Yesterday, Jonathan Tasini, a union leader and organizer, social activist and writer, filed a class action suit on behalf of 9,000 uncompensated bloggers against the Huffington Post, AOL, Arianna Huffington and Kenneth Lerer, claiming that TheHuffingtonPost.com unjustly denied them compensation for their contributions to the site. The suit has generated heated comments from both sides. Jeff Bercovici of Forbes reported that in a telephone conference with reporters, Mr. Tasini compared the practices of the Huffington Post’s founder, Arianna Huffington, to those of a slave owner:
“The Huffington bloggers have essentially been turned into modern-day slaves on Arianna Huffington’s plantation. . . She wants to pocket the tens of millions of dollars she reaped from the hard work of those bloggers…. This all could have been avoided had Arianna Huffington not acted like the Wal-Marts, the Waltons andLloyd Blankfein, which is basically to say, ‘Go screw yourselves, this is my money.’”
Armed with the words of a number of harsh critics of the lawsuit, Ms. Huffington fired back on the Huffington Post this morning, stating:
“The lawsuit filed by Jonathan Tasini is so utterly without merit, and has been so thoroughly eviscerated in the media – including being ridiculed as the ‘dumbest lawsuit ever’ – I am hesitant to take any time away from aggregating adorable kitten videos to respond.”
However, Ms. Huffington did take the time to respond. Her scathing post argues in part:
“Without a shadow of a doubt (legal or otherwise), Tasini understood and appreciated the value of having a post on HuffPost — and was only too happy to use our platform’s ability to get his work seen by a wider audience and raise his profile when he was running for office. Until, years later, when he suddenly decided that he’d changed his mind… and that instead of providing a boost to his career and political aspirations, posting on our site was actually just like being a slave on a plantation (I wonder if slaves ever sent thank-you treats to their masters).”
Tasini’s lawsuit alleges two claims against the Huffington Post: first, a violation of N.Y. Gen. Oblig. Law §349 which provides a statutory bar against deceptive business practices and second, unjust enrichment. Tasini argues that the Huffington Post “…deceptively marketed themselves as a forum for news and ideas to get Plaintiff and the Class to provide valuable content to it for free. In fact, TheHuffingtonPost.com intended to realize substantial revenues from the free content provided.”
This argument is either faulty or at minimum, inelegantly stated, as the Huffington Post is in fact a forum for news and ideas, and Tasini can hardly claim deception on that point. The Complaint also alleges that the Huffington Post deceived the bloggers by hiding the number of page views attributed to their content and claiming that they did not track the number of page views. These allegations will probably also fall flat, as it seems improbable that plaintiffs will be able to prove that the class members sustained an actual injury due to their inability to determine the number of page views.
Tasini’s unjust enrichment claim is also troublesome. First, there are notable differences among state unjust enrichment laws, making the claim inappropriate for a nationwide class-action. See In re Grand Theft Auto Video Game Consumer Litig., 251 F.R.D. 139, 147 (S.D.N.Y. 2008) (finding significant variation among state unjust enrichment laws). For example, some state laws differ with respect to whether the defendants have to prove actual loss or impoverishment, and some states preclude claims where another adequate legal remedy is available or where there is an existing enforceable contract. Thompson v. Jiffy Lube Intern., Inc., 250 F.R.D. 607, 626 (D. Kansas 2008).
Second, to prove unjust enrichment in New York, “courts will look to see if a benefit has been conferred on the defendant under mistake of fact or law, if the benefit still remains with the defendant, if there has been otherwise a change of position by the defendant, and whether the defendant’s conduct was tortious or fraudulent.” Here, as Damien Hoffman of Wall Street Cheat Sheet pointed out,“the bloggers clearly received reasonable consideration in the form of publicity almost none of them could afford.” Hoffman “contributed according to [his] own volition for valuable consideration that was reasonable to [him] at the time.” If many bloggers take Hoffman’s stance, it will be difficult for Tasini to argue that there was a mistake of fact or law or that the Huffington Post’s conduct was tortious or fraudulent. More importantly, Tasini appears to have failed to make allegations regarding any of these factors in the Complaint. Instead, the allegations in the Complaint focus on the fact that the Huffington Post benefited from the bloggers’ efforts. This alone is not sufficient to sustain a claim. “A claim for unjust enrichment does not lie to relieve a party ‘of the consequences of [the party’s] own failure to . . . exercise caution with respect to a business transaction.” Dragon Inv. Co. Ill LLC v. Shanahan, 854 N.Y.S.2d 115, 118 (N.Y. 2008).
As of this evening, even Mr. Tasini appears to have doubts about the ability of his suit to succeed. He blogged in response to Ms. Huffington’s Post,
“I have no idea whether we will win the legal case. Judges do what they will do. It is a novel argument. . . “
However, if Mr. Tasini’s suit is successful, it could have serious consequences for Internet publishers who regularly populate their sites with free user content and may not be able to afford a compensation model.