This case is noteworthy because it resolves a split among the federal circuit courts regarding whether equitable defenses can override an ERISA plan’s reimbursement provisions. Moreover, it highlights the importance of ensuring that an ERISA plan contains clear and complete language regarding the plan’s rights to both subrogation and reimbursement from third party recoveries, including the allocation of attorney fees. For example, an ERISA plan could be drafted to expressly provide that the plan’s recovery is not offset by any portion of the plaintiff’s attorney’s fees.

A copy of the McCutchen opinion is available here.

The complaint, which the student filed with assistance from the American Civil Liberties Union, claims that employees at Minnewaska Area Middle School violated the student’s First and Fourth Amendment rights.

According to the suit, the 12-year-old student felt that one of the school’s hall monitors was picking on her, so she wrote on her own Facebook wall that she hated that person because she was mean.  The message was not posted from school property or using any school equipment or network, according to the complaint.

The complaint also alleges that school employees pressured the student to divulge her e-mail and Facebook login information, which they then used to search her accounts.  The student was given in-school suspension and was forced to miss a class ski trip because of the posting, according to the complaint.

The Minnewaska School District has released a statement in which it denies any wrongdoing.  According to the statement, “[The student] participated in Facebook conversations that contributed to a disruption of the learning environment and caused some people within the school community to feel unsafe.”

In January, the Supreme Court declined to review three cases involving students who had been punished for their off-campus use of social media.

Two of the cases originated in the Third Circuit Court of Appeals, in which the en banc court upheld the right of two students to create fake MySpace pages that mocked their principals.

However, a third case that originated in the Fourth Circuit had come out differently: the court had upheld a school’s punishment against aWest Virginia high school student for creating and inviting classmates to a MySpace group that allegedly ridiculed a fellow student.

The Court’s decision not to review these cases means that a split among the circuits on this issue persists, and the degree to which constitutional protections extend to students’ off-campus use of social media remains an unsettled question.

By Nick Nelson

A flurry of recent court decisions is bringing just this issue to the fore:  can a public school punish its students for their off-campus online activities?

One student has appealed her case to the U.S. Supreme Court, giving the Court its first opportunity to determine how much protection the First Amendment affords to a student’s use of social media.

A Matter of First Impression

A former high school student who was suspended for her off-campus blog posting has filed a petition for certiorari with the Court.[1]  The student, Avery Doninger, has claimed that the suspension violated her First Amendment rights to free speech and expression.[2]  The Second Circuit sided with the school district in 2008 and again in April of this year.

Doninger’s petition comes at an opportune time.  In June, the U.S. Court of Appeals for the Third Circuit decided two cases, discussed below, in which a student was punished for using the social networking site MySpace to disparage a school official.[3]  In both cases, the court held that the students’ use of the site, which occurred off campus on home computers, was protected speech.[4]  But in more recent decisions by the Fourth and Eighth circuits, the courts held that even off-campus use of social media can be punishable if it is likely to cause a substantial disruption on campus.[5]

The apparent conflict could prompt the Court to take up the question of whether a school may punish its students for their off-campus use of social media. The issue would be one of first impression for the Court.

Student Speech in the Pre-MySpace Era

In its landmark decision in Tinker v. Des Moines Independent Community School District in 1969, the Supreme Court held that student speech may not be suppressed unless school officials reasonably conclude that it will “materially and substantially disrupt the work and discipline of the school.”[6]  The Court held that wearing black armbands to protest the Vietnam War would not substantially disrupt school activities and was therefore protected symbolic speech.

Since Tinker, the Court has identified some narrow exceptions to the “substantial disruption” standard.  In Bethel School District v. Fraser in 1986, for example, the Court held that a school could punish a student for a sexually vulgar speech made on campus.[7]  And more recently in Morse v. Frederick in 2007, the Court held that a school could suppress even off-campus student speech if the speech occurs at a school-sponsored event and is reasonably viewed as promoting illegal drug use.[8]

Doninger v. Niehoff

The Supreme Court has yet to consider student speech expressed through social media, but the Second Circuit confronted that issue in 2008 in the case of Doninger v. Niehoff.[9] 

High school junior Avery Doninger was disqualified from running for senior class secretary after she used the blog service LiveJournal to post what the court called “a vulgar and misleading message about the supposed cancellation of an upcoming school event.”[10]  Doninger and her parents sued to force the school to let her serve in student leadership, but the District Court denied the injunction.[11]

The Second Circuit applied Tinker’s “substantial disruption” standard and affirmed.  The court found that, in light of the incendiary nature of the blog post and the misleading information it contained, Doninger’s post created “a foreseeable risk of substantial disruption to the work and discipline of the school.”[12]  Doninger could be punished for her off-campus, online speech that contained misleading facts about a school event and vulgar references to school officials.

