Microsoft Word - 2_2018.2_Hidy_Final.docx 2018.2_HIDY_FINAL BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS: LEGAL RIGHTS, JUDICIAL RATIONALES, AND THE RESULTANT BUSINESS RISKS Kathleen McGarvey Hidy* This Article examines the risk exposure of business organizations involved in disputes over rights in social media accounts. The complexity of both the legal rights asserted and the judicial rationales used to adjudicate these rights triggers unique risks for business organizations. Increasingly, business organizations rely on social media outreach to perform core business operations such as advertising, marketing, marketing intelligence, and sales. These uses engender litigation and create judicial precedent in which courts struggle to define and delineate the legal rights and remedies applicable to these disputes. There are unresolved legal issues resulting from conflicting analytical frameworks advocated by litigants and used by courts to adjudicate these disputes. Operating in this complicated legal environment poses unique risks for business organizations. This Article analyzes those risks and proposes risk mitigation strategies. I. Introduction ............................................................... 428 II. The Legal Landscape of Social Media Account Business Disputes: A Long and Winding Road ......... 432 A. The Employee’s Rights in a Social Media Account Used for Business .................................. 433 1. PhoneDog v. Kravitz ....................................... 433 2. Maremont v. Susan Fredman Design Group . 436 3. Eagle v. Morgan ............................................. 442 4. Mattocks v. Black Entertainment Television . 448 * Assistant Professor of Legal Studies and Ethics, Williams College of Business, Xavier University; 2015–2017 Faculty Fellow, Cintas Institute for Business Ethics, Xavier University. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 427 5. Vaughn v. Radio One ..................................... 451 6. CDM Media USA v. Simms............................ 452 7. Ardis Health v. Nankivell .............................. 455 8. Christou v. Beatport ....................................... 457 9. Emerald City v. Kahn ..................................... 459 10. WBS v. Croucier ............................................. 461 B. The Independent Contractor and Business Social Media Accounts ......................................... 462 C. Business Management Companies and Social Media Accounts ................................................... 464 D. Bankruptcy Proceedings and Business Social Media Accounts ................................................... 466 III. The Judicial Precedent: A Complicated Legal Terrain ....................................................................... 471 A. Property Rights and Social Media Accounts ....... 472 B. The Right to Control a Social Media Account ..... 474 C. Social Media Accounts and Interference with Economic Opportunities and Contractual Relationships ....................................................... 477 D. Intellectual Property Violations and Social Media Accounts ................................................... 478 E. Fiduciary Duties and Social Media Accounts ..... 481 F. Privacy Rights and Social Media Accounts......... 482 G. Social Media Account Valuations and Damages Calculations ......................................................... 483 IV. The Resultant Business Risks and Proposals for Risk Mitigation .......................................................... 486 A. The Creation of Social Media Accounts .............. 487 B. The Management of Social Media Accounts and Company Policies ......................................... 488 C. Contract Review and Due Diligence Involving Social Media Accounts ......................................... 490 D. Remedies and Risk Management of Social Media Account Disputes ...................................... 492 V. Conclusion .................................................................. 494 2018.2_HIDY_FINAL 428 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 I. INTRODUCTION As individual social media engagement grows each year, business organizations increasingly rely on social media to perform core business functions, such as advertising, marketing, and sales.1 This trend presents emerging business risks triggered by disputes over control of business social media accounts and a complex and confusing legal framework used to adjudicate these disputes. As business organizations expand their social media presence, their risk exposure arising from these legal issues expands.2 The number of individuals using social media represents a substantial percentage of all internet users and a significant portion of the adult population in the United States. A 2016 Pew Research Center study reports the significant social media engagement of individuals in the United States on at least one, and often multiple, social media sites: • 79% of internet users use Facebook, which represents 68% of all U.S. adults,3 • 32% of internet users use Instagram, which represents 28% of all U.S. adults,4 1 See, e.g., Shea Bennett, 88% of Brands Will Use Social Media Marketing in 2014 [Study], ADWEEK (Nov. 14, 2013), http://www.adweek.com/digital/smm-2014/ [perma.cc/9HC8-QWBP]; Facebook, Twitter Remain Top Social Networks Used by US Companies, EMARKETER (Dec. 2, 2015), https://www.emarketer.com/Article/Facebook- Twitter-Remain-Top-Social-Networks-Used-by-US-Companies/1013290 [perma.cc/834W-FSQV]. 2 For a discussion of the role of legal compliance in the strategic management of a firm’s resources, see generally Constance E. Bagley, What’s Law Got to Do With It?: Integrating Law and Strategy, 47 AM. BUS. L.J. 587 (2010). 3 Shannon Greenwood et al., Social Media Update 2016: Facebook Usage and Engagement Is on the Rise, While Adoption of Other Platforms Holds Steady, PEW RES. CTR. (Nov. 11, 2016), http://www.pewinternet.org/2016/11/11/social-media-update-2016/ [perma.cc/SP8D-JLW9]. 4 Id. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 429 • 24% of internet users use Twitter, which represents 21% of all U.S. adults,5 • 29% of internet users use LinkedIn, which represents 25% of all U.S. adults,6 and • 31% of internet users are on Pinterest, which represents 26% of all U.S. adults.7 The study further found that fifty-six percent of adults who use the internet use more than one of these five social media sites.8 While the demographics of social media users vary by age, gender, education level, and income,9 Facebook’s global footprint dominates the market in most countries around the world.10 Facebook in 2017 boasted two billion monthly users globally, a seventeen percent increase from the previous year.11 Business organizations market to this growing population of social media users through social media outreach with a reported eighty-eight percent of brands in the United States with one hundred or more employees engaging in social media marketing.12 Business engagement on social media sites is driven by the multivalent impact such outreach has on a business organization’s core operations, as its marketing strategies, advertising, sales, and marketing intelligence capabilities are directly affected by social media engagement.13 A 2010 McKinsey & Co. study demonstrated 5 Id. 6 Id. 7 Id. 8 Id. 9 Id. 10 Facebook Remains the Largest Social Network in Most Major Markets, EMARKETER (Apr. 8, 2016), https://www.emarketer.com/Article/Facebook-Remains-Largest-Social- Network-Most-Major-Markets/1013798 [perma.cc/6HFZ-AM9A]. 11 Mark Zuckerberg Says Facebook Now Has 2 Billion Users Worldwide, FORTUNE (June 27, 2017, 1:56 PM), http://www.fortune.com/2017/06/27/mark%20-%20zuckerberg%20- %20facebook%20-userbase/ [perma.cc/B58E-L28J]. 12 Bennett, supra note 1. 13 Joan Lindsey-Mullikin & Norm Borin, Why Strategy Is Key for Successful Social Media Sales, 60 BUS. HORIZONS 473, 473–74 (2017). 2018.2_HIDY_FINAL 430 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 that “networked enterprises,” which include those that engage in social media outreach, are “more likely to be market leaders and also more likely to have higher margins than companies using the Web in more traditional ways.”14 These efforts have measurable outcomes. For example, the value of advertising on social media worldwide was estimated to be $17.74 billion in 2014, a jump from $11.36 billion the previous year.15 Social media impacts an estimated fifty-four percent of consumers’ decisions as brands leverage these platforms to increase sales by “reminding, informing, and entertaining customers.”16 Businesses’ expenditures to create, maintain, and litigate over social media accounts corroborate the contention that such accounts are valuable business assets: One indication of this value is the large sum which companies have spent developing and maintaining a viable presence on Facebook, Twitter, Tumblr, Google+ and other platforms, and creating marketing campaigns that utilized these mediums. Indeed, a multi-billion dollar industry has been created to help firms manage their social media footprint . . . .17 The social media platforms that are the “most popular” for selling merchandise are Facebook, Instagram, Twitter, and Pinterest.18 Data further suggests that the type of social media platform employed by a business to interact with its customers influences the level of attention the brand receives. For example, the market leader in social media platforms is Facebook, but Instagram users interact with brands 58 times more often than Facebook users and 120 14 John G. Loughnane et al., Valuation of Social Media Assets, AM. BANKR. INST. J., Dec. 2015, at 36, 36 (quoting David Gilfoil & Charles Jobs, Return on Investment for Social Media: A Proposed Framework for Understanding, Implementing and Measuring the Return, 10 J. BUS. & ECON. RES. 637, 638 (2012)). 15 Lindsey-Mullikin & Borin, supra note 13, at 474. 16 Id. at 481. 17 Loughnane, supra note 13, at 36. 18 Lindsey-Mullikin & Borin, supra note 13, at 474. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 431 times more often than Twitter users.19 The potential to convert a social media post into an actual sale is both measurable and, in part, related to which social media site the business employs: “[A]n Instagram photo next to an item for sale boosts sales conversions by a factor of seven.”20 Social media is an accessible, affordable, and useful tool for business organizations to capture market share and build brand loyalty. But legal risks attend the business use of social media. Business use of social media accounts to connect with and influence customers and clients has led to legal disputes over the right to control and derive economic benefits from the accounts.21 These disputes arise when a business organization’s right to control a social media account is challenged by an employee,22 an independent contractor,23 a corporate debtor in bankruptcy,24 or a social media management company that refuses to relinquish control over the account it manages on behalf of the business organization.25 Litigation ensues and the courts wrestle with a myriad of legal questions posed by a technological advancement—namely, a social media account—that has legal kinship with property rights,26 privacy rights,27 19 Id. 20 Id. (“Fifty-three percent of adults between the ages of 18 and 29 use Instagram . . . making it arguably the world’s most powerful platform for brands . . . .”). 21 See infra Part II. 22 See, e.g., Maremont v. Fredman, No. 10 C 7811, 2014 U.S. Dist. LEXIS 26557 (N.D. Ill. Mar. 3, 2014). 23 See, e.g., Salonclick, L.L.C. v. Superego Mgmt., L.L.C., No. 16 Civ. 2555 (KMW), 2017 U.S. Dist. LEXIS 6871 (S.D.N.Y. Jan. 18, 2017). 24 See, e.g., In re CTLI, L.L.C., 528 B.R. 359 (Bankr. S.D. Tex. Apr. 3, 2015). 25 See, e.g., Keypath Educ., Inc. v. Brightstar Educ., Inc., No. 16-cv- 2545-JWL, 2017 U.S. Dist. LEXIS 14061 (D. Kan. Jan. 31, 2017). 26 See, e.g., PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2011 U.S. Dist. LEXIS 129229, at *26–27 (N.D. Cal. Nov. 8, 2011); see infra Section III.A for a discussion of the judicial precedent on this issue. 27 See In re CTLI, 528 B.R. at 377–78; see infra Section III.F for a discussion of the judicial precedent on this issue. 2018.2_HIDY_FINAL 432 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 intellectual property rights,28 contract rights,29 and duties arising under tort law.30 The precedent that emerges is complex, confusing, and, in certain instances, contradictory. This Article examines the risk exposure of business organizations operating in this legal environment when disputes over rights in social media accounts arise. Part II of this Article reviews the judicial precedent and identifies the legal theories examined by courts to define and delineate the rights arising in social media account business disputes. Part III explores the complicated and, in certain instances, unresolved legal issues resulting from the analytical frameworks discussed in Part II. Finally, Part IV investigates the risks posed to business organizations operating in this legal environment and proposes a framework for mitigating risk caused by social media account disputes. II. THE LEGAL LANDSCAPE OF SOCIAL MEDIA ACCOUNT BUSINESS DISPUTES: A LONG AND WINDING ROAD Business disputes over the right to control and derive economic benefits from social media accounts are increasingly adjudicated by the courts. These challenges arise under both federal and state law.31 The legal claims cover a wide array of asserted rights rooted in the law of 28 See, e.g., Christou v. Beatport, 849 F. Supp.2d 1055, 1074–77 (D. Colo. 2012); see infra Section III.D for a discussion of the judicial precedent on this issue. 29 See, e.g., CDM Media v. Simms, No. 14 CV 9111, 2015 U.S. Dist. LEXIS 37458, at *5–10 (N.D. Ill. Mar. 25, 2015); see infra Section III.C for a discussion of the judicial precedent on this issue. 30 See, e.g., Ardis Health v. Nankivell, No. 11 Civ. 5013 (NRB), 2011 U.S. Dist. LEXIS 120738, at *8 (S.D.N.Y. Oct. 19, 2011); see generally infra Part III for a discussion of the judicial precedent on this issue. 31 See, e.g., Maremont v. Fredman, No. 10 C 7811, 2014 U.S. Dist. LEXIS 26557 (N.D. Ill. Mar. 3, 2014); Eagle v. Morgan, No. 11-4303, 2013 U.S. Dist. LEXIS 34220, at *14–15 (E.D. Pa. Mar. 12, 2013). 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 433 contracts, torts, and intellectual property.32 The disputes themselves arise from contested control over social media accounts between business organizations and various parties, including former employees, independent contractors, former business partners, and business entities retained to manage these accounts.33 The context of these disputes include employment terminations, soured business partnerships, and bankruptcy proceedings. What emerges from the precedent is a kaleidoscope of judicial rationales used by courts to define and delineate the legal rights over these social media accounts. A. The Employee’s Rights in a Social Media Account Used for Business 1. PhoneDog v. Kravitz In PhoneDog v. Kravitz,34 the United States District Court for the Northern District of California considered a legal challenge brought by a business against a former employee who refused to give up control of a Twitter account. The business, PhoneDog, provided news and web resources for mobile products and services.35 PhoneDog’s promotional and marketing social media outreach to its customer base included the use of multiple social media sites such as Facebook, YouTube, and Twitter.36 Employees of PhoneDog used Twitter accounts with the business’s name in the Twitter account handle to promote PhoneDog’s business activities and provide information to its customers.37 Noah Kravitz was hired by PhoneDog to work as a video blogger and product reviewer and, in that capacity, was provided with a Twitter account with the handle @PhoneDog_Noah. 32 See infra Part II. 33 Id. 34 PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2011 U.S. Dist. LEXIS 129229, at *1 (N.D. Cal. Nov. 8, 2011). 35 Id. at *2. 36 Id. 37 Id. 2018.2_HIDY_FINAL 434 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 Mr. Kravitz used a password to access this Twitter account and tweeted on it about PhoneDog’s services and informational content he generated as a product reviewer and video blogger.38 By the time Mr. Kravitz left PhoneDog some four-and-a-half years later, @PhoneDog_Noah had approximately 17,000 Twitter followers.39 Mr. Kravitz refused to relinquish the account to PhoneDog when he left the company, continuing to use the account under a new handle, @noahkravitz.40 PhoneDog sued Mr. Kravitz. At the outset of the litigation, the court examined a jurisdictional challenge: Mr. Kravitz sought dismissal of his former employer’s case on the grounds that the $340,000 in damages claimed by PhoneDog was based on a faulty valuation.41 Mr. Kravitz argued that the jurisdictional threshold of $75,000, a prerequisite to litigate in federal court, had not been met. The court deferred this challenge for summary judgment adjudication, but acknowledged that competing methodologies existed for the valuation of the Twitter account and that this was a contested issue.42 The lawsuit against Mr. Kravitz asserted that his refusal to relinquish control of the Twitter account to PhoneDog when he left the company constituted (1) misappropriation of trade secrets, (2) intentional interference with prospective economic advantage, (3) negligent interference with prospective economic advantage, and (4) conversion.43 The district court refused to dismiss the trade secret claim at the pleadings phase, ruling that there were evidentiary issues 38 Id. at *2–3. 