Volunteer Bloggers Lose Lawsuit Demanding Payment
An unsurprising end to a ridiculous lawsuit.
In the wake of the transaction that resulted in The Huffington Post becoming part of the AOL media empire, or vice versa depending on how you look at it, a group of bloggers who had been writing at HuffPo for years without compensation filed a class action lawsuit seeking to get themselves a piece of the action under the theory that their content, which HuffPo was receiving for free played a role in the $300,000,000 valuation placed on the site by the sale. As I noted at the time, there was very little legal merit to the Plaintiff’s claims. They had begun blogging at the site knowing that they would not be receiving compensation and cannot be said to be surprised that they didn’t get a piece of the action when the site was sold. Moreover, there was considerable evidence that these uncompensated bloggers were not responsible for the vast majority of the site’s traffic.
Yesterday, just under a year after the suit was filed, a Federal District Court Judge dismissed the lawsuit:
A dissatisified group of unpaid contributors to The Huffington Post got what they were promised: exposure and nothing more, a federal judge has ruled.
The unpaid bloggers sued The Huffington Post last year, seeking compensation after the popular blog was acquired by AOL Inc. for $315 million. The bloggers had sought at least $105 milion of the purchase price, claiming the value created by their content made the website a popular acquistion target.
On Friday, U.S. District John Koeltl disagreed, finding the bloggers submitted their content with no expectation of monetary compensation.
“The plaintiffs entered into their transactions with the defendants with full knowledge of the facts and no expectation of compensation other than exposure,” the judge said. “In such circumstances, equity and good conscience counsel against retroactively altering the parties’ clear agreements.”
The judge dismissed the lawsuit with prejudice, meaning it can’t be brought again.
As I noted at the time the lawsuit was filed, the Plaintiff was proceeding under a theory called “unjust enrichment,” which in layman’s terms is the idea that a party should not be permitted to profit from the work of another without providing some compensation. As Judge Koetl points out, though, there was a fatal flaw in the Plaintiff’s case, namely the fact that they knew from the start that they were not going to be compensated monetarily for the content they provided at the site:
No one forced the plaintiffs to give their work to The Huffington Post for publication and the plaintiffs candidly admit that they did not expect compensation. The principles of equity and good conscience do not justify giving the plaintiffs a piece of the purchase price when they never expected to be paid, repeatedly agreed to the same bargain, and went into the arrangement with eyes wide open. See Shanahan, 854 N.Y.S.2d at 118 (“A claim for unjust enrichment does not lie to relieve a party ‘of the consequences of [the party’s] own failure to . . . exercise caution with respect to a business transaction.'” (quoting Charles Hyman, Inc. v. Olsen Indus., 642 N.Y.S.2d 311 (App. Div. 1996)); cf. Miller v. Schloss, 113 N.E. 337, 339 (N.Y. 1916) (implied contract not found where “[e]ach and every act of the plaintiffs was voluntary and with full and exact knowledge on their part”). Quite simply, the plaintiffs offered a service and the defendants offered exposure in return, and the transaction occurred exactly as advertised. The defendants followed through on their end of the agreed-upon bargain. That the defendants ultimately profited more than the plaintiffs might have expected does not give the plaintiffs a right to change retroactively their clear, up-front agreement. That is an effort to change the rules of the game after the game has been played, and equity and good conscience require no such result.
As I noted at the time this lawsuit was filed, Tasini and the other unpaid bloggers had no ground for expecting get any compensation at all, never mind expecting that they would be getting one third of the purchase price that AOL paid for HuffPo. Despite this, they submitted material not once or twice but over an extended period of time. Clearly they, were expecting compensation in some other form whether it was exposure , eyeballs, recognition, or even merely their own enjoyment. Coming back years after the fact and asserting that they are entitled to compensation they knew they were never going to get merely because Arianna Huffington hit the big time with the AOL buyout is. quite simply, absurd.
This was the correct decision.
Here’s the opinion: