IRS vs. Tea Party “scandal”: Minnesota nonprofits have not been immune from IRS action

May 16, 2013

Many eyes are on the White House over news the IRS has been targeting Tea Party-like tax-exempt corporations.  The law in question is 26 U.S.C. 501 (c)(4), which provides tax-exempt status to organizations that are “operated exclusively for the promotion of social welfare.”  Those are Congress’ words, not President Obama’s.

 Under the law, (c)(4) groups get tax-exempt status.  They differ from their (c)(3) cousins because (c)(4)s get to participate in politics—the theory being that voters deserve to hear views of groups dedicated to “social welfare.”  In Minnesota, (c)(4)s have ranged from taxpayer-rights groups to Lions Clubs.

 Because Congress created the law in the first place, it has the ultimate responsibility to make sure it’s being enforced.  Secondarily the executive branch does too, by and through the IRS.  To that end, the Minnesota Council of Nonprofits reports that in 2011 the IRS revoked the tax-exempt status of more than 5,100 Minnesota nonprofits, 666 of them (c)(4)s.

Many were revoked because they were no longer in existence.  Still, by its acts, the IRS was doing its job.  That also is true with respect to its investigation Tea Party groups.  But what both the IRS and Congress need to do is ensure (c)(4)s of all political stripes get the same treatment.

Posted in Politics | Leave a Comment »

10 steps bloggers should take to avoid getting sued

September 21, 2012

Being sued over blog posts is bad, and being threatened with legal action can be just as bad.  Saturday morning, at the 2012 Minnesota Blogger Conference, I am presenting on …

10 steps bloggers should take to avoid getting sued

1. Tell the truth

Libel is a claim that a communicator has harmed someone’s reputation by publishing something false.  So truth is the ultimate defense to a libel suit.   A blog post that says horrible things about someone is not libelous if it is true.

2.  Report for jury duty

Sometimes even false posts are legally protected.  That’s because a jury ultimately decides whether the blogger did “what a reasonable blogger would do” under the circumstances.

3.  Focus on the famous

Politicians, celebrities, and other public figures must prove “actual malice” to win a libel suit.  So if you stick to writing about famous people, the risk of legal liability decreases.

4.  Act like the AARP era

Most of a blogger’s legal defenses were enacted with the Mainstream Media in mind.  So emulate the “AARP” generation by Avoiding Anonymous Sources, Attributing Information, Retracting When Necessary, and Publishing Regularly.

5.  Know when truth doesn’t matter

Bloggers do risk liability for publishing true information if doing so is an invasion of privacy.  So don’t publish Social Security numbers or bank-account information, and tread carefully with racy pictures.

6.  Stay local

Most laws governing bloggers are state laws, enforced separately and differently in each state.  So posting about people outside Minnesota increases the chance, complexity, and cost of litigation.

7.  Keep SLAPP in the face

Minnesota is among states with laws that protect against “SLAPP” lawsuits, which are Strategic Lawsuits filed to prevent Public Participation.  The SLAPP laws provide extra protection to bloggers who write about public issues

8.  Picture a troll

“Copyright trolls” patrol the internet, looking for material used without the owner’s permission.  Bloggers are easy prey.   Know where your pictures come from, and get permission to publish if necessary.

9.  Act in moderation

Some believe that bloggers can avoid legal liability by not moderating comments.  I disagree.  Moderate your comments and remove the dicey ones.

10.  Blog as a matter of policy

Read your business and homeowners’ insurance policies for whether you’re covered if you’re sued.  Consider purchasing a separate policy for bloggers.

Posted in Blogging, Copyright, Defamation, First Amendment, Internet law, Invasion of Privacy, Media Law, Uncategorized | 3 Comments »

Don’t plan to sue your computer consultant

September 13, 2012

If a computer consultant messes up your website, can you sue him or her?  It will be difficult to do so in Minnesota, it appears.

In a case that hasn’t gotten much attention, a federal judge in Minnesota ruled this month that state law does not provide a cause of action for computer-consultant “malpractice.”  The judge’s reasoning was that computer consultants are not “professionals” on par with lawyers, doctors, and others who have a “heightened standard of care” and therefore can get sued for malpractice.

The case involved a Michigan law firm that hired Thompson-Reuters’ Minnesota-based West Publishing arm to develop and design a website.  Something went wrong, and hundreds of emails did not end up getting forwarded.  The law firm claimed that negligence caused hundreds of thousands of dollars in lost business.

But Judge John Tunheim ruled that even if that was true, Minnesota—like Wisconsin and a few others states—did not provide a cause of action for computer-consultant “malpractice.”

I am not sure I agree with such rulings.  People hire web designers and other computer consultants because they do not know how to work the web themselves.  Such “consultants” do, in fact, have specialized knowledge, and arguably should be held to heightened standards.  Stay tuned as the law evolves on this one …

Posted in Internet law, Uncategorized | 1 Comment »

Big Minnesota win for big record companies

September 13, 2012

Record companies spun a big win this week in a case involving the Brainerd, Minn. woman who allegedly downloaded and shared a couple dozen copyrighted songs.

