodo eventually returned the phone to Apple, but refused to take down the information about the phone from its website.

While Gizmodo has certainly succeeded in inserting itself in the news cycle, it may not realize exactly just how much trouble it put itself in. In California it is a felony to receive stolen property valued at over $950, which carries up to a year in prison. See Penal Code § 496. Gizmodo will certainly argue that the iPhone was “found,” not stolen, and that even if it was stolen, Gizmodo didn’t know the phone was stolen.

First, was the iPhone stolen? Under Penal Code § 485, “[o]ne who finds lost property under circumstances which give him knowledge of or means of inquiry as to the true owner, and who appropriates such property to his own use, or to the use of another person not entitled thereto, without first making reasonable and just efforts to find the owner and to restore the property to him, is guilty of theft.” Here, someone found a prototype next generation iPhone at a bar and immediately sold it for $5,000 in cash. There is no evidence the individual who found the phone tried to return the phone to its owner, or that he even waited any substantial period of time before selling the phone to Gizmodo. Clearly, the iPhone is considered stolen under California law.

Next, did Gizmodo know the phone was stolen? While Gizmodo has already asserted that it “didn’t know [the iPhone] was stolen when we bought it,” there is more than enough evidence to support a conviction. The seminal California case on the topic, People v. Boinus, 153 Cal.App.2d 618 (1957), discussed exactly this type of situation and held that a jury may infer that the purchaser knew the property was stolen from the circumstantial evidence:

Although guilty knowledge of the fact that the property was stolen is an essential fact to be proved in a prosecution for receiving stolen property, such knowledge need not be that actual and positive knowledge which is acquired from personal observation of the fact. It is not necessary that the defendant be told directly that the property was stolen. Knowledge may be circumstantial and deductive. Among the elements from which knowledge may be inferred are that the property was obtained from a person of questionable character, and the failure of the accused to satisfactorily explain his possession. Possession of stolen property, accompanied by an unsatisfactory explanation of the possession or by suspicious circumstances, will justify an inference that the property was received with knowledge it had been stolen. It is enough if, considering all the evidence, which may be circumstantial, an inference of guilt may be found.

Id. at 621-22.

The circumstantial evidence in this case strongly suggests that Gizmodo knew the phone was stolen. If it weren’t stolen, why would they have agreed to pay $5,000 for it? The fact that the phone had its data erased remotely shortly after it went “missing” even further suggests the phone was stolen.

In addition to facing likely criminal charges, Gizmodo faces a potentially damaging civil lawsuit as well. California is very protective of companies’ intellectual property rights and anyone found liable for misappropriation of trade secrets is liable for the damage caused and any financial gain to the person or company guilty of misappropriation. Civil Code § 3426. And, where the misappropriation is intentional, the court may award double damages. Under California’s Uniform Trade Secret Act, “any person has a duty not to use trade secrets the person knows have been improperly obtained by others and is liable for misappropriation under such circumstances.” Core Wealth Management, LLC v. Heller, 2010 WL 1453068 (2010). Here, as noted above, there is plenty of circumstantial evidence to suggest that Gizmodo knew the prototype iPhone had been improperly obtained, and thus Gizmodo had a duty not to publish such information. And, given the evidence surrounding how Gizmodo obtained the prototype iPhone, there is a very good chance a court would award double damages.

Gizmodo may have felt it pulled one over on the tech giant by posting information on the super-secret next generation iPhone, but in the end, Apple will likely have the last laugh.

[This article originally appeared at The Huffington Post.]

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Rapper and entertainment mogul Jay-Z sued Boston Red Sox slugger David Ortiz in federal court in New York on Thursday for naming his Dominican Republic nightclub “Forty Forty.” The rapper claims that Ortiz intended to trade on the fame of Jay-Z’s “40/40″ clubs in cities including New York, Las Vegas, and Atlantic City, and that Ortiz has therefore infringed his registered trademarks in “40/40″ and “40/40 Club.” Jay-Z wants over $5 million to put a stop to what he calls Ortiz’s “brazen and unauthorized attempt to trade on the value and goodwill that [he] has cultivated in the 40/40 Marks….” He claims that Ortiz was well aware of his 40/40 clubs because he patronized the New York establishment several times, while the Red Sox were playing the Yankees and during the All-Star Break. In a bold mash-up of hip hop and Biblical allusion befitting his inimitable style, Hova’s lawyers claim that Big Papi and his confederates are “trying to reap where they have not sown by using Plaintiff’s 40/40 Marks without permission….”

