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Business Law Today

January 2022

January 2022 in Brief: Internet Law & Cyber-Security

Juliet Marie Moringiello and Sara Beth Kohut

January 2022 in Brief: Internet Law & Cyber-Security
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Delaware Chancery Court Permits Discovery of “Actionable Statements of Fact” on Twitter

By Sara Beth A.R. Kohut, Young Conaway Stargatt & Taylor, LLP

The Delaware Court of Chancery recently issued a letter opinion explaining a bench ruling that authorized Twitter to comply with subpoenas served by plaintiff BDO USA in its quest for identifying information relating to four anonymous Twitter accounts allegedly used by a former BDO partner and his new business to disparage BDO. BDO USA, LLP v. EverGlade Global, Inc., C.A. No. 2021-0244-KSJM (Del. Ch. Ct. Jan. 5, 2022). Chancellor Kathaleen McCormick looked to Doe v. Cahill, 884 A.2d 451 (Del. 2005), which set the standard for discovery of an anonymous blogger who derided a local elected official. Applying that standard, the Court of Chancery concluded that the discovery should proceed because (a) Twitter had made reasonable efforts to notify the holder of the account and provide an opportunity to respond, and (b) BDO showed facts sufficient to defeat a motion for summary judgment. The court refuted the defendant’s contention that notice was required to be given using Twitter, noting that tweets to the since-deleted accounts were futile. Twitter had sent notice to the email addresses it had on file for the accounts, which satisfied the requirement for “reasonable efforts.”

Further, the court concluded BDO provided sufficient facts to survive summary judgment on defamation. While the defendant argued platforms like Twitter “are informal outlets of personal opinion and not reliable sources of information,” the Chancellor discussed the dramatic changes in social media since earlier precedent was issued, and that such outlets are “used increasingly as a news source and people expect that at least some of what they encounter on the site is factual.” While certain of the statements on the Twitter accounts would be considered opinion, others were statements “susceptible of proof,” such that the Chancellor deemed them “actionable statements of fact” for purposes of satisfying the summary judgment standard as to defamation. Accordingly, the court authorized Twitter to comply with the subpoenas.

Alaska Supreme Court Revives a Patient’s Chance to Recover for HIPAA Violations Under Breach of Contract Principles

By Chey Goodman, Drexel University’s Thomas R. Kline School of Law

On January 14, 2022, the Supreme Court of Alaska vacated and remanded a decision by the state’s Superior Court that dismissed a sexual assault victim’s claims against a hospital after one of its employees intentionally disclosed his private information to the man who assaulted him in violation of the Health Insurance Portability and Accountability Act (HIPAA). Guy v. Providence Health & Servs. Washington, No. S-17520, 2022 WL 128833 (Alaska Jan. 14, 2022).

The plaintiff brought a claim for breach of contract, alleging that the hospital had a contractual obligation to ensure that his health information was not released to third parties. He argued that, despite there being no contract between the parties concerning HIPAA disclosures, public policy supports a finding that the implied covenant of good faith and fair dealing protects patients’ health information when receiving medical treatment. The hospital responded that this case was a tort claim at heart, masquerading as a breach of contract claim to get around the already-passed statute of limitations on the supposed tort claim. At trial, per the hospital’s request, the court instructed the jury that, to hold the hospital liable, they must find that it is more likely true than not that the employee was acting within the scope of her employment with the hospital to establish vicarious liability. The jury did not find as such, and therefore returned a verdict for the hospital.

On appeal, the Alaska Supreme Court noted that there is truth to the fact that the claim was a tort case at heart, but it was pled as a breach of contract claim and must be tried as such. Noting that a party to a contract is liable for a breach caused by employees acting outside the scope of employment, the Supreme Court concluded that the central question is not whether the employee was acting as an agent, but rather, whether a contract existed between the parties in the first place, and if so, did the hospital’s conduct violate the terms therein? Accordingly, the case was remanded for further proceedings to make those determinations.