39 Id. at *3. 40 Id. 41 Id. at *8. PhoneDog reached this calculation by alleging that the Twitter account “generated approximately 17,000 followers, which according to industry standards, are each valued at $2.50. Thus, PhoneDog contends that its damages amount to $42,500 ($2.50 x 17,000) for each month that Mr. Kravitz has used the account, which at the time of filing amount to $340,000 for eight months.” Id. 42 Id. at *12–13. 43 Id. at *3. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 435 over whether the Twitter account password and followers were protected trade secrets and whether Mr. Kravitz’s actions constituted misappropriation.44 The conversion claim survived dismissal at the pleadings phase as well. The court determined that, under California tort law, the Twitter account was property and the conversion claim was at the “core of this lawsuit.”45 The district court initially dismissed PhoneDog’s claims related to interference with economic advantage.46 Each of those torts required PhoneDog to demonstrate in its pleadings what economic relationships were disrupted by Mr. Kravitz’s actions, what economic harms flowed from these disruptions and, on the claim of negligent interference with prospective economic advantage, the duty of care owed by Mr. Kravitz to his employer, PhoneDog.47 These claims were reinstated when PhoneDog amended its complaint.48 The district court reasoned that PhoneDog’s economic relationship with its advertisers—current and future—was potentially disrupted by Mr. Kravitz’s change in the social media account handle.49 @PhoneDog_Noah generated traffic to PhoneDog’s website which increased website views; this had a direct link to increases in advertising revenue for PhoneDog.50 Changing the Twitter handle allegedly decreased the traffic to PhoneDog’s website and detrimentally impacted PhoneDog’s advertising revenue. PhoneDog also alleged damage to its relationships with the 17,000 Twitter followers and CNBC and Fox News outlets. Mr. Kravitz countered that PhoneDog did not demonstrate how the Twitter followers and news outlets were in economic relationships with PhoneDog, an argument the district court 44 Id. at *15–20. 45 Id. at *26–27. 46 Id. at *23–26. 47 Id. at *20–27. 48 PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2012 U.S. Dist. LEXIS 10561, at *1 (N.D. Cal. Jan. 30, 2012). 49 Id. at *3–4. 50 Id. 2018.2_HIDY_FINAL 436 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 reserved for disposition at a later phase in the litigation.51 This case eventually settled with Mr. Kravitz retaining sole control of the Twitter account.52 2. Maremont v. Susan Fredman Design Group In a second case, Maremont v. Susan Fredman Design Group,53 a lawsuit was brought by an employee against the business that hired her for the business’s usurpation of control of her social media accounts—the reverse of the case PhoneDog v. Kravitz. Jill Maremont was the director of marketing, public relations, and e-commerce at a firm specializing in interior design. She sued the design firm and its owner for unauthorized use of her social media accounts, in federal district court.54 The dispute arose after Jill Maremont was hired by Susan Fredman Design Group (“SFDG”) to promote SFDG’s sales; Ms. Maremont’s social media efforts on SFDG’s behalf were explicitly tied to her bonus compensation.55 Ms. Maremont’s LinkedIn page confirmed that her responsibilities at SFDG included “developing and conducting social media campaigns for SFDG on Facebook and Twitter.”56 The social media marketing campaign that Ms. Maremont launched on behalf of SFDG included a blog created for SFDG that was displayed on SFDG’s website.57 Ms. Maremont also opened a personal Twitter account and a Facebook account for her personal and professional use,58 51 Id. at *4–5 n. 2. 52 Susan Park & Patricia Sánchez Abril, Digital Self-Ownership: A Publicity-Rights Framework for Determining Employee Social Media Rights, 53 AM. BUS. L.J. 537, 544 (2016). 53 No. 10 C 7811, 2014 U.S. Dist. LEXIS 26557 (N.D. Ill. Mar. 3, 2014). 54 Maremont, 2014 U.S. Dist. LEXIS 26557, at *1–3. 55 Maremont v. Susan Fredman Design Grp., No. 10 C 7811, 2011 U.S. Dist. LEXIS 140446, at *4 (N.D. Ill. Dec. 7, 2011). 56 Maremont, 2014 U.S. Dist. LEXIS 26557, at *3. 57 Id. 58 Id. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 437 posted to these social media accounts to promote the business activities of SFDG, linked the Twitter account and the Facebook account to SFDG’s blog and website, and stored account access information for these accounts in a password- protected folder on a SFDG-owned computer and SFDG server.59 The Twitter account that Ms. Maremont created, @jmaremont, had approximately 1120 followers.60 Whether SFDG directed Ms. Maremont to open the Twitter account for its business was an issue contested by the parties.61 However, Susan Fredman did request that Ms. Maremont create a Facebook Page for the group. Using her personal account, Ms. Maremont created a Page for SFDG.62 To manage the SFDG Facebook Page, an administrator had to log on through his or her personal Facebook account.63 Ms. Maremont claimed that she listed both herself and Susan Fredman as administrators of the SFDG Page, and later added another SFDG employee.64 Ms. Maremont denied that she provided direct access to the Twitter and Facebook accounts to SFDG employees.65 However, an SFDG intern claimed that Ms. Maremont gave her access to the social media accounts’ passwords to assist Ms. Maremont in posting on these platforms.66 While off from work recuperating from an automobile accident, Ms. Maremont’s Twitter account was used by 59 Maremont, 2011 U.S. Dist. LEXIS 140446, at *5. 60 Maremont, 2014 U.S. Dist. LEXIS 26557, at *3. 61 Id. at *3–4. 62 Id. at *4. A Page is distinct from an Account. Accounts are tied to individual people. In addition to their personal Profiles, any individual can create a Page representing a business. The user designates themselves or other individuals as Administrators to manage the Page on behalf of the business. Administrators can post content, interact with other Facebook users, and connect with customers as the business. But the business never has its own Account. It can only operate on Facebook through individuals’ Accounts to manage its Page. See Pages, FACEBOOK: BUSINESS PRODUCTS, https://www.facebook.com/business/products/pages [perma.cc/6T6V-LDK7]. 63 Maremont, 2014 U.S. Dist. LEXIS 26557, at *4. 64 Id. at *4. 65 Id. at *5. 66 Id. 2018.2_HIDY_FINAL 438 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 SFDG, allegedly without her authorization, to promote SFDG’s business activities.67 SFDG admitted accessing Ms. Maremont’s personal Facebook account to post on the SFDG Page but denied Ms. Maremont’s allegation that her personal Facebook account was used by SFDG to accept Facebook friend requests and to make posts on her personal Profile.68 An SFDG employee found an electronic spreadsheet with the social media accounts’ passwords on Ms. Maremont’s desk and accessed the accounts on SFDG’s behalf using this information.69 Ms. Maremont claimed that she told the owner and the president of SFDG to refrain from posting on these social media accounts—a claim they denied.70 When her employer allegedly ignored her request, Ms. Maremont changed the password to her Twitter and Facebook accounts, preventing SFDG from accessing either.71 Ms. Maremont left SFDG and brought a lawsuit in the United States District Court for the Northern District of Illinois against the design firm and its owner, alleging legal violations arising from SFDG’s access and control over the disputed social media accounts.72 Ms. Maremont alleged violations of (1) the Lanham Act, 15 U.S.C. § 1125(a); (2) the Stored Communications Act, 18 U.S. C. §2701 et seq.; (3) the Illinois Right of Publicity Act, 765 Ill. Comp. Stat. 1075/1 et seq.; and (4) the common law right of privacy.73 Ms. Maremont first claimed false association or false endorsement under the Lanham Act, which makes it illegal to falsely represent “‘the origin, association or endorsement of goods or services through the wrongful use of another’s distinctive mark, name, trade dress, or other device.’”74 The 67 Id. at *5–6. 68 Id. at *6–7. 69 Id. at *5. 70 Id. at *8. 71 Id. 72 Id. at *1. 73 Id. 74 Id. at *11 (quoting L.S. Heath & Son, Inc. v. AT&T Info. Sys., Inc., 9 F.3d 561, 575 (7th Cir. 1993). 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 439 district court ruled that Ms. Maremont stated a cognizable claim, finding that Ms. Maremont’s following on Facebook and Twitter was a result of her prominence as a professional interior designer and that she used these social media accounts to promote her work at SFDG.75 The commercial context of her Facebook and Twitter posts and the alleged deceptive use by SFDG of her name and likeness when it posted on these platforms sufficiently alleged a “commercial injury” under the Lanham Act.76 Later ruling on summary judgment adjudication of this claim, the district court stated that the availability of relief under the statute was a disputed issue for the jury to decide. She could proceed with this claim because the jury might reasonably conclude that her social media accounts constituted a commercial interest of hers, which she would have a right to protect.77 Ms. Maremont could show that she created the Facebook and Twitter accounts “for her own economic benefit, knowing that if she left her employment at SFDG, she could promote another employer to her Twitter and Facebook followers.”78 The district court acknowledged that these social media accounts were tied to SFDG’s business interests as well but it ruled that Facebook and Twitter followers can become a “marketable commercial interest”79 for the employee even while she is posting through these social media accounts for her employer: A social network account not only serves the worker’s interest by facilitating contact with her network, but also helps the worker to build her reputation and market herself to potential employers. Specifically, the social network account helps the worker to 75 Maremont v. Susan Fredman Design Grp., 772 F. Supp. 2d 967, 971 (N.D. Ill. 2011). 76 Id. 77 Maremont v. Fredman, No. 10 C 7811, 2014 U.S. Dist. LEXIS 26557, at *12 (N.D. Ill. Mar. 3, 2014). The district court noted that standing to assert a Lanham Act violation is limited to a commercial class of plaintiffs seeking to protect commercial interests. 78 Id. at *13. 79 Id. 2018.2_HIDY_FINAL 440 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 develop her “personal brand”—the combination of her online image, reputation, and network.80 The district court further explained that because the Twitter account was in Ms. Maremont’s name—and not in SFDG’s name—the tweets by SFDG could constitute a Lanham Act violation despite the fact that the tweets pertained to SFDG’s business activities.81 The use of Ms. Maremont’s Twitter account by SFDG could trigger, according to the district court, a false endorsement Lanham violation, even though SFDG tweeted a link to a blog entry by SFDG’s owner.82 The blog entry explained Ms. Maremont’s accident and related injuries, and notified readers that another employee would temporarily replace Ms. Maremont in posting on the Twitter account.83 The false endorsement Lanham Act claim brought by Ms. Maremont was ultimately dismissed, however, on the issue of damages: Ms. Maremont admitted in her deposition testimony that she did not suffer any financial injury as a result of SFDG and its owner’s use of her Facebook and Twitter accounts.84 Ms. Maremont’s recovery under this claim had to constitute either compensation for financial losses she suffered or proof of unjust enrichment by SFDG and its owner.85 The only injuries Ms. Maremont asserted under the false endorsement claim were damages related to the mental distress she suffered over the alleged misuse of her social media accounts; these damages did not meet the financial harm contemplated under §1117 of the Lanham Act.86 80 Id. (quoting Zoe Argento, Whose Social Network Account? A Trade Secret Approach to Allocating Rights, 19 MICH. TELECOMM. & TECH. L. REV. 201, 221 (2013)). 81 Maremont, 2014 U.S. Dist. LEXIS 26557, at *15. 82 Id. at *15–16. 83 Id. 84 Id. at *16–18. 85 Id. at *18. 86 Id. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 441 The district court granted summary judgment to SFDG on the Illinois Right of Publicity claim. It ruled that there was no evidence in the record about the nature of the Facebook account’s postings with respect to this claim. Focusing on SFDG and its owner’s use of Ms. Maremont’s Twitter account, the district court held that this use did not constitute misappropriation of Ms. Maremont’s name or likeness because the initial tweet by SFDG linked to Susan Fredman’s blog, which explained Ms. Maremont’s accident and her replacement during her recovery by a guest blogger/tweeter.87 SFDG and its owner also prevailed on summary judgment on Ms. Maremont’s common law right of privacy claim. The district court ruled that the facts discussed in the Facebook posts and tweets were not “private” and “Maremont did not try to keep any such facts private.”88 Therefore, there was no intrusion upon “private” matters, as the tort requires.89 In discussing the privacy issue, the district court did distinguish between Facebook posts which are “accessible only to those whom the user selects, and thus they are not strictly public” and tweets which are “usually visible and accessible to the general public” although tweeters can restrict messages to their Twitter followers.90 The final claim advanced by Ms. Maremont alleged that the actions of SFDG and its owners in accessing and using Ms. Maremont’s Twitter and Facebook accounts without her authorization violated the Stored Communications Act (SCA or the “Act”). The district court stated that “the SCA provision at issue states that whoever ‘(1) intentionally accesses without authorization a facility through which an electronic communication service is provided; or (2) intentionally exceeds an authorization to access that facility;’ and by doing so ‘obtains, alters, or prevents authorized access to a wire or electronic communication while it is in 87 Maremont v. Susan Fredman Design Grp., No. 10 C 7811, 2011 U.S. Dist. LEXIS 140446, at *18–19 (N.D. Ill. Dec. 7, 2011). 88 Id. at *21. 89 Id. at *20–21. 90 Id. at *21 n.2. 2018.2_HIDY_FINAL 442 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 electronic storage in such system’ violates the SCA.”91 The district court denied summary judgment on this claim, determining that there were triable issues of fact as to whether SFDG and its owner’s conduct in accessing and controlling the Facebook and Twitter accounts constituted a violation of the SCA as well as whether this conduct warranted the imposition of both statutory and punitive damages.92 Punitive damages are recoverable under the Act if the evidence demonstrates that SFDG and its owner willfully and intentionally accessed the Facebook and Twitter accounts despite Ms. Maremont’s directives.93 The district court also noted that evidence of Ms. Maremont’s emotional distress related to SFDG’s access and control of the social media accounts could constitute actual damages under the statute.94 At trial, a jury ruled in favor of SFDG and its owner, Susan Fredman, on the SCA claim, ending the lengthy litigation with a judgment in favor of the business and its owner who were sued by their employee.95 3. Eagle v. Morgan In another case brought by an employee against her former employer, Eagle v. Morgan,96 a business dispute erupted over the access and control of a LinkedIn account. The employee, Dr. Linda Eagle, co-owned a banking education company, Edcomm, Inc.97 While she was a principal and an employee of Edcomm, Inc., the business 91 Maremont v. Susan Fredman Design Grp., No. 10 C 7811, 2014 U.S. Dist. LEXIS 26557, at *19–20 (N.D. Ill. Mar. 3, 2014) (quoting 18 U.S.C. § 2701(a) and Shefts v. Petrakis, 758 F. Supp. 2d 620, 635 (C.D. Ill. 2010)). 92 Id. at *23–28. 93 Id. at *28. 94 Id. at *25–28 95 Maremont v. Susan Fredman Design Grp., No. 10 C 7811, 2015 U.S. Dist. LEXIS 17749, at *1 (N.D. Ill. Feb. 13, 2015). 96 No. 11-4303, 2013 U.S. Dist. LEXIS 34220, at *2 (E.D. Pa. Mar. 12, 2013). 97 Id. at *1. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 443 used LinkedIn, a social media networking site devoted to business-related connections, to pursue marketing and sales initiatives of Edcomm, Inc.98 Edcomm, Inc. did not have a policy mandating that its employees create LinkedIn accounts nor did it pay to have such accounts maintained.99 However, it did urge its employees to create a LinkedIn account and the business “became involved in the account content” of its employees, creating policies covering the “online content” of the LinkedIn accounts.100 Edcomm, Inc. also did not have a policy regarding how an employee’s LinkedIn account could be transferred to Edcomm, Inc. should an employee leave,101 although company executives believed Edcomm, Inc. “owned” all of its current and former employees’ LinkedIn accounts: What about LinkedIn . . . the question is who really owns that account? *** We do. It was created with an email account that is ours, on our computers, on our time and at our direction.102 Pursuant to Edcomm, Inc.’s policies and practices, Dr. Eagle created a LinkedIn account affiliated with an email address provided by Edcomm.103 Dr. Eagle provided her LinkedIn password to certain Edcomm employees to assist her in managing the account.104 98 Id. at *2–3. Like Facebook Pages, LinkedIn only permits businesses to administer Company Pages through individual users’ Accounts. Businesses do not have their own Accounts. Requesting to Become an Admin of a Company Page, LINKEDIN: HELP, https://www.linkedin.com/help/linkedin/answer/17481 [perma.cc/ 78R8-2JZ3]. 99 Eagle, 2013 U.S. Dist. LEXIS 34220, at *3. 100 Id. 101 Id. at *6. 102 Id. at *5. 103 Id. at *3. 104 Id. at *6. According to the court, Dr. Eagle shared her LinkedIn account password sometime “prior to her termination”—either before or after the stock purchase sale of Edcomm, Inc. Id. 2018.2_HIDY_FINAL 444 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 Dr. Eagle and her co-owners of Edcomm entered into a stock purchase agreement to sell their interests to Sawabeh Information Services Company.105 These former business owners continued to work for Edcomm as employees until their employment was terminated several months after the stock sale.106 After Dr. Eagle’s termination, employees of Edcomm changed the password to Dr. Eagle’s LinkedIn account.107 For approximately two weeks, Edcomm had exclusive control of the social media account.108 During this period, Edcomm altered Dr. Eagle’s LinkedIn account information to include the name, picture, education, and experience of its interim chief executive officer, although some information pertaining to Dr. Eagle remained on the LinkedIn profile.109 Edcomm notified the public within a week of Dr. Eagle’s termination that she was no longer affiliated with it, but neglected to post this notification on the LinkedIn profile.110 A Google search of Dr. Eagle’s name during the period when Edcomm controlled the account confusingly brought up the LinkedIn profile with the interim chief executive officer’s name and likeness.111 After this two- week period, LinkedIn took control of the account; shortly thereafter, Dr. Eagle regained access to it.112 Dr. Eagle sued Edcomm and several other defendants in the United States District Court for the Eastern District of Pennsylvania over their access, control and alteration of her LinkedIn account.113 She asserted eleven claims: (1) violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030(a)(2)(C); (2) violation of the CFAA, 18 U.S.C. § 1030(a)(5)(C); (3) violation of 105 Id. at *2. 106 Id. 107 Id. at *6. 108 Id. at *6–7. 109 Id. at *8. 110 Id. at *7–8. 111 See id. at *8. 112 Id. at *7. 113 Id. at *14. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 445 Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A); (4) unauthorized use of a name in violation of 42 Pa.C.S. § 8316; (5) invasion of privacy by misappropriation of identity; (6) misappropriation of publicity; (7) identity theft under 42 Pa. C.S. § 8315; (8) conversion; (9) tortious interference with contract; (10) civil conspiracy; and (11) civil aiding and abetting.114 Edcomm, Inc. pursued counterclaims against Dr. Eagle for conversion, misappropriation and unfair competition.115 Edcomm won summary judgment on the first two claims brought by Dr. Eagle under the CFAA, as well as the Lanham Act unfair competition claim.116 The district court ruled that Dr. Eagle’s alleged lost business opportunities resulting from Edcomm’s two-week control of her LinkedIn account were not compensable under the CFAA; damages involving loss of goodwill, lost revenue, or interference with a customer relationship are not recoverable under the CFAA.117 The district court also found that Dr. Eagle did not offer proof that Edcomm’s alteration of the LinkedIn account—replacing her name and likeness with the interim chief executive officer’s name and likeness—created a likelihood of confusion as required under the Lanham Act.118 The district court adjudicated the remaining claims and counterclaims at a bench trial. The district court ruled that Dr. Eagle proved Edcomm’s use of her LinkedIn account violated Pennsylvania’s statutory prohibition119 against the unauthorized use of a name.120 Edcomm, Inc.’s unauthorized use of Dr. Eagle’s name—which had commercial value— through its access, control, and alteration of her LinkedIn 114 Id. at *14. 115 Id. at *15. 116 Eagle v. Morgan, No. 11-4303, 2012 U.S. Dist. LEXIS 143614, at *18, *27 (E.D. Pa. Oct. 4, 2012). 117 See id. at *14–16. 118 Id. at *23–27. 119 See 42 PA. STAT. AND CONS. STAT. ANN. § 8316 (West 2018). 120 Eagle, 2013 U.S. Dist. LEXIS 34220, at *17. 2018.2_HIDY_FINAL 446 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 account, was done for its commercial benefit.121 The statute prohibits this conduct.122 The district court also found that Edcomm’s control and use of the LinkedIn account constituted invasion of privacy through the misappropriation of Dr. Eagle’s identity123 and violated the tort of misappropriation of publicity by depriving Dr. Eagle of her “exclusive right to control the commercial value of her name and to prevent others from exploiting it without permission.”124 While Dr. Eagle prevailed on these two claims, the district court ruled that she could not recover compensatory or punitive damages for Edcomm, Inc.’s violations of the law because she did not present evidence to support damages awards on these claims.125 She was awarded “compensatory damages of $0.”126 The district court refused to award punitive damages since Dr. Eagle did not prove by a preponderance of the evidence that Edcomm, Inc. acted with “maliciousness and reckless indifference.”127 The court awarded judgment to Edcomm and the individually named defendants on Dr. Eagle’s remaining claims at the bench trial. The district court ruled that information about Dr. Eagle that remained on the LinkedIn page after Edcomm replaced the page with identifying information about its interim chief executive officer did not constitute identity theft;128 a LinkedIn account “is not tangible chattel, but rather an intangible right to access a specific page on a computer” so the tort of conversion was not relevant to these facts;129 and the civil conspiracy and civil aiding and abetting claims failed due to lack of evidence on how the individual defendants conspired or assisted in the 121 See id. at *18–19. 122 Id. 123 See id. at *20–22. 124 Id. at *23. 125 Id. at *41–42. 126 Id. at *42. 127 Id. at *44. 128 See id. at *25–26. 129 Id. at *28–29. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 447 tortious conduct.130 The district court also dismissed Dr. Eagle’s claim that Edcomm’s use of her LinkedIn account constituted tortious interference with her LinkedIn contract.131 Dr. Eagle did not prove damages, as required under this tort.132 However, the district court did note that other evidence established the remaining elements of the tort.133 There was a contractual relationship between Dr. Eagle and LinkedIn which Edcomm, Inc. “acted with purpose or intent to harm . . . by preventing that relationship from continuing.”134 The district court rejected Edcomm’s justification for its usurpation of Dr. Eagle’s account—that the company had an “official policy” stating that Edcomm owned its employees’ LinkedIn accounts and could “mine” these social media accounts for data and information when the employees left Edcomm.135 No such policy existed and the district court construed the LinkedIn user agreement which Dr. Eagle entered into as “clearly” indicating that Dr. Eagle herself owned access to the LinkedIn account.136 Edcomm, Inc lost on its counterclaims against Dr. Eagle for misappropriation137 and unfair competition138 and withdrew its conversion claim.139 Edcomm failed to establish that Dr. Eagle’s account was developed through the expenditure of Edcomm’s resources and that Dr. Eagle’s LinkedIn contacts list was created and maintained by Edcomm’s efforts.140 Because of this, the district court ruled that Dr. Eagle’s efforts to regain control of the LinkedIn account were not evidence of misappropriation or unfair 130 Id. at *31–35. 131 Id. at *31. 132 Id. 133 Id. at *30. 134 Id. 135 Id. 136 Id. 137 Id. at *46. 138 Id. at *49. 139 Id. at *15 n.3. 140 Id. at *46. 2018.2_HIDY_FINAL 448 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 competition, impliedly ruling that the LinkedIn account was legally hers to control at all times.141 4. Mattocks v. Black Entertainment Television Stacey Mattocks was unable to achieve even Dr. Eagle’s Pyrrhic victory in her case against her part-time employer, Black Entertainment Television, L.L.C. (BET). In Mattocks v. Black Entertainment Television,142 the United States District Court for the Southern District of Florida entered summary judgment in favor of BET in a dispute between BET and its part-time employee, Stacey Mattocks, involving a Facebook “fan” page Ms. Mattocks created for a televised series owned by BET.143 Ms. Mattocks’ fan page was not an official Facebook fan page as defined by Facebook’s Terms of Service, which differentiates between an “official Page” created and maintained by an authorized representative of a brand and those created to express support or interest in a brand.144 Two years after Ms. Mattocks created her fan page, BET contacted her and, shortly thereafter, hired her part- time to work on an hourly basis for BET and manage the show’s fan page on BET’s behalf.145 BET provided its trademarks and logos for the fan page, encouraged BET viewers to “like” the fan page, shared exclusive content with Ms. Mattocks to post on the page, and directed Ms. Mattocks on the posting of certain information on the fan page.146 BET employees posted content on the page as well and Ms. Mattocks was tasked with notifying BET of intellectual property infringement related to the page users.147 During 141 See id. at *46–49. 142 43 F. Supp. 3d 1311 (S.D. Fla. 2014). 143 Id. at 1315, 1321. 144 See id. at 1314–15. 145 Id. at 1315–16. 146 Id. 147 Id. at 1316. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 449 this period, Facebook “likes”148 on the fan page grew from two million to over six million.149 BET and Ms. Mattocks eventually entered into a Letter Agreement in which Ms. Mattocks gave full access to the fan page to BET, including administrative access and the right to update content at BET’s “sole discretion.”150 In exchange for these rights, BET agreed not to change Ms. Mattocks’ administrative rights to the page in any way to exclude her from page access. The parties entered into discussions about Ms. Mattocks becoming a full-time employee of BET. In the course of those discussions, Ms. Mattocks notified BET that she planned to restrict BET’s access to the page until their employment discussions were amicably resolved.151 Ms. Mattocks then “demoted BET’s administrative access” to the page, effectively preventing BET from having direct access to the page to post content.152 These actions triggered a cascade of events: BET requested that Facebook “migrate” fans from the unofficial page to a BET-sponsored fan page, a request Facebook granted. Additionally, Facebook shut down the page and Twitter assented to BET’s request to disable the Twitter account Ms. Mattocks used to promote the television series for BET.153 Ms. Mattocks brought suit against BET, asserting that its actions with respect to these social media accounts tortiously interfered with Ms. Mattocks’ contractual relationships with Twitter and Facebook, constituted a conversion of a business interest, breached a duty BET owed Ms. Mattocks to act in good faith and fair dealing towards her, and violated the 148 Id. at 1315 (quoting Bland v. Roberts, 730 F.3d 368, 385 (4th Cir. 2013) (“‘Liking’ of Facebook is a way for Facebook users to share information with each other. The ‘like’ button, which is represented by a thumbs-up icon, and the word ‘like’ appear next to different types of Facebook content. Liking something on Facebook ‘is an easy way to let someone know that you enjoy it.’”)). 149 Id. at 1316. 150 Id. 151 Id. 152 Id. 153 Id. 2018.2_HIDY_FINAL 450 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 Letter Agreement entered into by the parties.154 The district court ruled that BET did not tortiously interfere with Ms. Mattocks’ contractual relationships with Twitter and Facebook because BET had a “‘supervisory interest in how the relationship is conducted or a potential financial interest in how a contract is performed’” which justified its interference.155 Additionally, BET’s control over the social media accounts during the period when Ms. Mattocks managed the fan page and the Twitter account, and its financial interest in maintaining that control, justified its subsequent decision to lobby Facebook and Twitter to shut down the accounts (and “migrate” fans to a new Facebook fan page). BET’s conduct, in the district court’s assessment, was not motivated by “purely malicious reasons,” which, if shown, could negate BET’s justification for its interference.156 Ms. Mattocks also lost on her contract claims because the district court found that Ms. Mattocks was in material breach of the Letter Agreement when she restricted BET’s access to the Facebook fan page. This legally excused BET from performing any obligations pursuant to that agreement.157 Because BET was excused from any contractual obligations once Ms. Mattocks breached the Letter Agreement, no covenant of good faith and fair dealing could be imposed on BET.158 Finally, Ms. Mattocks alleged that BET’s request that Facebook “migrate” the Facebook page “likes” to a new, BET-sponsored Facebook fan page deprived her of a business interest she had in those “likes” as well as the business opportunities gleaned from those “likes.” 159 The district court refused to categorize the Facebook “likes” as a “property interest” owned by Ms. Mattocks: 154 Id. at 1316–17. 155 See id. at 1319 (quoting Palm Beach Cty. Health Care Dist. v. Prof’l Med. Educ., Inc., 13 So.3d 1090, 1094 (Fla. Dist. Ct. App. 2009)). 156 Id. at 1319. 157 Id. at 1320. 158 Id. at 1320–21. 159 Id. at 1321. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 451 “[L]iking” a Facebook Page simply means that the user is expressing his or her enjoyment or approval of the content. At any time, moreover, the user is free to revoke the “like” by clicking an “unlike” button. So if anyone can be deemed to own the “likes” on a Page, it is the individual users responsible for them.160 The district court further found that no tortious conversion occurred because BET’s conduct was neither unauthorized nor wrongful; Facebook’s acquiescence to BET’s request after its review of the facts and Facebook’s policies confirmed this conclusion.161 5. Vaughn v. Radio One In another media business dispute in which the media company prevailed, Vaughn v. Radio One,162 the United States District Court for the Southern District of Indiana granted summary judgment in favor of Radio One, the owner and operator of radio stations in Indianapolis, Indiana. Radio One was sued by its former, part-time employee, Kelly Vaughn, for gender discrimination under Title VII, 42 U.S.C. Section 2000e-2.163 Radio One successfully defended against the Title VII discrimination claim by demonstrating that Ms. Vaughn’s termination resulted from her failure to abide by Radio One’s conflict-of-interest policy and her failure to take the corrective actions ordered by Radio One to remedy that conflict, which were related to Ms. Vaughn’s use of social media.164 The conflict of interest arose when Ms. Vaughn developed a television show for another media outlet with an on-air Radio One personality, Amos Brown. Ms. Vaughn created a Facebook Page and a Twitter account using the name and likeness of Mr. Brown and created websites to promote this television show.165 When Radio One learned 160 Id. 161 Id. 162 151 F. Supp. 3d 877 (S.D. Ind. 2015). 