Antitrust Law Daily Wrap Up, TOP STORY—2ndCir: Bloggers' Claims for Compensation Based on Unjust Enrichment, Deception Rejected, (Dec 12, 2012)

By Jeffrey May, J.D.

Unpaid bloggers who contributed content to The Huffington Post news website in exchange for exposure for their work were not entitled to compensation after the website was purchased in 2011 by AOL, Inc. for approximately $315 million, the U.S. Court of Appeals in New York City has decided. Claims of unjust enrichment and deceptive business practice in violation of New York General Business Law (NYGBL) §349 were properly dismissed (Tasini v. AOL , Inc., December 12, 2012, per curiam).

According to the plaintiffs, $105 million of the value of The Huffington Post was created by the content they submitted. The plaintiffs brought the suit seeking to recover that value.

The plaintiffs contended that they were duped into providing free content for The Huffington Post based upon the representation that their work would be used to provide a public service and would not be supplied or sold to “Big Media.” According to the plaintiffs, had they known that The Huffington Post would use their efforts not solely in support of liberal causes, they would never have supplied material.

The court explained that in order to prevail on a claim for unjust enrichment in New York, a plaintiff must establish (1) that the defendant benefitted; (2) at the plaintiff's expense; and (3) that equity and good conscience require restitution. The plaintiffs failed to allege facts sufficient to state such a claim. They did not allege that The Huffington Post had represented that their work was purely for public service or that the website would not subsequently be sold to another company. Moreover, the plaintiffs understood that they would receive compensation only in the form of exposure and promotion.

Under NYGBL §349, a plaintiff must demonstrate that (1) the defendant’s deceptive acts were directed at consumers, (2) the acts are misleading in a material way, and (3) the plaintiff has been injured as a result. Without elaboration, the court upheld the lower court’s determination that the complaint failed to allege facts to make out the first two elements—that the challenged acts were consumer-oriented or misleading in a material way.

The case is No. 12-1428-cv.

Valeria Calafiore Healy (Healy LLC) for appellants.

Thomas G. Hentoff (Williams & Connolly LLP) for appellees.

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