Tag Archives: Lawsuit

Former Twitter Board Member Sues Elon Musk’s X For $20 Million In Pay

Elon Musk, ,

A former Twitter board member, Omid Kordestani, sued the social media company owned by Elon Musk on Friday, claiming that the billionaire refused to cash out more than $20 million worth of shares, The New York Times reported.

Mr. Kordestani, who joined Twitter’s board in 2015 and helped oversee the sale of the company to Mr. Musk in 2022, received most of his compensation in stock. But after Mr. Musk bought the company, now called X, he refused to pay Mr. Kordestani for those shares, the lawsuit said.

X “seeks to reap the benefits of Mr. Kordestani’s seven years of service to Twitter without paying him for it,” said the suit, which was filed in California Superior Court in San Francisco.

A representative for X did not immediately respond to a request for comment.

Such a public battle between a former board member and the company he once helped manage is rare — most boardroom disputes are settled quietly behind the scenes. But Mr. Musk’s tumultuous acquisition of the social media company for $44 billion upended many notions of normal business practices, and the billionaire has faced a slew of lawsuits over his handling of the deal.

With his lawsuit, Mr. Kordestani becomes the most senior Twitter leader to take legal action against Mr. Musk — but certainly not the first. Twitter’s former chief executive, chief financial officer, and top lawyers have also sued the company to recoup compensation, and thousands of employees have joined mass arbitration cases that accuse Mr. Musk of wrongfully terminating them and refusing to pay proper severance.

Omid Kordestani, a former board member of Twitter, (now rebranded as X), has filed a lawsuit against Elon Musk’s social media company alleging that they failed to cash out over $20 million worth of his shares, Benzinga reported.

The lawsuit, filed in California Superior Court in San Francisco on Friday, accuses X of benefiting from Kordestani’s seven years of service to Twitter without compensating him.

The Iranian-American businessman, who joined Twitter’s board in 2015, played a significant role in the sale of the company to Musk in 2022.  He received most of his compensation in stock.

However, after Musk’s acquisition, he allegedly refused to pay Kordestani for those shares, the report noted. 

According to the lawsuit, Musk’s purchase agreement stipulated that Kordestani’s 800,000 stock options, worth over $20 million, should have been paid out within five days of the deal’s closure. However, that payment was allegedly not made.

In my opinion, Mr Musk should have done the right thing and paid out the stock options that Mr. Kordestani had earned. I cannot imagine why Mr. Musk decided to just … not fulfill his obligation to pay Mr. Kordestani what he as owed.

Elon Musk’s X Loses Lawsuit Against Bright Data Over Scraping

X, ,

A federal judge in California dismissed a lawsuit filed by Elon Musk’s X against Israel’s Bright Data, in a case that involved the scraping of public online data and its appropriate uses, CNBC reported.

X, formerly Twitter, sued Bright Data, alleging the company “scrapes data from X” and sells it “using elaborate technical measures to evade X Corp.’s anti-scraping technology.” X also claimed the company violated its terms of service and copyright.

In dismissing the complaint, Judge William Alsup wrote, “X Corp. wants it both ways: to keep its safe harbors yet exercise a copyright owner’s right to exclude, wresting fees from those who wish to extract and copy X users’ content.”

Giving social networks complete control over the collection and use of public data “risks the possible creation of information monopolies that would disserve the public interest,” the judge wrote. He added that X was not “looking to protect X users’ privacy,” and was “happy to allow the extraction and copying of X users’ so long as it gets paid.”

Reuters reported U.S. District Judge William Alsup in San Francisco ruled on Thursday that X, formerly Twitter, failed to plausibly allege that Bright Data Ltd had violated its user agreement by allowing the scraping and evading X’s own anti-scraping technology.

Alsup said using scraping tools is not inherently fraudulent, and giving social media companies free rein to decide how public data are used “risks the possible creation of information monopolies that would disserve the public interest. 

The judge also said X was not entitled to “de facto copyright ownership” in copyrighted content that X’s user made available to the public.

Or Lenchner, Bright Data’s chief executive, said in a statement: “Bright Data’s victory over X makes it clear that the world of public information on the web belongs to all of us, and any attempt to deny the public access will fail.”

ArsTechnica reported a US district judge William Alsup has dismissed Elon Musk’s X Corp’s lawsuit against Bright Data, a data-scraping company accused of improperly accessing X (formerly Twitter) systems and selling data.

According to Alsup, X failed to state a claim while arguing that companies like Bright Data should have to pay X to access public data posted by X users.

