Customers Allege Phone Case Manufacturer Failed to Protect Personal Data

Data Security” by Blogtreprenuer is licensed under CC BY 2.0.

Blythe McGregor, Associate Member, University of Cincinnati Law Review

Consumers purchase and use phone cases to protect their devices from wear, tear, and damage. When purchasing cases online, customers often provide personal information such as home addresses, phone numbers, email addresses, and financial information to a seller. Customers may not realize that, along with their cell phones, their personal information may also need protection.

In February 2020, customers of Slickwraps, Inc., a company specializing in skin-tight cases for tech accessories, became especially vulnerable to data theft.[1] When a slickwraps.com hacker emailed around 400,000 consumers “We have your data” from a corporate email address, these consumers were put on notice of a breach.[2] The email made it clear that the hacker did not intend to use the information for harm, but wanted to inform recipients that anyone could access the information and use it for any purpose.[3] Although consumers were notified in a unique way, corporate data breaches are not at all uncommon. As of January 2020, an estimated 7.9 billion records were exposed since the beginning of 2019.[4] In a complaint filed on March 12, 2020, a handful of slickwraps.com users affected by the hack initiated a class action lawsuit against Slickwraps alleging that this breach, unlike many other corporate breaches, was wholly avoidable.[5]

Almedia et al v. Slickwraps, Inc.

Three named plaintiffs filed a class action complaint in the Eastern District of California alleging a data breach case that was beyond the typical.[6] The data breach affected about 858,000 customers: more than double the amount notified via email of the breach by the aforementioned hacker. The information breached included the customers “names, physical addresses, phone numbers, purchase histories, and unique email addresses.”[7] The complaint also alleged that photos customers had uploaded to make a personalized phone case were  released.[8] Slickwraps, the defendant, claimed that no passwords or payment information was compromised.[9] Plaintiffs allege that Slickwraps’ security policy was “woefully lax” and that the company was well aware of its insufficiency.[10] Not long before the breach, a cybersecurity analyst publicly announced that the analyst had been able to access the customers’ personal information from the Slickwraps website.[11] The analyst described how, through the site’s phone case customization page, anyone was able to access the company’s entire network and access all its information.[12] The analyst also tried to alert Slickwraps directly by sending the company a direct message on Twitter and emailing the CEO, but the company allegedly ignored the warnings and took no action.[13]

Class members were Slickwraps customers whose data was exposed as a result of the breach.[14] The complaint proposed certification of either a class of all persons whose data was compromised, or a class of all people residing in California whose data was compromised.[15] The class action lawsuit seeks to hold Slickwraps liable for “inadequate safeguarding” of information and failing to provide notice to customers that their information had been made vulnerable.[16] Specifically, plaintiffs assert claims of negligence, intrusion into private affairs, negligence per se, breach of express contract, breach of implied contract, and deprivation of rights under the California Unfair Competition Law and California Consumer Privacy Act.[17] The complaint alleges that Slickwraps knew or should have known of the importance of the personal data stored, and in storing this information the company assumed a legal duty to keep information secure.[18] Plaintiffs assert that even though Slickwraps knew of the breach for several days, they only decided to inform the public when they became afraid of liability for inaction.[19] Also, although the CEO eventually emailed a notification about the breach and an apology, there is no information on the website or elsewhere about the breach, thus leaving many affected customers unaware of the situation.[20] As to the negligence claim, plaintiffs claim that a duty to protect against a security breach was imposed by Federal Trade Commission cyber-security guidelines, e-commerce industry standards, and California law.[21] This duty was allegedly breached by Slickwraps’ failure to implement reasonable measures.[22]

Plaintiffs seek compensatory damages, reimbursement of out of pocket mitigation measures, such as credit monitoring fees, and injunctive relief in the form of Slickwraps’ implementation of security monitoring systems.[23] The complaint expresses that, in addition to the immediate loss of privacy suffered by plaintiffs, class members will suffer a heightened risk of fraud and identity theft for years to come.[24]

Recent Related Caselaw

Recent data breach cases raise issues related to standing and the ability to state a claim for data privacy cases like Almeida. Specifically, data breach case defendants often assert that plaintiffs have not suffered an injury in fact, as required to establish standing, and that defendants do not have a duty of care, as required to successfully assert a claim for negligence. These recent cases may be instructive regarding the potential for the Almeida plaintiffs’ success in winning their claim. For example, the Ninth Circuit considered a similar case in 2018: In Re Zappos.com, Inc.[25] Much like the Almeida plaintiffs, customers’ personal account data was compromised when a hacker infiltrated an online retailer’s website.[26] The district court dismissed certain plaintiffs’ claims for lack of standing, holding that plaintiffs whose information had yet to be used fraudulently had not suffered an injury in fact, as required for Article III standing.[27] Those plaintiffs appealed.[28] The Ninth Circuit concluded that the district court erred because a plaintiff has standing to sue if “there is a substantial risk that the harm will occur.”[29] Zappos was factually distinct from Almeida because the Zappos plaintiffs’ credit and debit card information was compromised.[30] The Ninth Circuit considered the sensitive nature of customers’ bank account data during its standing analysis.[31]  The Ninth Circuit also expressed that when plaintiffs allege that the full extent of an injury resulting from a data breach may not be experienced until some time after the breach occurs, even if such harm has yet to occur, plaintiffs allege an injury in fact based on substantial risk.[32]

More recently, the Northern District of California in Bass v. Facebook faced a similar set of facts when Facebook users sued the social networking website alleging their personal information was taken by hackers due to the company’s failure to implement adequate security procedures.[33] Specifically,  hackers accessed and stole users’ “access tokens,” the ability to log into the website multiple times without reentering a username and password, giving the hackers access to a multitude of personal information stored within each user’s account.[34] The court concluded that the plaintiffs’ increased risk of identity theft satisfied Article III standing’s injury in fact requirement.[35] One roadblock to establishing standing in this case was one plaintiff’s failure to show that his injury in fact was fairly traceable to the data breach.[36] Facebook had not notified the plaintiff that he had been a victim of the breach, although the company had notified other victims, and the plaintiff was unable to show any plausible link to the breach.[37] The court made it clear that notification by the company, even if the company did notify other victims, is not essential to a plausible allegation.[38]

Importantly, the Bass court discussed the factors that must be present for California courts to find a duty of care exists to support a negligence action.[39] These factors include:

the foreseeability of harm to the plaintiff, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blame attached to the defendant’s conduct, the policy of preventing future harm, the extent of the burden to the defendant and the consequences to the community of imposing a duty to exercise care with resulting liability for breach, and the availability, cost, and prevalence of insurance for the risk involved.[40]

Analysis

It is likely that the Almeida complaint successfully states a claim and establishes standing. No clear injury has yet occurred, especially since the hacker made clear in his or her email he or she would not use the information obtained for harm. However, the Bass court required only an increased risk of identity theft to establish injury in fact, whereas, the Zappos court required a substantial risk that the injury will occur. Almeida plaintiffs likely established that there is an increased risk of substantial harm. The hacker had access to personal information such as name, address, and phone number, thus increasing the likelihood that an identity theft crime will injure all members of the proposed class. Thus, under the Bass standard, plaintiffs likely established an injury in fact. However, if the higher Zappos standard is applied, it may be more difficult to prove injury in fact, although the standard likely would still be met. The Slickwraps hacker accessed a large amount of personal information, even if this personal information was not financially sensitive. Although some of this information may be publicly available, there is likely not evidence that all of this information was publicly available for the hundreds of thousands of customers affected. Also, personal photographs that customers had uploaded to the customization tool were compromised, many of which likely were not otherwise available to the public. Because of the sheer mass of customer information compromised, and the private nature of the information viewed as a whole, plaintiffs likely successfully established that a substantial harm will result from the breach.

It is also likely that plaintiffs will establish that Slickwraps had a duty to protect customers’ secure information. This is a unique case: a seemingly friendly “cybersecurity analyst” hacked the website and warned Slickwraps of vulnerabilities. This situation provides a very strong basis for finding that the data breach was wholly foreseeable to Slickwraps. Even if the analyst had not warned Slickwraps, any time that a company is storing personal information, a duty to protect sensitive information exists. This is evident in the Bass case, where Facebook’s use and storage of private information was evidence that plaintiff placed trust in the social network, thus giving rise to a duty to protect that information.[41] The complaint also alleges that a duty is established under the Federal Trade Commission Act, California Civil Code, and industry standards.[42]

Additionally, because of the clear notice given by the cybersecurity analyst and Slickwraps’ choice to continue business as usual, courts should impose additional liability and punitive damages. Data breaches are common, and hackers are becoming more advanced, making security procedures tougher to successfully implement.[43] When alerted to a weakness in security, ecommerce vendors should have an additional duty to make efforts to strengthen the current cybersecurity system immediately, and to notify consumers of the threat of breach so all involved can take protective action.

Conclusion

The Almeida facts provide a twist on a classic corporate data breach case by alleging strong evidence that Slickwraps knew or should have known about the vulnerability on its website. Situations like this may become more common as hacking ability and knowledge is used to detect cybercrime rather than commit it.[44] When the private, personal information of hundreds of thousands of consumers is compromised, each consumer is at higher risk of identity theft and an injury in fact is established. Additionally, when outside analysts or hackers identify vulnerabilities and bring them to a company’s attention, victims of a data breach can provide very convincing evidence of a neglected duty of care should the company fail to act. This should expose a company to increased liability for resulting harm.


[1] Ben Kochman, Phone Case Co. Sued After Hackers Say ‘We Have Your Data’, Law 360 (March 13, 2020), https://www.law360.com/classaction/articles/1253070/phone-case-co-sued-after-hackers-say-we-have-your-data-.

[2] Id.

[3] Complaint, Almeida v. Slickwraps Inc., 2:20-at-00256, (E.D. Cal. March 12, 2020).

[4] All Data Breaches in 2019 & 2020 – An Alarming Timeline, Selfkey (March 5, 2020), https://selfkey.org/data-breaches-in-2019/.

[5] Complaint, supra note 3, at 1.

[6] Id. at 2.  

[7] Id. at 3.

[8] Id. at 4.

[9] Igor Bonifacic, Vinyl Cover Maker Slickwraps Coughs Up Customer Info in Data Breach, Engadget (Feb. 21, 2020), https://www.engadget.com/2020/02/21/slickwraps-data-breach/.

[10] Complaint, supra note 3, at 3.

[11] Id.

[12] Id. at 4.

[13] Id.

[14] Id. at 35.

[15] Id.

[16] Id. at 8.

[17] Id.

[18] Id. at 21.

[19] Id. at 17.

[20] Id. at 18.

[21] Id. at 40.

[22] Id.

[23] Id. at 8.

[24] Id. at 9.

[25] In re Zappos.com, Inc., 888 F.3d 1020 (9th Cir. 2018).

[26] Id. at 1023.

[27] Id. at 1024.

[28] Id.

[29] Id. at 1029.

[30] Id. at 1023.

[31] Id. at 1027.

[32] Id. at 1028-29.

[33] Bass v. Facebook, Inc., 394 F. Supp. 3d 1024 (N.D. Cal. 2019); see also Adkins v. Facebook, Inc., No. C 18-05982-WHA, 2019 WL 7212315 (N.D. Cal. Nov. 26, 2019).

[34] Bass, 394 F. Supp. 3d at 1029-30.

[35] Id. at 1035.

[36] Id.

[37] Id. at 1035-36.

[38] Id. at 1036.

[39] Id. at 1039.

[40] Id.

[41] Id.

[42] Complaint, supra note 3, at 40.

[43] Paul Rubens, Cybersecurity: Defending ‘Unpreventable’ Cyber Attacks, BBC (Feb. 3, 2015), https://www.bbc.com/news/business-31048811.

[44] Taylor Armerding, Hackers Needed to Defeat Hackers, Forbes (Sept. 5, 2019), https://www.forbes.com/sites/taylorarmerding/2019/09/05/hackers-needed-to-defeat-hackers/#7811b5177823.

Can Federally Funded Educational Institutions Get in Trouble for Helping Public Health Authorities Battle Coronavirus?

Photo by moren hsu on Unsplash

Alisher Kassym, Associate Member, University of Cincinnati Law Review

According to the National Center for Education Statistics, there are 98,277 public schools and almost 50.8 million students in the United States.[1] Amidst the coronavirus outbreak, 37 states have decided to close public schools, which amounts to 72,000 schools being closed, affecting at least 37 million students.[2] However, closing schools is not the only way to mitigate the spread of the virus. Some educational institutions may disclose students’ personal information to public health authorities to facilitate the ongoing fight against the coronavirus. These disclosures may be problematic, as the federal law dictates that the educational institutions and agencies—barring few exceptions—cannot disclose and release students’ personal information.[3] Will educational institutions be punished for sharing students’ data, even if the purpose of the disclosure is to prevent the effects of coronavirus?

Family Educational Rights and Privacy Act

20 U.S.C.S. § 1232g, also known as the Family Educational Rights and Privacy Act (“FERPA”), is a federal law that applies to all educational institutions and agencies that receive federal funding under programs administered by the Department of Education.[4] Per FERPA, the educational institutions and agencies generally cannot disclose personally identifiable information from students’ educational records.[5] Noncompliance with FERPA’s rules may result in funding cuts for the violating parties.[6]

There are notable exceptions to the non-disclosure provision of FERPA. First, an eligible student can submit written consent to disclose personally identifiable information.[7] Multiple exceptions allow—but do not require—the release of information without consent from the students.[8] Out of the available non-consensual exceptions, perhaps the most applicable exception for the current coronavirus outbreak is health or safety emergency.[9] The exception permits disclosure of students’ educational records “in connection with an emergency [to] appropriate persons if the knowledge of such information is necessary to protect the health or safety of the student or other person.”[10] The language of the statute does not clarify what constitutes a health or safety emergency.[11]

It is safe to presume that, due to absence of federal guidelines, the educational institutions have discretion over qualifying events as an emergency. Before 1988, the Code of Federal Regulations (“CFR”) listed four non-statutory criteria for determining the application of the emergency exception under FERPA.[12] The CFR listed the following considerations: (1) seriousness of the threat to the health or safety of the student population; (2) the necessity of the information at issue to meet the emergency; (3) whether the parties receiving the information are in a position to address the emergency; and (4) time considerations.[13] In 1988, the Secretary of Education deleted those criteria, reasoning that educational institutions and agencies were capable of making the necessary determinations without the Federal regulation.[14] The discussion also hinted that the removed criteria would remain relevant.[15] Still, it became clear that institutions covered by FERPA were free to determine whether the emergency exception applied.

