San Francisco - The Electronic Frontier Foundation (EFF), the Citizen Media Law Project (CMLP), and Public Citizen Monday urged the U.S. Court of Appeals for the Second Circuit to consider the critical First Amendment questions at issue in a case asserting "hot news misappropriation" -- a doctrine that a federal court used to put time limit restrictions on the reporting of facts.
The defendant in the case, TheFlyOnTheWall.com, had gathered stock recommendations from investment banking firms like Merrill Lynch, Morgan Stanley, and Lehman Brothers and reported them on its website. The firms sued TheFlyOnTheWall.com, claiming that the information was "hot news" and the website was free-riding on the firms' work in creating the recommendations. A federal court agreed with the investment banks and ordered TheFlyOnTheWall.com to delay reporting of the information for two hours after the reports are released.
"Surprisingly, no court has carefully explored the tension between the so-called 'hot news misappropriation' doctrine and freedom of speech and freedom of the press," said EFF Senior Staff Attorney Corynne McSherry. "We're asking the appeals court to recognize the elephant in the room and analyze the 'hot news' doctrine in light of the strong First Amendment protections developed by the Supreme Court to encourage the expression of truthful statements on matters of public concern."
Applying heightened First Amendment scrutiny is especially important now, as the Internet is increasingly allowing Americans to publicly gather, share, and comment on the news of the day. Misuse of the "hot news" doctrine could stifle this extraordinary growth of free expression.
"It's not hard to see how new and vital forms of social media could get caught in a 'hot news' dragnet," said McSherry. "The court must ensure that this doctrine is not used to quash online commentary and information-sharing."
For the full amicus brief:
Senior Staff Attorney
Electronic Frontier Foundation