“To the extent the claims are based on access to systems, they fail because X Corp. has alleged no more than threadbare recitals,” parroting laws and finding in other cases without providing any evidence, Alsup wrote. “To the extent the claims are based on scraping and selling of data, they fail because they are preempted by federal law,” specifically standing as an “obstacle to the accomplishment and execution of” the Copyright Act.

“X Corp. wants it both ways: to keep its safe harbors yet exercise a copyright owner’s right to exclude, wresting fees from those who wish to extract and copy X user’s content,” Alsup said.

In my opinion, it appears that Elon Musk wants to prevent other companies from scraping X’s user data, but also wants to be paid for that data. I see why the judge dismissed Mr. Musk’s complaint.

Google Pledges To Destroy Browsing Data To Settle ‘Incognito’ Lawsuit

google,

Google plans to destroy a trove of data that reflects millions of users’ web-browsing histories, part of a settlement of a lawsuit that alleged the company tracked people without their knowledge, The Wall Street Journal reported.

According to the Wall Street Journal, the class action lawsuit, filed in 2020, accused Google of misleading users about how Chrome tracked the activity of anyone who used the private “incognito” browsing option. The lawsuit alleged that Google’s marketing and privacy disclosures didn’t properly inform users of the kinds of data being collected, including details about which websites they viewed.

The settlement details, filed Monday in San Francisco federal court, set out the actions the company will take to change its practices around private browsing. According to the court filing, Google has agreed to destroy billions of data points that the lawsuit alleges it improperly collected, to update disclosures about what it collects in private browsing and to give users the option to disable third-party cookies in that setting.

The agreement doesn’t include damages for individual users. But the settlement will allow individuals to file claims. Already the plaintiff attorneys have filed 50 in California state court.

CBS News reported Google will destroy a vast trove of data as part of a settlement over a lawsuit that accused the search giant of tracking consumers even when they were browsing the web using “incognito” mode, which ostensibly keeps people’s online activity private.

The details of the settlement were disclosed Monday in San Francisco federal court, with a legal filing noting that Google will “delete and/or remediate billions of data records that reflect class members’ private browsing activities.”

The settlement stems from a 2020 lawsuit that claimed Google misled users into believing that it wouldn’t track their internet activities while they used incognito. The settlement also requires Google to change incognito mode so that users for the next five years can block third-party cookies by default.

“This settlement is an historic step in requiring dominant technology companies to be honest in their representations to users about how the companies collect and employ user data, and to delete and remediate data collected,” the settlement filing states.

“This settlement ensures real accountability and transparency from the world’s largest data collector and marks an important step toward improving and upholding our right to privacy on the internet,” the court document stated.

The Hill reported Google agreed to rewrite the disclosure that appears at the beginning of every “incognito mode” session to inform users that it collected data from private browsing sessions, according to court documents filed Monday.

“This settlement is an historic step in requiring dominant technology companies to be honest in their representations to users about how companies collect and employ user data, and to delete and remediate data collected,” the filing, submitted by the plaintiffs’ attorneys, reads.

In my opinion, Google shouldn’t have collected users data at all. Incognito mode was probably designed to imply that Google wouldn’t grab users data. Instead, Google grabbed it anyway.

Twitter Violated Contract That Failed to Pay Bonuses To Employees

Twitter,

A federal judge ruled late Friday afternoon that Twitter, now known as X, violated a contract when it failed to pay what amounts to tens of millions of dollars in bonuses that the company had orally promised its employees, Courthouse News Service reported.

Mark Schobinger, the former senior director of compensation for Twitter, filed suit against the social media company on behalf of himself and other current and former Twitter employees in June.

Schobinger, who is based in Texas, claims that employees were not paid a portion of their 2022 bonuses when they were due in the first quarter of 2023, despite repeated promises from senior executives at the company, including Ned Segal, the former chief financial officer of the company. This bonus was to be paid to employees who stayed with the company until the first quarter of 2023.

According to Schobinger, these promises were made both before and after Elon Musk acquired the social media platform in October 2022. Schobinger also said employees took these promises into consideration when deciding whether or not they wanted to leave their jobs with the social media company and that he turned down opportunities from other companies at the time because of the promised bonus.

U.S. District Judge Vincent Chhabria, in a brisk three-page opinion, wrote that California law governs the case because of the choice-of-law provision in the California Civil Code “applies only to matters of contract interpretation, not to matters of contract validity or enforceability. Because Twitter doesn’t even try to argue that Texas law should apply under the governmental interest approach, California law governs by default.”

Reuters reported Twitter violated contracts by failing to pay millions of dollars in bonuses that the social media company, now called X Corp, had promised its employees, a federal judge ruled on Friday.