Discussion

The educational institutions and agencies will likely face no issues with invoking the FERPA’s emergency exception to share students’ personal information with public health authorities. Institutions have the discretion to protect students’ health by any measures deemed necessary because the institutions have no required criteria governing the application of the emergency exception. Moreover, information disclosures in connection with a global pandemic[16] are likely to be viewed as reasonable due to the nature of the situation and health risks imposed on individuals. The COVID-19 outbreak also satisfies the pre-1988 CFR emergency exception standards—the threat from the virus is serious, time is of the essence, and the release of students’ personal information (such as health conditions) can ease the pandemic’s effect. Lastly, because the virus is a recognized threat to public welfare, the measures taken against it will inevitably be connected to health and safety of the population. Thus, the schools and other entities governed by FERPA will be able to use the FERPA’s emergency exception to disclose information from students’ educational records.

This prediction is further fortified by the Department of Education’s recent report. The report stated that an educational institution or agency may release personally identifiable information if it considers the “totality of circumstances” surrounding the spread of COVID-19.[17] The report also noted that public health officials and medical personnel are typically “appropriate parties” to whom students’ information is disclosed under the emergency exception.[18] Taken together, the report’s wording implies that the educational institutions would be under minimal risk of violating FERPA for disclosing students’ personal information in connection with the pandemic emergency. Nevertheless, the report cautioned that educational institutions’ judgment must be based on a specific emergency, not a general and distant threat.[19] On top of that, the disclosures are limited in time to the period of emergency, meaning that blanket releases of information should not be practiced.[20] Since a violation of FERPA can result in loss of federal funding, the educational institutions can still choose to obtain students’ consent to minimize the risks of potential litigation.

Conclusion

Educational institutions will likely be able to disclose students’ personally identifiable information to public health authorities to mitigate the effects of coronavirus. The spread of coronavirus can be classified as a public health and safety emergency under the FERPA exception due to the threat posed by the virus. Thus, the institutions can invoke the emergency exception to share information from students’ educational records.


[1] Map: Coronavirus and School Closures, Education Week (March 6 2020), https://www.edweek.org/ew/section/multimedia/map-coronavirus-and-school-closures.html (last visited March 16, 2020).

[2] Information as of March 16, 2020. Id.

[3] See 20 U.S.C.S. § 1232g(b) (LexisNexis, Lexis Advance through Public Law 116-108).

[4] U.S. Department of Education, FERPA General Guidance for Students, https://www2.ed.gov/policy/gen/guid/fpco/ferpa/students.html.

[5] See 20 U.S.C.S. § 1232g(b) (LexisNexis, Lexis Advance through Public Law 116-108).

[6] Id. at § 1232g(b)(1).

[7] Id.

[8] U.S. Department of Education, supra note 4.

[9] 20 U.S.C.S. § 1232g(b)(1)(I).

[10] Id.

[11] Id. at § 1232g.

[12] Brown v. City of Oneonta, 106 F.3d 1125, 1132 (2d Cir. 1997)

[13] Id.

[14] Final Regulations, Family Educational Rights and Privacy, 53 F.R. 11942 (1988).

[15] Id. “Nothing in the statute or legislative history prohibits an agency or institution from considering the four specific criteria that have been removed.”

[16] “We have therefore made the assessment that COVID-19 can be characterized as a pandemic.” World Health Organization, WHO Director-General’s opening remarks at the media briefing on COVID-19 (11 March 2020), https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19—11-march-2020.

[17] FERPA & Coronavirus Disease 2019 (COVID-19), U.S. Department of Education, 3 (March 2020), https://studentprivacy.ed.gov/resources/ferpa-and-coronavirus-disease-2019-covid-19.

[18] Id. at 4.

[19] Id. at 3.

[20] Id. at 4.

The Availability of Emotional Distress Damages Under the Rehabilitation Act

Madeline Pinto, Associate Member, University of Cincinnati Law Review

I. Introduction

The Rehabilitation Act[1] (“the R.A.” or “the Act”) provides that “[n]o otherwise qualified individual with a disability . . . shall, solely by the reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subject to discrimination under any program or activity receiving Federal financial assistance.”[2] The Rehabilitation Act falls within the category of “Spending Clause legislation” because the Act “invokes Congress’s power under the Spending Clause to place conditions on the grant of federal funds.”[3] Courts have often likened Spending Clause legislation to a contract because “in return for federal funds, the States agree to comply with federally imposed conditions.”[4] Therefore, “the legitimacy” of Spending Clause legislation “rests on whether the State voluntarily and knowingly accepts the terms of the ‘contract.’”[5]

There is a split between the Fifth and Eleventh Circuits as to whether emotional distress damages are an available remedy under the Rehabilitation Act.[6] The Fifth Circuit holds that emotional distress damages are not an available remedy under the Rehabilitation Act because this type of damages is not traditionally available for a breach of contract action.[7] The Eleventh Circuit takes the contrary position; emotional distress damages are an available remedy under the Rehabilitation Act because emotional distress is a foreseeable consequence of discrimination.[8] The Supreme Court’s decisions in Bell v. Hood and Barnes v. Gorman provide a framework for determining which remedies are available under the Rehabilitation Act. The Fifth Circuit employed this framework and correctly held that emotional distress damages are not an available remedy under the Rehabilitation Act.  

II. Background

A. The Supreme Court’s Interpretation of Available Remedies in Bell and Barnes.

In Bell v. Hood,[9] the Supreme Court determined that federal courts have jurisdiction over a case where the plaintiffs alleged a violation of their Fourth and Fifth Amendment rights, even though there was no established cause of action.[10] The Court held that federal courts enjoy jurisdiction because the question of whether plaintiffs can recover money damages for a violation of their constitutional rights is a weighty question of law that warrants the exercise of federal jurisdiction.[11] In reaching this conclusion, the Court reasoned that “where legal rights have been invaded, and a federal statute provides for a general right to sue for such invasion, federal courts may use any available remedy to make good the wrong done.”[12]

In Barnes v. Gorman[13], the Supreme Court determined that punitive damages are not an available remedy under the Rehabilitation Act.[14] The plaintiff, Gorman, was a paraplegic who used a wheelchair and lacked control over his bladder functions, “forcing him to wear a catheter attached to a urine bag around his waist.”[15] Gorman was arrested for trespass and sustained serious medical complications as a result of the arresting officers’ conduct.[16] During the arrest, the police refused to allow Gorman to empty his urine bag.[17] Additionally, the van used to transport Gorman to the police station was not outfitted for his wheelchair so the arresting officers removed Gorman from his wheelchair and strapped him into the van seat.[18] As a result, Gorman fell to the floor, rupturing his urine bag and sustaining injuries to his back and shoulder.[19] Gorman sued the police, alleging violations of the Rehabilitation Act.[20] The Court relied on its prior reasoning in Pennhurst that Congress’ authority to pass Spending Clause legislation, such as the Rehabilitation Act, hinges on “whether the [recipient] voluntarily and knowingly accepts the terms of the ‘contract.’”[21] The Court concluded that a remedy is available under Spending Clause legislation “only if the funding recipient is on notice that, by accepting federal funding, it exposes itself to liability of that nature.”[22] The Court specified that a funding recipient is on notice of: (1) remedies that are expressly included in the statute; and (2) remedies “traditionally available in suits for breach of contract.”[23] Applying this test, the Court held that punitive damages were not an available remedy under the Rehabilitation Act because punitive damages are not traditionally available in suits for breach of contract.[24] However, the Court cautioned that its decision does not stand for the proposition that “suits under Spending Clause legislation are suits in contract, or that contract-law principles apply to all issues that they raise.”[25]

The Court reconciled its holding with the presumption established in Bell v. Hood.[26] The Court reasoned that the wrong committed by a funding recipient who violates Spending Clause legislation is “the failure to provide what the contractual obligation requires.”[27] The Court concluded that this wrong is “made good” when the funding recipient compensates the plaintiff for any harm caused by its failure to comply with its contractual obligations.[28] Thus, the Court held that punitive damages are “not embraced within the rule described in Bell” because they are not compensatory in nature.[29]

B. The Eleventh Circuit’s Interpretation of Available Remedies Under the Rehabilitation Act in Sheely.

In Sheely v. MRI Radiology Network, P.A.,[30] the Eleventh Circuit determined that emotional distress damages are an available remedy under the Rehabilitation Act.[31] The plaintiff, Sheely, was blind and used a guide dog.[32] Sheely was prohibited from accompanying her minor son to his appointment at a radiology facility owned and operated by MRI Radiology Network, P.A. (“MRN”) because of MRN’s policy that service animals are not permitted beyond the facility’s waiting room.[33] Sheely sued MRN for a violation of the Rehabilitation Act, seeking, among other relief, non-economic compensatory damages.[34] The Eleventh Circuit recognized that the Court analogizes Spending Clause legislation to a contract and applied the test set forth in Barnes.[35] The Eleventh Circuit concluded that federal funding recipients are on notice that, by accepting federal funds, they are exposing themselves to liability for emotional distress damages.[36] The Eleventh Circuit reasoned that emotional distress “is a foreseeable consequence of funding recipients’ ‘breach’ of their ‘contract’ with the federal government not to discriminate against third parties because discrimination frequently causes emotional distress. [37]

The Eleventh Circuit further concluded that emotional damages are an available remedy under the Rehabilitation Act even if the test set forth in Barnes requires a direct application of contract law.[38] Specifically, the Eleventh Circuit reasoned that, although emotional damages are not typically available for breach of contract, courts have frequently found that a plaintiff may recover emotional damages for “breach of ‘personal’ contracts.”[39] Additionally, the Eleventh Circuit highlighted the Restatement’s exception to the general rule that emotional damages are not available for breach of contract where “‘the contract or the breach is of such a kind that serious emotional disturbance was a particularly likely result.’” [40] The Eleventh Circuit reasoned that this exception applies to suits for violations of the Rehabilitation Act because emotional distress is a foreseeable consequence of discrimination.[41]

Next, the Eleventh Circuit considered the effect of the Bell v. Hood presumption on the scope of the remedies available under the Rehabilitation Act.[42] The Eleventh Circuit acknowledged that the Bell v. Hood presumption changes when it is applied to Spending Clause legislation because a remedy is only available under Spending Clause legislation if funding recipients are on notice that they may be subject to liability for those remedies.[43] However, the Eleventh Circuit concluded that the court must abide by the Bell v. Hood presumption because emotional distress damages satisfy the test set forth in Barnes and fall within the category of compensatory damages embraced by the presumption.[44]

C. The Fifth Circuit’s Interpretation of Available Remedies Under the Rehabilitation Act in Cummings.  

In contrast, the Fifth Circuit held, in Cummings v. Premier Rehab Keller, P.L.L.C., that emotional distress damages are not an available remedy under the Rehabilitation Act.[45] The plaintiff, Cummings, was deaf and blind and communicated in American Sign Language.[46] Cummings sought to receive physical therapy services at Premier Rehab Keller, P.L.L.C. (“Premier”).[47] Cummings requested that Premier provide an ASL interpreter but Premier refused.[48] Cummings sued Premier for violations of the Rehabilitation Act, seeking, among other remedies, damages for emotional distress.[49] Applying the Barnes test, the Fifth Circuit reasoned that federal funding recipients are not on notice that they could be subject to emotional distress damages under the Rehabilitation Act because “emotional damages, like punitive damages, are traditionally unavailable in breach-of-contract actions.”[50]

The Fifth Circuit also declined to apply the Restatement’s exception to the general rule that emotional distress damages are not available in breach of contract actions.[51] The Fifth Circuit reasoned that the Restatement’s exception fails to put funding recipients on notice that they may be liable for emotional distress damages as required by the Barnes test.[52] Specifically, the Fifth Circuit concluded that “funding recipients are unlikely to be aware that this exception exists” because there is a “general prohibition against emotional distress damages in contract law.”[53] Additionally, the Fifth Circuit noted that, although the Restatement provides an exception for punitive damages where “the conduct constituting the breach is also a tort for which punitive damages are recoverable,” the Court in Barnes held that punitive damages were not available under the Rehabilitation Act because “funding recipients were not ‘on notice’ that they might be liable for punitive damages.”[54]

The Fifth Circuit concluded that the Bell v. Hood presumption does not mandate a finding that emotional distress damages are an available remedy under the Rehabilitation Act.[55] The Fifth Circuit reasoned that the limitation the Court has placed on the Bell v. Hood presumption in the context of Spending Clause legislation applies in this case because “federal funding recipients are not ‘on notice’ that their ‘contractual obligation’ can expose them to liability for emotional distress damages.”[56]

III. Discussion

A. The Fifth Circuit Correctly Employed the Available Remedies Inquiry Set Forth in Barnes.

In applying the Barnes available remedies inquiry, the Fifth Circuit in Cummings correctly asked whether emotional distress damages are traditionally available in breach of contract actions. The Supreme Court in Barnes chose to focus its available remedies inquiry on which damages are traditionally available in breach of contract actions because Spending Clause legislation is analogous to a contract. As such, the Court held that recipients of federal funds are only on notice of remedies that are traditionally available for breach of contract actions. Therefore, the Court held that punitive damages are not available under the Rehabilitation Act. In reaching this conclusion, the Court did not consider whether punitive damages are a foreseeable consequence of violations of the Rehabilitation Act or other anti-discrimination statutes. This indicates that an evaluation of the foreseeable consequences of discrimination is not part of the available remedies inquiry.

The Fifth Circuit rightly abided by the Court’s available remedies inquiry and correctly held that emotional distress damages are not an available remedy under the Rehabilitation Act. Consistent with the Court’s reasoning in Barnes, the Fifth Circuit determined that emotional distress damages are an available remedy under the Rehabilitation Act by focusing on whether emotional distress damages are traditionally available in breach of contract actions. Applying this test, the Fifth Circuit held that federal funding recipients should not be considered on notice that they could be liable for emotional distress damages under the Rehabilitation Act. Like the Court in Barnes, the Fifth Circuit declined to consider whether emotional distress is a foreseeable consequence of violations of the Rehabilitation Act or other anti-discrimination actions.

In contrast, the Eleventh Circuit misapplied the available remedies inquiry outlined in Barnes. The Eleventh Circuit recognized that the Court applies a contract metaphor to Spending Clause legislation. However, rather than focusing on whether emotional distress damages are traditionally available for breach of contract actions, the Eleventh Circuit focused its inquiry on whether emotional distress damages are a foreseeable result of violations of the Rehabilitation Act. Specifically, the Eleventh Circuit reasoned that federal funding recipients are on notice that they can be subject to emotional distress damages because emotional distress is a frequent, and thus foreseeable, consequence of a breach of an anti-discrimination statute, such as the Rehabilitation Act. In this way, the Eleventh Circuit fundamentally altered the Barnes available remedies inquiry and, as a result, erroneously held that a plaintiff may recover emotional distress damages under the Rehabilitation Act.

