Daily Dicta: Williams & Connolly Launches Litigation Blitzkrieg for CoStar (Pity the Defendants)
The seven suits, filed in federal courts in Oregon, Georgia, New Jersey, California and the District of Columbia, send an unequivocal message: Don't mess with CoStar.
October 04, 2018 at 12:05 PM
9 minute read
Williams & Connolly litigators on Wednesday evening launched a blitzkrieg of lawsuits against real estate brokers on behalf of commercial real estate information giant CoStar Group Inc.
The seven suits, filed in federal courts in Oregon, Georgia, New Jersey, California and the District of Columbia, send an unequivocal message: Don't mess with CoStar.
The defendants all allegedly accessed CoStar's subscription database without authorization. But it's not quite like, say, using someone's Netflix password to watch the latest episode of “Unbreakable Kimmy Schmidt.”
CoStar says the brokers used their proprietary information for profit—as a way to generate business for themselves. And each suit stressed that the defendants were contacted in advance and given the opportunity to make amends and purchase a valid license, but declined to do so.
I'm guessing none of them appreciated the fact that they were about to get sued by Williams & Connolly litigators. It's sort of like bringing a nuclear bomb to a knife fight.
“Our database is our key asset, and we cannot sit back and let freeloaders steal our intellectual property and access to our services,” said CoStar CEO Andy Florance in written comments to Lit Daily. “That theft is an attack on our paying customers, our shareholders, and our employees.”
According to the complaints, CoStar employs nearly 4,000 people in the United States, and has invested almost $5 billion over the last 30 years in its database. It contains millions of copyrighted photographs and professionally researched information about commercial properties across the country. More than 100,000 subscribers pay varying fees depending on the scope of their access.
In December, a Williams & Connolly team led by partner Nicholas Boyle crushed CoStar competitor Xceligent Inc. in a copyright infringement case. CoStar flagged 9,000 instances where Xceligent allegedly used CoStar photos, as well as hundreds of unique proprietary data values.
The company ceased operations and terminated all 250 of its employees
The Williams & Connolly team also sued RE BackOffice for its role in the Xceligent scheme. A federal judge in Western Pennsylvania last fall ordered RE BackOffice to disgorge 100 percent of its profits from the venture and to pay $20,000 per infringing image per day in the event of further infringement.
The latest batch of suits by Boyle and associates David Riskin, Tamara Rubb and Jena Neuscheler show that CoStar isn't just going after the big fish. These defendants mostly sound like ordinary real estate agents. John Choi of Sandbox Real Estate in Edgewater, New Jersey, for example, doesn't even seem to have any active listings.
Nor do any of them appear to be criminal masterminds. Mainly, they used other people's passwords to sign in to CoStar's database, according to the complaints.
So why is CoStar making such a big deal out of it? Almost surely, the company is going to spend more (probably way more) on legal fees than whatever out-of-pocket losses it suffered.
The complaints address that head-on. “While the marginal cost of any single unauthorized access may be limited, in the aggregate stealing access to CoStar presents a major threat to the ongoing viability of CoStar's products.”
It reminds me of the broken windows theory of law enforcement. If you turn a blind eye to small transgressions, you create an environment that encourages bigger ones.
“For CoStar, litigation is a last resort—when we have significant evidence of wrongdoing, and no other options,” said CoStar's head of litigation, Jaye Campbell. “Our recent history shows that when we bring suit, we litigate to win. We look forward to successfully prosecuting this new set of unlawful-access cases, and anticipate that more cases of a similar nature will follow.”
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Durie Tangri and ACLU Sue San Francisco Police Department
Litigators from Durie Tangri and the ACLU on Thursday sued the city of San Francisco, alleging that the city's police department targeted black people for arrest because of their race.
In 2013 and 2014, the U.S. Drug Enforcement Administration and the U.S. Attorney's office for the Northern District of California partnered with the San Francisco Police Department to crack down on drug sales in the city's Tenderloin neighborhood.
Near the financial district, the Tenderloin is home to the federal courthouse in San Francisco. The neighborhood is also plagued by homelessness and drug sales.
According to the complaint, people of all races buy and sell drugs in the Tenderloin (which is certainly my impression). Yet when police officers targeted 37 people for federal prosecution for selling small amounts of drugs, every one of the defendants was black.
Rather than pleading guilty, a dozen defendants in the second wave of arrests sought discovery, seeking to prove that they were targeted because of their race. In response, the U.S. Attorney's office promptly dropped all charges against them.
“Neither the police department nor the federal prosecutors provided any meaningful explanation for why these defendants had been targeted for arrest and prosecution over others similarly situated, or what compelled the sudden dismissals of the charges against them,” the complaint states.
Daralyn Durie, who has made her name representing companies including Twitter, LinkedIn, Yahoo, and Netflix in high-stakes patent cases (and who won a contest for best closing argument at the ABA's Litigation Section meeting last year), is working pro bono on the case.
“Targeting individuals for arrest and criminal prosecution based on the color of their skin is indefensible and the numbers here—37 out of 37—speak for themselves,” she said.
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Seledy & Gay Sues Student Loan Servicer for Misleading Borrowers
When Philippe Selendy and Faith Gay split from Quinn Emanuel Urquhart & Sullivan in February, they said one reason for founding their own firm was a desire to bring different kinds of cases.
On Wednesday, Selendy & Gay lawyers offered an example of just that, filing a class action in the Southern District of New York on behalf of public servants such as teachers, nurses and police officers who hold student loans and are allegedly being defrauded by Navient, their student loan servicer.
To assist public servants struggling with student debt, the federal government in 2007 created Public Service Loan Forgiveness. Under the program, an eligible, full-time public service worker's federal student debt is forgiven entirely after 120 qualifying payments.
“A public servant is supposed to be able to make manageable monthly payments toward the student loan for ten years, and after ten years, the remaining student debt is forgiven,” states the 117-page complaint. “Tragically, it does not work that way in practice, in large part because the proper administration of the PSLF program depends on private, for-profit 'servicing companies.'”
Navient is one such company, responsible for servicing over $205.9 billion in federal student loans, owed by approximately 6.1 million accounts.
According to the complaint, “Navient has not been living up to its obligation to help vulnerable borrowers get on the best possible repayment plan and qualify for PSLF. Instead, Navient has harmed and continues to harm millions of hard-working public servants by routinely providing false information to these borrowers preventing them from qualifying for the PSLF program.”
Selendy & Gay lawyers working on the suit include Faith Gay, who said that Navient “has obstructed loan forgiveness at alarming rates, with horrifying effects on borrowers, their families and communities.”
Added Selendy & Gay partner Lena Konanova, “On behalf of all public servants—as many as 32 million borrowers who may qualify for loan forgiveness—we are asking the court to issue an injunction ordering Navient to stop affirmatively restricting borrowers' ability to enroll in Public Service Loan Forgiveness.”
The Selendy & Gay team also includes partner Maria Ginzburg and associate Maggie England.
The Gibson, Dunn & Crutcher partner is not happy.
A second jury in two weeks has failed to reach a verdict in a trial alleging Johnson & Johnson's baby powder caused mesothelioma.
Did a national employment law firm botch the rollout of changes to its own arbitration program?
New York's MoMA became concerned last spring when a company calling itself MoMaCha opened an art gallery and cafe on the Lower East Side within a few blocks of MoMA's design store.
Lawyers from firms including Latham & Watkins and Kellogg, Hansen, Todd, Figel & Frederick filed a 31-page complaint in the U.S. District Court for the Eastern District of California on behalf trade groups that are opposed to the California Internet Consumer Protection and Net Neutrality Act.
But…but… It's Avon!
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