Connecticut Business Litigation Blog : Connecticut Business Lawyer & Attorney : N. Kane Bennett : Aeton Law Partners LLP : Hartford, Middletown, Glastonbury

I have written several posts on risk management and litigation arising out of social networking or media websites such as Facebook, Twitter and LinkedIn. Dan Schwartz's Employment Law Blog includes coverage of a variety of concerns with use of social media and the need for internal policies and procedures.  While Dan's blog covers employment law and this blog covers business litigation, social media ends up a frequent topic on both blogs.  In fact, you can read about social media on legal blogs across the country covering litigation, intellectual property, privacy, defamation, and the first amendment.  

Some say social media is a fad so why the extensive coverage on legal blogs?  The facts is that as the use of social media continues to grow and involve massive numbers of users, so does the risk of litigation and potential for numerous other legal issues.   To see some staggering statistics on social media,  check out the link to this video I came across on Tyson Snow's blog Social Media Esq. The video is by Erik Qualman, the author of socialnomics.  Here is a link to the video on YouTube (social media revolution 2 refresh).

If you want a real world example of social media's growing impact on the legal industry, consider Citigroup (Citi).  Citi posted on its website a job listing for Associate General Counsel.   The Citi job is not for auditing, compliance, or litigation.  Instead, in what may be a new trend, the Citi job is for Associate General Counsel-Social Media Attorney.   Citi is not alone.  Clorox also sought out an attorney to oversee its social media programs. I expect more companies will follow with new stand alone social media attorney positions.

The responsibilities posted for the Citi position give business owners a snap shot of the potential areas for concern. As posted on its website:  

The Citi Social Media Attorney will be responsible for the legal oversight of social media in three spheres:

 

A.        Citi-sponsored media such as company websites, Twitter accounts, and   YouTube;

B.        Social media interaction between Citi and the public/third parties; and,

C.        Employee participation in social media, as site user and/or site administrator.

The specific duties of the Citi Social Media Attorney provide a glimpse of the need for management of a vast array of legal areas.  The duties for the Citi job include:

Advertising, Intellectual property, Information privacy/data security including specifically relevant sections of Lanham Act; Copyright Act as amended by Digital Millennium Copyright Act;  FTC Act and Guides (including recent Endorsements/Testimonials Guidelines); rights of publicity/privacy; promotions law; defamation law; Communications Decency Act.

 

In my view, Citi has smartly recognized that managing social media does not fall into a traditional field of law such as advertising or intellectual property alone, but rather overlaps several areas that can rapidly change.  As such, proper management of social media issues for a large company likely requires a dedicated position.  This could be a sign of a new practice area or niche: the Social Media Attorney. Either way, it certainly confirms that business and employment attorneys need to understand these areas of law to address the risks clients face as the use of social media continues to grow.

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In business litigation in Connecticut, attorneys many times seek to impose a constructive trust over assets or income connected to wrong doing, breach of fiduciary duty, or fraud by business partners or agents.  In a decision to be officially released on November 23, 2010, the Appellate Court upheld a trial court's  imposition of a constructive trust over certain assets of a business.  The case is Trevorrow v. Marcuccio, and you can download it here.

A constructive trust is not a real trust.  Rather, it is a judicially created trust and thus the term "constructive."  It arises when one party unjustly holds title or rights to property, such as assets or profits of a business partnership or corporation.  The wrongdoing may involve simply retaining property, misappropriating property, or converting the property into another form.  The trust is imposed against the wrongdoer who will be deemed to hold title of the property for the benefit of the innocent party.  In Trevorrow, the Appellate Court stated:

the issue raised by a claim for a constructive trust is, in essence, whether a party has committed actual or constructive fraud or whether he or she has been unjustly enriched

Typically, you see attorneys seeking constructive trusts in cases involving fraud, duress, breach of fiduciary duty, or some type of commission of a wrong.  However, the Trevorrow court clarified that the equitable remedy of a constructive trust is not only available in cases of actual or constructive fraud, but it is also available in cases where one party has been unjustly enriched at the expense of another even without a finding of wrong doing. 