B. The Fifth Circuit Correctly Concluded that the Restatement’s Exception does not put Funding Recipients on Notice.

The Fifth Circuit’s conclusion that the Restatement’s exception fails to put federal funding recipients on notice that they are subject to emotional distress damages is consistent with the Supreme Court’s reasoning in Barnes. The Court in Barnes implicitly concluded that the existence of a Restatement exception to the general rule that punitive damages are not available in breach of contract actions is not sufficient to put federal funding recipients on notice. The Restatement exception for punitive damages most likely applied in Barnes because the police officers’ treatment of Barnes likely constituted an actionable tort. However, as noted by the Fifth Circuit, the Court held that federal funding recipients were not on notice that they could be subject to punitive damages. Moreover, the Court’s decision to forgo any discussion of the punitive damages exception suggests that the existence of an exception does not affect whether federal funding recipients are on notice. Therefore, consistent with the Court’s reasoning in Barnes, the Fifth Circuit correctly concluded that the existence of a Restatement exception for emotional distress damages does not put federal funding recipients on notice.

In contrast, the Eleventh Circuit in Sheely erroneously relied on the Restatement’s exception to conclude that emotional distress damages are recoverable under the Rehabilitation Act. Moreover, the Eleventh Circuit erred in treating suits brought under the Rehabilitation Act as suits in contract to which all contract-law principles apply. Despite the Court’s caveat in Barnes that actions brought under Spending Clause legislation should not be treated as contract actions, the Eleventh Circuit concluded that an exception for emotional damages in contract law automatically applies to violations of the Rehabilitation Act. Further, rather than considering how courts have applied the Restatement’s exception to Spending Clause legislation, the Eleventh Circuit relied on the reasoning provided in ordinary—not to mention non-binding— breach of contract cases. Most notably, the Eleventh Circuit failed to consider the import of the Court’s decision not to discuss nor apply the Restatement’s exception for punitive damages in Barnes

C. The Fifth Circuit Correctly Concluded that the Bell v. Hood Presumption Does Not Render Emotional Distress Damages an Available Remedy Under the Rehabilitation Act.

Although the Fifth and Eleventh Circuits recognized that the notice requirement of the Court’s available remedies inquiry acts as a constraint on the Bell v. Hood presumption, only the Fifth Circuit recognized that this constraint applies to the availability of emotional distress damages under the Rehabilitation Act. As explained above, federal funding recipients are not on notice that they are subject to liability for emotional distress damages as required by the Court’s available remedies inquiry because emotional distress damages are not traditionally available for breach of contract actions. Due to this lack of notice, the Fifth Circuit correctly concluded that the constraint the Court placed on the Bell v. Hood presumption in the context of Spending Clause legislation applies in this instance. As such, the Bell v. Hood presumption does not require courts to award emotional distress damages under the Rehabilitation Act.

V. Conclusion

The Fifth Circuit correctly held that emotional distress damages are not an available remedy under the Rehabilitation Act. The Fifth Circuit applied the Supreme Court’s available remedies inquiry to the Rehabilitation Act by focusing on whether emotional distress damages are traditionally available for breach of contract actions. Further, consistent with the Court’s reasoning in Barnes, the Fifth Circuit concluded that the Restatement’s exception does not put federal funding recipients on notice (as required by the available remedies inquiry). Lastly, the Fifth Circuit concluded that the Bell v. Hood presumption does not require courts to award emotional damages under the Rehabilitation Act because federal funding recipients are not on notice that they are subject to emotional distress damages. Therefore, the Fifth Circuit correctly held that plaintiffs may not recover emotional distress damages for violations of the Rehabilitation Act.


[1] 29 U.S.C. § 794.

[2] Id.

[3] Barnes v. Gorman, 536 U.S. 181, 185-86 (2002).

[4] Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17 (1981).

[5] Id.

[6] Cummings v. Premier Rehab Keller, P.L.L.C., 2020 U.S. App. LEXIS 2250 (5th Cir. Jan. 24, 2020); Sheely v. MRI Radiology Network, P.A., 505 F.3d 1173 (11th Cir. 2007).

[7] Cummings, 2020 U.S. App. LEXIS 2250, at *12.

[8] Sheely, 505 F.3d at 12199-200.

[9] Bell v. Hood, 327 U.S. 678, 684 (1946).

[10] Id. at 681.

[11] Id. at 683-84.

[12] Id. at 684.

[13] Barnes v. Gorman, 536 U.S. 181 (2002).

[14] Id. at 183.

[15] Id.

[16] Id. at 184.

[17] Id. at 183.

[18] Id. at 183-84.

[19] Id.

[20] Id. at 184.

[21] Id. at 187.

[22] Id. (emphasis in original).

[23] Id.

[24] Id.

[25] See id. at 189 n.2.

[26] Id. at 189.

[27] Id.

[28] Id.

[29] Id.

[30] Sheely v. MRI Radiology Network, P.A., 505 F.3d 1173 (11th Cir. 2007).

[31] Id. at 1177.

[32] Id. at 1192.

[33] Id. at 1178.

[34] Id. at 1180.

[35] Id. at 1198.

[36] Id.

[37] Id.

[38] Id. at 1200.

[39] Id. at 1201 (citing Sullivan v. O’Connor, 296 N.E.2d 183 (Mass. 1973); Stewart v. Rudner, 84 N.W.2d 816 (Mich. 1957); Lamm v. Shingleton, 55 S.E.2d 810 (N.C. 1949)).

[40] Id. at 1200 (citing Restatement Second of Contracts §353).

[41] Id.

[42] Id. at 1203.

[43] Id. at 1191.

[44] Id. at 1203.

[45] Cummings v. Premier Rehab Keller, P.L.L.C., 2020 U.S. App. LEXIS 2250 at *12 (5th Cir. Jan. 24, 2020).

[46] Id. at *2.

[47] Id.

[48] Id.

[49] Id. at *4.

[50] Id. at *9.

[51] Id. at *10-12.

[52] Id.

[53] Id.

[54] Id. at *11.

[55] Id. at *15-16.

[56] Id.

Bike Paths and Eminent Domain

Photo by Max Böhme on Unsplash

J.P. Burleigh, Associate Member, University of Cincinnati Law Review

I. Introduction

During the 19th century, Congress granted railroad companies rights of access to build and operate railroads across public lands.[1] After the Interstate Highway System was built, many railroad companies stopped operating and once-busy railroads fell into disuse.[2] The “rail-trail” movement began in the 1960s out of a simple idea: convert abandoned railroads into recreational trails.[3] More than 20,000 miles of trails for biking, walking, and more have been built since then.[4] This effort has prompted numerous legal disputes around the taking of private property. In 2014, the Supreme Court held that when the railroads abandoned tracks, any rights of access ceased; thus, the federal government did not retain any rights to abandoned railways on privately owned land.[5] The question facing the rail-trail movement today is whether governments can build trails by using eminent domain, the government’s authority to take private property for public use. This past year, one Ohio couple captured national attention on this issue.[6]  

Mike and Barb Cameron own a farm in Mahoning County, Ohio that has been in Mike’s family for four generations.[7] The Camerons have grown crops, raised cattle, and made their home on the property for twenty-five years.[8] Fewer than one hundred yards from their house is an abandoned railroad bed, a slight depression in the land along which the Niles and Lisbon Branch of the Erie Railroad once ran.[9] The rails were removed in the 1980s[10] and the Camerons now own the entire rights to the property.[11] The railroad bed runs north-south through the middle of their 158 acre property.[12]

In November of 2018, Mill Creek Metroparks (“Mill Creek”) sued the Camerons in the Mahoning County Court of Common Pleas.[13] Mill Creek is a park district operating under Chapter 1545 of the Ohio Revised Code to build and supervise parks in northeastern Ohio.[14] The park district is asking the court to grant the park district a permanent easement along the former railbed. The Camerons would technically remain owners but Mill Creek would have a permanent right to use the railroad bed.[15] Mill Creek argues the easement can be created under the power of eminent domain.[16]

Mill Creek created the plan for this project in 1990 and has since secured close to $4 million in state and federal funding.[17] The existing stretch of the “hike and bikeway” opened between 2000 and 2001; it is a ten-foot wide paved surface for biking, hiking, rollerblading, and even cross-country skiing.[18] The organization plans to eventually pave the entire former railway and join it with the Great Ohio Lake-to-River Greenway, a planned trail that will stretch through four counties from Lake Erie to the Ohio River.[19] As of 2016, the Great Ohio Lake-to-River Greenway Coalition had raised $35 million and constructed 75 miles of the proposed 110-mile bikeway.[20] Mill Creek believes the trail will serve not only as valuable greenspace but also as “a link to history and culture,” a driver of economic growth, and an opportunity for recreation and improved health.[21]

The Camerons object to the easement which would divide their property in half.[22] They worry the easement would disrupt their farm’s operations which include allowing their cattle to graze freely.[23] They argue the easement will limit the movement of livestock and heavy machinery from one side of the property to the other and prevent them from hunting on their land.[24] They fear they could be found liable if they damage the trail or if trail users enter onto their property.[25] And they think it unfair that Mill Creek would get the rights to use the property, but the Camerons would continue to be taxed on ownership of the property.[26] The case is set for a jury trial this summer.[27] The suit is just one of nearly a dozen Mill Creek has filed against property owners since November 2018 to secure the rights for the proposed trail.[28]

The Camerons are not alone in fighting an attempt to build a trail across their property.[29] Property owners in Sioux City, Iowa and Swampscott, Massachusetts have engaged in years of expensive litigation to resist efforts to build trails on their property.[30] Some trail proponents see eminent domain as a necessary tool; the Sierra Club, for instance, believes using eminent domain is justified because bike trails improve health, create transportation options, and reduce the number of cars on the road.[31] On the other hand, in 2017, Wisconsin banned the use of eminent domain for recreational trails, including bikeways.[32] After the Cameron family’s story went public, similar legislation was introduced in the Ohio House of Representatives.[33] There are two big questions surrounding this controversy: is it legal for Mill Creek to take an easement on the Camerons’ property, and, if so, should it be?

II. Current Law

Park districts such as Mill Creek are led by park commissioners.[34] Those commissioners are empowered by section 1545.11 of the Ohio Revised Code to take private property:  

The board of park commissioners may acquire lands either within or without the park district for conversion into forest reserves and for the conservation of the natural resources of the state, including streams, lakes, submerged lands, and swamplands, and to those ends may create parks, parkways, forest reservations, and other reservations and afforest, develop, improve, protect, and promote the use of the same in such manner as the board deems conducive to the general welfare. Such lands may be acquired by such board, on behalf of said district . . . by appropriation.[35]

The Ohio Supreme Court has held that this is a “broad and comprehensive” grant of power, allowing boards of park commissioners to take “any natural tract of land bearing a reasonable relation to these words.” [36] 

This power is not unlimited, however. The Takings Clause of the Fifth Amendment to the Constitution requires governments to give “just compensation” when private property is taken for public use, including when taken under the power of eminent domain.[37] Early in the country’s history, many courts read the words “public use” to require that government or the public actually use the taken property.[38] Federal courts have broadened the idea of public use over the years to allow takings that merely provide some public benefit, such as redeveloping blighted neighborhoods, redistributing land, and economic development by a private group.[39] The grant of an easement on the Camerons’ land for the building of a public bike path is almost certainly acceptable under Fifth Amendment jurisprudence.

Ohio’s constitution also requires exercises of eminent domain be in service of a public use, but Ohio’s definition of “public use” is narrower than the federal understanding.[40] The Ohio Supreme Court has explained, “[t]he founders of our state expressly incorporated individual property rights into the Ohio Constitution in terms that reinforced the sacrosanct nature of the individual’s inalienable property rights . . . which are to be held forever inviolate.”[41] While the Takings Clause of the Ohio constitution and Fifth Amendment are nearly identical,[42] courts review eminent domain statutes with “heightened scrutiny” under the Ohio Constitution.[43] Further, while economic benefit can be considered in determining whether the property is being taken for a public use, economic benefit alone cannot satisfy Ohio’s public use requirement.[44]

Ohio also limits the use of eminent domain by statute.[45] The government must give the property owner notice of its intent to take the property and make a good faith offer to purchase the property in writing.[46] The taking must also be necessary.[47] The government has the burden of showing both public use and necessity.[48] The statute does not define “public use,” but does give examples of forbidden and permitted uses.[49] Takings solely for economic development are allowed only if a public entity retains possession of the property.[50] In contrast, takings for construction of roads and public parks are presumed to be public uses.[51] Courts have interpreted “necessary” to mean not just “absolute physical necessity” but also “reasonably convenient or useful to the public.”[52] If the applicable agency passes a resolution affirming the necessity of a taking, courts grant a presumption of necessity and the protesting property owner must show that the taking is not necessary.[53] 

Courts faced with cases similar to that of the Camerons have upheld park districts’ efforts to take property for bike trails. Recreational trails are a valid use under park districts’ statutory power. In 2007, the Ohio Supreme Court held that “the board of park commissioners is authorized under R.C. 1545.11 to appropriate property for the construction and use of a recreational trail.”[54] Further, the Fifth District Court of Appeals has twice held that a bike path is a public use.[55] A bike path across the Camerons’ property thus almost certainly counts as a public use, so their only defense is to show that the park district’s easement is not necessary.

Mill Creek bears the burden of proving that taking the Camerons’ property is necessary to build the bike trail. If Mill Creek has passed a resolution that the taking is necessary, the burden of proof shifts to the Camerons. Mill Creek passed a resolution in 1993 stating “the public interest demanded” a bike path along the former railway.[56] The Camerons could argue that this does not show necessity because the resolution was so long ago and did not address the specific route across their property. Even if the bike path itself is necessary, the Camerons dispute routing the path through their property.[57] The road in front of the Camerons’ property has been used as a bike trail for twenty years which undermines the argument that crossing the Camerons’ property is necessary.[58] Alternatively, even if a path off of the road is necessary, the path could run along the road instead of through the middle of the Camerons’ property. Mill Creek claims that such a route would cross dozens of properties and would therefore be more expensive.[59] The Camerons are unlikely to win this argument because of the broad definition of necessity as “reasonably convenient.” For example, the Fifth District found a bike path was necessary because it would “provide connectivity and health benefits” and because the agency acted in good faith.[60] No evidence of bad faith on the part of Mill Creek has been introduced, so a judge will likely follow this precedent and find the bike path necessary. Under current law, the Camerons probably cannot stop Mill Creek from acquiring an easement across their property for the bike path.