The case raises a host of legal questions. For starters, Ortiz’s nightclub is located in Santo Domingo in the Dominican Republic. Although Jay-Z alleges that Big Papi’s club has gained media attention in the U.S., the first this commentator heard about it was as a result of Jay-Z’s own lawsuit. I imagine I’m not the only one. Does it really infringe on Jay-Z’s trademarks for Ortiz to open a nightclub called “Forty Forty” in his home country, where Jay-Z does not have any clubs? It begs the question of how far U.S. trademark law extends, and trying to impose our laws on foreign countries leads to a whole host of other problems. Anticipating these problems, Jay-Z alleges (in a footnote) that he’s really only suing over Big Papi’s website advertising the club, which is available in the U.S. and anywhere else with internet access. (The website is entirely in Spanish—the language of the Dominican Republic—with the lone exception of the words “Forty Forty” and “Home.”) Jay-Z is on the case, though; apparently he is already suing Ortiz in the Dominican Republic over the “unlawful operation of the Dominican nightclub.”

I don’t pretend to know anything about Dominican law, but I do know that Jay-Z faces some serious procedural hurdles in the U.S. case. One of the first will be convincing the judge that the website alone is enough to subject Ortiz to the New York court’s jurisdiction. Ortiz is not a U.S. citizen and does not reside in New York. What is worse, the complaint does not even allege where Ortiz lives or what his citizenship is. I don’t want to get too technical here, but bear with me. Federal courts have jurisdiction over cases arising under federal law (so-called “federal question” cases) or cases between citizens of different states or between U.S. citizens and foreign citizens (”diversity” cases). Jay-Z alleges both federal question and diversity as bases for the New York court to exercise jurisdiction over the case, but he fails to allege Ortiz’s citizenship. That’s a problem.

Another problem is that, in order to haul Ortiz into court in New York, Jay-Z has to show that Ortiz has enough contacts with New York to subject him personally to that court’s jurisdiction. On this point, Jay alleges only that Ortiz “is an individual who plays professional baseball for the Boston Red Sox” and that he earns “substantial compensation in [New York] as a result of the fact that his team plays between nine and thirteen games per season at Yankee Stadium in the Bronx.” Jigga what? I highly doubt the fact that Ortiz plays a few games a year at Yankee Stadium—out of a 182-game season—means that he earns “substantial compensation” in New York or is enough to force Ortiz to defend himself in a New York court. Ortiz has to have some meaningful contacts with New York beyond merely being present there a few times a season, and it won’t do to just serve him with papers the next time the Sox are in town.

Putting aside these procedural problems, let’s move on to the substantive ones. The basis of the complaint is that the website promoting Big Papi’s club infringes on Jay-Z’s trademarks for “40/40″ and “40/40 Club.” “Forty Forty” is certainly a little close to “40/40″ for comfort, but trademark infringement is not that easy to prove. Jay-Z’s lawyers will have to convince the jury that people are, or are likely to be, confused that Ortiz’s nightclub in the Dominican Republic is associated with or endorsed by Jay-Z and his 40/40 franchise.

But remember: Ortiz plays for the Red Sox. Jay-Z has a lot of athlete friends and a globe-spanning entertainment empire, but he is a well-known and fiercely proud Yankees fan who is often seen sporting Yankees regalia. He even boasts in his recent hit “Empire State of Mind” that “sh*t, I made the Yankee hat more famous than a Yankee can” and that “I bleed blue.” While both statements are of doubtful veracity, his complaint in fact lists several events “for A-list celebrities” hosted at his 40/40 clubs, including Alex Rodriquez, Johnny Damon, and Alfonso Soriano. There is not a (current) Red Sox player on the list. Will a jury really believe that people might think Jay-Z allowed a famous player from the Yankees’ most hated rival to use his trademark? Also, the “40-40 club” is a reference to a baseball player hitting 40 home runs and stealing 40 bases in a single season—a club, ironically, that Ortiz does not belong to. The term is not singularly identified with Jay-Z or his clubs. Just another hurdle to overcome.

In light of all the issues surrounding this case, the main question is this: of all Jay-Z’s 99 problems, should Ortiz’s nightclub in the Dominican Republic really be one?

[This article originally appeared at The Huffington Post.]

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