163 Id. at 879, 885. 164 Id. at 886. 165 Id. at 881–82. 2018.2_HIDY_FINAL 452 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 about the show, it directed Ms. Vaughn to transfer “ownership of the URLS and social media pages that incorporated the name and likeness of Mr. Brown” to Radio One pursuant to Radio One’s conflict-of-interest policy.166 Ms. Vaughn refused to transfer the rights to the social media accounts and the URLS to Radio One; she did, however, delete the Facebook Page and the website promoting the television show.167 Radio One terminated Ms. Vaughn’s employment for refusing to transfer ownership of the social media accounts and websites and for violating its conflict-of- interest policy.168 Without resolving the legal issue involving the ownership rights to either the social media accounts or the URLS,169 the district court ruled that Ms. Vaughn failed to make a prima facie showing that she met Radio One’s “legitimate expectations,” which were laid out in its conflict- of-interest policy. Even assuming she had, the district court also found that Ms. Vaughn failed to rebut Radio One’s legitimate, non-discriminatory reason for termination— violation of its conflict-of-interest policy.170 6. CDM Media USA v. Simms CDM Media USA v. Simms171 involved another social media dispute in which corporate policies were at issue. Robert Simms was a senior manager at CDM Media USA (CDM).172 When hired, Mr. Simms agreed to abide by CDM’s employee handbook which required employees to keep confidential certain information and to return any property 166 Id. at 883. 167 Id. 168 Id. at 884. 169 Id. 170 Id. at 889–91. The court also held that she failed to identify a similarly-situated male employee who received more favorable treatment. Id. 171 No. 14 CV 9111, 2015 U.S. Dist. LEXIS 37458 (N.D. Ill. Mar. 25, 2015). 172 Id. at *3. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 453 to CDM upon leaving the business.173 A few years after he was hired, CDM and Mr. Simms entered into a non-compete agreement that had a one year competition prohibition clause, an assignment clause of Mr. Simms’ inventions to CDM, and a requirement that Mr. Simms return confidential information to CDM when he left the company.174 As a senior manager, Mr. Simms had access to some of CDM’s “most sensitive information”175 and he was CDM’s designated “point person” for the online communities CDM used for its business.176 One of these online communities headed by Mr. Simms was the CIO Speaker Bureau, a private, member-only LinkedIn group launched by CDM and comprised of senior executives in the information and technology field.177 This LinkedIn group’s membership was controlled by CDM and its membership list and communications were not publicly available.178 The membership in the CIO Speaker Bureau had grown to 679 members by the time Mr. Simms resigned his position at CDM.179 When Mr. Simms resigned, CDM directed him to change “the contacts” for CDM’s social media accounts; Mr. Simms followed this directive for all the accounts except the CIO Speaker Bureau LinkedIn group.180 CDM accused Mr. Simms of refusing to return the membership information and communications related to that LinkedIn group and subsequently using this information to compete against CDM in violation of their non-compete agreement.181 CDM claimed that Mr. Simms refused to return other highly sensitive and confidential company information as well.182 173 Id. at *2–3. 174 Id. at *3. 175 Id. 176 Id. at *4. 177 Id. at *3–4. 178 Id. 179 Id. at *4. 180 Id. 181 Id. at *4–5. 182 Id. at *5. 2018.2_HIDY_FINAL 454 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 CDM sued its former employee, Mr. Simms, for breach of contract, common law misappropriation of trade secrets, and violation of the Illinois Trade Secrets Act arising from his refusal to relinquish control over the CIO Speaker Bureau LinkedIn group. CDM also alleged in its lawsuit that Mr. Simms unlawfully retained CDM’s confidential information after he resigned from CDM and used that information to compete against CDM.183 CDM successfully defended against the dismissal of the breach of contract claim at the pleadings phase of the litigation. That claim was premised, in part, on the confidentiality provision of the non-compete agreement which required Mr. Simms to “return plaintiff’s [CDM’s] confidential information upon leaving the company.”184 The district court ruled that Mr. Simms’ refusal to relinquish control of the LinkedIn group and his alleged use of any confidential information contained on that social media account was arguably a breach of the non-compete’s requirement that he return confidential information to the company when he left.185 The employee handbook’s language, however, did not create contractual obligations in light of the explicit contractual terms in the non-compete agreement that no other agreement, including any statements in the employee handbook, governed the employment relationship between CDM and Mr. Simms.186 The district court determined that the membership list of the LinkedIn group could plausibly constitute a protectable trade secret under the Illinois Trade Secrets Act, 765 IlCS §1065/1 et seq. and refused to dismiss this claim at the pleadings stage as well.187 The district court dismissed CDM’s claim, however, that the “private communications” on the LinkedIn group contained confidential information which constituted a protectable trade secret: “While a private 183 Id. at *1. 184 Id. at *3. 185 Id. at *9–10. 186 Id. at *6–7. 187 Id. at *12–13. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 455 communication may contain a trade secret, it is not itself a trade secret.”188 Finally, the common law misappropriation of information claim survived dismissal as well.189 7. Ardis Health v. Nankivell A social media account business dispute also involving a corporate policy stipulating the return of confidential information was at the heart of another case, Ardis Health v. Nankivell.190 In this case, the United States District Court for the Southern District of New York entered a preliminary injunction against a former employee of Curb Your Cravings, L.L.C. (CYC) and USA Herbals L.L.C. (Herbals), whose duties included maintaining social media pages, blogs, and websites for a group of “closely affiliated online marketing companies” which had a common owner.191 The employee, Ashleigh Nankivell, signed a “Work Product Agreement” at the start of her employment with CYC requiring Ms. Nankivell to return all confidential information at the employer’s request.192 The agreement also stipulated that the work Ms. Nankivell developed or created while employed was the “sole and exclusive property” of the employer and constituted “work-for-hire” within the meaning of the Copyright Act of 1976,193 and that an actual or threatened breach of the agreement constituted “irreparable injury and damage” to the employer.194 After Ms. Nankivell’s termination, she refused to provide the companies with the access information to the online social media accounts, emails, and websites.195 The 188 Id. at *13–14. 189 Id. at *17. The court rejected Mr. Simms’ argument that the Illinois Trade Secrets Act preempts a common law misappropriation of information claim. Id. at *16–17. 190 No. 11 Civ. 5013 (NRB), 2011 U.S. Dist. LEXIS 120738 (S.D.N.Y. Oct. 19, 2011). 191 Id. at *2. 192 Id. at *3. 193 Id. at *3. 194 Id. 195 Id. at *4–5. 2018.2_HIDY_FINAL 456 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 companies filed suit, alleging that her refusal prevented the companies from accessing these accounts and websites to update them.196 The district court ruled that the companies owned the rights to the access information unlocking these social media accounts, email accounts, and websites, and that Ms. Nankivell’s “unauthorized retention” of that information likely constituted conversion under New York law.197 Of note, the district court concluded that the companies provided sufficient evidence to warrant injunctive relief, and ordered Ms. Nankivell to provide them immediately with the access information198: Plaintiff has provided this Court with sufficient evidence to support a finding of irreparable harm if the Access Information is not returned prior to a final disposition in this case. Plaintiffs depend heavily on their online presence to advertise their businesses, which requires the ability to continuously update their profiles and pages and react to online trends. The inability to do so unquestionably has a negative effect on plaintiffs’ reputation and ability to remain competitive, and the magnitude of that effect is difficult, if not impossible, to quantify in monetary terms. Such injury constitutes irreparable harm.199 Implicit in this ruling was the district court’s determination that the social media accounts managed by Ms. Nankivell were the property of CYC as well as, possibly, its related companies: “It is uncontested that plaintiffs own the rights to the Access Information.”200 196 Id. at *1, *5. The companies also alleged that Ms. Nankivell had illegally retained a company laptop and committed intellectual property infringement. Id. 197 Id. at *8. 198 Id. at *9. 199 Id. at *6–7. 200 Id. at *8. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 457 8. Christou v. Beatport In three lawsuits involving the music industry, courts examined the ownership rights of social media accounts used to market and promote music venues and bands. In Christou v. Beatport,201 a falling out between Bradley Roulier and his former employer—nightclub owner Regas Christou—led to litigation over multiple issues including access and control over a social media account on the site, MySpace.202 Mr. Roulier, a co-owner of an online music service, left his employment with Mr. Christou and founded a rival nightclub.203 Mr. Christou and his businesses accused Mr. Roulier and his businesses of violations of the Racketeer Influenced Corrupt Organizations Act, federal antitrust laws, trade secret theft and intentional interference with business expectancies.204 Part of the alleged strategy to destroy Mr. Christou’s nightclub businesses involved the misappropriation by Mr. Roulier and his businesses of a list of MySpace profile “friends” maintained by Mr. Christou’s nightclubs.205 Some 10,000 MySpace profile “friends” of Mr. Christou’s nightclubs were developed by Mr. Roulier and other employees for use by Mr. Christou’s businesses.206 When he left his employment with Mr. Christou’s businesses, Mr. Roulier and/or his representatives took the MySpace friends list as well as the web profile login and password and posted the MySpace friends list on his new nightclub’s website.207 Mr. Christou eventually succeeded in pressuring Mr. Roulier’s business into returning the list, or at least removing it from their website.208 At the pleadings phase of the litigation, the 201 849 F. Supp. 2d 1055 (D. Colo. 2012). 202 See id. at 1074. 203 Id. at 1062–63. 204 Id. at 1063–64. 205 See Christou v. Beatport, No. 10-cv-02912-RBJ-KMT, 2014 U.S. Dist. LEXIS 43459, at *19 (D. Colo. Mar. 31, 2014). 206 Id. 207 Id. 208 Id. 2018.2_HIDY_FINAL 458 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 United States District Court for the District of Colorado ruled that whether the MySpace friends list is a protectable trade secret under Colorado trade secret law is a question of fact and that Mr. Roulier’s actions, if proven, could constitute misappropriation.209 The district court also ruled that Mr. Roulier’s misappropriation could be imputed to his online music company which he co-owned.210 In its analysis of the trade secret status of the MySpace friends list, the district court stated: Social networking sites enable companies, such as the SOCO clubs, to acquire hundreds and even thousands of ‘friends.’ These ‘friends’ are more than simple lists of names of potential customers. ‘Friending’ a business or individual grants that business or individual access to some of one’s personal information, information about his or her interests and preferences, and perhaps most importantly for a business, contact information and a built-in means of contact.211 The district court both recognized the strategic value of these social media contacts to a business and determined that such information is not known by employees from “general experience” and is not easily replicated.212 Mr. Christou and his businesses took reasonable steps to secure and safeguard the secrecy of the MySpace profile friends list by limiting and restricting access to passwords and profile login information to select employees.213 While MySpace users can “friend” multiple businesses, the district court concluded that the MySpace profile friends list was not information obtainable through a public directory or a source outside of Mr. Christou’s businesses.214 “The names themselves, readily available to the public, are not the 209 849 F. Supp. 2d at 1074–76. 210 Id. at 1077. 211 Id. at 1075. 212 See id. at 1075–76. 213 Id. at 1075. 214 Id. at 1076. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 459 important factor,” the district court concluded.215 The trade secret status turned on “ancillary information” such as MySpace friends’ “email and contact information as well as the ability to notify them and promote directly to them via their MySpace accounts.”216 Mr. Christou and his businesses expended cost and effort in developing the friends list and the list was not easily duplicated by a competitor.217 The trade secrets claim and others were withdrawn at trial;218 a jury returned a verdict for the defense on the remaining monopolization and attempted monopolization claims.219 9. Emerald City v. Kahn In Emerald City v. Kahn,220 the United States District Court for the Eastern District of Texas presided over litigation arising from a business dispute between a band musician, Jordan Kahn, and his employer, Dean Taglioli’s Emerald City Management, L.L.C. and Emerald City Band, Inc. (collectively referred to as Emerald City). When Mr. Kahn left his employment as a musician in Emerald City’s bands, he allegedly “blocked” access to Emerald City’s social media accounts and websites.221 The parties accused each other of intellectual property misappropriation, including claims of trade secret theft, trademark and copyright infringement, and violations of contract and tort law.222 With respect to Emerald City’s claim that Mr. Kahn misappropriated trade secrets in violation of the Texas Uniform Trade Secrets Act when Mr. Kahn took possession 215 Id. 216 Id. 217 Id. 218 Christou v. Beatport, No. 10-cv-02912-RBJ-KMT, 2014 U.S. Dist. LEXIS 43459, at *17 (D. Colo. Mar. 31, 2014). 219 Id. at *7. 220 No. 4:140-cv-358, 2016 U.S. Dist. LEXIS 2143 (E.D. Tex. Jan. 8, 2016). 221 Id. at *3. 222 See id. at *4–5. 2018.2_HIDY_FINAL 460 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 of music tracks, a customer list and passwords,223 the district court ruled that “as a matter of law, passwords do not qualify as trade secrets.”224 Looking to the definition of a trade secret under the Texas Uniform Trade Secrets Act, the district court concluded that passwords lack “independent economic value” as required by that statute and granted dismissal of the trade secret claim on summary judgment adjudication.225 The district court refused to dismiss Emerald City’s claim that Mr. Kahn’s alleged use of Emerald City’s social media accounts constituted a breach of fiduciary duty under Texas state law.226 The initial registration of the social media accounts in Mr. Kahn’s name, as opposed to his employer’s name, also implicated a breach of fiduciary duty.227 The district court concluded “[t]herefore, Emerald City has presented evidence raising a fact issue regarding whether Kahn’s registration of the various media accounts and website in his own name, and his use of Emerald City’s passwords after his termination constitute a breach of fiduciary duty.”228 The district court also noted that business losses likely resulted from Mr. Kahn’s social media account lock-out and his efforts to direct web traffic away from Emerald City’s website to his own website.229 Finally, the district court refused to dismiss Emerald City’s claim of tortious 223 It is unclear from the district court’s opinion whether it is referring to passwords related to the social media accounts or other confidential, password protected aspects of Emerald City’s business operations such as the email system. See id. at *54–56. 224 Id. at *55. 225 Id. The district court distinguished passwords from customer lists and client information. The former is a barrier or lock to keep secret the latter which may have independent economic value and constitute a protectable trade secret. Id. 226 See id. at *58. 227 Id. 228 Id. at *60. 229 Id. at *59. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 461 interference with prospective business relationships. Emerald City provided evidence that Mr. Kahn’s interference with Emerald City’s social media accounts and website interrupted business dealings with prospective customers.230 10. WBS v. Croucier In WBS, Inc. v. Croucier,231 a third case involving disputing band members and control over social media accounts, the United States District Court for the Central District of California dismissed claims brought against a band manager for his refusal to relinquish control over the accounts. Rob Hoffman, the band manager of RATT, a heavy metal band whose trademarks were owned by WBS, was sued by WBS for violating California tort law. WBS alleged that Mr. Hoffman’s refusal constituted conversion and intentional interference with prospective economic advantage.232 Hoffman managed RATT pursuant to the directives of WBS, and he was the sole administrator of their Facebook and Twitter accounts.233 The two shareholders of WBS gave conflicting directions to Mr. Hoffman regarding relinquishing control of the social media accounts to one of the shareholders—Mr. Hoffman informed the shareholders of his “desire to remain neutral” until the shareholder dispute was resolved.234 The district court granted Mr. Hoffman’s motion for summary judgment on the conversion claim because WBS, Inc.’s Code of Conduct and Operation required a majority vote to end Mr. Hoffman’s management and control of the social media accounts or to threaten litigation against him.235 Without this vote, Mr. Hoffman’s refusal to turn over control of the band’s social media accounts could 230 See id. at *62–67. 231 No. CV 15-07251 DDP (JCx), 2016 U.S. Dist. LEXIS 155740 (C.D. Cal. Nov. 8, 2016). 232 Id. at *6. 233 Id. at *4–5. 234 Id. at *6. 235 Id. at *18–19. 2018.2_HIDY_FINAL 462 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 not be construed “to be a wrongful taking of WBS property.”236 The claim of intentional interference with prospective economic advantage was dismissed as well. The district court concluded that WBS failed to provide any evidence that Mr. Hoffman committed an independently wrongful act in refusing to relinquish control of the band’s social media accounts, as required by California tort law.237 Further, WBS provided no evidence that Mr. Hoffman’s actions caused economic harm to WBS: “WBS simply assumes, without any evidentiary support or citation to the record, that had Hoffman turned over the passwords to Blotzer’s counsel, WBS would have more actively communicated with followers over social media and succes sfully translated those outreach efforts into some economic gain.”238 Lacking evidentiary support, the intentional interference with prospective economic advantage claim was dismissed. B. The Independent Contractor and Business Social Media Accounts In Salonclick v. SuperEgo Management, the United States District Court for the Southern District of New York heard a case involving a dispute between Salonclick L.L.C. (Salonclick), a business which manufactures and sells hair and skin care products, and SuperEgo Management L.L.C. (SuperEgo), which Salonclick hired as an independent contractor of marketing, public relations, and graphic design services, as well as administrative support.239 Salonclick terminated its association with SuperEgo several years later; SuperEgo’s principal, Mindy Yang, then allegedly accessed Salonclick’s website and social media accounts—a Twitter 236 Id. at *19. 237 See id. at *21. 238 Id. at *20. 239 No. 16 Civ. 2555 (KMW), 2017 U.S. Dist. LEXIS 69960, at *3 (S.D.N.Y. May 8, 2017). 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 463 account and a Facebook Page—to divert followers of the website and social media accounts to her own business.240 During the pleadings phase of the litigation, the district court examined whether Salonclick’s claims of conversion, replevin, trespass, and breach of fiduciary duty against SuperEgo should proceed. It ruled that Salonclick’s Twitter and Facebook accounts were intangible property protected under New York law’s common law torts of conversion and replevin.241 The district court refused SuperEgo’s later request to dismiss Salonclick’s conversion claim for the misappropriation of the social media accounts, noting the availability of punitive damages if the evidence demonstrated that the social media accounts were taken by SuperEgo as a result of malice or reckless or willful disregard of Salonclick’s rights to the social media accounts.242 The district court further ruled that no “demand and refusal” for the return of the control over the social media accounts was required because SuperEgo knew it had “no right” to control the social media accounts.243 This was demonstrated, according to the district court, when SuperEgo used Salonclick’s social media accounts to promote, without any authorization, its own business interests.244 The district court dismissed Salonclick’s trespass claim, however, because Salonclick did not allege “injury to the chattel” as required by New York trespass law.245 In its ruling, the district court concluded that the social media accounts were “chattel” under New York law of trespass. No trespass of the accounts was alleged because the business losses arising from SuperEgo’s control of Salonclick’s social media accounts did not demonstrate injury or harm to the 240 See id. at *3–4. 241 Salonclick, L.L.C. v. SuperEgo Mgmt., L.L.C., No. 16 Civ. 2555 (KMW), 2017 U.S. Dist. LEXIS 6871, at *10 (S.D.N.Y. Jan. 18, 2017). 242 Salonclick, 2017 U.S. Dist. LEXIS 69960, at *8. 243 Id. at *9. 244 Id. 245 Salonclick, 2017 U.S. Dist. LEXIS 6871, at *10–12 (emphasis in original). 2018.2_HIDY_FINAL 464 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 social media accounts themselves.246 The district court also concluded that even as an independent contractor, SuperEgo was plausibly alleged to be an agent of Salonclick with respect to managing and posting on the social media accounts, and may have owed fiduciary duties to Salonclick when acting in that capacity.247 At the pleadings phase, the district court refused to dismiss Salonclick’s breach of fiduciary duty claim against SuperEgo.248 C. Business Management Companies and Social Media Accounts Business organizations who use social media accounts can create and manage those accounts internally through employees, or externally by hiring management companies or independent contractors to perform this work. In Keypath Education, Inc. v. Brightstar Education Group,249 Select Education, Inc. (Select) purchased certain assets of Brightstar Education Group, Inc. (Brightstar). Pursuant to this asset-purchase, Select began operating four technology institutes in California and Oregon previously operated by Brightstar.250 Prior to this asset-sale, Brightstar hired Keypath Education, Inc. (Keypath) to provide marketing, sales, and social media account management services for these four technology institutes.251 After the asset-sale, Select became concerned about Keypath’s performance of these services, including its alleged “failing to post content frequently and regularly” on the social media accounts, “creating social media content that was plagiarized from other websites,” and failing to update information on the 246 Id. at *11. 247 Id. at *13. 248 Id. 249 No. 16-cv-2545-JWL, 2017 U.S. Dist. LEXIS 14061 (D. Kan. Jan. 31, 2017). 250 Id. at *3. 251 Id. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 465 social media accounts.252 When Select terminated its relationship with Keypath, Select requested Keypath’s assistance in transitioning control of the social media accounts over to new entities. Keypath allegedly refused that assistance: Select Education alleges that Keypath could not transfer ownership or provide access to IOT Campuses’ social media accounts because Keypath created those accounts in its own name and lost the passwords to those accounts. Even after various social media vendors (such as Facebook and LinkedIn) proposed solutions to provide access to these accounts, Keypath delayed assistance and failed to execute the instructions of those vendors.253 Select claimed that Keypath’s delay and interference with the transition of control of the social media accounts and other services to new entities resulted in the loss of potential students, the unnecessary expenditure of time and resources, and the delay of the launch of a new marketing campaign.254 Keypath filed a lawsuit against Select and Brightstar in the United States District Court for the District of Kansas for breaches of various contracts. Select filed multiple counterclaims against Keypath: breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and unjust enrichment.255 The district court refused Keypath’s request to dismiss the fiduciary duty claim. The district court ruled that Keypath and Select had an implied fiduciary relationship arising from the following allegations: Keypath became an agent of Select with respect to the social media accounts; Keypath was the “owner” of these social media accounts and had exclusive access to the accounts; and Keypath created the accounts for the technology institutes in its own name and barred Select from 252 Id. at *4. 253 Id. at *5. 254 Id. at *5–6. 255 Id. at *6. 2018.2_HIDY_FINAL 466 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 accessing the accounts without Keypath’s authorization.256 Select’s relinquishment of control over the social media accounts was a “key characteristic” of a fiduciary relationship.257 D. Bankruptcy Proceedings and Business Social Media Accounts Before the United States Bankruptcy Court for the Southern District of Texas was a case of first impression involving the question of “whether social media can ever be property of a bankruptcy estate.”258 The Bankruptcy Court in In re CTLI, L.L.C.259 concluded that business social media accounts are the property of the corporation’s bankruptcy estate.260 This case involved a Chapter 11 reorganization of a business called CTLI, L.L.C. (CTLI), a gun store and shooting range that, prior to the bankruptcy, was doing business under the name, “Tactical Firearms.”261 The Bankruptcy Court reasoned that the meaning of “property of the estate” under the United States Bankruptcy Code, 11 U.S.C. § 541 includes both tangible and intangible property; further, the underlying state law of the bankruptcy action controls the determination of what specifically constitutes property.262 Because no Texas court had examined the issue of whether social media accounts can be construed as property under Texas law, the Bankruptcy Court guided its analysis by looking at other jurisdictions and concluded: [B]usiness social media accounts are property interests. Like subscriber lists, business social media accounts provide valuable access to customers and 256 Id. at *9. 257 Id. at *10 (citing Dana v. Heartland Mgmt. Co., 301 P.3d 772, 778 (Kan. Ct. App. 2013)). 258 In re CTLI, L.L.C., 528 B.R. 359, 361 (Bankr. S.D. Tex. 2015). 259 Id. 260 Id. at 366. 261 Id. at 362. 262 Id. at 366. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 467 potential customers. The fact that those customers and potential customers can opt out from future contact does not deprive the present access of value. Just as Facebook Users can “unlike” a Page at any time, subscribers to email lists can also, by federal law, opt out at any time.263 This judicial determination to include a social media account in a bankruptcy estate turns on the Bankruptcy Court’s recognition that a distinction exists between individual social media accounts and business social media accounts. The Bankruptcy Court stated that individual social media accounts would likely not qualify as a property interest under the United States Bankruptcy Code because of the Code’s prohibition against using property to coerce an individual to perform personal services: “Because the value in a Facebook Page or Profile lies in the ability to reach Friends or Fans through future communications, the property interest in an individual Profile would likely not become property of the estate.”264 Noting the “liberty” interests and concerns connected to individual social media accounts, the Bankruptcy Court concluded that no such interests are at risk if a social media account is a business account, “even if the business is closely associated with an individual.”265 The Bankruptcy Court then analyzed whether a Facebook Page titled “Tactical Firearms” was a business social media account. It concluded that CTLI owned the Page, not the former majority owner of the business, Jeremy Alcede, because the Facebook Page was named after the gun store and shooting range, Tactical Firearms; it was linked to a business website; the posts made by Mr. Alcede on the Facebook Page were related to CTLI’s business activities and promotional campaigns; and Mr. Alcede granted access to the Facebook Page to a CTLI employee through a paid marketing tool and granted a vendor access to the Facebook 263 Id. at 366–67. 264 Id. at 367. 265 Id. at 373. 2018.2_HIDY_FINAL 468 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 Page as well to promote certain products.266 The Bankruptcy Court rejected Mr. Alcede’s argument that because he posted personal status updates on his Facebook Profile or tweeted political messages, the Tactical Firearms Page and Twitter account belong to him, not CTLI: The very nature of social media dictates that its best use for business is somewhat more subtle than other forms of marketing. A Tweet advertising the fact that the owner of a gun store is at a gun show, far from being especially “personal” in nature, is a perfect example of this kind of subtle marketing. This Tweet most assuredly served to develop Mr. Alcede’s reputation as being a well informed, connected insider in the gun-buying community, a reputation that would attract consumers to the business of Tactical Firearms that he was running at the time he issued this Tweet.267 The Bankruptcy Court also concluded that the political posts on the social media accounts related to a pro-gun political agenda directly related to CTLI’s business.268 Finally, the fact that the Tactical Firearms Facebook Page initially could only be accessed through Mr. Alcede’s personal Facebook Profile did not convince the Bankruptcy Court to classify that Page as personal and not business-related. The Bankruptcy Court explained that Facebook page access can be granted to others who also have Facebook profiles in order to manage a page, while not providing access to the personal Facebook profile itself.269 The Twitter account at issue in the bankruptcy proceedings was determined to be a business social media account as well. The Twitter account was originally named after the business, Tactical Firearms, with a Twitter handle of @tacticalfirearm.270 The summary of the 266 Id. at 368–70. 267 Id. at 371. 268 Id. at 371–72. 269 Id. at 372. 270 Id. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 469 Twitter account described the business and the Tactical Firearms web page linked directly to this Twitter account.271 In analyzing the property interests associated with the social media accounts, the Bankruptcy Court discussed the difference between the business goodwill accrued in a business social media account (and attributable to the bankruptcy estate) and the professional goodwill of an individual who is closely associated with a business social media account: A business social media account is in a sense a manifestation of the business’s accrued goodwill. The goodwill of a company is developed by its employees over the years. Nonetheless, whatever goodwill the individual caused to be associated with the business remains property of the business.272 Mr. Alcede may have developed professional goodwill through his use of the business social media accounts, which “manifested” through the Facebook fans and Twitter followers of CTLI’s social media accounts.273 This professional goodwill attributable to CTLI’s social media accounts and any “property interest” associated with that professional goodwill can literally “follow” Mr. Alcede through the voluntary migration of Twitter followers and Facebook followers to his own personal social media accounts.274 Ceding control of the social media accounts to CTLI does not impede Mr. Alcede’s protection of those property interests.275 Mr. Alcede was unsuccessful in convincing the Bankruptcy Court that its transfer of the right to administer the Facebook and Twitter social media accounts from him to CTLI violated his right of privacy. The Bankruptcy Court ruled that Mr. Alcede waived any privacy right he may have had in Facebook messages he sent from the Tactical 271 Id. 272 Id. at 373 (internal citation omitted). 273 Id. 274 Id. 275 Id. at 373–74. 