III. Future Law

In response to the Mill Creek’s attempts to obtain easements across private properties, members of the Ohio House of Representatives have introduced legislation to limit taking private property for bike trails.[61] Last year, Representative Don Manning sponsored House Bill 288, which would prohibit taking private property to build recreational trails.[62] Eleven legislators co-sponsored the bill.[63] Michael Cameron, the trustees of Green Township where the Camerons reside, and several other affected property owners testified in support of H.B. 288 before the Ohio House Civil Justice Committee.[64] Several cities (including Cincinnati), park districts, and non-profits testified against the bill.[65] Under criticism for limiting eminent domain authority too much, the bill did not make it out of committee.[66] 

This year, Representative Manning and Representative Don Hambley proposed a more moderate alternative, H.B. 476.[67] Instead of banning eminent domain for recreational trails altogether, H.B. 476 imposes limits on the use of eminent domain and allows for local governments to veto the taking.[68] Under H.B. 476, if a property owner objects in writing to a proposed taking of his or her property,[69] “[t]he legislative authority of the municipal corporation where the real property is located, or board of township trustees for the township where the real property is located, may veto the appropriation.”[70] In the Camerons’ case, such an amendment would save their property, as the trustees of Green Township are opposed to Mill Creek’s course of action.[71]

H.B. 288 might have gone too far in seeking an all-out ban on taking property for recreational trails. Bike trails and similar public projects provide important benefits to communities; prohibiting the government from appropriating land for that purpose might be unwise. H.B. 476 on the other hand, offers a more sensible approach by requiring the affirmation of the municipal legislature or board of township trustees. This adds an additional layer of protection for property owners while leaving the door open for taking land for bike trails if the community as a whole approves of the project. Especially because park district commissioners are not elected, H.B. 476 adds a healthy dose of democracy to ensure that eminent domain is being used responsibly in this context.

IV. Conclusion

The story of Mike and Barb Cameron is one that could become even more common in coming years. The push to create new recreational trails will lead to further disputes about how to acquire the necessary land. These controversies pit the public benefits of trails against the fundamental right of private property. Ohio should get ahead of this problem by adopting H.B. 476, allowing local communities a say in whether to take property for this purpose. Doing so will ensure that private property remains “forever inviolate” in Ohio.[72]


[1] Brandt Trust v. United States, 572 U.S. 93 (2014).

[2] American-Rails, The Decline of Rail Travel: Three Decades of Turmoil, https://www.american-rails.com/decline.html (last visited Mar. 21, 2020).

[3] Amy Kapp, Connectivity Evolution: Examining a Decade of Rails-to-Trails’ Impact, 2012-2020, Rails-to-Trails (Dec. 31, 2019), https://www.railstotrails.org/trailblog/2019/december/31/connectivity-evolution-examining-a-decade-of-rails-to-trails-impact-2010-2020/.

[4] Id.

[5] Brandt, 572 U.S. at 110.

[6] Rachel Wagoner, Mahoning County farmers fight eminent domain for bike trail, Farm and Dairy (Jul. 8, 2019), https://www.farmanddairy.com/news/mahoning-county-farmers-fight-eminent-domain-for-bike-trail/562277.html.

[7] Id.  

[8] Id.

[9] Id.

[10] Id.

[11] Hearing on H.B. 288 Before the Ohio H. Civil Justice Comm., 133rd Gen. Assemb. (statement of Michael Cameron, proponent).

[12] Id.

[13] Complaint, Bd. of Comm’rs. v. Cameron, et al., 2018 CV 02795 (Mahoning Cty. C.P. Nov. 20, 2019).

[14] Id. at ¶ 1.  

[15] Id. at ¶ 14.

[16] Id.

[17] Stephen L. Avery and Justin Rogers, Mill Creek Metroparks Bikeway, Mill Creek Metroparks (Apr. 11, 2016) http://www.millcreekmetroparks.org/wp-content/uploads/2016/04/MetroParks-Bikeway-Board-Presentation-4.11.16.pdf.

[18] Id.

[19] Id.

[20] Id.

[21] Id.

[22] Cameron, supra note 11.

[23] Id.

[24] Id.

[25] Id.

[26] Id.

[27] Order of Magistrate, Bd. of Comm’rs., 2018 CV 02795 (Mahoning Cty. C.P. Feb. 20, 2020).

[28] Wagoner, supra note 6.

[29] Steven Malanga, We’re From the Government and We’re Here to Build a Bike Path, Wall Street Journal (Feb. 14, 2019, 5:19 PM) https://www.wsj.com/articles/were-from-the-government-and-were-here-to-build-a-bike-path-11581718779.

[30] Id.

[31] Mackenzie Christman, Why Can’t Eminent Domain Help Build Bike Paths?, Sierra Club (Oct. 7, 2019) https://www.sierraclub.org/wisconsin/blog/2019/10/why-cant-eminent-domain-help-build-bike-paths.

[32] Wis. Stat. 32.015.

[33] H.B. 288, 133rd Ohio Gen. Assemb. (2019); H.B. 476, 133rd Ohio Gen. Assemb. (2020).

[34] Ohio Rev. Code Ann. § 1545.05-28.

[35] Ohio Rev. Code Ann. § 1545.11 (emphasis added).

[36] Snyder v. Board of Park Comm’rs, 125 Ohio St. 336, 340 (Ohio 1932).

[37] Chicago, B. & Q. R. Co. v. Chicago, 166 U.S. 226, 241 (1897) (applying the Fifth Amendment to the states through the Fourteenth Amendment).

[38] Kelo v. City of New London, 545 U.S. 469, 506-515(2005) (O’Connor, J., dissenting).

[39] Id.

[40] City of Norwood v. Horney, 853 N.E.2d 1115,1142-43 (Ohio 2005).

[41] Id. at 1129.

[42] “[W]here private property shall be taken for public use, a compensation therefor [sic] shall first be made in money.” Ohio Const., Art I § 19.

[43] Norwood, 853 N.E.2d at 1123.

[44] Id.

[45] Ohio Rev. Code Ann. § 163.01-63.

[46] Ohio REv. Code Ann § 163.04.

[47] “No agency shall appropriate real property except as necessary and for a public use. In any appropriation, the taking agency shall show by a preponderance of the evidence that the taking is necessary and for a public use.” Ohio Rev. Code Ann. § 163.021(A).

[48] Id.

[49] Cox v. State, 2016 WL 4507779 (N.D. Ohio 2016).

[50] Ohio Rev. Code Ann. § 163.01(H)(1).

[51] Ohio Rev. Code Ann. § 163.01(H)(2)

[52] Bd. of Trs. of Sinclair Cmty. College Dist. v. Farra, 2010-Ohio-568, ¶ 37 (Ohio Ct. App. 2010).

[53] Ohio Rev. Code Ann. § 163.09(B)(1)(a).

[54] State ex rel. Coles v. Granville, 116 Ohio St. 3d 231, ¶ 29 (Ohio 2007).

[55] City of Dublin v. Beatley, 2018-Ohio-3354, ¶¶ 21-24, 35-37 (Ohio Ct. App. 2018); City of Dublin v. RiverPark Grp., LLC, 2019-Ohio-1790, ¶¶ 11-29 (Ohio Ct. App. 2019).

[56] Complaint at ¶ 6, Bd. of Comm’rs., 2018 CV 02795.

[57] Statement of Michael Cameron, supra note 11.

[58] Hearing, supra note 11 (statement of Green Township Trustees, proponent).

[59] Wagoner, supra note 6.

[60] Beatley, 2018-Ohio-3354 at ¶ 34.

[61] Wagoner, supra note 6.

[62] H.B. 288, 133rd Ohio Gen. Assemb. (2019).

[63] Id.

[64] Hearing, supra note 11 (statements of Michael Cameron, Green Township Trustees, Alan Dickerhoof, and David roller, proponents).

[65] Hearing, supra note 11 (statements of City of Cincinnati, City of Upper Arlington, Cleveland Metroparks, Columbus and Franklin County Metroparks, Ohio Bicycle Federation, and Tristate Trails, opponents).

[66] Larry Limpf, Rec trails subject of eminent domain bill, The Press (Jan. 31, 2020, 4:00 PM) https://presspublications.com/content/rec-trails-subject-eminent-domain-bill.

[67] H.B. 476, 133rd Ohio Gen. Assemb. (2020).

[68] Id.

[69] Id.

[70] Id.

[71] Statement of Green Township Trustees, supra note 58.

[72] City of Norwood v. Horney, 853 N.E.2d 1115,1129 (Ohio 2005).

Limiting Limited Liability in Copyright Infringement Suits

Photo: liability by Marco Verch under CC BY 2.0

Mike Chernoff, Associate Member, University of Cincinnati Law Review

I. Introduction

A copyright holder has the exclusive right to reproduce his copyrighted work, prepare derivative works, and distribute copies of the work.[1] If these rights are violated, the party responsible for the violation can be found to have infringed on the copyright.[2] This liability for infringement can extend to a third party vicariously in certain situations.[3] Recently, the District Court for the Northern District of Alabama ruled on the application of vicarious liability for copyright infringement to limited liability companies in Joe Hand Promotions, Inc. v. Alburl.[4] This case also raised the question of whether willful infringement damages may extend to another member of an LLC when vicarious liability has been found.[5]

II. Copyright Infringement

Copyright protection is available to “original works of authorship fixed in any tangible medium of expression.”[6] The exclusive rights that are afforded to a copyright holder include the right to reproduce the work, to prepare derivative works, and to distribute copies of the work.[7] In the case of a motion picture or other audiovisual works, the exclusive right to perform the copyrighted work publicly is also vested in the owner of the copyright.[8] Anyone who violates any of these exclusive rights of the copyright owner is liable for infringement of the copyright.[9] To make a prima facie case of copyright infringement, a plaintiff must show that (1) it owns a valid copyright in the work and (2) the defendants copied copyright-protected elements of the work.[10]

If the infringement is willful, courts can impose higher damage penalties by as much as $150,000.[11] This would be in addition to the ordinary damages that are available to the plaintiff in a copyright case, which can generally be either (1) actual damages plus additional profits of the infringer, or (2) between $750 and $30,000.[12] In the Eleventh Circuit, infringing conduct is willful when the infringer knows the conduct violates another’s exclusive rights, whether or not the violation is malicious.[13]

Parties can also be liable for the infringing conduct of others.[14] A party is vicariously liable for the infringing conduct of others when they have the ability to supervise the infringer and a financial interest in the infringing activity.[15] Vicarious liability may attach even when the defendant is unaware of the infringing conduct.[16]

III. Joe Hand Promotions, Inc. v. Alburl

The application of willful vicarious liability to a limited liability company (“LLC”) recently appeared in a suit in Alabama in Joe Hand Promotions, Inc. v. Alburl.[17] Scott Aburl and Angie Barraza were owners of Sidelines33, LLC, (“Sidelines”) and operated Sideline Pub & Grub with Barraza claiming a ten percent ownership stake.[18] Barraza’s responsibilities were limited to scheduling employees, daytime bartending, opening the store on occasions, counting the drawer, and ensuring the establishment was stocked.[19] Joe Hand Promotions (“JHP”), a distributor and licensor of sporting events, alleged that Sidelines exhibited the August 26, 2017 Floyd Mayweather, Jr. vs. Conor McGregor boxing match (“the program”) without paying the proper licensing fee.[20] JHP contracted to have exclusive commercial distribution rights of the program.[21] JHP alleged that Sidelines unlawfully obtained the Program through an unauthorized source and that Sidelines intentionally pirated the program in order to attract customers.[22]

Barraza did not dispute that the Program was broadcast at Sidelines, but denied that she assisted in showing the unlawful program.[23] She claimed to have no knowledge about the alleged infringement because Alburl, her now ex-husband, was solely responsible for receiving the transmission.[24] Barraza conceded that the Program was shown at Sidelines and that JHP had a valid copyright, thus JHP had a prima facie case of willful copyright infringement by Sidelines.[25]

The court had to decide two issues: was Barraza vicariously liable for the infringing broadcast and if so, was the vicarious infringement willful. Barraza argued that her “minor” ownership interest in Sidelines and Alburl control of the business precluded vicarious liability for the infringing display.[26] Barraza claimed no ability to supervise the direct infringer and that she was not a “dominant influence” in the business and should not be held liable for Alburl’s decisions.[27] The court granted the plaintiff’s motion for summary judgment on liability, holding that all owners were liable for the actions of the business, just as all owners shared in the gains and losses of the business.[28] The court determined an owner’s level of influence over the conduct of the business is not material to determine her liability for copyright infringement when the company is found to have infringed.[29]

Barraza argued that even if she was liable for the infringing conduct, she could not be assessed damages for willful infringement because she was not aware of the infringement.[30] The court ruled that the issue was whether the company’s conduct was willful, not Barraza’s.[31]

IV. Discussion

The extension of vicarious liability to the owners of an LLC provides a difficult question concerning the second element of vicarious liability: the right and ability to supervise the direct infringer. There are cases, including the Alburl case above, in which the LLC owner would not have had much, if any, supervising ability in displaying the unlicensed program. Vicarious liability should not extend to the non-supervisory owners because one of the elements of vicarious liability is not met. Extending vicarious liability to non-supervisory members of an LLC also takes away a key benefit of the LLC model: the limited liability. The limited liability structure of an LLC is designed to take away the risk of liability of individual LLC owners due to the acts of another person. Holding LLC members vicariously liable for another’s infringement activities destroys this limit on liability.

The extension of willful damages to a vicariously liable member also raises conflicts with the nature of LLCs. LLCs separate the members from the company as legal entities. Although a person involved in the company may have been willful in infringement, this does not indicate that an individual member may have been knowledgeable of this infringement. The imputation of knowledge should not cross the company-member boundary when this boundary was designed to protect the members from the company’s situations.

V. Conclusion

Extending vicarious liability to non-supervisory members of an LLC may greatly limit the benefits that LLC members are provided in this type of business organization. The protection provided by the LLC would be further weakened by allowing willful damages to extend to these vicarious infringers. Courts should consider these protections LLCs offer to their members when deciding these cases.


[1] 17 U.S.C.S. § 106 (Lexis 2020).

[2] 17 U.S.C.S. § 501(a) (Lexis 2020).

[3] Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 262 (1996).

[4] Joe Hand Promotions, Inc. v. Alburl, No. 5:18-cv-1935-LCB, 2020 U.S. Dist. LEXIS 29309 (N.D. Ala. Feb. 20, 2020).

[5] Id.

[6] 17 U.S.C.S. § 102 (Lexis 2020).

[7] 17 U.S.C.S. § 106 (Lexis 2020).

[8] 17 U.S.C.S. § 106(4) (Lexis 2020).

[9] 17 U.S.C.S. § 501(a) (Lexis 2020).

[10] Joe Hand Promotions, Inc. v. Alburl, No. 5:18-cv-1935-LCB, 2020 U.S. Dist. LEXIS 29309, at *6 (N.D. Ala. Feb. 20, 2020) (citing Saregama India, Ltd. v. Mosley, 635 F.3d 1284, 1290 (11th Cir. 2011)).

[11] 17 U.S.C.S. § 504(c)(2) (Lexis 2020).

[12] 17 U.S.C.S. §504 (Lexis 2020).