Mark Schobinger, who was Twitter’s senior director of compensation before leaving Elon Musk’s company in May, sued Twitter in June, claiming breach of contract.

Schobinger’s suit alleged that before and after billionaire Musk bought Twitter last year, it promised employees 50% of their 2022 target bonuses but never made those payments happen.

In denying Twitter’s motion to dismiss the case, U.S. District Judge Chhabria ruled that Schobinger plausibly stated a breach of contract claim under California law and he was covered by a bonus plan.

X no longer has a media relations office. The company did not immediately respond to a request for comment to its X account outside business hours.

In my opinion, it appears that Twitter may have intentionally told employees that they would get a bonus if they stuck around. Eventually, it became clear that this offer was a lie.

Unsealed Complaint Says Meta “Coveted” Under-13s

Meta, ,

An unsealed complaint in a lawsuit filed against Meta by 33 states alleges the company is not only aware that children under the age of 13 use its platforms, but has also “coveted and pursued” this demographic for years on Instagram, Engadget reported.

The document, which was first spotted by The New York Times, claims that Meta has long been dishonest about how it handles underage users’ accounts when they’re discovered, often failing to disable them when reported and continuing to harvest their data.

According to Engadget, the newly unsealed complaint, filed on Wednesday, reveals arguments that were previously redacted when attorneys generals from across the US first hit Meta with the lawsuit last month in the California federal court. It alleges that the presence of under-13s is an “open secret” at Meta.

Meta’s global head of safety, Antigone Davis, proposed a requirement for parents to have approval power for downloads for kids under the age of 16.

Mashable reported Meta loves to decry that it does its best to protect children on its platform. After all, kids under 13 can’t even sign up for Instagram or Facebook because of the Children’s Online Privacy Protection Act of 1998 – but that doesn’t actually stop most kids from signing up because lying online is a classic American pastime.

And we know that Meta knows this, Mashable reported. Meta CEO Mark Zuckerberg said at a congressional hearing in March 2021 that “there is clearly a large number of people under the age of 13 who would want to use a service like Instagram.” This is part of the reason the platform has considered creating Instagram Youth.

Meta told Mashable in an emailed statement that Instagram doesn’t allow users under the age of 13 to use the app and that it has “measures in place to remove these accounts when we identify them.”

PCMag reported that Meta has received 1.1 million reports of users under the age of 13 using Instagram since 2019; however, the company has opted to disable only a small fraction of those accounts, according to The New York Times.

A newly unsealed legal complaint brought against the company by the attorneys of 33 states shows that not only did Meta not delete the accounts, but the company, “routinely continued to collect” the children’s personal information, including their email addresses and phone numbers, without their parent’s permission, a violation of federal children’s privacy laws.

The complaint was filed last month in the US District Court for the Northern District of California by California, Colorado, and 31 other states.

In a statement Saturday to the New York Times, Meta says the complaint “mischaracterizes our work using selective quotes and cherry-picked documents.”

In my opinion, this is really bad news for Meta. It seems to me that allowing children to use Meta’s platforms – without the knowledge of the children’s parents – is not a good look for a company that should have known better.

Internet Archive Files Appeal In Copyright Infringement Case

Legal,

As expected, the Internet Archive this week has submitted its appeal in Hatchette v. Internet Archive, the closely-watched copyright case involving the scanning and digital lending of library books, Publishers Weekly reported.

In a brief notice filed with the court, IA lawyers are seeking review by the Second Circuit court of appeals in New York of the “August 11, 2023 Judgement and Permanent Injunction; the March 24, 2023 Opinion and Order Granting Plaintiffs’ Motion for Summary Judgement and Denying Defendant’s Motion for Summary Judgement; and from any and all orders, rulings, findings and/or conclusions adverse to Defendant Internet Archive.”

According to Publishers Weekly, the notice of appeal comes right at the 30-day deadline – a month to the day after judge John G. Koeltl approved and entered a negotiated consent judgement in the case which declared the IA’s scanning and lending program to be copyright infringement, as well as a permanent injunction that, among its provisions, bars the IA from lending unauthorized scans of the plaintiffs’ in-copyright, commercially available books that are available in digital editions.

The copyright infringement lawsuit was first filed on June 1, 2020, in the Southern District of New York by Hachette, HarperCollins, Penguin Random House, and Wiley, and organized by the Association of American Publishers.

