The HuffingtonPost Bloggers Class Action Lawsuit Won’t Go Anywhere
[Update, December 2012: as predicted, case dismissed, and dismissal just affirmed by the Second Circuit. The court didn’t even reach the class action issue, it just denied it on the merits. “[P]laintiffs were perfectly aware that The Huffington Post was a forprofit enterprise, which derived revenues from their submissions through advertising. Perhaps most importantly, at all times prior to the merger when they submitted their work to The Huffington Post, plaintiffs understood that they would receive compensation only in the form of exposure and promotion.”]
Writing has always been a tough business, one dependent upon unorthodox forms of compensation. Charles Dickens’ novels used to come with advertisements for alpaca umbrellas and quack medical treatments. One of Toni Morrison’s books was loaded with ads for cigarettes, the New York Times just put up an expensive but easily avoided paywall.
Which brings us to the Huffington Post, long despised by other writers who resented its obsession with search engine optimization and by SEO professionals who resented its success in repackaging other’s content.
But nobody hated the Huffington Post as much as its own bloggers, the folks who generated a ton of its content without compensation in a spirit of, I suppose, political activism, just to watch it be sold off to AOL for $315 million.
One of them has decided to sue:
[A] group of unpaid bloggers for the Huffington Post, led by union organizer and journalist Jonathan Tasini, filed a class-action lawsuit against the HuffPo; its foundress, La Arianna; and media giant AOL, which bought HuffPo back in February. The gist of the lawsuit, as Tasini told Jeff Bercovici of Forbes, is that the site’s unpaid writers “must share in the value they create” — $315 million worth of value, based on what AOL paid for the Huffington Post.As a writer myself, I’m all in favor of writers being paid for what they do. But the lawsuit against HuffPo strikes me as a bit dubious….
They’re proceeding under a theory of unjust enrichment. They filed as a class action, with a proposed class of:
All current and former unpaid content providers to TheHuffingtonPost.com residing in the United States and Canada and who did not and continue not to receive any compensation related thereto. [Excluding members of HuffingtonPost or the plaintiff’s law firm.]
No class action is proper unless all litigants are governed by the same legal rules. Otherwise the class cannot satisfy the commonality and superiority requirements of Fed.R.Civ.P. 23(a), (b)(3). Yet state laws about theories such as those presented by our plaintiffs differ, and such differences have led us to hold that other warranty, fraud, or products-liability suits may not proceed as nationwide classes. See, e.g., Isaacs v. Sprint Corp., 261 F.3d 679 (7th Cir.2001);Szabo v. Bridgeport Machines, Inc., 249 F.3d 672 (7th Cir. 2001); In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293 (7th Cir.1995). See also In re Mexico Money Transfer Litigation, 267 F.3d 743, 746-47 (7th Cir.2001). The district judge, well aware of this principle, recognized that uniform law would be essential to class certification.
As the plaintiffs in the Lycoming Engines aircraft product liability class action, learned the hard way, unjust enrichment laws differ from state to state — some call it a tort, some call it a quasi-contract, some call it just a claim in equity — and courts tend to demand a lot from plaintiffs trying to allege unjust enrichment in claims that cross state lines.
In the HuffingtonPost case, the proposed class is not just nationwide, but includes Canada.
Put simply, as much as I’d like to see more nationwide unjust enrichment class actions, they typically don’t go anywhere, because unjust enrichment laws from state-to-state simply vary too much. The plaintiffs in Lycoming Engines abandoned their unjust enrichment claims once the Third Circuit said the District Court would have to do a state-by-state analysis of unjust enrichment claims. The same will have to happen here.
Maybe he’ll refile as just a New York state-based class, or maybe New York and some other states with similar laws (the Lycoming Engines opinion is a good place to start for a survey on these laws), but that still leaves a lot of unanswered questions about how he’ll prove class-wide status for his claims. Posting on HuffingtonPost isn’t like buying a car or household appliance, the reasons people post vary considerably, as does the value conferred upon HuffingtonPost by each post. Class action status will thus almost certainly be denied.
Which leaves just the plaintiff himself. Assuming his claim prevails, how much are his two-hundred or so articles worth? If the going rate at Demand Media’s content farm is indicative, about $3,000 or so.
Maybe he should refile in small claims court.