For background, see here. Here’s a response from a friend of mine, an experienced lawyer whose judgment I trust:
As it happens, I’m the lawyer who drafted Juicy Campus’s terms and conditions, and who is representing Juicy Campus in connection with the New Jersey subpoena (along with local counsel in New Jersey). I was in trial the last week of March (on an unrelated matter) or I would have weighed in sooner.
Juicy Campus’s Terms and Conditions simply do not say that Juicy Campus will delete offensive posts. To the contrary, the Terms and Conditions expressly provide:
6. No Pre-Screening or Regular Screening of Content.
You acknowledge that JuicyCampus does not pre-screen Content, but agree that JuicyCampus shall have the right (but not the obligation) to access, re-arrange, modify and remove or restrict access to any Content on the Site in its sole discretion and without notice or compensation. Without limiting the foregoing, JuicyCampus shall have the right to access and remove or restrict access to any Content that violates this Agreement or that JuicyCampus believes is otherwise objectionable, in its sole discretion.
The Attorney General’s office is basing its investigation on the theory that because Juicy Campus requires its users to agree that they will not post anything defamatory, Juicy Campus is therefore obligated to delete posts that are alleged to be defamatory by third parties. In particular, the AG seems focused on paragraph 7 of the Terms and Conditions, which provides:
7. User Conduct.
You agree to not use the Site to:
(a) violate or solicit the violation of any applicable local, state, national or international law;
(b) infringe the rights of any third party, including but not limited to intellectual property rights and privacy or publicity rights;
(c) upload, post, email or otherwise transmit any Content that:
(1) is unlawful, threatening, abusive, tortious, defamatory, obscene, libelous, or invasive of another’s privacy;
… If you use the Site to commit any of the above offenses, JuicyCampus may, at its sole discretion … remove any Content you posted to the Site.No one could reasonably interpret such language to impose on Juicy Campus any obligation to delete posts.
Even were there some representation that Juicy Campus would delete posts from the Site (which there emphatically is not), the AG’s investigation for violation of New Jersey’s consumer fraud statute would be baseless. The New Jersey Consumer Fraud Act prohibits, inter alia, “any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation … in connection with the sale or advertisement of any merchandise …” (emphasis added). Juicy Campus does not charge users to post on site or read the site, and does not sell any merchandise on the site. Juicy Campus does, however, serve third-party advertising. It seems self-evident that one who clicks on a banner ad does not do so in reliance on any representation in the Terms and Conditions, but according to Assistant Attorney General James Savage, the fact that JuicyCampus.com sells advertising to third parties is enough to support a finding of fraud if users (even those who never clicked on any advertisement) were misled by its Terms and Conditions into thinking that it would delete offensive posts.
If this is the law in New Jersey, I’m moving there tomorrow to hang out my shingle. It seems to allow one who is neither a party to a contract nor an intended beneficiary of that contract to allege that one has been defrauded by the manner of the contracting parties’ performance, without having sustained any damage as a result. I would start by suing all the lenders who have the right to foreclose on late-paying borrowers but are refraining from doing so, on the theory that their failure to enforce the borrowers’ payment obligation defrauds me. I would then sue every bank in New Jersey that had ever waived an overdraft charge, since I believe their agreements with their customers allow them to collect such charges. The absurdity of the Attorney General’s position is underscored by the sheer inanity of some of the interrogatories in the subpoena (my favorite: “What does the Company mean by the term ‘beta’ as it is currently used on the JuicyCampus.com website”).
Paul Mulshine of NJ.com got it right: it’s grandstanding. Richard Blumenthal, the Attorney General of Connecticut, has now chimed in with a letter asking for information similar to that sought by the New Jersey subpoena. I’ll keep you posted as things develop.