Social Media & the Law - Beyond Big Brother?

By Maggie Tamburro

It’s safe to say the transformation is complete – attorneys, courts, and the legal industry have finally gotten the message – no pun intended. The new challenge isn’t to convince the legal field of a need to embrace social media, but rather solving the growing number of legal and ethical dilemmas spawned by the fact that social media and the legal industry are now inextricably intertwined.

In perhaps one giant sigh of collective consciousness, social networking channels are gaining acceptance in courts, grabbing the attention of lawmakers and administration officials, and garnering recognition by government regulatory agencies. Whether an evidentiary ruling, which allows social media evidence to be used in a hearing, or a debate over ethical implications in the use of social sites to research potential jurors, witnesses, or other courtroom players, no area of the law has been left untouched.

Compared to other areas of law, which can take years to evolve, advances that have taken place in social media have forced us to adapt relatively quickly in order to survive, often with the latest decision being the rule of the day.

The legal result: Social media’s place in the legal industry is no longer the exception. Bigger questions are surfacing regarding the extent of its role as a significant industry player. Will the next step be for the law to recognize an affirmative duty to maintain certain social media channels? Is it possible that we could envision a future where maintaining a social media presence or making disclosures is a requirement, mandated in certain industries, or for particular entities or individuals?

Consider these questions in light of three recent decisions involving social media.

1. SEC recognizes social media as acceptable in light of fair disclosure regulations

On April 2, 2013, the Securities Exchange Commission (SEC) issued a report stating that company announcements made through social media channels can, in some circumstances, act as an acceptable way to announce key information, so long as investors have been made aware about which social media sites would be utilized to distribute the information.

According to the SEC’s report, the ruling followed an investigation that was prompted by a Facebook post made by the CEO of Netflix, on his personal Facebook page, announcing the company had hit a monthly online viewing metrics milestone exceeding one billion hours. The company’s stock price showed an increase at the close of trading on the following day, initiating concerns over disclosure compliance related to trading based upon nonpublic information.

The SEC refrained from initiating any enforcement action in this instance. But its report clarified that company communications can include social media channels for disclosures – although cautioning that disclosures made on a corporate officer’s personal social media site are likely unacceptable, and emphasizing that each case requires careful analysis.

2. New York District Court allows service of defendants via social media

On March 7, 2013, a New York District Court in the S.D. allowed service of five defendants via email and Facebook in a suit brought by the Federal Trade Commission (FTC) involving allegations over a claimed money making scheme related to call centers located in India.

The court reasoned that because the FTC did not propose to serve defendants only by means of Facebook, but chose it as a supplemental means, the service here did not call into question due process. The court noted, “The FTC has set forth facts that supply ample reason for confidence that the Facebook accounts identified are actually operated by defendants,” which showed likelihood that service by Facebook would actually reach defendants.

The court opined, “The Court acknowledges that service by Facebook is a relatively novel concept, and that it is conceivable that defendants will not in fact receive notice by this means. But, as noted, the proposed service by Facebook is intended not as the sole method of service, but instead to backstop the service upon each defendant at his, or its, known email address. And history teaches that, as technology advances and modes of communication progress, courts must be open to considering requests to authorize service via technological means of then-recent vintage, rather than dismissing them out of hand as novel (emphasis added).”

3. Spoilation sanction allowed in District of New Jersey due to alleged destruction of social media account

A March 25, 2013 opinion out of the U.S. District Court for the District of New Jersey held that the plaintiff in this case had a duty to preserve his Facebook account. The court ruled that the jury could be given an instruction allowing it to draw an “adverse inference” against the plaintiff for failing to preserve his Facebook account and intentional destruction of evidence.

The case involved allegations that plaintiff, a ground operations supervisor, sustained injuries during the course of employment while unloading baggage from an aircraft. As part of discovery relevant to plaintiff’s requested damages and social activities, defendants sought production of plaintiff’s social media accounts, including Facebook records.
After much back and forth between the parties, the defendants were advised by plaintiff’s counsel that his Facebook account had been deactivated and all of his account information lost. In sum, discovery of the information failed – the account could no longer be activated as the information it contained had been deleted fourteen days after deactivation of the account.

Walking a Tightrope – Privacy Concerns vs. the Need to Know

At what point will the tide turn necessitating increasing legal regulation of social media channels? If so, will government and lawmakers be able to find a balance between protection of user’s privacy and mandating certain online activity or disclosures?

Perhaps it’s no surprise that just last week, the presidential administration appointed its very first chief privacy officer, Twitter’s legal director, who reportedly also served as a vice-president and deputy general counsel at Google. The interests at stake are many-faceted and the questions difficult.

Does social media’s growing legal significance require more governmental regulation? Americans can be fickle – it’s worth noting that on May 2, 2013, theguardian reported that some measures indicate the number of Facebook users dropped by approximately 10 million as compared to a year ago. Perhaps the increased legal significance will scare some users away.

Is the stage set for increased social media regulation?

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Maggie Tamburro

Maggie Tamburro is an attorney and writer who holds a Juris Doctor from The John Marshall Law School and a Bachelor of Arts from the University of Texas. She was admitted to the Illinois Bar in 1994 and Florida Bar in 1999 and has significant experience in legal research, editing, and writing. Maggie is active her in local community, holding various publicly appointed civic board positions.

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