[13] Joe Hand Promotions, Inc. v. Alburl, No. 5:18-cv-1935-LCB, 2020 U.S. Dist. LEXIS 29309, at *7 (N.D. Ala. Feb. 20, 2020) (quoting Yellow Pages Photos, Inc. v. Ziplocal, LP, 795 F.3d 1255, 1271 (11th Cir. 2015)).

[14] Joe Hand Promotions, Inc. v. Alburl, No. 5:18-cv-1935-LCB, 2020 U.S. Dist. LEXIS 29309, at *10 (N.D. Ala. Feb. 20, 2020) (citing Southern Bell Tel. & Tel. Co. v. Associated Tel. Directory Publishers, 765 F.2d 801, 811 (11th Cir. 1985)).

[15] Id.

[16] Southern Bell Tel. & Tel. Co. v. Associated Tel. Directory Publishers, 765 F.2d 801, 809 (11th Cir. 1985) (citing Gershwin Publ’g Co. v. Columbia Artists Management, Inc., 443 F.2d 1159, 1162 (2d Cir. 1971)).

[17] Joe Hand Promotions, Inc. v. Alburl, No. 5:18-cv-1935-LCB, 2020 U.S. Dist. LEXIS 29309 (N.D. Ala. Feb. 20, 2020).

[18] Id. at *1, *9.

[19] Id. at *9.

[20] Id. at *2.

[21] Id. at *1.

[22] Id. at *2-*3.

[23] Id. at *5.

[24] Id. at *5-*6.

[25] Id. at *6, *9.

[26] Id. at *11.

[27] Id.

[28] Id. at *15.

[29] Id. at *16.

[30] Id. at *17.

[31] Id. at *18.

Autoerotic Asphyxiation and Accidental Death Insurance

Photo by Helloquence on Unsplash

Zachery Hullinger, Associate Member, University of Cincinnati Law Review

I. Introduction

Life insurance policies provide some measure of solace and stability to grieving families, but the collection on these policies is not always assured. Accidental death insurance sometimes contains an exception for “intentionally self-inflicted injuries.”[1] Federal circuit courts have recently split on the applicability of this exception in instances where death resulted from autoerotic asphyxiation.[2] Autoerotic asphyxiation is “the practice of temporarily depriving oneself of oxygen while masturbating in order to increase sexual sensation.”[3] Those engaging in the activity do not expect to die, but the failure to restore oxygen flow can result in death—a death that may be regarded as accidental. But the decedents undeniably place themselves at risk, and some courts have held that despite the death being unintentional, insurance recovery is barred by the exception for intentionally self-inflicted injuries.

Not only do these cases present unique factual situations that strain the concepts of accident and injury, judges may also have difficulty empathizing with them. Accidental deaths are typically the sort of case that may tug at a judge’s heartstrings, but to most judges, the practice of autoerotic asphyxiation probably appears depraved and utterly foreign. In these cases, it is exceedingly important to disentangle the legal questions from their factual underpinnings, and to frame those questions without prejudice. Part II of this article reviews the three cases that comprise the current circuit split. Part III discusses the correct interpretation of autoerotic asphyxiation under accidental death insurance policies, determining that it does not constitute an intentionally self-inflicted injury.

II. The Circuit Split

Three circuit courts have confronted insurance benefits covered by the Employee Retirement Income Security Act (“ERISA”), a federal statute that governs health insurance policies.[4] The Ninth Circuit, in Padfield v. AIG Life Ins. Co.,[5] and the Second Circuit, in Critchlow v. First UNUM Life Ins. Co. of Am.,[6] have held that the insurance policy exclusions for intentionally self-inflicted injuries did not apply to deaths to by autoerotic asphyxiation. The Seventh Circuit recently disagreed in Tran v. Minnesota Life Ins. Co.[7] This section will discussion each case in chronological order.

A. Padfield v. AIG Life Ins. Co. (2002)

In Padfield, the plaintiff’s husband was found dead in the back of a van, hung by a necktie, and surrounded by pornographic materials.[8] The coroner’s report stated that the death was the accidental result of autoerotic asphyxiation.[9] After Mrs. Padfield claimed benefits from her husband’s death insurance policy, AIG invoked exceptions in the policy that denied recovery for death resulting from suicide or intentionally self-inflicted injury.[10] The Ninth Circuit first dispensed with the suicide exclusion by applying a dual subjective and objective inquiry, holding that the decedent had a subjective expectation of survival, and that this expectation was objectively reasonable since death was not “substantially likely” to result from the conduct.[11] 

The court then turned to the intentionally self-inflicted injury exception, where it framed the question as being “whether the physical consequences that Mr. Padfield intended were injuries.”[12] The court, applying the dual subjective and objective inquiry, determined that the decedent intended only for a temporary deprivation of oxygen and euphoric light-headedness, and that injuries were not “substantially certain” to result from his conduct.[13] Because courts interpret terms in ERISA policies “in an ordinary and popular sense as would a person of average intelligence and experience,”[14] the Ninth Circuit held that these intended results would not have constituted an injury “as that word is commonly defined.”[15] The dissent argued that intentionally restricting “the flow of oxygen to the brain by self-asphyxiation, even without intent to be fatal, is to inflict, intentionally, injury upon oneself.”[16]

B. Critchlow v. First UNUM Life Ins. Co. of Am. (2004)

The Second Circuit struggled mightily with autoerotic asphyxiation in Critchlow. It initially held opposite to the Ninth Circuit,[17] a decision it later withdrew and vacated while deciding whether to rehear the case en banc, after one judge changed his mind and flipped the original 2-1 holding.[18] In Critchlow, the decedent had tied ligatures to various parts of his body to limit oxygen flow, along with counter weights attached to the cords that functioned as an escape mechanism.[19] However, the escape mechanism failed to save him. The decedent had first engaged in these activities when he was only twelve or thirteen years old, and had presumably continued throughout the nearly twenty years before his death.[20] UNUM denied coverage under the decedent’s life insurance policy, citing the exception for intentionally self-inflicted injuries.[21] 

Like the Ninth Circuit, the Second Circuit asked whether the decedent’s subjective intent to survive was objectively reasonable.[22] The court separated the total strangulation from partial strangulation, noting that a focus on total strangulation confuses the intent of Critchlow’s activities with their result.[23] The court ultimately held that the only result of properly practiced autoerotic asphyxiation is temporary lightheadedness, and that a reasonable person would not ordinarily understand this to constitute an “injury.”[24] The dissenting judge, who had enjoyed majority status in the vacated opinion, would have held partial strangulation to be an injury, and said he would not change his mind “until someone, whose opinion I respect, honestly informs me…he or she would not hesitate to undergo a session of autoerotic asphyxiation through strangulation.”[25]

C. Tran v. Minnesota Life Ins. Co. (2019)

The dissents in Padfield and Critchlow certainly foreshadowed an eventual circuit split, which the Seventh Circuit delivered fifteen years after Critchlow. In Tran, the decedent was found hung from a noose attached to the ceiling beam in his basement, in what the police had initially deemed a suicide.[26] The presence of sexual paraphernalia and a towel wrapped around decedent’s neck, presumably used as a safety precaution, ultimately led the medical examiner to conclude that the decedent had died performing autoerotic asphyxiation.[27] The Seventh Circuit split its analysis of the intentionally self-inflicted injury exception in two parts, by first asking whether autoerotic asphyxiation is an “injury,” and then determining whether that injury was “intentionally self-inflicted.”[28]

The court first confronted the other circuits’ separation of the act into partial and total strangulation, stating that the strangulation never shifted from partial and nonlethal to lethal, but rather that one act of autoerotic asphyxiation had killed the decedents. But the court said that even if the act is viewed as one of partial strangulation, it is still an injury, as “an ordinary person would consider choking oneself by hanging from a noose to be an injury.”[29] The court further supported this claim by noting that strangulation is a criminal offense[30] and that autoerotic asphyxiation is a sexual masochism disorder.[31] After holding that autoerotic asphyxiation constituted an injury, the court simply determined that the decedent had indeed intended to perform this action, and therefore intended to injure himself.[32] The dissent contended that the decedent’s “conduct was undoubtedly risky but was not inherently injurious,” and that the majority incorrectly concluded “that any amount of asphyxiation is injurious.”[33]

III. Discussion

To understand the self-inflicted injury exception, it may be helpful to first separate it from the unusual context of autoerotic asphyxiation; consider the following example provided by Fawcett v. Metropolitan Life Insurance Co.:

An insured might so wish to avoid continuing on his job that he plans to shoot himself in the foot, thus intending to render himself unable to work, but yet alive. . . . However, upon successfully shooting himself in the foot, the injured loses consciousness due to the extreme pain and the gruesome sight of his damaged appendage. Unfortunately, no one hears the shot, and no one returns home to the home to discover the insured until many hours have passed, during which time the insured has bled to death. . . . [T]he insured may not have committed suicide, but his death was certainly caused “wholly or partly, directly or indirectly, by… [an] intentionally self-inflicted injury.[34]

Autoerotic asphyxiation cases are similar in that the decedent did not intend the ultimate result—death. But the question under the intentionally self-inflicted injury exception is whether they intended the underlying injury that resulted in their death, or, to borrow from the above example, whether they intended to shoot themselves in the foot, and whether that shot qualifies as an injury.

The Seventh Circuit’s separation of injury and intent was helpful, but backwards. The decedent could really only intend one result—asphyxiation—from his actions, despite the existence of multiple potential injuries that the decedent never intended. The inquiry should first be filtered through the question of the intent to distill the sole pertinent action that will then be assessed under the injury prong of the analysis. This failure to lead with the intent prong also explains why Tran rejected the delineation between partial and total strangulation. The other circuits never explicitly broke the act of strangulation into different “stages,” but it is necessary to focus on partial strangulation since that was the decedent’s intent, though temporary strangulation may be a more precise phrasing.[35]

In all cases, the decedent’s intent was to asphyxiate himself only to the point of sexual pleasure. The cases then ask whether this subjective intent was objectively reasonable. Since the prudent practice of autoerotic asphyxiation involves safeguards to prevent lethal strangulation and damage to the neck, it is difficult to say that decedents’ expectation of nonlethal asphyxiation was objectively unreasonable. The action is undoubtedly risky, as Judge Bauer noted in Tran, but the expectation of mere temporary asphyxiation is not unreasonable.[36] The inquiry then turns to whether temporary asphyxiation is an injury in and of itself.

The Seventh Circuit found injury through its visceral depiction of autoerotic asphyxiation, and by making commonsense appeals. Tran held that “an ordinary person would consider choking oneself by hanging from a noose to be an injury,”[37] and went further to say that “[s]trangling oneself to cut off oxygen to one’s brain is an injury, full stop.”[38] This depiction is evocative and has an intuitive appeal. But it fails to specify the injury.  While taking issue with the loss of oxygen to the brain, the court doesn’t specify exactly how the brain is impaired or injured. If it merely results in lightheadedness, as the other circuits have indicated, an ordinary person would not consider that to be an injury.

Consider oxygen deprivation in other contexts, removed from any images of hanging by a noose. Imagine a group of kids competing to see how long they can hold their breath underwater. We would not say that their choice to deprive themselves of oxygen was an injury. If someone were to choke on food for an extended period, but eventually dislodge it from their throat and continue their day without incident, we would not say that they were injured merely because they were temporarily deprived of oxygen.

The Seventh Circuit’s additional support, citing strangulation as a criminal offense, is also not persuasive. Not only is this not probative as to whether the act is injurious, but self-strangulation is also worlds apart from strangulation by another. The former is voluntary, controllable, and nonviolent, while the latter is often violent, likely results in bruises and marks to the neck, and infringes on the victim’s liberty interests.

IV. Conclusion

Death by autoerotic asphyxiation pushes the boundaries of what society considers to be an accident and an injury. But oxygen deprivation and strangulation, while potentially lethal, are not inherently injurious, even if the ordinary person may seek to avoid them. After disentangling the legal questions from the unusual situations underlying these accidental death insurance claims, it becomes apparent that the decedents do not intentionally injure themselves, and the beneficiaries should be able to recover from their accidental death policies.


[1] Life insurance policies sometimes contain Accidental Death & Dismemberment (“AD&D”) policy riders, which usually contain exceptions for suicide and deaths resulting from intentionally self-inflicted injury.  See Tran v. Minnesota Life Ins. Co., 922 F.3d 380, 381-82 (7th Cir. 2019).

[2] Id. at 386.

[3] Sam Erman, Word Games: Raising and Resolving the Shortcomings in Accident-Insurance Doctrine That Autoerotic-Asphyxiation Cases Reveal, 103 Mich. L. Rev. 2172, 2173 (2005).

[4] The Fifth and Eighth Circuits have applied state law in resolving insurance benefits for death resulting from autoerotic asphyxiation.  See, e.g., Sims v. Monumental Gen. Ins. Co., 960 F.2d 478 (5th Cir. 1992); Am. Bankers Ins. Co. of Fla. v. Gilberts, 181 F.3d 931 (8th Cir. 1999).

[5] Padfield v. AIG Life Ins. Co., 290 F.3d 1121 (9th Cir. 2002).

[6] Critchlow v. First UNUM Life Ins. Co. of Am., 378 F.3d 246 (2d Cir. 2004).

[7] Tran v. Minnesota Life Ins. Co., 922 F.3d 380 (7th Cir. 2019).

[8] Padfield, 290 F.3d at 1124.

[9] Id.

[10] Id.

[11] Id. at 1127.

[12] Id. at 1129.

[13] Id.

[14] Id. at 1124 (citing Babikian v. Paul Revere Life Ins. Co., 63 F.3d 837, 840 (9th Cir.1995)).

[15] Id. at 1130.

[16] Id. at 1130 (Leavy, J., dissenting).

[17] Critchlow, 340 F.3d at 130 (opinion withdrawn and vacated on reconsideration, 378 F.3d 246 (2d Cir. 2004)).

[18] Critchlow v. First UNUM Life Ins. Co. of Am., 378 F.3d 246, 249 (2d Cir. 2004).

[19] Id. at 249-50.

[20] Id. at 260 (“Critchlow’s father’s affidavit indicated that Critchlow had practiced autoerotic asphyxiation at as early as the age of 12 or 13”).

[21] Id. at 250.

[22] Id. at 259.

[23] Id. at 260.

[24] Id. at 262.

[25] Id. at 265 (Van Graafeiland, J., dissenting).

[26] Tran v. Minnesota Life Ins. Co., 922 F.3d 380, 381 (7th Cir. 2019).

[27] Id.; Id. at 388 (Bauer, J., dissenting) (noting that decedent had put in place prophylactic measures to mitigate risk, including “a towel wrapped around his neck, his foot resting on a step stool, and a possible release mechanism”).

[28] Id. at 382.

[29] Id. at 384.

[30] Id.