In her petition to the Supreme Court, Doninger argues that the Second Circuit’s decision was incorrect, and it conflicts with two recent Third Circuit cases, where the court held that school officials overreached when they punished off-campus use of social media.[13]

J.S. v. Blue Mountain School District

In J.S. v. Blue Mountain School District, a middle school student identified as “J.S.” used a home computer to create a fake MySpace profile of her principal.[14]  The profile contained, in the words of the Third Circuit, “crude content and vulgar language, ranging from nonsense and juvenile humor to profanity and shameful personal attacks aimed at the principal and his family.”[15]  The school district suspended J.S. for ten days.

Arguing that Tinker was the controlling case, and that J.S. had caused no substantial disruption, J.S. sued the Blue Mountain School District.  The District Court ruled in the school’s favor, holding that even though J.S.’s conduct did not cause a substantial disruption, the lewdness of the speech warranted an exception under the Supreme Court’s decision in Fraser.[16]

The Third Circuit, sitting en banc, overruled the District Court as to J.S.’s First Amendment claim.[17]  The court rejected the notion that the Fraser exception should stretch to cover the circumstances of the case.  The court held that “Fraser’s ‘lewdness’ standard cannot be extended to justify a school’s punishment of J.S. for use of profane language outside the school, during non-school hours.”[18] The school district has announced that it will petition the Supreme Court for review of the decision.[19]

Layshock v. Hermitage School District

On the day it decided the J.S. case, the Third Circuit also issued a decision in the similar case of Layshock v. Hermitage School District.[20]  High school junior Justin Layshock sued after he was suspended for using a home computer to create a fake MySpace profile of his principal, using a photograph that he copied and pasted from the school district’s website.[21]

The District Court sided with Layshock on his First Amendment claim.  The court found that even though the profile was viewed on school computers and prompted a general buzz on campus, the School Districtcould not establish “a sufficient nexus between Justin’s speech and a substantial disruption of the school environment.”[22]

On appeal, the school district argued that Layshock’s speech was lewd and was sufficiently connected to school property to fall under the Supreme Court’s decision in Fraser.  Layshock’s speech “initially began on-campus,” the school district argued, when he “entered school property” by accessing the school district’s website to copy the principal’s photograph.[23]

In its decision, the Third Circuit wrote that the school district’s argument “equates Justin’s act of signing onto a web site with the kind of trespass he would have committed had he broken into the principal’s office or a teacher’s desk; and we reject it.”[24]  The court held that Fraser could not be construed to cover off-campus speech that has no real ties to school property.[25]  The court affirmed the District Court’s grant of summary judgment in Layshock’s favor.[26]

Fourth and Eighth Circuits Tinker with Tinker

Within weeks of the Third Circuit’s decisions in J.S. and Layshock, two other circuits issued opinions involving off-campus student use of social media.  In both cases, the court held that Tinker’s substantial disruption standard could apply to communications sent between home computers outside of school hours, and students could be punished for their off-campus speech.

In the Fourth Circuit case of Kowalski v. Berkeley County Schools, high school senior Kara Kowalski was suspended for using a home computer to create a disparaging MySpace group page.[27]  Kowlaski claimed that the page was devoted to raising awareness of sexually transmitted diseases, but the school argued that the page was in fact directed at a particular student, identified as “Shay N.”[28]  Kowalski invited 100 of her MySpace friends to join the group, and several of those friends posted disparaging comments about Shay N. on the new page.  Kowalski sued after the district suspended her for ten days.  In its July 27 opinion, the Fourth Circuit held that the school district’s punishment was permissible.[29]  The court found that Kowalski’s actions were “sufficiently connected to the school environment” to trigger Tinker’s substantial disruption analysis.[30]  The court held that a substantial disruption had occurred, and under Tinker the school could punish Kowalski for her off-campus speech.[31]

