STLR Link Roundup – October 7, 2016

Online Gambling Lawsuit Dismissed in Ninth Circuit

A federal judge dismissed a putative class action against defendant Valve for allegedly facilitating unlawful gambling through its multi-billion dollar online gaming platform. Valve powers gambling sites through which users bet on game outcomes using “trade bots” to trade “skins,” cosmetic items in the game-world that translate into real-world value. The court decided plaintiffs failed to meet the RICO standing requirement because gambling losses are insufficient injury. Critics believe plaintiffs will appeal. The same day, the Washington State Gambling Commission ordered a cease and desist against Valve for these same activities.

Ninth Circuit Authorizes Using Twitter to Serve Process on Foreign Defendants

The Ninth Circuit authorized service of process via Twitter for foreign defendants who use Twitter campaigns to solicit donations. In 2002, the Ninth Circuit authorized service of process via email for foreign defendants. Generally, courts have not authorized service of process via Facebook, although decisions such as Joe Hand Promotions v. Shepard for the Eighth Circuit explicitly addressed domestic defendants and left room for some leeway for electronic service on foreign defendants. Because Twitter may suspend alleged perpetrators’ accounts, and users may block messages to their accounts, there is some question whether Twitter will be an effective medium for serving defendants.

New York Federal Court Rejects Enforcing AT&T’s Arbitration Clause

An AT&T wireless customer sued AT&T asserting TCPA violations after receiving unsolicited text and calls on behalf of AT&T “U-verse” regarding an unrelated account. AT&T moved for arbitration citing its arbitration clause. A federal judge held that plaintiff did not assent to this broad clause that allegedly bound consumers to arbitration for unrelated service disputes. This decision suggests companies should consider crafting narrowly-focused online consumer arbitration clauses. A New York federal judge also recently allowed circumventing arbitration in an antitrust case against Uber.

California Federal Court Dismisses Class Action Lawsuit Against Lyft, Post-Spokeo

The May 2016 Supreme Court decision Spokeo v. Robins affirmed the requirement of injury-in-fact Article III standing for access to federal courts on claims of federal statute violations. However, debates remain as to its application. In Nokchan v. Lyft, plaintiff sued Lyft asserting harm due to Fair Credit Reporting Act (FCRA) disclosure violations. The court decided that as in Spokeo, defendants’ failure to provide required notice to users is insufficient to meet the injury-in-fact requirement. Going forward, plaintiffs will need to prove they suffered cognizable harms to maintain standing.

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