[31] Id. at 385 (“Some people enjoy harming themselves.  That harm is still an injury.”).

[32] Id. at 385-86.

[33] Id. at 388-89 (Bauer, J., dissenting).

[34] Fawcett v. Metro. Life Ins. Co., No. C-3-97-540, 2000 U.S. Dist. LEXIS 10061, at *18-19 (S.D. Ohio June 28, 2000) (quoting Shepherd v. Metro. Life Ins. Co., 1995 U.S. Dist. LEXIS 22203, at *14 (S.D. Ohio Mar. 9, 1995)).

[35] Critchlow, 378 F.3d at 260 (warning that a focus on total strangulation “tends to merge the concepts of intent and result.”)

[36] Tran, 922 F.3d at 388 (Bauer, J., dissenting).

[37] Id. at 384.

[38] Id. at 386.

My Home, My Castle: What About A Homeless Man’s Cardboard Home?

Photo by Toby Wong on Unsplash

Ali Kassym, Associate Member, University of Cincinnati Law Review

I. The Incident

One night during October 2018, Joseph Matos, a homeless man in New York, was suddenly awoken by two individuals.[1] One of the individuals, a male college student, kicked Matos’s dwelling—a structure formed by multiple cardboard boxes linked together under the awning of a hair salon.[2] Provoked by the action, Matos got out of his shelter and launched at the visitors with a knife, stabbing one of them and slashing the other.[3] Charged with assault, Matos has raised an unorthodox defense—Matos invoked New York’s castle doctrine and claimed that the doctrine justified his actions, as he was protecting his home against intruders.[4] This case raises a number of legal questions, including whether a structure made from cardboard boxes is a home within the meaning of castle doctrine. This article is set to answer this question.

II. Background

Under the New York Penal Law §35.15, a person may not use deadly physical force unless the person reasonably believes that serious physical harm is imminent.[5] Even then, a person must retreat if the opportunity presents itself.[6] However, a person has no duty to retreat when “he or she is in his or her dwelling and not the initial aggressor.”[7] This exception dates back to the longstanding principle that a person, if assailed at his dwelling, may stand his ground and oppose attackers without fleeing.[8] The right to stand one’s ground is also available to individuals who have a permission to be present in the dwelling: guests, family members, baby-sitters, etc.[9]

One of the key issues stemming from Matos’s defense is whether a construction made from cardboard boxes is a “dwelling” within the meaning of the castle doctrine, thus legally justifying his self-defense. Article 35 of the New York Penal Code, which addresses the castle doctrine, does not provide a definition for the term “dwelling.”[10] However, the term is defined for purposes of burglary and criminal trespass as a “building which is usually occupied by a person lodging there at night.”[11]

New York case precedents do not readily assist in determining whether a shelter made from cardboard boxes constitutes a dwelling. In People v. Aiken, the defendant, when confronted by his apartment neighbor, struck the neighbor with a metal pipe and killed him.[12] The court in Aiken refused to recognize that defendant was entitled to a §35.15 jury instruction because he was in a doorway between his apartment and a hall when he killed the victim.[13] The court described the doorway as a “portal between an interior world and a public one,” thus not covered by the dwelling-defense exception under §35.15.[14] The exclusion of public places from legal definition of the term “dwelling” is also supported in other cases.[15]

Contrary to the decision in Aiken, the court in People v. McCurdy held that a hallway space in an apartment complex was qualified as a dwelling under §35.15.[16] In McCurdy, the defendant struggled with the victim inside the hallway outside of defendant’s apartment.[17] Because of the locked front door, the hallway was only accessible to the residents of the building and their guests.[18] The degree of privacy of the hallway led the court to a conclusion that the defendant should have been able to invoke §35.15 during his trial.[19] Similarly, in People v. Cruz-Sanchez, the court deemed the porch of the defendant’s home to be a dwelling as a matter of law.[20] A porch, as the court in Cruz-Sanchez reasoned, was a “part of structure where the defendant lives and where others are ordinarily excluded—the antithesis of which is routine access to or use of an area by strangers.”[21] Thus, exclusive access plays a key role in determining whether a certain structure fits within the legal meaning of a dwelling.

III. Discussion

The New York case law does not offer a clear answer as to what constitutes a dwelling within §35.15. Nevertheless, the relevant precedents set up a guiding framework that can be used to establish whether the term dwelling extends to various places. The framework dictates that a dwelling cannot be located within a public domain accessible by strangers. Consequently, the more restricted—or exclusive—an access to a place is, the higher the chances that a defendant’s dwelling will be included in the definition.

Matos’s residence—made from interlinked cardboard boxes—is unlikely to be deemed a dwelling within §35.15 of the New York Penal Law. As shown by the precedents, apartments and houses routinely qualify as a dwelling. At the very least, dwelling implies having a proprietary interest in a residence, the owner of which retains a right to exclude or include others as he pleases. In this case, Matos’s housing was located on a public space next to a hair salon—Matos did not own the land where his dwelling was located. The only thing Matos owned was structure made of cardboard, located on a public domain for which bystanders had direct access. Nothing prevented random strangers from invading the cardboard structure except for Matos himself. Therefore, Matos’s box shelter has very slim chances of qualifying as a dwelling under Article 35.

There are, however, more impediments facing Matos’s defense. Even if the cardboard boxes were considered a dwelling, Matos’s defense will likely fail due to the fact that he acted in self-defense while outside of the boxes. On top of that, one can hardly imagine a court favoring Matos’s defense due to public policy concerns. With about 60,000 homeless people in New York—3,000 of which live on the streets[22]—any court would be hesitant to set a precedent justifying the homeless to defend an occupied piece of public property with deadly force.

IV. Conclusion

Overall, Mr. Matos’s defense will likely fail the dwelling element of a castle doctrine, as the doctrine does not seem to expand to untraditional residences like cardboard boxes. Moreover, Matos did not, and likely had no right to, restrict the access to his shelter, which was located in a public space. Consequently, Matos has marginal chances of prevailing on the castle doctrine claim.


[1] Nikita Stewart & Jan Ransom, He Says He Stabbed a Student to Defend His Home. His Home Is a Box., The New York Times (Jan 15. 2020), https://www.nytimes.com/2020/01/15/nyregion/homeless-stabbing-college-students.html.

[2] Id.

[3] Id.

[4] Id.

[5] N.Y. Penal Law §35.15(2)(a) (2020).

[6] Id.

[7] Id. at (2)(a)(i).

[8] People v. Tomlins, 213 N.Y. 240, 243 (1914).

[9] People v. White, 484 N.Y.S.2d 994, 996 (Sup. Ct. 1984).

[10] Id.

[11] N.Y. Penal Law §140.00(3) (2020).

[12] People v. Aiken, 4 N.Y.3d 324, 326 (2005).

[13] Id. at 329.

[14] Id. at 330.

[15] See People v. Hernandez, 721 N.Y.S.2d 633, 633 (App. Div. 1st Dept. 2001) (holding that justification under §35.15 was inapplicable because the shooting occurred outside of defendant’s apartment, an area not within defendant’s dwelling.); See also People v. Duren, 652 N.Y.S.2d 297, 298 (App. Div. 2nd Dept. 1996) (affirming the judgment that the defendant had a duty to retreat because the crime in question took place in the lobby of defendant’s apartment building, and not his dwelling.)

[16] People v. McCurdy, 450 N.Y.S.2d 507, 510 (App. Div. 2nd Dept. 1982)

[17] Id. at 508-509.

[18] Id. at 510.

[19] “Access to the hallway was limited to residents of the building and their guests. A  locked front door insured this security. The incident itself took place at the foot of the stairs leading to the apartment. The degree of privacy of the brownstone and its hallway compels us to conclude that the jury should have been told that defendant had no duty to retreat, if he reasonably believed that Bradford was using, or was about to use, deadly physical force.” People v. McCurdy, 450 N.Y.S.2d 507, 510 (App. Div. 2nd Dept. 1982).

[20] People v. Cruz-Sanchez, 821 N.Y.S.2d 856, 857 (Cnty. Ct. 2006).

[21] Id.

[22] Tyler Blint-Welsh, Federal Data Shows Nearly 80,000 Homeless in New York City, The Wall Street Journal (24 Oct. 2019), https://www.wsj.com/articles/federal-data-show-nearly-80-000-homeless-in-new-york-city-11571922000.

Reverse Settlements: Finding a Balance Between Doing Business and Monopolizing the Market

Photo by Thought Catalog on Unsplash

Ali Kassym, Associate Member, University of Cincinnati Law Review

Pay-for-delay transactions are a recent, concerning practice in the pharmaceutical industry. In a pay-for-delay transaction, a patent holder pays an alleged patent infringer to delay the production of a generic drug.[1] This type of pay-for-delay transactions seem counterintuitive because the party bringing an infringement claim ends up paying the alleged infringer instead of pursuing litigation or demanding a compensation. The practice’s unintuitive nature earned it a name—reverse settlement—alongside dozens of allegations of unfair competition and antitrust laws.[2] In 2013, the Supreme Court examined whether reverse settlements unreasonably prevent competition.[3] The Court concluded that reverse settlements are not presumptively unlawful, but are often illegal depending on the facts surrounding the settlement.[4] Today, many lawyers question whether government enforcement is effective at deterring reverse settlements.[5] According to the Federal Trade Commission, there were 30 explicit reverse settlements in 2016 alone, with 14 more settlements categorized as potentially containing features similar to a classic pay-for-delay transaction.[6] In light of increased attention reverse settlements have received, this article will analyze the status of reverse settlements today and briefly evaluate the effectiveness of efforts aimed at preventing pharmaceutical companies from manipulating market competition with pay-for-delay transactions.

I. Generic Drugs Approval Process under the Hatch-Waxman Act

In 1984, the Drug Price Competition and Patent Term Restoration Act (“Hatch-Waxman Act”) introduced a new approval pathway for generic drug products—filing an Abbreviated New Drug Application (“ANDA”).[7] Greatly simplified, to be approved under the Act a generic drug manufacturer only needs to demonstrate that the new generic drug is safe, effective, and does not infringe on patent rights.[8] Most importantly, the first-to-file ANDA applicant for a generic drug gets a 180-day marketing exclusivity.[9] Since the ANDA process does not shield generic drug applicants from patent infringement liability, the approved, patent-owning brand-name drug manufacturers can, and often do allege patent infringement against the challenging ANDA applicants. [10] During the patent litigation, patent-holding manufacturers will sometimes prefer to pay off the generic drug ANDA applicant to stop, or at least, delay the drug from getting to consumers.[11] Reverse settlements like this have come under increased scrutiny, and the legality of revere settlement came to head in the Supreme Court case, FTC v. Actavis.[12]

II. The Supreme Court’s Decision in FTC v. Actavis

In Actavis, the Federal Trade Commission (“FTC”) claimed that a settlement between Solvay Pharmaceuticals (“Solvay”), Actavis, and Paddock Laboratories violated the Federal Trade Commission Act alleging that it was an unlawful, anti-competitive practice.[13] Solvay obtained ANDA for a brand-name drug called AndroGel in 1999.[14] Later that year, Actavis filed ANDA for a generic drug imitating AndroGel.[15] Separately from Actavis, Paddock also filed ANDA for their product, another generic imitation of AndroGel.[16] Solvay commenced patent litigation against both of the generic drug applicants which endured for several years.[17] However, the Food and Drug Administration eventually approved Actavis’ first-to-file generic drug Solvay and the generic manufacturers settled in 2006.[18] Per the settlement agreement, Actavis agreed to: (1) delay the release of its generic product to the market until 2015 (thereby surrendering the lucrative 180-day exclusivity) and (2) promote AndroGel to urologists.[19] In return, Solvay agreed to make annual payments of $19-30 million for nine years.[20] Solvay maintained that the payments to generic manufacturers were for their services rather than an anti-competitive pay-off.[21] The Eleventh Circuit ruled that reverse settlements were immune from antitrust attacks where the anticompetitive effects of the settlement are in accord with the exclusionary potential of the patent.[22] In other words, the circuit court asserted that the right to “cripple competition” was inherently vested in patent holders, even if there was an option to negate the patent monopoly by challenging the validity of a patent in litigation.[23]

The Supreme Court reversed the Eleventh Circuit’s decision in a 5-3 holding.[24] The Court disagreed that the potential involvement of patent monopoly could shield an agreement from antitrust investigation because there is a chance a patent can be invalidated through litigation.[25] Moreover, the Court’s precedents indicated that patent settlements could be in violation of antitrust laws.[26] The majority also deemed reverse settlements to be an unusual practice that could potentially have a “significant adverse effect on competition.”[27] While the Court recognized the value of encouraging settlements over patent litigation, the opinion cited five competing considerations that counterbalance the policy favoring settlements.[28] Lastly, the Court refused to hold that reverse settlements were presumptively unlawful.[29] The majority opinion found that the unlawful nature of pay-for-delay settlements would often depend on the factors such as size, scale, potential litigation costs, inclusion of other services, and lack of justifications.[30] The need to explore the facts surrounding a settlement thus barred the presumption against legitimacy of the reverse settlements.[31]

III. The Status of Reverse Settlements Today

The Supreme Court was hesitant to do away with reverse settlements in Actavis. Nonetheless, the Court also declined to extend antitrust immunity for patents to generic drug settlements. Instead, the majority advised federal courts to determine the legitimacy of each reverse settlement based on the underlying facts noting that some settlements will likely have an anti-competitive effect on the market. This holding theoretically provides parties in reverse settlement with room for defending the agreement from antitrust attacks while also upholding traditional goals of anti-trust law. But where exactly is the line between doing business and creating a monopoly? The Court offered some guiding factors such as the size and scale of a settlement, which implies that settlements larger in value pose a higher risk of disrupting competition. Perhaps the Court was justified to not draw a clear line, as evidenced by the fact that FTC cannot always readily determine whether a settlement with generic manufacturers even contains an unlawful form of compensation.[32]

IV. Efforts Against the Pay-for-Delay Settlements: A Promise of Effectiveness?

Since reverse settlements are not always unlawful, a legislator tasked with combating them is faced with a need to thread a fragile balance between endorsing speedy resolution through legitimate settlements and preventing the anti-competitive effects of pay-for-delay transactions. California is the first U.S. state to ban pay-for-delay agreements between pharmaceutical companies.[33] Approved by the Governor of the state on October 7th, 2019,[34] the aim of the Assembly Bill No. 824 (“California Bill”) is to preserve access to affordable drugs by banning reverse settlements and thereby promoting market competition.[35]

