Technology: 2016 Yearly Update

Many of the Technology case decisions this past year involved text messaging. In two decisions, both from Massachusetts, the court considered whether a real estate transaction may be completed through the exchange of text messages.  Another case involved an alleged Telephone Consumer Protection Act violation by a licensee who sent a text message. One case involved allegations of copyright infringement.

A.         Cases

1.         Donius v. Milligan, No. 16MISC000277 HPS, 2016 WL 3926577 (Mass. Land Ct. July 25, 2016)

Text messages may create an enforceable contract if all essential terms are included and the terms are signed.

A prospective purchaser sought to enforce a contract to purchase a property. He argued that text messages between his representative and the seller’s representative created an enforceable contract. The text messages included a sales price and a closing date.

The court held that text messages may create an enforceable contract if they contain the essential terms of the transaction and they are signed. In this instance, the texts were not signed, the messages did not include all material terms, and the seller’s representative was not authorized to bind the principal. The court dismissed the case.

2.         Bell v. Taylor, Nos. 15-2343, 15-3735, 15-3731, 2016 WL 3568139 (7th Cir. July 1, 2016)

Photographer could not prove damages against licensee who used unauthorized photo on her website.

A photographer brought a copyright infringement action against a licensee who used one of his photographs on her website. The trial court determined that the licensee infringed the copyright, but the photographer could not prove any damages from the use of the photograph. The value of the photo was speculative, and there was no evidence that the licensee attracted more clients because of the photo. The appellate court affirmed summary judgment for the licensee.

3.         St. John’s Holdings, LLC v. Two Electronics, LLC, No. 16MISC0000090, 2016 WL 1460477 (Mass. Dist. Ct. Apr. 14, 2016)

A text message may memorialize offer and acceptance in a transaction.

The potential purchaser alleged that the seller accepted a binding offer to purchase a property through a text message sent by the seller’s representative. The court determined that a text message may memorialize offer and acceptance of an offer in a property transaction if all essential terms are included and the terms are signed. The electronic signature at the end of a text message is evidence of a party’s intent to have the writing be legally binding. The seller’s motion to dismiss was denied allowing the potential purchaser’s case to proceed.

4.         Payton v. Kale Realty, LLC, No. 13C8002, 2016 WL 703869 (N.D. Ill. Feb. 22, 2016)

Licensee did not violate the Telephone Consumer Protection Act by sending a text message that did not relate to the sale of goods.

The plaintiff brought a claim for violation of the Telephone Consumer Protection Act against a licensee for an allegedly unauthorized text message. Several months prior to the text message at issue, the parties had engaged in discussions regarding a possible business relationship, during which the plaintiff provided the licensee with his cell phone number. According to the court, the text message related to a possible employment relationship and so was not a commercial solicitation. Therefore, there was no violation of the Telephone Consumer Protection Act and the court granted summary judgment in favor of the licensee.

B.         Statutes/Regulations

California

California amended its consumer data protection statute. The definition of consumer data now includes “username or email address in combination with a password or security question and answer that would permit access to an online account.”[7]

Oregon

Oregon passed an amendment to its security breach statute. The amendment modified the definition of “personal information” to include data from “automatic measurements of a consumer’s physical characteristics, such as an image of a fingerprint, retina or iris, that are used to authenticate the consumer’s identity in the course of a financial transaction or other transaction.”[8] If a data breach occurs, the customer and attorney general must be notified if more than 250 people were affected.[9]

South Carolina

As noted in a prior edition of the Legal Pulse, South Carolina passed a new statutory scheme, effective January 1, 2017, governing real estate licensees. In South Carolina, licensee advertising must identify the name of the affiliated brokerage firm. When advertising on the internet or other electronic media, a licensee may include a link to the brokerage firm website to satisfy that requirement.[10]

Virginia

Virginia’s regulations were amended to reflect newer forms of advertising. The regulations replace “online” and other terms with the term “electronic media.”[11] Electronic advertising must include disclosure of the firm name and city and state of business, or the licensee name, affiliated firm name, and city and state of business. In electronic advertising, the disclosure must be provided on the main page of the website or no more than one click away from the main page of the website.[12]

Washington

Washington amended its data breach statute. Notice of a data breach is not required if the breach is not reasonably likely to subject consumers to a risk of harm.[13] However, a breach must be disclosed if information was not secured or the encryption key or other information needed to decipher protected information was acquired by unauthorized personnel.[14]

C.         Volume of Materials Retrieved

Technology issues were identified 3 times in 3 cases this quarter (see Table 1).