In the Eighth Circuit case of D.J.M. v. Hannibal Pub. Sch. Dist., a tenth-grade student identified as “D.J.M.” used a home computer to send instant messages to another student, who was also using a home computer.[32]  The messages described D.J.M.’s desires to obtain a gun and kill other students.[33]  After the messages came to light, D.J.M. spent the following months in a juvenile detention center, and he was also suspended from school for the remainder of the school year.[34]  In its August 1 opinion, the Eighth Circuit held that D.J.M.’s speech was punishable on two grounds.[35]  First, it constituted an unprotected “true threat” against a fellow student.[36]  Second, the speech caused a substantial disruption under Tinker.[37]  The Eighth Circuit held, albeit in dicta, that under Tinker a student may be punished for off-campus speech.[38]

Fit For Appeal?

In J.S. and Layshock, the Third Circuit stopped short of adopting the Tinker standard in the context of speech that occurred off-campus.  This approach contrasts with the decisions from the Second, Fourth, and Eighth circuits, discussed above, in which the courts held that Tinker may indeed apply even to off-campus speech.  Of course, J.S. and Layshock could be viewed as involving speech in the nature of opinion, while the other cases involved statements that contained misleading facts, bullying, or threats of physical harm, which could have contributed to the application of Tinker outside of the Third Circuit.

If members of the Supreme Court view the circuit courts’ decisions as conflicting, the Court will be more likely to grant review of Doninger’s petition in order to resolve the split.  Even if the cases are not read as directly conflicting, the Court may use this opportunity to update its school speech jurisprudence for the social networking generation.

After the law was defeated at the Ninth Circuit, Governor Schwarzenegger announced the filing of a petition for certiorari, asking the U.S. Supreme Court to save the law,
arguing that the same justifications for precluding sales of pornography to minors should be applied to violent video games. “By prohibiting the sale of violent video games to children under the age of 18 and requiring these games to be clearly labeled, this law would allow parents to make better informed decisions for their kids,” Schwarzenegger said. “I will continue to vigorously defend this law and protect the well-being of California’s kids.”

California’s appeal faces a steep uphill battle, however, since the Ninth Circuit decision is just one of several similar Appeals Court rulings that all to have reached the same conclusion; the restriction of video game sales on the basis of violence is unconstitutional. To save the California law, the Supreme Court would have to reverse its long-standing First Amendment jurisprudence and hold that violent material deserves more limited constitutional protection.

As the video game industry continues to evolve, patents are becoming more of an issue, both from an enforcement and defense position. A Supreme Court ruling could go a long way toward determining whether the software and business method patents obtained by software companies are a hollow or substantive asset.

Section 365 permits bankrupt companies to (i) assume contracts (meaning to retain the benefits and obligations as if the bankruptcy never occurred); (ii) assume and assign contracts to third parties or (iii) reject most types of contracts. The ability to pick and chose which contracts to keep, which to sell, and which to dismiss is a critical element of most successful reorganizations.

A potential problem arises with Section 365 with respect to contracts that are not assignable under non-bankruptcy law (and one major category of such types of contracts are certain intellectual property licenses that would be commonly entered into between developers and publishers).

Because those types of contracts are not assignable under non-bankruptcy law, the Bankruptcy Code provides that a bankrupt company cannot assign such contracts.

However, the exact language of Bankruptcy Code states that the bankrupt company cannot “assume or assign” such contracts. Reading this provision literally, several courts (including a few federal Circuit Courts of Appeal) have held that the bankrupt company is not only prohibited from assigning the contract… but also prohibited from retaining the contract for itself. Other courts and some legal commentators suggest that inclusion of the phrase “assume or” is an unintentional mistake by Congress that should be ignored because it is illogical to prevent a bankrupt company from assuming a contract when it does not intend to assign it and may prohibit bankrupt companies that rely heavily on intellectual property licenses from reorganizing.

Last week, the United States Supreme court denied certiorari in a case in which this issue might have been clarified once and for all. However, in a statement accompanying the denial of cert, Justices Kennedy and Breyer recognized the split of authority and the importance of the resolution of this problem.

As game publishers, who rely heavily on intellectual property licenses from developers, consider bankruptcy as a means of reorganizing and attempting to regain their footing, it will be important to watch this issue.