The California bill provides that an agreement resolving a patent infringement in relation to the sale of pharmaceutical product is presumed to have an anti-competitive effect if: (1) a nonreference drug filer[36] receives anything of value from a brand company alleging patent infringement, including a promise from a brand company to not launch a generic version of its drug, or (2) the nonreference drug filer agrees to abandon the “research, development, manufacturing marketing, or sales” of the nonreference drug filer’s product for any amount of time.[37] The bill further clarifies that usual settlement terms—such as covenants not to sue on a claim that the nonreference drug product infringes a U.S. patent, or compensation for avoiding future litigation—are not included within the meaning of “value” and thus will not trigger the presumption of unlawfulness.[38] However, the bill contains a few provisions aimed at preventing drug manufacturers from masking a litigation-avoidance payment as a compensation, such as the requirement of documentary proof of saved litigation expenses dating at least six months before the settlement and flexible cap on the amount of compensation.[39] Notably, the legislation allows the accused pharmaceutical companies to demonstrate compliance with the law via several exceptions.[40] Lastly, the bill imposes significant fiscal penalties—a violation of the bill could result in the payout of the greater amount between the three times the value received, or twenty million dollars.[41] Importantly, the bill contains the provision exposing violating parties to remedies and injunctions under the various state anti-trust statutes.[42]

A similar measure was introduced by Senators Klobuchar and Grassley in 2018.[43] The bill, named “Preserve Access to Affordable Generics and Biosimilars Act (“Generics Act”), intends to prohibit pay-for-delay settlements.[44] Per the Generics Act, Congress found generic drugs to be 80-85% cheaper than brand name drugs, which is why the settling drug manufacturers find splitting the profits from the monopoly created by reverse settlements to be more profitable than market competition.[45] The language of the Act draws significant parallels with the California Bill, as the Act utilizes similar language to describe what makes a settlement unlawful, the participating parties, available justifications and exceptions (including reasonable litigation fees up to $7.5 million).[46] The Generics Act also imposes civil penalty sufficient to “deter violations of this sections” but no greater than 3 times the value of the reverse settlement.[47] Similarly to the California Bill, the Act incorporates additional remedies provided by Federal law.[48]

Both of the legislative examples above are built to deter and punish reverse settlements. The bills also attempt to preserve the legitimate status of lawful patent infringement settlements by allowing settling parties to justify their terms of the agreement. At first glance, the structure of the Generics Act is quite similar to that of the California Bill. While language of the bills is fairly broad, the bills are still in accord with the Supreme Court’s ruling in Actavis as they incentivize the government to examine the underlying facts rather than to presume the illegality of every settlement between a patent owner and a generic drug applicant. Therefore, the effectiveness of the bills will be directly tied to the scrutiny and investigation of the state government.

Perhaps the biggest obstacle at dealing with reverse settlements through the proposed bills is proper deterrence. While both the California Bill and the Generics Act impose triple value penalties—with an option of flat $20 million in California Bill—the civil payouts may have little effect in deterring the reverse settlements among large corporations. For example, in 2015 Teva entered into a $1.2 billion settlement with FTC for engaging in a pay-for-delay settlement in connection to their drug Provigil.[49] While the sum is, without a doubt, substantial even for a corporation worth over $50 billion,[50] the settlement was an equivalent relative to Provigil’s annual revenue.[51] There are more examples of disproportionate and seemingly ineffective deterrence by the government.[52]

 The Supreme Court in Actavis hinted that settlements involving high value transactions would be more likely to violate anti-trust laws.[53] However, some multi-billion dollar corporations—the most exposed group of defendants under Actavis—can simply pay the civil penalty and continue to monopolize the market via pay-for-delay settlements. Instead of lump-sum penalties, the government should prioritize injunctions. Injunctions, such as corporate integrity agreements,[54] are often more effective at restraining healthcare providers.[55] Both the California Bill and the Generics Act contain provisions enabling injunctions and other remedies from applicable anti-trust legislation to be implemented in a reverse settlement. Thus, the lack of proper deterrence is addressed by the injunctions. Nevertheless, the imposition of the injunctive penalty is not required by either statute and is at the discretion of the regulating government agencies.

The shifting nature of reverse settlements is also a cause for concern. As evidenced by the FTC’s report for the 2016 fiscal year, the number of final settlement between brand drug manufacturers and generic ANDA filers has increased since 2013, but the number of settlements excluding litigation fees has dropped significantly.[56] Looking at this trend, one may assume that the parties involved in a reverse settlement will often mask the compensation for the delay of a generic drug as a cost of avoiding litigation. Both the California Bill and the Generics Act presume unreasonable litigation fees to be a part of the reverse settlement, with the California statute even requiring litigation documentation predating the settlement.

However, there are other methods of hiding the true purpose of a patent settlement. For example, a reverse settlement is not so easy to identify when something of value is substituted for a dollar payment. For example, parties to a settlement may strike a deal to not compete with each other by making a licensing agreement instead of direct payment.[57] In such situations, the value of the deal is not readily available, thus complicating the government’s task of identifying and punishing pay-for-delay transactions.

V. Conclusion

The reverse settlements are an effective tool that allows some pharmaceutical companies to manipulate the drugs market at the expense of consumers. The recent attempts at combating the anti-competitive practice seem to be generally well equipped to deal with reverse settlements. Nevertheless, the bills may need to be expanded to account for insufficient penalties and masked transactions. Still, the bills are a step in the right direction and provide specific jurisdictional and legislative starting points for government regulation of the pharmaceutical market.


[1] FTC v. Actavis, Inc., 570 U.S. 136, 140 (2013).

[2] See Id.

[3] See Id.

[4] Id. at  137-138.

[5]Valerie Bauman, Pharma Pay-for-Delay Deals Called ‘Cost of Doing Business’, Bloomberg Law (Feb. 10, 2020), https://www.bloomberglaw.com/product/blaw/document/X1L4FOKC000000?bna_news_filter=health-law-and-business&jcsearch=BNA%25200000016ff2ddd064a96ff2dd1cb70001#jcite.

[6] Fed. Trade Comm’n, Agreements Filed with the Federal Trade Commission under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003: Overview of Agreements Filed in FY 2016: A Report by the Bureau of Competition (2019).

[7] U.S. Food & Drug Admin., Hatch Waxman Letters (2018).

[8] 21 U.S.C.S. § 355(b)(1) (2020).

[9] 21 U.S.C.S. § 355(j)(5)(B)(iv) (2020).

[10] “It shall be an act of infringement to submit…an application under section 505(j) of the Federal Drug, and Cosmetic Act…for a drug claimed in a patent or the use of which is claimed in a patent.” 35 U.S.C.S. § 271(e)(2)(A) (2020);  FTC v. Actavis, Inc., 570 U.S. 136, 141 (2013).

[11] See Actavis, 570 U.S. 136, 141 (2013).

[12] See Id.

[13] Id. at 144-145.

[14] Id.

[15] Id. at 144.

[16] Id.

[17] Id.

[18] Id. at 145.

[19] Id.

[20] Id.

[21] Id.

[22] Id. at 146.

[23] Id.

[24] Id. at 139.

[25] Id. at 147.

[26] Id. 149.

[27] Id. at 148-149.

[28] The Court cited the following considerations: (1) reverse settlements can have a genuine anti-competitive effect; (2) anti-competitive consequences can be proved to be justified; (3) in the context of unjustified reverse settlements, the patent owner often has the power to harm the market; (4) it is not always necessary to litigate patent validity to resolve an antitrust issue; (5) allowing antitrust attacks on reverse settlements will not preclude the parties from settling their interests by other means. Id. at 154-158.

[29] Id. at 159.

[30] Id. at 159.

[31] Id. at 159-160.

[32] See FTC report 2016 (stating that 14 agreements in 2016 could potentially contain some form of compensation, but it is not clear from the face of the agreement whether certain provisions of the settlement act as a form of compensation to the generic manufacturer).

[33] Laura Mahoney, ‘Pay to Delay’ Generic Drug Arrangements Banned in California (1), Bloomberg Law (Oct. 7 2019),https://www.bloomberglaw.com/product/blaw/document/X756F6VK000000?bna_news_filter=true&jcsearch=BNA%25200000016d7481d551affdfcefe1a70001#jcite.

[34] The bill came in effect on January 1st of 2020. Id.  

[35] See generally A.B. 824, 2019-2020 Reg. Sess. (Cal. 2019)

[36] Nonreference drug filer is either :1) an ANDA filer or a 2) biosimilar biological application filer. Id. at (g)(1-2).

[37] Id. at 134002(a)(1)(A-B).

[38] Id. at 134002(a)(2)(B-C).

[39] Id. at 134002(a)(2)(C)(ii)(I-II).

[40] Parties to the settlement are not in violation if they can demonstrate the following by the preponderance of evidence: 1) the value received in compensation is a fair value for goods and services the nonreference drug filer agreed to provide, or 2) the agreement generated pro-competitive effect. Id. at 134002(a)(3)(A-B).

[41] Id. at (e)(1)(A)(i).

[42] “Each party that violates or assists in the violation of this section shall be liable for any damages, penalties, costs, fees, injunctions, or other … under the Cartwright Act … the Unfair Practices Act … or the unfair competition law … as applicable.” Id. at (e)(2).

[43] Preserve Access to Affordable Generics and Biosimilars Act, S.3792, 115th Cong. (2018).

[44] Id.

[45] Id. at (a)(6)(B)(i-ii)(C).

[46] See generally Id.

[47] Id. at (f)(1).

[48] Id. at (f)(4).

[49] Bauman, supra note 5.

[50] Teva was worth between $48-61 billion in 2015. Teva Pharmaceutical Industries Net Worth 2006-2019 | TEVA, Macrotrends.

[51] Bauman, supra note 5.

[52] See Id.

[53] See Actavis, 570 U.S. 136, 158-159 (2013).

[54] The government negotiates corporate integrity agreements with health care providers as a part of settlements. Under the agreement, providers and entities agree to obligations in exchange for participation in Federal health care programs. Corporate Integrity Agreements, U.S. Department of Health and Human Services Office of Inspector General, https://oig.hhs.gov/compliance/corporate-integrity-agreements/index.asp.

[55] Bauman, supra note 5.

[56] Fed. Trade Comm’n, supra note 6.

[57] Bauman, supra note 5.

Artificial Intelligence in the Hiring Process

Machine Learning and Artificial Intelligence in Analytics” by deepak pal is licensed under CC BY 2.0.

Blythe McGregor, Associate Member, University of Cincinnati Law Review

The interview stage of the hiring process traditionally involves human to human interaction and an applicant is judged on his or her interpersonal skills. Increasingly, employers are turning to video interviews, in lieu of a face to face interview, to expedite the hiring process and cut costs.[1] Sometimes it is not another human watching and critiquing these videos. Employers, using a video and artificial intelligence platform such as HireVue,[2] may choose to have applicants’ answers evaluated by artificial intelligence (“AI”). Platforms like Hirevue program machines to simulate human analysis of movement, word choice, and voice to examine the interviewee.[3] The computer program then gives each applicant a score on “employability,” although often, the AI analysis takes place only during the first round of interviews.[4] Large companies, such as Unilever and Hilton, use this technology on thousands of applicants during the hiring process.[5]

Although use of AI may reduce employers’ burdens of reviewing and scoring each video interview personally,[6] critics of this hiring method argue that it is not rooted in psychology and could discriminate against nervous or non-native speakers.[7]  Additionally, as with any system that encodes and stores large amounts of personal data, there are also privacy concerns.[8] The Illinois General Assembly responded to the latter class of concerns in early 2019 by proposing the Artificial Intelligence Video Interview Act (“AIVIA”).[9] AIVIA became effective on January 1, 2020.[10] AIVIA affects hiring processes for jobs that are based in Illinois.[11] Although Illinois was the first state to pass legislation regulating the use of AI in the interview process,[12] it is not the first AI-hesitant regulation to be enacted. Other states have enacted regulations on the use of AI in the context of the testing and use of autonomous vehicles.[13]

Artificial Intelligence Video Interview Act

AIVIA imposes five restrictions on employer use of AI to analyze video interviews.[14] First, Section 5 of AIVIA imposes three steps to disclose information about the AI program and obtain consent from the applicant.[15] Initially, the employer must notify the applicant that AI will be used to analyze and consider the applicant’s interview.[16] Next, employers must provide each applicant with information about how the particular artificial intelligence works and what types of characteristics it uses to evaluate applicants.[17] Finally, employers must obtain consent from the applicant to subject their video to the type of analysis identified in the previous step.[18] All three of these requirements must be satisfied prior to asking applicants to submit a video interview.[19] AI cannot be used to evaluate a nonconsenting applicant.[20] Importantly, AIVIA does not define “artificial intelligence” or indicate the depth of explanation required by the second step. This will be discussed further in the analysis section.

Section 10 of AIVIA limits an employer’s ability to share video interviews that have already been submitted.[21] Employers can only share videos with those whose “expertise or technology is necessary in order to evaluate an applicant’s fitness for a position.”[22] Finally, Section 15 limits how and when an employer can store the submitted video interviews.[23] If an applicant requests that an employer delete the video, the employer must comply with the request within 30 days.[24] The employer must also instruct anyone else who received the video to delete it along with any backup copies.[25]

Analysis

Although AIVIA requires enhanced transparency when employers use AI to evaluate interviews, the act does not provide definitions or detailed guidelines to direct employers in the implementation of these new policies. AIVIA does not define AI, so it is not clear exactly what methods of video evaluation are subject to these regulations. Employers likely use many computer programs to sort and analyze information about applicants’ interviews, even when a human is the one evaluating the video in the first place. How removed from direct human involvement must the process be to qualify as “artificial intelligence analysis” under AIVIA?

Also, there is some ambiguity regarding how much information an employer is required to give to fulfill the second disclosure requirement. An employer must explain “how the artificial intelligence works” and disclose the “general characteristics” it uses to evaluate.[26] However, as explained above, employers themselves are not programming and implementing the AI program. Employers are using programs designed and provided by companies like HireVue to evaluate applicants. Employers utilizing this program may not have a detailed understanding of how the AI technology is structured and operates and therefore, may not be able to give the technical explanation required under AIVIA. Also, although the employer may know the general characteristics the technology identifies, because the employer is not programming the technology themselves, the employer may not be aware of when the AI system flags more nuanced facial movements or mannerisms. The third-party AI provider could possibly provide this information to the employee, but it is unclear whether AIVIA requires this information to come directly from the employer.

The logistics of implementing these policies are also ambiguous. First, AIVIA does not specify in what form notice should be given to the applicant or how the applicant should give consent. This could create enforcement issues if there are no physical records to be used as evidence that the company has complied with AIVIA’s notice and consent requirements. There is also little guidance as to how videos should be deleted upon request from an applicant under Section 15. This Section is titled “Destruction of Videos” yet the statute simply calls for deleting the video. Merely deleting a file does not necessarily mean it is completely irretrievable from a computer’s hard drive.[27]  Next, AIVIA lacks complete privacy protection as it merely requires employers to “instruct” other persons who received the video to delete it and requires such other persons to comply with this instruction. Once again, enforcing this requirement seems implausible as it may apply to people or companies besides the employer, and it will be difficult to track whether they complied with deletion. Also, if an applicant does not give consent, AIVIA does not require employers to consider applicants using another method. Some applicants who have concerns about the use of AI, for example that the use of AI could lead to discriminatory results, may be disqualified from the job before they are even considered. AIVIA also does not identify what liability and damages an employer may incur upon violation of the act. With AIVIA recently taking effect, employers may not yet be incentivized to strictly comply. Because of these logistical ambiguities, applicants would not be remiss in thinking AIVIA does not completely protect their privacy.