2018.2_HIDY_FINAL 470 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 Firearms Facebook Page because that Page was business- related, separate and distinct from his personal Facebook Profile.276 It was irrelevant that CTLI lacked a policy explaining to employees that the social media accounts were the property of CTLI; however, such a policy would put employees on notice that no privacy rights accrued in these accounts: Here, though to this Court’s knowledge the Debtor had no explicit policy regarding social media, the social media accounts were unambiguously property of the Debtor and not of Mr. Alcede personally. The Court concludes that given that the social media accounts were named for the Debtor and were used for business purposes, Mr. Alcede should have been aware that the accounts were property of the Debtor and thus that he did not have a personal privacy interest therein.277 The Bankruptcy Court also concluded that Mr. Alcede’s waiver of his alleged privacy rights was confirmed by the fact that he provided administrative access to the Facebook Page to a CTLI employee and to an outside business vendor.278 The remedial relief that the Bankruptcy Court contemplated—to return control of the valuable business social media accounts to CTLI—was complicated by Mr. Alcede’s actions. Facebook had granted Mr. Alcede’s request, per its corporate policy, to permit a one-time, irreversible change from the name of the Tactical Firearms Facebook page to Jeremy Alcede Entreprenuer.279 The Bankruptcy Court noted that Facebook’s “one-time-change” policy is triggered when a Facebook page has 200 or more Facebook “likes” which, according to the Bankruptcy Court, “suggests that Facebook is aware of the property interest inherent in a popular Page and the importance of helping the rightful 276 Id. at 377. 277 Id. at 378. 278 Id. 279 Id. at 374. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 471 owner protect this interest.”280 The Tactical Firearms Page had more than 11,000 likes and, pursuant to this Facebook policy, the page’s name could be and was irreversibly changed by Mr. Alcede. The Bankruptcy Court ordered Mr. Alcede to turn over access to the former Tactical Firearms Facebook page to CTLI. If CTLI were to request that Facebook change this Facebook page to the current business name and that request was not granted, the Bankruptcy Court stated that CTLI could seek compensatory damages arising from Mr. Alcede’s actions.281 Mr. Alcede also changed the Tactical Firearms Twitter account handle. The Bankruptcy Court ordered Mr. Alcede to provide a new password and new email address for the Twitter account to CTLI so that it could gain access to the social media account and change the Twitter handle to reflect the fact that it belongs to CTLI.282 The Bankruptcy Court summarized its lengthy analysis of the legal issues by noting that “the social media accounts of Tactical Firearms were, pre-confirmation, property of the estate, and there is no reason not to treat them as the Court would treat any other assets belonging to the estate. . . . [T]his Court holds that the reorganized Debtor should have full control over these social media accounts.”283 III. THE JUDICIAL PRECEDENT: A COMPLICATED LEGAL TERRAIN Courts have used a variety of analytical frameworks to examine the legal arguments in business disputes involving the right to control and derive economic benefits from social media accounts.284 The precedent emerging from these court 280 Id. 281 Id. at 374–77. The Bankruptcy Court noted an additional avenue of relief: Facebook’s migration of Facebook Fans to a new Facebook Page. 282 Id. at 377. 283 Id. at 374. 284 Legal scholarship has proliferated in the past several years in this area; notably, the scholarship proposes specific analytical frameworks for the analysis of legal rights arising from social media account disputes arising in a business context. See Argento, supra note 80 (proposing a 2018.2_HIDY_FINAL 472 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 cases present judicial rationales that are complicated, confusing, and in certain instances, contradictory. As will be discussed in Part IV, this creates risk for business organizations operating in this legal environment. Federal courts, the favored forum to bring these disputes, evaluate both federal and state law claims when analyzing the rights associated with business social media accounts. The jurisprudence involving disputes about control over social media accounts has addressed a variety of issues: property rights, the right to control property, interference with economic opportunities or contractual relationships through misappropriation of that control, intellectual property violations, fiduciary duties, privacy rights, and the valuation of social media accounts and damages calculations. 285 A. Property Rights and Social Media Accounts The emerging precedent on the issue of property rights and social media accounts establishes that social media trade secrets framework); Park & Abril, supra note 52 (proposing a multifactor quasi-publicity rights framework); Courtney J. Mitchell, Keep Your Friends Close: A Framework for Addressing Rights to Social Media, 67 VAND. L. REV. 1459 (2014) (advocating for a shop-right and hired-to- invent doctrine analogous to patent law); Tiffany A. Miao, Access Denied: How Social Media Accounts Fall Outside the Scope of Intellectual Property Law and into the Realm of the Computer Fraud and Abuse Act, 23 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 1017 (2013) (arguing that the authorization framework of the Computer Fraud and Abuse Act provides a superior framework to intellectual property frameworks when resolving social media account disputes); Smita Gautam, #Bankruptcy: Reconsidering “Property” to Determine the Role of Social Media in the Bankruptcy Estate, 31 EMORY BANKR. DEV. J. 127 (2014) (arguing that social media accounts should be excluded from bankruptcy estates because they present inherent liberty interests beyond the scope of traditional notions of property). 285 The precedent arises in varying adjudication phases of the litigation: dismissal at the pleadings stage, summary judgment, bench trials, and post-trial motions. The courts’ conclusions on various legal issues discussed in Part III are in the context of the pleading and evidentiary standards appropriate to each phase. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 473 accounts constitute intangible property. The CTLI court explicitly ruled that social media accounts constitute intangible property and are legally protectable assets identical to other assets held by a business organization.286 The PhoneDog court stated unequivocally that a Twitter account constitutes property.287 The Salonclick court held that under New York law, Twitter and Facebook accounts are intangible property and that the wrongful taking of this intangible property could constitute tortious misconduct under conversion and replevin claims.288 The PhoneDog court agreed, stating that the conversion of property claim was “at the core of this lawsuit.”289 The Ardis court discussed these property rights in the context of the access information itself, i.e. passwords which control the social media accounts. If a business organization owns the right to the access information unlocking social media accounts, unauthorized retention of that access information constitutes conversion of property.290 Courts disagree on how to characterize the legal form of property interests in social media accounts, and also where to draw boundary lines for those property interests. The Eagle court refused to characterize wrongful control of a LinkedIn account as conversion under Pennsylvania law because it ruled that the LinkedIn account was not chattel.291 It concluded that a LinkedIn account is an intangible right of access, not tangible chattel. Therefore, no conversion occurred when control of the LinkedIn account was usurped. This contradicts the holding of the Salonclick court, which held that social media accounts are chattel 286 In re CTLI, L.L.C., 528 B.R. 359, 366–67 (Bankr. S.D. Tex. 2015). 287 PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2011 U.S. Dist. LEXIS 129229, at *26–27 (N.D. Cal. Nov. 8, 2011). 288 Salonclick, L.L.C. v. SuperEgo Mgmt., L.L.C., 16 Civ. 2555 (KMW), 2017 U.S. Dist. LEXIS 6871, at *10 (S.D.N.Y. Jan. 18, 2017). 289 PhoneDog, 2011 U.S. Dist. LEXIS 129229, at *27. 290 Ardis Health v. Nankivell, No. 11 Civ. 5013 (NRB), 2011 U.S. Dist. LEXIS 120738, at *8 (S.D.N.Y. Oct. 12, 2011). 291 Eagle v. Morgan, No. 11-4303, 2013 U.S. Dist. LEXIS 34220, at *28–29 (E.D. Pa. Mar. 12, 2013). 2018.2_HIDY_FINAL 474 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 under the law of New York.292 The Mattocks court ruled that even if a Facebook Page’s “likes” constituted a property interest, no conversion occurred when the business organization took over the Page because its control was neither unauthorized nor wrongful.293 The Mattocks court, however, refused to characterize Facebook “likes” as property interests, ruling that there were no business interests or business opportunities in Facebook “likes.”294 By contrast, the CTLI court recognized that an employee who posts on a business social media account may also have a “property interest” in those accounts associated with her professional goodwill developed through the social media account’s use and its followers.295 B. The Right to Control a Social Media Account While courts largely treat social media accounts as legal property interests, judicial determinations differ on who has the right to control this property and derive economic benefit from it. Also, the judicial rationales used by courts to arrive at these determinations are crafted from different and, in some instances, divergent justifications. Ownership rights over a social media account used in business might derive from the motivation behind creating the account, the registration and name on the account, the supervision of the account’s content and its users’ activities, or a combination of all of these factors. “What’s in a name? That which we call a rose/By any other word would smell as sweet.”296 Shakespeare’s insight was unheeded by courts that ruled the naming of a social media account is persuasive evidence as to who owns that 292 Salonclick, 2017 U.S. Dist. LEXIS 6871, at *11. 293 Mattocks v. Black Entm’t Television, 43 F. Supp. 3d 1311, 1321 (S.D. Fla. 2014). 294 Id. 295 In re CTLI, L.L.C., 528 B.R. 359, 373 (Bankr. S.D. Tex. 2015). 296 WILLIAM SHAKESPEARE, ROMEO AND JULIET act 2, sc. 2 (Rene Weis et al. eds., The Arden Shakespeare 3d ed. 2012). 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 475 social media account. The PhoneDog court indicated that an employee’s creation and naming of a Twitter handle after the business organization when the employee was hired, as well as the Twitter account’s use to promote the interests of that business, likely gave the business a property right in the Twitter account.297 The Maremont court and the CTLI court blurred the analysis on this ownership issue when they both acknowledged that both parties shared marketable and commercial interests in the accounts.298 However, the CTLI court concluded the Twitter account and Facebook Page were owned by the employer, not the employee. They were named after the business, linked to a business web page, were used to promote the business’s activities and interests, and access to these accounts was shared with individuals both within and outside the business.299 The Maremont court came to the opposite conclusion, holding that the social media accounts belonged to the employee despite the fact that her social media accounts, pursuant to her job responsibilities, were used to promote the business organization’s marketing campaigns and Maremont’s bonus compensation was tied to the success of her social media efforts on behalf of her employer.300 The Vaughn court abstained from identifying who owned the disputed Facebook and Twitter pages,301 but the CDM court stated that a business organization had sufficiently alleged that control of a LinkedIn group formed at the direction of a business organization could constitute confidential information, to which the employer was entitled 297 See PhoneDog v. Kravitz, No. C-11-03474 MEJ, 2011 U.S. Dist. LEXIS 129229, at *2–3, *26–27 (N.D. Cal. Nov. 8, 2011). 298 See Maremont v. Fredman, No. 10 C 7811, 2014 U.S. Dist. LEXIS 26557, at *12–13 (N.D. Ill. Mar. 3, 2014); In re CTLI, 528 B.R. at 373–74. 299 In re CTLI, 528 B.R. at 368–70. 300 Maremont, 2014 U.S. Dist. LEXIS 26557, at *13; see also Maremont v. Susan Fredman Design Grp., No. 10 C 7811, 2011 U.S. Dist. LEXIS 140446, at *4–5 (N.D. Ill. Dec. 7, 2011). 301 See Vaughn v. Radio One, 151 F. Supp. 3d 877, 890–91 (S.D. Ind. 2015). 2018.2_HIDY_FINAL 476 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 under a non-compete agreement.302 The Mattocks court concluded that the business had the right to control the Facebook and Twitter accounts created and managed by a part-time employee, which included a Facebook Fan Page which was not an Official Fan Page as defined by Facebook’s Terms of Service and which was created independently by someone who the business later hired as a part-time employee. This right to control the account arose from the business’s supervisory role in directing the employee’s posts and its financial interest in those accounts. The Mattocks court disregarded the fact that the employee unilaterally created the Facebook account prior to her employment.303 The Ardis court relied on a work product agreement in its analysis and subsequent conclusion that a business organization and its related companies owned the access rights to information for accessing its social media accounts. Their employee signed a work product agreement which contained language that work created or developed during employment was the “sole and exclusive property” of the business organization, and which required the return of any confidential information.304 The Salonclick court implicitly ruled that the disputed Twitter and Facebook accounts belonged to a business organization, not the independent contractor who created and managed these accounts.305 In contrast, the Keypath court found a plausible fiduciary relationship between a management company which created the accounts and allegedly established itself as their owner, 302 CDM Media USA v. Simms, No. 14 CV 9111, 2015 U.S. Dist. LEXIS 37458, at *9–10 (N.D. Ill. Mar. 25, 2015). 303 See Mattocks v. Black Entm’t Television L.L.C., 43 F. Supp. 3d 1311, 1319–21 (S.D. Fla. 2014). 304 See Ardis Health, L.L.C. v. Nankivell, No. 11 Civ. 5013 (NRB), 2011 U.S. Dist. LEXIS 120738, at *3–8 (S.D.N.Y. Oct. 19, 2011). 305 See Salonclick, L.L.C. v. SuperEgo Mgmt., L.L.C., 16 Civ. 2555 (KMW), 2017 U.S. Dist. LEXIS 69960, at *8–9 (S.D.N.Y. May 8, 2017). 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 477 but operated them for the benefit of the principal business.306 The Eagle court diverged from this analysis and concluded that a LinkedIn account was a commercial interest owned by the employee, not her employer. The court acknowledged the commercial value of the LinkedIn account to its user, Dr. Eagle, even though the employer directed Dr. Eagle to create the account, the account was used to promote sales and marketing initiatives of the employer, the employer was involved in managing the account content, and other employees had access to and assisted in managing the LinkedIn account. The Eagle court also pointed to the language of the LinkedIn User Agreement, stating it conclusively established that the account’s user, Dr. Eagle, owned the social media account.307 C. Social Media Accounts and Interference with Economic Opportunities and Contractual Relationships Courts vary in how they identify and explain the nature of economic relationships, economic opportunities, and contractual rights implicated in disputes over business social media accounts. The PhoneDog court ruled that tortious interference with economic advantage claims could proceed against an employee who diverted Twitter followers to a personal account by changing the account handle because the diversion potentially disrupted the business’s economic relationship with both current and future advertisers.308 In Emerald City, the court similarly held that it was a question of fact whether a former employee’s interference with a 306 Keypath Educ., Inc. v. BrightStar Educ. Grp., Case No. 16-cv- 2545-JWL, 2017 U.S. Dist. LEXIS 14061, at *9–10 (D. Kan. Jan. 31, 2017). 307 See Eagle v. Morgan, No. 11-4303, 2013 U.S. Dist. LEXIS 34220, at *30, *46–49 (E.D. Pa. Mar. 12, 2013). 308 PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2012 U.S. Dist. LEXIS 10561, at *3–4 (N.D. Cal. Jan. 30, 2012). 