The Eighth Circuit Court of Appeals ruled that it was not unconstitutional to impose a $220,000 penalty on Jammie Thomas-Rasset because the damages were not “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.”  By doing so, the appeals court reversed the trial judge’s reduction of the award to $54,000.

For support, the Eighth Circuit cited the 1984 landmark case of Sony v. University City Studios, where the United States Supreme Court cleared the way for homeowners to use videocassette recorders to record shows off TV.  The Eighth Circuit then explained:

With the rapid advancement of technology, copyright infringement through online file-sharing has become a serious problem in the recording industry. Evidence at trial showed that revenues across the industry decreased by fifty percent between 1999 and 2006, a decline that the record companies attributed to piracy. This decline in revenue caused a corresponding drop in industry jobs and a reduction in the number of artists represented and albums released.

Thomas-Rasset’s lawyers have vowed a Supreme Court appeal, and I can’t blame them–even though copyright infrinigement is a big deal.

Lost in such cases, though, is a painful truth:  While the record companies can come away big winners, the creative artists who frequently have to surrender their copyrights are the ones who get left behind.

Posted in Copyright, Internet law | Leave a Comment »

Minnesota Court of Appeals protects a blogger’s right to tell the truth

August 20, 2012

This morning, the Minnesota Court of Appeals released a decision that wisely protects bloggers’ rights to tell the truth, particularly on matters of public concern.

The case, Moore v. Hoff, involved a long-simmering Minneapolis dispute between John Hoff, who writes a blog titled “The Adventures of Johnny Northside,” and Jerry L. Moore, who worked in the University of Minnesota’s Urban Research and Outreach-Engagement Center.

Hoff made a blog post that Moore claimed were defamatory, and in turn Moore claimed that his termination from the university was linked to the allegedly false post.  Moore sued Hoff for defamation but also for interfering with his business relations.  A jury found that the posts were not false but nevertheless found interference with business relations.

But the Minnesota Court of Appeals reversed the jury verdict, ruling that a claim based on interference with business relations must involve a falsity, not a truth.  The court further explained that the communication involved matters of public concern in North Minneapolis.

Minnesota online communicators should be heartened by this holding, which affirms bloggers’ places in the media marketplace.

Posted in Blogging, Defamation, Internet law, Media Law | 1 Comment »

Recent Minnesota Supreme Court decisions are unfriendly to free speech

August 20, 2012

Summer has delivered two sizzling First Amendment decisions from the Minnesota Supreme Court, neither of which is good for online communicators.

The most recent decision came earlier this month.  State v. Crawley involved a Minnesota statute that makes it a crime to knowingly file a false police report.  In a 4-3 decision, the court held that even though the statute criminalizes expression based on its content–something the First Amendment abhors–the law was OK because it could be read to criminalize only defamatory speech, which is not protected by the First Amendment. 

In other words, the Minnesota Supreme Court wrote language into a statute that doesn’t exist.  In a dissent, Justice Stras called the court to the carpet and said the justices should not get in the business of writing statutes.  It is hard to disagree.

The other decision, Tatro v. University of Minnesota, which was released in June, received more mainstream media play than Crawley.  In fact, I talked about it when I was interviewed on Channel 9 last week.

In that case, the court ruled unanimously that the university could discipline a student in its morturary sciences program for making Facebook posts that most people would find to be, quite frankly, tasteless.  The court acknowledged that the university was abridging freedom of speech but justified the ruling because the university had a policy prohibiting certain online communication.

From a free-speech perspective, Tatro is much less problematic than the recent Crawley case.  At least the university had a policy.  As for Crawley, all communicators, online and otherwise, should be concerned that the state’s highest court would rewrite a speech-restrictive statute as they did.

I would not be at all surprised to see the case end up in the United States Supreme Court, as a Minnesota case did 20 years ago.  That case was R.A.V. v. City of St. Paul, where the nation’s high court disagreed with the Minnesota Supreme Court over a St. Paul ordinance that criminalized the messages that cross burnings are intended to convey.  Interestingly, the Minnesota Supreme Court based its Crawley decison on R.A.V.

Interesting stuff.  Stay tuned.

Posted in Defamation, First Amendment, Internet law, Media Law, Minnesota Law | 1 Comment »

Shakopee bar owner prevails in bout against UFC

August 17, 2012

A federal judge ruled this week that a Shakopee bar owner could not be personally liable for allegedly showing an Ultimate Fighting Championship bout in his establishment.

The fight, between Quinton “Rampage” Jackson and Keith Jardine, took place back in 2009, but it took until this past Tuesday for the personal-liability issue to work its way through federal court.

Judge Richard H. Kyle ruled that the pay-per-view broadcast’s owner, Joe Hand Promotions, Inc., had not demonstrated that there was ”no distinction” between the corporate entity of Kelley’s Bar and the entity’s owner.