In short, in Trevorrow, there was no finding of fraud or unethical conduct.  Rather, the court simply found that one person in the business relationship would have been unjustly enriched if permitted to keep the property. The Trevorrow case also serves as reminder that the trial court's enjoy discretionary equitable powers to impose constructive trusts if proper facts are present.

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I recently attended the Connecticut Privacy Forum.  One of the presentations was by Kim Peretti who is Director of Forensic Services at Pricewaterhouse and a former federal prosecutor that chased down identity thieves globally. (read an interview with Kim here about the infamous TJX case).   I learned quite a bit of information about trafficking in personal identifying information also known as PII.  You can read my live tweets from her presentation here. 

In the data theft industry, the thieves are called "carders."  They are out there looking for victims in person and online.   The primary goal is not only credit card information, but  "full wallets."  Full wallets is when the carder gets all the information you might have in your wallet.  Credit cards, license, bank cards, etc.  The thieves might get this information from you personally, but more likely through a company that keeps this type of information.  Once they get a full wallet, they typically sell it overseas where the information is stored on computer servers and offered for sale on websites.  Scary stuff. 

As a coincidence, I have had a recent uptick of inquiries from victims of identity theft.  There are many laws that are implicated in cases of identity theft such as wire fraud, computer fraud, and theft statutes. The theft may also involve a data breach such as in the case of TJX.   

Here is a quick summary of Connecticut's statutory law for identity theft.

In Connecticut, an attorney can file a civil lawsuit on behalf of a victim of identity theft and obtain an award of one thousand dollars or treble damages, whichever is greater pursuant to statutory law. In addition, a victim can obtain an award of costs and reasonable attorney's fees.  Damages may include documented lost wages, or any financial loss that can be tied to the identity theft. Courts have the ability to award other types of relief also, including but not limited to, not less than two years of commercially available identity theft monitoring.  

In Connecticut, attorneys may prove identity theft for civil damages by showing a violation of the criminal identity theft statutes.  This is similar to the civil theft statute and computer crime statute.  In general, the criminal identity theft statutes may be broken down under the following categories:

• Class B felony identity theft.  This violation concerns cases where the victim is under the age of 60 and the value of money or theft exceeds ten thousand dollars or the victim is over the age of 60 and the value is greater than five thousand dollars.
• Class C felony identity theft.  This violation occurs where the victim is under 60 and the value is greater than five thousand dollars, or if the victim is over 60.
• Class D felony identity theft.  This occurs for any violation regardless of age or value.

To prove the underlying violation or actual identity theft, an attorney must prove in the following:

A person commits identity theft when such person knowingly uses personal identifying information of another person to obtain or attempt to obtain, in the name of such other person, money, credit, goods, services, property or medical information without the consent of such other person.
 

Personal identifying information is defined by the statute as:

any name, number or other information that may be used, alone or in conjunction with any other information, to identify a specific individual including, but not limited to, such individual's name, date of birth, mother's maiden name, motor vehicle operator's license number, Social Security number, employee identification number, employer or taxpayer identification number, alien registration number, government passport number, health insurance identification number, demand deposit account number, savings account number, credit card number, debit card number or unique biometric data such as fingerprint, voice print, retina or iris image, or other unique physical representation.
 

If you are a victim of identity theft, you should take fast action.    Some of the actions you might consider: 

• Identify potential defendants for a lawsuit, such as the actual perpetrator or the source where the perpetrator obtained the information
• Assess provable damages
• Seek police involvement and file a private complaint
• Take immediate action to help restore credit ratings
• Filing for an injunction, damages or other lawsuit against perpetrators

Consulting an identity theft attorney is also a good idea.  An identity theft attorney can help a victim sort through the various options, take direct action on behalf of the victim, and determine if there are grounds for a lawsuit to seek an injunction, restraining order, or damages. 

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