2018.2_HIDY_FINAL 478 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 business organization’s social media accounts interrupted business dealings with potential customers.309 The CDM court concluded that a former employee’s control and use of the employer’s LinkedIn group could constitute a contractual violation of a non-compete agreement. The court explained that although the employee was the “point person”310 for the LinkedIn group, a confidentiality provision in that agreement required this employee to return confidential information, including confidential information contained on the LinkedIn account.311 The Eagle court concluded the opposite: it stated that a LinkedIn account was owned not by the employer but by the employee. Thus, the employer would have tortiously interfered with the employee’s contractual relationship with the social media provider, LinkedIn, when it exercised control over the LinkedIn account, if Dr. Eagle had provided evidence of damages.312 The Mattocks court reached a different conclusion, holding that an employer did not tortiously interfere with the employee’s contractual relationships with social media site providers, Twitter and Facebook. The court found that the employer had cognizable interests in the social media site user agreements between the employee and the providers: The business had a “‘supervisory interest in how the relationship is conducted or a potential financial interest in how a contract is performed,’” which justified its interference in the contractual agreements.313 D. Intellectual Property Violations and Social Media 309 Emerald City Mgmt. v. Kahn, No. 4:140-cv-358, 2016 U.S. Dist. LEXIS 2143, at *62–67 (E.D. Tex. Jan. 8, 2016). 310 CDM Media USA v. Simms, No. 14 CV 9111, 2015 U.S. Dist. LEXIS 37458, at *4 (N.D. Ill. Mar. 25, 2015). 311 Id. at *9–10. 312 Eagle v. Morgan, No. 11-4303, 2013 U.S. Dist. LEXIS 34220, at *30 (E.D. Pa. Mar. 12, 2013). 313 Mattocks v. Black Entm’t Television L.L.C., 43 F. Supp. 3d 1311, 1319 (S.D. Fla. 2014). 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 479 Accounts Litigants often allege intellectual property violations in business disputes over social media accounts. Courts examine both federal and state law claims where the misuse of the social media account may violate intellectual property rights. However, the courts’ analyses of these claims conflict on certain issues and are idiosyncratic and fact-specific on others. For example, courts disagree as to what constitutes trade secret misappropriation in a social media business dispute. The PhoneDog court refused to dismiss a trade secret claim at the pleadings phase ruling that there were evidentiary issues surrounding whether a Twitter account password and Twitter followers were protected trade secrets.314 The Emerald City court disagreed on this point stating unequivocally that social media account passwords are not trade secrets because they “lack independent economic value.”315 The CDM court ruled that a LinkedIn account could be the subject of a common law misappropriation of trade secret claim and that a membership list of a LinkedIn group could plausibly constitute a protectable trade secret under an Illinois state statute. However, the CDM court held that private communications on LinkedIn are not trade secrets in and of themselves, although the content of the communications on this social media messaging might contain protectable trade secrets.316 The Christou court ruled that a MySpace friends list could constitute a protectable trade secret and the misappropriation of that list by a former employee could be imputed to the employee’s rival company, which used the MySpace friend list to benefit that business. The strategic value of such a list, according to the Christou court, derives from social media networking sites’ ability to 314 PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2011 U.S. Dist. LEXIS 129229, at *20 (N.D. Cal. Nov. 8, 2011). 315 Emerald City Mgmt. v. Kahn, No. 4:140-cv-358, 2016 U.S. Dist. LEXIS 2143, at *55 (E.D. Tex. Jan. 8, 2016). 316 See CDM Media USA v. Simms, No. 14 CV 9111, 2015 U.S. Dist. LEXIS 37458, at *12–14, *16–17 (N.D. Ill. Mar. 25, 2015). 2018.2_HIDY_FINAL 480 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 grant a business access to the contact information, an explanation of preferences and interests of those potential customers, and a “built-in” platform to contact those persons.317 An employee might bring a false association or false endorsement claim under the Lanham Act if the employee creates a social media account in her own name and another employee from the business posts on that account. The Maremont court ruled that a Lanham Act violation for impersonation was plausible under these facts. The Lanham Act violation derived from the commercial context of Facebook and Twitter posts. The court held that the business’s impersonation of the employee on the Facebook and Twitter accounts could constitute a “commercial injury” under the Lanham Act.318 Even though these social media accounts were tied to her employer’s business interests, the employee arguably had a marketable commercial interest in her Twitter and Facebook followers because they helped to build her professional brand.319 Confusingly, under these same facts, the Maremont court found there was not a valid state law right of publicity claim for misappropriation of an employee’s name or likeness because the business tweeted that a guest blogger was using the account, not the employee in whose name the account was held.320 The Eagle court, however, concluded that because the employee’s name has commercial value, a business violates Pennsylvania statutory law through the unauthorized use of an employee’s name when it accesses, controls, and alters the employee’s LinkedIn account. The Eagle court also ruled that this behavior violated the common law torts of 317 Christou v. Beatport, 849 F. Supp. 2d 1055, 1074–76 (D. Colo. 2012). 318 Maremont v. Susan Fredman Design Grp., 772 F. Supp. 2d 967, 971 (2011). 319 Maremont v. Fredman., No. 10 C 7811, 2014 U.S. Dist. LEXIS 26557, at *13 (N.D. Ill. Mar. 3, 2014). 320 Maremont v. Susan Fredman Design Grp., No. 10 C 7811, 2011 U.S. Dist. LEXIS 140446, at *18–19 (N.D. Ill. Dec. 7, 2011). 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 481 misappropriation of publicity321 and an invasion of privacy through misappropriation of Dr. Eagle’s identity.322 Unlike in Maremont, the Eagle court found insufficient evidence to support a Lanham Act claim.323 The Eagle court concluded that replacing another executive’s name and likeness on a former employee’s LinkedIn account did not violate the Lanham Act without proof of a likelihood of confusion. E. Fiduciary Duties and Social Media Accounts Courts have consistently ruled that when a business entrusts the management of a social media account to an individual or entity, the account manager owes a fiduciary duty to the business. These fiduciary duties arise in various contexts. The Emerald court stated that a former employee’s misuse of control over a social media account could constitute a breach of a fiduciary duty.324 The breach allegedly arose when the employee registered the social media account in his own name rather than the employer’s name,325 indicating that fiduciary duties extend even to the initial registration of a social media account. The Salonclick court ruled that an independent contractor could act as an agent of the business organization by managing and posting on the business’s social media accounts and owe a fiduciary duty to the business organization when providing those services.326 This fiduciary obligation arose in Keypath when a social media management company was hired to control and manage social media accounts of another business organization. Confusingly, the Keypath court reasoned that the social 321 Eagle v. Morgan, No. 11-4303, 2013 U.S. Dist. LEXIS 34220, at *23 (E.D. Pa. Mar. 12, 2013). 322 Id. at *20–21. 323 Eagle v. Morgan, No. 11-4303, 2012 U.S. Dist. LEXIS 143614, at *26–27 (E.D. Pa. Oct. 4, 2012). 324 Emerald City Mgmt. v. Kahn, No. 4:140-cv-358, 2016 U.S. Dist. LEXIS 2143, at *58–60 (E.D. Tex. Jan. 8, 2016). 325 Id. at *60. 326 See Salonclick, L.L.C. v. SuperEgo Mgmt., L.L.C., 16 Civ. 2555 (KMW), 2017 U.S. Dist. LEXIS 6871, at *13 (S.D.N.Y. Jan. 18, 2017). 2018.2_HIDY_FINAL 482 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 media account was arguably owned by the management company, but it had a fiduciary duty to manage that account on behalf of the business organization.327 F. Privacy Rights and Social Media Accounts Courts examine the issue of whether privacy rights exist in a social media account used for business purposes. This legal question arises in cases where a social media account contains both business-related posts and personal posts, or where the account is identified with an individual who uses the account to advance the interests of a business as well as her own professional brand. The analytical frameworks used by courts to answer this question differ. One framework focuses on the characterization of the posts and whether they are private in nature. The Maremont court stated there was no invasion of privacy by a business when it accessed its employee’s Facebook and Twitter accounts because the posts on those accounts were not private and the employee did not try to keep them private.328 A second analytical framework used by courts centers on the initial categorization of a social media account as either a business or an individual account. If the account itself is characterized as a business account, no privacy interests arise from the posts on the accounts; the account users are on notice that no such privacy rights exist in these accounts. The CTLI court ruled that no privacy rights existed in Facebook messages sent from a business organization’s Facebook page because that page was business-related. The CTLI court stated that a former employee and majority business owner waived any privacy rights by sharing administrative access to the social media accounts. Also, the CTLI court concluded that the business nature of the account as well as naming the social media account after the 327 Keypath Educ., Inc. v. BrightStar Educ. Grp., No. 16-cv-2545- JWL, 2017 U.S. Dist. LEXIS 14061, at *9–10 (D. Kan. Jan. 31, 2017). 328 Maremont v. Susan Fredman Design Grp., No. 10 C 7811, 2011 U.S. Dist. LEXIS 140446, at *20–21 (N.D. Ill. Dec. 7, 2011). 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 483 business put the employee on notice that he had no privacy interests in the account.329 Confusion, however, could arise from a distinction made by the CTLI court between individual social media accounts and business social media accounts. It noted that a social media account of a public figure or a celebrity could be characterized as a personal property interest that might not be included as property of the estate under bankruptcy law.330 It is unclear how a given court might ascertain whether a social media account is a business or individual account. The legal implications of a social media account’s categorization as a business or individual account are significant, however. Further, the judicial precedent does not apply uniform standards on how to analyze privacy concerns: should the analysis focus on the nature of the social media account or the nature of the posts on the social media account? G. Social Media Account Valuations and Damages Calculations Legal scholars as well as courts acknowledge the difficulty in assessing the valuation of social media accounts. This is a substantial hurdle in the proof of damages in litigation disputes over control of business social media accounts. Limited research exists to prove the assumption that social media accounts have value.331 However, multiple courts assert that such accounts have value to business organizations, which expend resources to create and maintain these accounts and litigate over ownership rights, corroborating the argument that social media accounts used for business purposes possess value. The PhoneDog court recognized the problem inherent in the valuation of business social media accounts when it 329 See In re CTLI, L.L.C., 528 B.R. 359, 377–78 (Bankr. S.D. Tex. 2015). 330 Id. at 367. 331 For a discussion of this issue, see Loughnane et al, supra note 14, at 36 (“However, there is limited research on the topic of social media valuation at present.”). 2018.2_HIDY_FINAL 484 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 delayed ruling upon a jurisdictional challenge to a business’s valuation of damages over the loss of control of a Twitter account. The PhoneDog court acknowledged that “competing methodologies” exist related to the valuation of the social media account, deferring until summary judgment adjudication the complicated task of ascertaining what financial harm the business sustained, if any, when it lost 17,000 Twitter followers.332 Other courts acknowledge the implicit value in these accounts without directly addressing the valuation problem. The Ardis court reasoned that a business would be irreparably harmed if access information to social media accounts was not returned until the end of the litigation over the control of those accounts. While noting the difficulty in quantifying the business harm in “monetary terms,” the Ardis court adamantly said that loss of the control over the social media accounts “unquestionably has a negative effect on plaintiffs’ reputation and ability to remain competitive. . . .”333 The Emerald City court argued that business losses likely resulted from a former employee’s social media account lock-out of his former employer to business-related social media accounts. Evidence of such losses was inferred from efforts to direct web traffic away from the business’s website to the former employee’s own website.334 However, courts do not hesitate to discuss the economic attributes associated with social media accounts. The Maremont court cited the “commercial injury” sustained by an employee whose Twitter and Facebook accounts were usurped by her employer.335 The Eagle court similarly noted that an employee’s name used in her LinkedIn account had 332 See PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2011 U.S. Dist. LEXIS 129229, at *12–13 (N.D. Cal. Nov. 8, 2011). 333 Ardis Health, L.L.C. v. Nankivell, No. 11 Civ. 5013 (NRB), 2011 U.S. Dist. LEXIS 120738, at *7 (S.D.N.Y. Oct. 12, 2011). 334 See Emerald City Mgmt., L.L.C. v. Kahn, No. 4:140-cv-358, 2016 U.S. Dist. LEXIS 2143, at *59 (E.D. Tex. Jan. 8, 2016). 335 Maremont v. Susan Fredman Design Grp., 772 F. Supp.2d 967, 971 (N.D. Ill. 2011). 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 485 commercial value, which she had the exclusive right to control.336 A MySpace friends list provided strategic value to the business in Christou.337 The CTLI court explained that a “business’s accrued goodwill” resides in its social media account and remains the property of the business338 even while an employee’s professional goodwill may be simultaneously accrued in that social media account. Professional goodwill can “follow” the employee when she leaves if followers of the social media account migrate to an employee’s new account.339 Despite widespread judicial agreement that social media accounts used in business have economic value, this problem of the valuation of a social media account translates into a problem of proving damages. Speculative or unproven damages derail recovery on claims brought in these business disputes. For example, the Eagle court awarded compensatory damages “in the amount of zero dollars” on proven violations of misappropriation of identity and misappropriation of publicity.340 Failure to prove damages torpedoed the employee’s claim that her employer tortiously interfered with her contract with LinkedIn.341 A claim for intentional interference with prospective economic advantage was dismissed in WBS, Inc. v. Croucier because no evidence proved that transferring account control would have produced economic benefits to the shareholders of the business.342 The Maremont court dismissed a false endorsement claim brought under the Lanham Act on the issue of damages. Recovery under the statute required proof of either financial losses suffered by the complaining party or 336 Eagle v. Morgan, No. 11-4303, 2013 U.S. Dist. LEXIS 34220, at *23 (E.D. Pa. Mar. 12, 2013). 337 See Regas Christou v. Beatport, L.L.C., 849 F. Supp. 2d 1055, 1075 (D. Colo. 2012). 338 In re CTLI, L.L.C., 528 B.R. 359, 373 (Bankr. S.D. Tex. 2015). 339 Id. at 373–74. 340 Eagle, 2013 U.S. Dist. LEXIS 34220, at *42. 341 See id. at *30–31. 342 WBS, Inc. v. Croucier, No. CV 15-07251 DDP (JCx), 2016 U.S. Dist. LEXIS 155740, at *20 (C.D. Cal. Nov. 8, 2016). 