Score one for the little guy.  And it’s no small thing.  As Bloomberg News explains, hundreds of such lawsuits are filed each year:

The companies send investigators into bars and restaurants the night of an event to gather photographic or video evidence that the establishment showed it without paying the fee.

The price for watching a pay-per-view boxing event at home might be $50, while businesses typically pay $1,500 to $3,000 or more depending on the size of the venue, said Joseph Gagliardi, president of J&J Sports Productions Inc., which promotes boxing matches.

Showing a boxing match, soccer game or mixed martial arts event without paying the commercial fee could potentially result in a bar or restaurant owner getting hit with a $260,000 bill.

Posted in Copyright, Television, Uncategorized | 1 Comment »

Town with 39 people can ban all businesses, including “adult” ones

August 6, 2012

The latest installment in Minnesota governmental attempts to ban “adult” businesses brings us to the tiny hamlet of Florence, Minnesota, population 39, which has successfully banned all businesses — including adult ones — from its two-tenths of a square mile.

At issue was an establishment called the “Juice Bar,” which shut down after the owner was threatened with criminal prosecution.  The owner sued and claimed the the city could not ban all businesses consistent with the First Amendment.  The theory was that banning businsses left no room for constitutionally protected “adult” communication.

The city contended that the effort to maintain “entirely residential” property was valid because of its interest in staying small and not having much infrastructure.  Last week, federal judge Donovan Frank agreed, stating:

The City has the power to enact its own ordinances and its decision to be zoned entirely residential is unrelated to the suppression of free expression; the incidental restriction on any First Amendment freedoms resulting from the zoning ordinances is no greater than necessary to the furtherance of those interests.

Posted in First Amendment, Uncategorized | Leave a Comment »

Federal judge says “no go” to East Grand Forks’ attempt to regulate adult media

August 1, 2012

Much of the law that protects the media comes from the world of adult media, and a dispute over an “adult” business ordinance in East Grand Forks, Minn., provides the latest chapter.

Last week, a federal judge took the fairly unusual step of enjoining the city from enforcing an ordinance against “Fantasysrus” because the ordinance potentially infringes on First Amendment rights. 

Judge John Tunheim ruled that the ordinance was too vague to be enforced because it did not define “adult uses” and permitted arbitrary enforcement.  As the judge explained:

The East Grand Forks city ordinance does not define “sexually oriented” and provides no guidance as to how much of the merchandise or activity must be sexually explicit or an “adult use” to trigger the ordinance. Consequently, an art gallery with some paintings of nudes, a dance studio that teaches belly dancing, a sauna that allowed nudity at certain times, or a bookstore selling Fifty Shades of Gray could be “sexually oriented” or not, depending on the discretion of the city official.

Judge Tunheim also ruled that because the ordinance provided no framework for differentiating between a “sexually oriented store” and a “sexually oriented bookshop,” the city got too much discretion over who could operate a business and who could not.

The decision is yet another reminder that the government has limited power to restrict not only the freedom of expression, but the freedom to purchase others’ expression—even when the expression has more to do with what goes on behind closed doors.

Posted in First Amendment, Uncategorized | Leave a Comment »

Minnesota law banning emails and other communications for 50 years is constitutional

December 28, 2011

When a Minnesota court orders that an alleged domestic abuser cannot email, message, or otherwise contact the victim for 50 years, there is no First Amendment violation, according to a Minnesota Court of Appeals decision issued Monday.

A Minnesota man brought an appeal to challenge a law that authorizes courts to issue “orders for protection” 50 years in duration under certain circumstances.  In the case, the man had pleaded guilty assault and violating a prior order that his wife sought for her protection.  After the husband served time for stalking and harassing another woman, he again was arrested for violating the order issued with respect to his wife.

So the court issued another order for 50 years, pursuant to a Minnesota statute that forbids an alleged abuser from having any contact with the victim “whether in person, by telephone, mail or electronic mail or messaging, through electronic devices, through a third party, or by any other means.”

The husband’s claim was that the statute constituted a prior restraint on his right to engage in expression.  The court of appeals disagreed, likening the law to those that provide protest-free buffer zones around abortion clinics.  The court observed that such laws ban conduct, not speech.  The court went on to explain that state government has a “strong intrest in preventing violence in a domestic setting,” and that the law was narrowly tailored because it “applies only to the most persistent abusers.”

Fifty years is, indeed, a long time.   But the court was correct to characterize the law as one addressing actions, not speech.  The law bans all contacts with the victim, regardless of what the alleged abuser might say.  And that, under the First Amendment, is permitted.

The decision is the second this month in which the court rejected First Amendment challenges to court orders arising from domestic relations.  Earlier in December, the court ruled that blogging about a former girlfriend can constitute harassment and that a Minnesota man could be ordered to remove his blog from the internet.

Posted in First Amendment, Internet law, Minnesota Law | Leave a Comment »

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