The Internet Archive posted on its blog: “Internet Archive Files Appeal in Publishers’ Lawsuit Against Libraries”. From the blog (posted on September 11, 2023):

“Today, the Internet Archive has submitted its appeal in Hatchette v. Internet Archive. As we stated when the decision was handed down in March, we believe the lower court made errors in facts and law, so we are fighting on in the face of great challenges. We know this won’t be easy, but it’s a necessary fight if we want library collections to survive the digital age.”

Statement from Brewster Kahle, Founder and digital librarian of the Internet Archive:

“Libraries are under attack like never before. The core values and library functions of preservation and access, equal opportunity, and universal education are being threatened by book bans, budget cuts, onerous licensing schemes, and now by this harmful lawsuit. We are counting on the appellate judges to support libraries and our longstanding widespread library practices in the digital age. Now is the time to stand up for libraries.”

The Verge reported that the appeal from the IA follows a settlement that saw the Archive limit access to some of its scanned books as well as a second suit filed by music publishers over the Archive’s digitization of vintage records.

According to The Verge, the March ruling found that the internet Archive’s scanning and lending of books didn’t fall under the protections of fair use law, and an August settlement required it to remove public access to commercially available books that remained under copyright.

In addition to affecting the Archive, the ruling cast doubt on a legal theory called “controlled digital lending” that would allow other libraries to offer access to digitized books they physically own – rather than relying on frequently expensive and limited lending systems like OverDrive.

In my opinion, it sounds like the publishers are out to get the Internet Archive. This makes me sad. There are currently plenty of people who suddenly favor book bans – even from physical libraries. I don’t like the direction this is going in.

Appeals Court Rules Government May Have Violated 1st Amendment

Legal, ,

A U.S. appeals court on Friday ruled several government entities including the White House, the FBI, the Surgeon General and the Centers for Disease Control and Prevention likely violated the First Amendment by pressuring social media companies to moderate their content on misinformation surrounding vaccines, The Hill reported.

In a decision issued Friday evening, the Fifth Circuit Court of Appeals said government actors “likely coerced or encouraged” social media companies to moderate their content, affirming a decision by a lower court with respect to the White House, the FBI, the CDC and the Surgeon General. According to The Hill, the three judges issuing the decision were all appointed by Republicans.

The White House in a statement said the Department of Justice was reviewing the decision and its options going forward.

“This Administration has promoted responsible actions to protect public health, safety, and security when confronted by challenges like a deadly pandemic and foreign attacks on our elections,” the statement said. “Our consistent view remains that social media platforms have a critical responsibility to take account of the effects their platforms are having on the American people, but make independent choices about the information they present.”

Here are some pieces of the United States Court of Appeals for the Fifth Circuit:

For the last few years – at least since the 2020 presidential transition – a group of federal officials has been in regular contact with nearly every major American social-media company about the spread of “misinformation” on their platforms. In their concern, those officials – hailing from the White House, the CDC, the FBI, and a few other agencies – urged the platforms to remove disfavored content and accounts from their sites.

And, the platforms, seemingly complied. They gave the officials access to an expedited reporting system, downgraded or removed flagged posts, and deplatformed users. The platforms also changed their internal policies to capture more flagged content and sent steady reports on their moderation activities to the officials. That went on through the COVID-19 pandemic, the 2022 congressional election, and continues to this day.

Enter this lawsuit. The Plaintiffs – three doctors, a news website, a healthcare activist and two states – had posts and stories removed or downgraded by the platforms. Their content touched on a host of divisive topics like the COVID-19 lab-leak theory, pandemic lockdowns, vaccine side-effects, election fraud, and the Hunter Biden laptop story. The Plaintiffs maintain that although the platforms stifled their speech, the government officials were the ones pulling the strings – they “coerced, threatened and pressured [the] social-media platforms to censor [them]” through private communications and legal threats.

So, they sued the officials for First Amendment violations and asked the district court to enjoin the officials’ conduct. In response, the officials argued that they only “sought to mitigate the hazards of online misinformation” by “calling attention to content” that violated the “platforms’ policies,” a form of permissible government speech.

USA Today reported that the decision from the conservative 5th Circuit Court of Appeals partly upheld an order from a Louisiana federal judge that blocked many federal agencies from having contact with companies like Facebook, YouTube, and X, formerly Twitter, about content moderation.

But the 75-page opinion from three-judge panel also significantly narrowed the scope of the order that was a major victory for conservatives. USA Today also reported that the Biden administration has 10 days to seek a Supreme Court review of the ruling.

In my opinion, social media platforms that allow people to post misinformation typically have options for users who don’t want to see that sort of content. For example, X gives users the ability to mute and/or block content they are not interested in.