2018.2_HIDY_FINAL 486 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 unjust enrichment to the business that violated the Lanham Act, neither of which was proffered.343 Finally, the risk of punitive damages in social media account business disputes exists. The Maremont court allowed a claim to proceed to trial under the Stored Communications Act which permits the recovery of punitive damages if the jury concludes that the business willfully and intentionally accessed the employee’s social media accounts despite the employee’s explicit directives to not do so.344 The Salonclick court warned that punitive damages could be awarded on a conversion claim if the evidence established that an independent contractor misappropriated a business’s social media accounts with malice or reckless or willful disregard of the business’s right to control the social media accounts.345 IV. THE RESULTANT BUSINESS RISKS AND PROPOSALS FOR RISK MITIGATION Significant risks346 exist for business organizations that use social media accounts. The risk involves lengthy, protracted litigation arising from efforts to establish who has the right to control these social media accounts and derive economic benefits from these accounts. It also includes the potential expenditure by business organizations of substantial resources and monies to pursue their legal rights. Calculating outcomes as to how courts will rule on specific legal questions and whether courts will adopt specific methodologies for valuation of social media accounts 343 See Maremont v. Susan Fredman Design Grp., No. 10 C 7811, 2014 U.S. Dist. LEXIS 26557, at *18 (E.D. Pa. Mar. 3, 2014). 344 See id. at *23–28. 345 See Salonclick, L.L.C. v. SuperEgo Mgmt., L.L.C., No. 16 Civ. 255 (KMW), 2017 U.S. Dist. LEXIS 69960, at *8 (S.D.N.Y. May 8, 2017). 346 See, e.g., Nadelle Grossman, The Duty to Think Strategically, 73 LA. L. REV. 449, 461 (2013) (“Broadly speaking, risk is the potential for an outcome to deviate from what is expected.”). This Article discusses the critical importance of risk analysis and risk mitigation in order to strategically create and sustain value in business organizations. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 487 is difficult given the wide array of judicial rationales adopted by courts on such issues. Additionally, business organizations may be sued over the control of social media accounts and may face, in certain instances, the risk of punitive damages if their behavior warrants imposition of such damages. The reputational risk to a business associated with the loss of its ability to control messaging on its social media accounts compounds the harm resulting from financial losses such as lost revenue. A hostile takeover of a social media account by a disgruntled employee, independent contractor, former business partner, or management company could result in significant reputational harm or damage to the brand which is not easily remedied or repaired. Revenue risk is a relevant risk as well. As detailed in Part I, social media accounts are engines of advertising, marketing, and branding increasingly relied upon by business organizations to communicate, connect and transact with customers, clients, and the public. Multiple courts have ruled that interfering with a social media account imperils a business’s ability to use the social media platform to sell its products and services. In its broadest terms, lost business opportunities result from the disruption of control over a business social media account. Finally, the risk of intellectual property misappropriation, including the theft of trade secrets which provide strategic and competitive advantages to a business, is recognized by courts as well. The judicial precedent establishes that business organizations must navigate a complex legal environment and face multiple risks when disputes occur over the control of social media accounts. The examined cases provide a blueprint for how business organizations can mitigate these risks. Below is a proposed framework for risk mitigation. A. The Creation of Social Media Accounts A business organization decreases the risk that a social media account will be judicially determined to be the property of an employee or other entity if it: (1) names the social media account after the business; (2) links the social 2018.2_HIDY_FINAL 488 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 media account to a business page or website; (3) ensures that posts on the account are related to business activities and promotional campaigns; (4) provides a social media account summary that identifies the business purpose of the account; and (5) shares access to the account with multiple individuals within the business organization.347 The business organization should document that it directed an employee, independent contractor, or external management company to create and manage the account solely and exclusively on behalf of the business. The business organization can further mitigate risk by entering into an agreement explicitly stating that the social media accounts are created solely for the economic benefit of the business and, in the case of an employee managing the account, are not created or maintained for the benefit of the employee.348 If a social media account is created in an individual’s name, the business organization should solicit an acknowledgment or agreement from that individual that the account was created at the direction of the business organization in the context of the work the employee or individual performs for the business organization and posts made on that account are for the sole benefit of the business organization.349 B. The Management of Social Media Accounts and Company Policies Risk mitigation strategies should continue once social media accounts are created. Business organizations should adopt policies detailing the creation, management, and retention of control over social media accounts. Managers 347 See, e.g., In re CTLI, L.L.C., 528 B.R. 359, 366–79 (Bankr. S.D. Tex. 2015). 348 See, e.g., PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2011 U.S. Dist. LEXIS 129229, at *2–3 (N.D. Cal. Nov. 8, 2011); Maremont v. Fredman, No. 10 C 7811, 2014 U.S. Dist. LEXIS 26557 (N.D. Ill. Mar. 3, 2014). 349 See Eagle v. Morgan, No. 11-4303, 2013 U.S. Dist. LEXIS 34220, at *3-8 (E.D. Pa. Mar. 12, 2013); see also Maremont, 2014 U.S. Dist. LEXIS 26557, at *3–5. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 489 should be trained on the policies and implement practices consistent with these policies, including routine audits which monitor and test whether the policies are adhered to and compliance is achieved. These policies should include notification to employees, independent contractors, and social media management companies that the social media accounts are the exclusive property of the business organization350 and that the social media accounts are subject to content review and revision by the business organization.351 The policies should also clearly state that an employee or manager of a social media account has no privacy rights in the account, regardless of whether the account is a privately-maintained or publicly-available account.352 The business should procure and document acknowledgment of these policies. Employees who create and manage business social media accounts should be trained on the use of the account. Employees should also be monitored on their management of these accounts and evaluated on their conduct, as part of their employment review. Training, monitoring, and evaluating an employee on social media use signals to these employees and to the courts that the social media account is the property of the business and its management is for business purposes exclusively. Employers should draft and enforce a policy specifically related to the transfer of the social media account to the control and management of another employee when the employee leaves the business.353 This policy can include language prohibiting an employee from changing the name of a social media account or 350 See, e.g., Ardis Health, L.L.C. v. Nankivell, No. 11 Civ. 5013 (NRB), 2011 U.S. Dist. LEXIS 120738, at *2–9 (S.D.N.Y. Oct. 19, 2011). 351 See, e.g., Mattocks v. Black Entm’t Television L.L.C., 23 F. Supp. 3d 1311, 1316 (S.D. Fla. 2014). 352 See In re CTLI, L.L.C., 528 B.R. 359, 377–78 (Bankr. S.D. Tex. 2015). 353 See Eagle, 2013 U.S. Dist. LEXIS 34220, at *7; PhoneDog, 2011 U.S. Dist. LEXIS 129229, at *2–3. 2018.2_HIDY_FINAL 490 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 otherwise attempting to divert social media account followers from the business organization.354 A business organization can adopt a conflict of interest policy, empowering the business to discipline and even terminate an employee who uses social media accounts in a way that competes with the business or misuses the business’s intellectual property or proprietary information.355 A corporate policy on the return of confidential information should include the return of access information for social media accounts.356 C. Contract Review and Due Diligence Involving Social Media Accounts Business organizations may mitigate risk through the careful drafting and review of contracts which relate to the rights and duties surrounding social media account control. Requiring an employee to sign a work product agreement at the start of employment diminishes the risk of losing control over a social media account if the agreement stipulates that: (1) all confidential information of the employer must be returned by the employee at the request of the employer; (2) the work developed by the employee or created while employed at the business is the sole and exclusive property of the employer and constitutes “work for hire”; and (3) any actual or threatened breach of the work product agreement constitutes irreparable injury and damage to the employer.357 Non-compete agreements can be broadly drafted to prohibit employees from “taking” social media accounts with 354 See Emerald City Mgmt., L.L.C. v. Kahn, No. 4:14-cv-358, 2016 U.S. Dist. LEXIS 2143, at *58–60 (E.D. Tex. Jan. 8, 2016); PhoneDog, 2011 U.S. Dist. LEXIS 129229, at *3. 355 Vaughn v. Radio One of Ind., 151 F. Supp. 3d 877, 880–81 (S.D. Ind. 2015); see also CDM Media United States, Inc. v. Simms, No. 14 CV 9111, 2015 U.S. Dist. LEXIS 37458, at *2–3 (N.D. Ill. Mar. 25, 2015). 356 See, e.g., CDM Media, 2015 U.S. Dist. LEXIS 37458, at *2–5. 357 Ardis Health, L.L.C. v. Nankivell, No. 11 Civ. 5013 (NRB), 2011 U.S. Dist. LEXIS 120738, at *3 (S.D.N.Y. Oct. 19, 2011). 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 491 them, using information from those accounts, and failing to return “property” associated with those accounts, including access passwords for these accounts.358 Business organizations that outsource the creation or management of a social media account to independent contractors or management companies should draft and enter into social media account contracts with those entities. These contracts should stipulate that the business has exclusive ownership and control over the accounts and that the entity managing it owes a fiduciary duty to manage the account on behalf of the business.359 Business organizations should closely monitor and control the sharing of intellectual property on social media accounts as well.360 A business organization conducting due diligence in connection with business acquisitions, mergers, or asset purchases should investigate and review contracts or affiliations involving the management of social media accounts. This review should include identifying who has access and control over these accounts, whether the contractual obligations survive the merger, acquisition, or asset purchase, and how transfer of the control over the account will occur after the closing on the transaction.361 This due diligence should include an assessment of the quality of the management of the social media accounts.362 358 A business organization should draft contractual language (such as a non-compete or confidentiality agreement) in a manner that does not vitiate binding language in the employee handbook. See CDM Media, 2015 U.S. Dist. LEXIS 37458, at *3–10. 359 See Keypath Educ., Inc. v. BrightStar Educ. Grp., No. 16-cv-2545- JWL, 2017 U.S. Dist. LEXIS 14061, at *3–6 (D. Kan. Jan. 31, 2017); Salonclick, L.L.C. v. SuperEgo Mgmt., L.L.C., 16 Civ. 2555 (KMW), 2017 U.S. Dist. LEXIS 6871, at *2–3 (S.D.N.Y. Jan. 18, 2017). 360 Mattocks v. Black Entm’t Television L.L.C., 43 F. Supp. 3d 1311, 1315–16 (S.D. Fla. 2014). 361 See Keypath, 2017 U.S. Dist. LEXIS 14061, at *3–6. 362 See id. 2018.2_HIDY_FINAL 492 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 D. Remedies and Risk Management of Social Media Account Disputes An analysis of the judicial precedent reveals risk mitigation strategies a business organization can employ— both pre-dispute and post-dispute—to contain the detrimental effects on a business embroiled in a dispute over a social media account. These strategies include enlisting the aid of social media providers, avoiding conduct that could justify punitive damages awards, and selecting methodologies that substantiate valuations of social media accounts. Prior to a dispute, business organizations should review the social media policies and contracts of social media providers that govern the social media accounts used by the business. If a dispute erupts over the control of an account, the business organization can enlist the support of these social media providers to regain control over these accounts. These policies and contracts may empower the social media provider to take proactive action to assist the business organization in establishing its property rights in the account.363 The business organization’s policies, or lack thereof, in establishing its ownership rights in the account are relevant to the social media provider’s assessment of who should control the account. A business organization should be alert to the risk that an employee, independent contractor, or management company may pre-emptively contact the social media providers and convince them to irrevocably change the accounts, damaging the business organization’s ability to recover control over the social media accounts and access to account followers.364 Courts struggle to provide adequate remedies where social media providers’ policies prevent them from undoing certain actions.365 363 See, e.g., Mattocks, 43 F. Supp. 3d at 1316–17. 364 See In re CTLI, L.L.C., 528 B.R. 359, 374–76 (Bankr. S.D. Tex. 2015). 365 See id. at 374–77. 2018.2_HIDY_FINAL No. 2:426] BUSINESS DISPUTES OVER SOCIAL MEDIA ACCOUNTS 493 As social media account disputes carry the risk of punitive damages366 so business organizations should proceed prudently in the wake of a social media account dispute. Evidence of malice or willful disregard of an employee’s directives to refrain from accessing a social media account can justify punitive damages, depending on the claims brought in the litigation and how a court examines ownership rights over the account. To mitigate this risk, the business organization should train employees to seek the guidance of legal counsel when a social media account dispute occurs. Counsel can evaluate the facts, identify the rights over the accounts, and take appropriate action to maintain, regain, or refrain from exercising control over the social media account. Legal redress may include seeking emergency judicial relief in the form of a temporary restraining order or a preliminary injunction.367 If legal redress is sought, a court will require proof of the social media account’s value as well as the damages related to the account’s misuse. The risk business organizations face, like other litigants in these cases, is an inability to convince a court of a compelling methodology for the valuation of the social media account and the specter of speculative arguments on financial losses related to the account’s misuse.368 To mitigate this risk, business organizations should adopt a methodology, pre- dispute, to provide accurate valuations of its social media accounts and to substantiate these accounts’ connections to business revenue.369 These valuations should be tracked, audited, and continuously updated for use by a court seeking reliable evidence on damages. 366 See, e.g., Maremont v. Fredman, No. 10 C 7811, 2014 U.S. Dist. LEXIS 26557, at *18 (E.D. Pa. Mar. 3, 2014); Salonclick, L.L.C. v. SuperEgo Mgmt., L.L.C., 16 Civ. 2555 (KMW), 2017 U.S. Dist. LEXIS 69960, at *8 (S.D.N.Y. May 8, 2017). 367 See, e.g., Ardis Health, L.L.C. v. Nankivell, No. 11 Civ. 5013 (NRB), 2011 U.S. Dist. LEXIS 120738 (S.D.N.Y. Oct. 19, 2011). 368 See, e.g., Eagle v. Morgan, No. 11-4303, 2013 U.S. Dist. LEXIS 34220, at *40–42 (E.D. Pa. Mar. 12, 2013). 369 See Loughnane et al., supra note 14, at 36. 2018.2_HIDY_FINAL 494 COLUMBIA BUSINESS LAW REVIEW [Vol. 2018 V. CONCLUSION Business organizations’ increasing reliance on social media for sales, marketing, and branding presents unique challenges to those organizations in risk identification and mitigation as social media account disputes over the right to control and derive economic benefits from these accounts proliferate. The risk exposure intensifies as business organizations navigate a complex and complicated legal environment in which courts struggle to apply coherent and consistent legal rules to define and delineate the rights related to these social media accounts. Risk mitigation efforts focused on creating and communicating clear and comprehensive policies and procedures regarding the ownership of these accounts can assist business organizations in securing their rights.