Conclusion

AIVIA is a simplistic start to a possible trend toward increased regulation of AI in the hiring process. The act requires heightened employer transparency but, by language alone, does little to ensure that an applicant’s privacy is completely protected once they have submitted a video. Also, the act does not fully address concerns about whether the use of AI creates an unfair hiring process. Notably, AIVIA does not require employers to use only nondiscriminatory AI systems. Because the AI analysis turns on the mannerisms and speaking style of applicants, these systems may unintentionally discriminate against minority or non-English speaking applicants whose mannerisms and way of speaking differs from the baseline “ideal” applicant characteristics programmed into the system. Companies may look to successful current employees when identifying characteristics of an ideal applicant, and, if all these employees are men, for example, the interviews of those in a protected group may be systematically rejected.[28]  Additionally, applicants who do not consent to the use of such technology may not have another way to participate in interviewing, and thus, may consent to the use of AI despite legitimate concerns of discriminatory results.

Although the use of AI to evaluate applicants may save employers time, this efficiency comes at a cost. More detailed and comprehensive legislation is needed to protect job applicants from discrimination and invasion of privacy inherent in this new hiring technology. State legislation should regulate AI technology at its source: the third-party AI service providers. Strict regulation could reduce discriminatory impact and ensure the safe storing and sharing of video data. Legislatures may not yet have the full understanding of AI technology necessary to create and enforce this type of statute. As the use of AI technology becomes more widespread in other contexts and the dangers of its use become more apparent, extensive AI regulation will likely become more common.


[1] John W. Schoen, Lights, Camera, Job Interview!, CNBC (27 Jan 2014), https://www.cnbc.com/2014/01/24/shortcomings-evident-as-video-job-interviews-increase.html.

[2] Drew Harwell, A Face-Scanning Algorithm Increasingly Decides Whether You Deserve the Job, The Washington Post (Nov. 6, 2019), https://www.washingtonpost.com/technology/2019/10/22/ai-hiring-face-scanning-algorithm-increasingly-decides-whether-you-deserve-job/.

[3] Id.

[4] Id.

[5] Id.  

[6] Rebecca Heilweil, Artificial Intelligence Will Help Determine if You Get Your Next Job, Vox (Dec. 12, 2019), https://www.vox.com/recode/2019/12/12/20993665/artificial-intelligence-ai-job-screen.

[7] See Harwell, supra note 2.

[8] Tom Starner, AI Can Deliver Recruiting Rewards, But At What Risk?, HR Executive (Dec. 31, 2019), https://hrexecutive.com/ai-can-deliver-recruiting-rewards-but-at-what-legal-risk/.

[9] Artificial Intelligence Video Interview Act, Ill. Public Act 101-0260, http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=101-0260.

[10] Id.

[11] Employers Using AI in Hiring Take Note: Illinois’ Artificial Intelligence Video Interview Act is Now in Effect, Lexology (Feb. 10, 2020), https://www.lexology.com/library/detail.aspx?g=39ee6ae8-d114-47e3-a535-f6c721064252.

[12] Rebecca Heilweil, Illinois Says You Should Know if AI is Grading Your Online Job Interviews, Vox (Jan. 1, 2020), https://www.vox.com/recode/2020/1/1/21043000/artificial-intelligence-job-applications-illinios-video-interivew-act.

[13] Regulation of Artificial Intelligence: The Americas and the Caribbean, Library of Congress, https://www.loc.gov/law/help/artificial-intelligence/americas.php.

[14] Artificial Intelligence Video Interview Act, Ill. Public Act 101-0260, http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=101-0260.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21] Id.

[22] Id.

[23] Id.

[24] Id.

[25] Id.

[26] Id.

[27] Are Deleted Files Completely Erased, Webopedia, https://www.webopedia.com/DidYouKnow/Hardware_Software/Erasing_Deleted_Files.asp.

[28] Allen Smith, AI: Discriminatory Data In, Discrimination Out, Society for Human Resource Management (Dec. 12, 2019), https://www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/artificial-intelligence-discriminatory-data.aspx.

A Problem With Causation: Analyzing Michael Bolsinger’s Negligence Claim Against the Houston Astros

Photo by Jose Morales on Unsplash

Nicholas Eaton, Associate Member, University of Cincinnati Law Review

I. INTRODUCTION

Major League Baseball (MLB) pitchers have one of the toughest jobs in sports. As the opposing team scores, the blame falls directly on the pitcher’s shoulders. Throwing a baseball past world-class hitters is an almost impossible task – almost impossible. However, if these world-class hitters were to know which pitches were coming, the task begins to inch towards actually impossible. This is the situation Michael Bolsinger was faced with on August 4th, 2017 when he pitched against the Houston Astros. He allowed four earned runs in one inning and never played in the MLB again.[1]

Upon discovering that the Houston Astros electronically stole pitch signs in 2017, Bolsinger filed suit.[2] Bolsinger claims that the Astros negligently failed to supervise its employees “so as to avoid causing unreasonable risks of harm . . ..”[3] His complaint began a lawsuit unparalleled in the sporting world. Unfortunately for Bolsinger, he will have a difficult time proving causation, a critical element of a negligent case.

II. BACKGROUND

A. Houston Astros Sign Stealing Scandal

In November 2019, news broke that the Houston Astros used cameras to steal catchers’ signs throughout their 2017 World Series championship season.[4] The MLB’s investigation revealed that the Astros used electronics to decode signs and banged on a trashcan to communicate the upcoming pitch to the hitter.[5] This type of “high-tech sign stealing” is explicitly against MLB rules.[6] In response, the MLB suspended Houston’s general manager and manager for a season; stripped them of several upcoming draft picks; and fined them five million dollars.[7] Houston was not stripped of its 2017 World Series championship.[8]

B. Michael Bolsinger

1. Career

Michael Bolsinger played for many teams within several organizations over his three years in and out of the MLB.[9] He spent time with the Arizona Diamondbacks, Los Angeles Dodgers and Toronto Blue Jays.[10] He was consistently sent down to the minor leagues and brought back up to the major league throughout this period.[11] Over this time, he held a 4.93 earned run average (ERA) and a 8-19 combined record.[12] Bolsinger was a below average pitcher working to cement his place on an MLB roster. [13]

2. August 4th, 2017

On August 4th, 2017, the Toronto Blue Jays faced the Houston Astros.[14] Bolsinger was sent in during the game’s fourth inning, his team trailing 7-2.[15] He proceeded to give up four hits, three walks, and four earned runs.[16] Twenty-eight trash can bangs were detected over the course of this game, making this the most egregious example of cheating by the Astros in the 2017 season.[17] According to Bolsinger’s complaint, this game was the “death knell to his career in the MLB.”[18]

III. DISCUSSION

A. Negligence

Bolsinger has sued the Houston Astros for negligence.[19] A proper negligence claim has four elements: (1) A duty of care; (2) violation of that duty; (3) causation; and (4) injury.[20] Two elements of negligence that require further explanation are causation and duty of care. The existence and extent of a duty of care is a factual inquiry that is heavily dependent on the circumstances.[21] In the context of Bolsinger’s case, the duty of care would be similar to that of a negligent interference with prospective economic advantage claim. The duty of care in this circumstance is to refrain from interfering with a relationship so as to cause the plaintiff to lose the economic benefit of that relationship.[22]

Causation is separated into two parts: Causation in fact and proximate cause. Causation in fact requires that “the negligent act or omission was a substantial factor in bringing about the injury and without which no harm would have been incurred.”[23] Proximate cause requires the act be one that “in natural and continuous sequence, unbroken by any efficient, intervening cause, produce[d] the result complained of and without which the result would not have occurred.”[24]

B. Bolsinger’s Negligence Case Is Not Compelling

For Bolsinger to succeed on his negligence claim, he must prove each of the four elements of negligence. While he will likely be able to prove duty, violation, and injury, he will struggle to prove causation of damages.

In order to analyze Bolsinger’s negligence claim, the Astros’ duty of care must be determined. Bolsinger’s complaint claims that the Astros “owed a duty of care to Plaintiff Bolsinger to supervise and operate Houston Astros LLC so as to avoid causing unreasonable risks of harm to Plaintiff Bolsinger.”[25] Once again, Bolsinger’s claim is similar to a claim for negligent interference with prospective economic relations. Therefore, the Astros would be under a duty to refrain from interfering with his potential MLB contracts so as to prevent him from gaining employment in the future.

Next, the court must determine whether the Astros breached their duty of care. Bolsinger claims that by allowing their employees to make and/or aid and abet the sign stealing scheme the Astros negligently failed to avoid unreasonable risks of harm to Bolsinger.[26] If the Astros duty of care is defined as it is above, then their actions are a breach of that duty. By stealing pitchers’ signs, the Astros were risking harm to the careers of many players. Pitchers who pitched against them would give up more runs. Batters from other teams would pale in comparison to Astros batters when seeking contract extensions. The Astros’ actions negatively affected players across the league.

Finally, Bolsinger must prove that he experienced damages and that his damages are causally related to the Astros actions. It appears that Bolsinger suffered damages. Playing in the minor leagues or overseas is far less profitable than playing in the MLB. However, Bolsinger will likely have difficulty proving that his damages were caused by the Houston Astros. Due to the fact that he was continuously sent down to the minor leagues, it could be argued that the Astros game was just a small factor in his eventual release.

The statistics show that the Astros played a part in the demise of Bolsinger’s career. His last MLB game, a very poor performance, was played in their stadium.[27] However, this performance was one of a string of subpar performances that culminated on August 4th, 2017. Bolsinger’s ERA in 2017 was 6.31.[28] An ERA of 6.31 was 45% higher than the league average of 4.36 in 2017.[29] Even if the August 4th game is removed, Bolsinger’s ERA would have been 5.49, 26% above league average.[30]

In order for the causation element to be met, the Astros’ conduct must be a substantial factor of Bolsinger’s injury and there must be no intervening causes.[31] While the August 4th performance was certainly a factor in Bolsinger’s eventual release, he will have difficulty proving that it was a substantial factor. The MLB is the premier baseball league in the world. Performing at a below average rate can, and likely will, lead to a player’s termination. Furthermore, there are a slew of possible intervening causes for Bolsinger’s termination. The team could have valued younger pitchers in the farm system higher than him; they could have had their eye on pitchers in free agency; or they could have considered his whole season and been underwhelmed. For these reasons, Bolsinger’s negligence claim would likely lack proof of causation.

IV. CONCLUSION

Michael Bolsinger’s career was unfairly tarnished by the cheating Houston Astros on August 4th, 2017. As a pitcher, the element of surprise is crucial to success. When this was unfairly taken away from Bolsinger against the Astros, he was annihilated. While this ended up being his last game in the MLB, Bolsinger’s negligence claim is still unlikely to succeed. Bolsinger will have the tall task of proving that the game against the Astros was a substantial factor of his termination and that there were no intervening causes. Due to his lackluster career up to that point, this is a pitch that he and his counsel will struggle to deliver.


[1] Michael McCann, Can a Pitcher Successfully Sue Astros for Sign Stealing?, Sports Illustrated (Feb. 11, 2020), https://www.si.com/mlb/2020/02/11/mike-bolsinger-astros-sign-stealing.

[2] Id.

[3] Bolsinger Compl. 10. Bolsinger also claims unfair business practices, intentional interference with contractual relations, intentional interference with prospective economic relations, and negligent interference with prospective economic relations. Bolsinger Compl. 1. However, in the interest of a shorter blog post, only his negligence claim is discussed here.

[4] R.J. Anderson & Mike Axisa, Astros sign-stealing scandal: What to know about MLB’s penalties against Houston, CBS Sports (Jan. 18, 2020), https://www.cbssports.com/mlb/news/astros-sign-stealing-scandal-what-to-know-about-mlbs-penalties-against-houston/.

[5] Id.

[6] Id.

[7] Id.

[8] Avery Yang, MLB Will Not Strip Astros, Red Sox of World Series Title, Sports Illustrated (Jan. 22, 2020), https://www.si.com/mlb/2020/01/22/mlb-will-not-strip-world-series-titles.

[9] See Mike Bolsinger, Baseball Reference, https://www.baseball-reference.com/register/player.fcgi?id=bolsin001mic.

[10]McCann, supra note 1.

[11] See Mike Bolsinger, supra note 9.

[12] McCann, supra note 1.

[13] The average ERA across the MLB was 3.96 in 2015, 4.19 in 2016, and 4.36 in 2017. Major League Baseball Pitching Year-by-Year Averages, Baseball Reference, https://www.baseball-reference.com/leagues/MLB/pitch.shtml.

[14] McCann, supra note 1.

[15]Toronto Blue Jays at Houston Astros Box Score, August 4, 2017, Baseball Reference, https://www.baseball-reference.com/boxes/HOU/HOU201708040.shtml.

[16] McCann, supra note 1.

[17] Bolsinger Compl. 8.

[18] Id. at 6.

[19] Id. at 10.

[20] 57A Am Jur 2d Negligence § 5.

[21] See 57A Am Jur 2d Negligence § 6.

[22] Venhaus v. Shultz, No. A116433, 2007 Cal. App. LEXIS 1623, at *10-11 (Ct. App. Cal. Sept. 28, 2017).

[23] Gutierrez v. Excel Corp., 106 F.3d 683, 687 (5th Cir. 1997).

[24] Pickett v. RTS Helicopter, 128 F.3d 925, 929 (5th Cir. 1997).

[25] Bolsinger Compl. 10.

[26] Bolsinger Compl. 10.

[27] McCann, supra note 1.

[28] Mike Bolsinger, supra note 9.

[29] Major League Baseball Pitching Year-by-Year Averages, supra note 13.

[30] Bolsinger allowed four earned runs in one third of an inning pitched on August 4th, 2017. Toronto Blue Jays at Houston Astros Box Score, August 4, 2017, supra note 15. If you remove the one third of an inning, his 2017 innings pitched would be forty-one. Mike Bolsinger, supra note 9. If you remove four earned runs, his 2017 earned runs would be twenty-five. Id. (25/41) x 9 = 5.49.

[31] Gutierrez v. Excel Corp., 106 F.3d 683, 687 (5th Cir. 1997); Pickett v. RTS Helicopter, 128 F.3d 925, 929.