MagicJack Legal Documents

By Rob Beschizza

Collected here are legal documents relating to MagicJack's defamation lawsuit against Boing Boing. The presiding judge ruled its case a SLAPP -- a strategic lawsuit against public participation -- and ultimately entered a judgment against it and made MagicJack pay most of our legal costs.

There's a lot to read, so some excerpts are included. Highlights include the wild expense of fighting off lawsuits, MagicJack's litigators saying they didn't want to see discussion of the case on the "blogosphere," and it now being a matter of court record that I produce 'lusty and imaginative' expressions of contempt.

It's worth remembering that all this was about a 200-word blog post that cites, verbatim, the exact text it mocks.


Summons and Complaint [PDF]

The original lawsuit, filed in Marin County Superior Court on March 11, 2009, by Arnold & Porter on behalf of MagicJack. This details MagicJack's complaint against the blog post. Suggested listening: "Michael Bolton - How can we be lovers if we can't be friends?"


Motion to Strike Complaint [PDF]

Our motion to strike MagicJack's suit as a 'strategic lawsuit against public participation,' or SLAPP. Suggested listening: "Cypress Hill - Insane in the Brain." Some excerpts:

"This is precisely the type of bad-faith, strategic lawsuit that the California legislature sought to prevent when it enacted the anti-SLAPP statute. ... If permitted to proceed, MagicJack's lawsuit threatens to have a chilling effect not just on Boing Boing, but more generally on public criticism and debate concerning corporate practices and consumer privacy rights."

"Notwithstanding the rhetoric contained in MagicJack's Complaint, all that is at issue in this lawsuit is an approximately 200-word "blog" post on the Boing Boing website ... The Beschizza Post, written in the humorous and biting style that is the hallmark of "Boing Boing," ... plainly was intended to criticize (and colorfully characterize) only the MagicJack EULA. Indeed, the EULA provision itself comprises more than a third of the Beschizza Post, and consistently is referenced as the basis for the author's statements and opinions."

Though MagicJack asserts it has has not acted on the relevant EULA terms, our motion points out that at the time, the EULA specified that "these advertisements are necessary for the MagicJack device to work."


Declaration of Cory Doctorow [PDF]
Declaration of Marc Mayer [PDF]

These declarations are in support of our anti-SLAPP motion, establishing Boing Boing's history of reporting on EULAs and related issues. Elements of the secret masterplan are revealed in open court: Boing Boing is hyperbolic, acerbic, or wry. Boing Boing seeks to influence technological policy, law and norms. Boing Boing disapproves of contracts of adhesion. Suggested listening: George Baker Selection - Little Green Bag. From our lawyer's declaration:

"I have visited the MagicJack website and homepage several times in an effort to locate MagicJack's Terms of Service. However, I have been unable to navigate to the MagicJack Terms of Service from the MagicJack homepage"

And you still can't. But the live chat will provide the link if you ask.


Opposition to anti-SLAPP motion [PDF]

MagicJack opposes our anti-SLAPP motion. It offers a more vigorous and detailed criticism of my post than the actual lawsuit. Suggested listening: "Boots Randolph - Yakety Sax/The Benny Hill Show."

Particularly interesting is the claim that blog posts about consumer products are 'commercial speech,' and hence undeserving of certain first amendment protections. Au contraire.


Declaration of Dan Borislow in support of opposition [PDF]

MagicJack CEO Dan Borislow's declaration, in support of his lawyers' opposition to our anti-SLAPP motion. Suggested listening: Rick Dees - Disco Duck. Excerpt:

"MagicJack LP is a small, privately held company that is not in the public eye."

Wherein we follow the SLAPP motion with the FACEPALM motion.


Reply ... in support of motion [PDF]

Debunking MagicJack's opposition to our anti-SLAPP motion. Suggested listening: "Joe Dolce Music Theatre - Shaddap You Face"

"MagicJack's Opposition to Boing Boing's SLAPP motion is smoke-and-mirrors, resting on piecemeal and out-of-context excerpts from the Beschizza Post ... and an incorrect and nonsensical view of the First Amendment ... The critical facts underpinning this lawsuit are undisputed, including that MagicJack records telephone numbers, that its EULA requires MagicJack users to consent to allow MagicJack to "analyze" these telephone numbers for advertising purposes, and that MagicJack intends to use and exploit the consents that it acquired in its EULA""

"Also problematic is MagicJack's argument that the conduct authorized in the EULA cannot constitute "privacy invasion" because users have consented to them in the very same EULA. The argument is completely circular. ... It also validates the need for reports like the Beschizza Post in order to warn consumers that consent to the EULA would permit MagicJack to engage in potentially invasive activities. ... It is analogous to a situation in which a cable company, as a precondition to service, installed cameras in private homes and then required the homeowner to consent to allow the company to "analyze" the footage. It certainly would be no defense to a charge that the service greement permits "spying" ... [to say] that the cameras had not yet been turned on.""

"In any event, there is no dispute that MagicJack's ticker did not even purport to represent the number of people who came for a "free trial today" -- even though that is what it says it does. ... MagicJack could simply have reported the number of people who actually signed up for its "free trial" (certainly it keeps track of that number) on a given day, which would have been consistent with the ticker. Instead, MagicJack chose to use exaggeration and approximation, and now cannot complain about being held to task for that decision."


Ruling Granting SLAPP [PDF]

Here, the judge grants our SLAPP motion. Suggested Music: The London Symphic Orchestra -- The Final Countdown Orchestral Remix

"Plaintiff's own evidence shows that the counter is not counting visitors to the website as the visitor visits the site. Instead, the visitor is seeing an estimate. It is not probable that the trier of fact would therefore find untrue the statement that the counter is a "a fake." "


Motion for Attorneys' Fees and Costs [PDF]

This is our motion to get our attorneys' fees and court costs paid by MagicJack. It is splendid reading; much of it covers unexpected behavior by MagicJack and its lawyers after they lost. Suggested listening: "Henry Mancini - Baby Elephant Walk"

"MagicJack was represented in this action by highly competent and experienced litigation counsel. MagicJack and its counsel certainly should have known that the alleged defamatory statements were statements of opinion and not actionable. MagicJack also should have recognized that the claims likely would be subject to California's anti-SLAPP statute, and thus that fees would be awardable to Boing Boing if it were to prevail. Nevertheless, MagicJack elected to pursue this action, apparently hoping that when faced with a lawsuit by a major law firm, Boing Boing would immediately cave ... Additionally, even though MagicJack failed to ever contact Boing Boing, it sought punitive damages against Boing Boing - apparently for in terrorem effect, since MagicJack and its counsel must have known that punitive damages were not recoverable under Cal. Civ. Code § 48a"

"Boing Boing attempted to resolve this attorneys' fees dispute without the necessity of a motion. ... MagicJack accepted those conditions, and over the following two weeks the parties prepared and finalized a settlement agreement. However, the day after the final settlement agreement was circulated for execution, MagicJack suddenly reneged on its offer, stating that it would only sign the agreement if Boing Boing entered into a confidentiality agreement and agreed not to speak about the settlement agreement or its attorneys' fees."

"Moreover, MagicJack hired highly experienced counsel, at one of the largest and most prestigious law firms in the country, to file its case and oppose the anti-SLAPP motion. MagicJack apparently dedicated at least three attorneys to the case, including two associates and a senior partner, Beth Parker, who is a highly seasoned litigator with more than 25 years of trial and appellate experience"

"I told Ms. Parker that Boing Boing would agree to keep the settlement amount confidential, but that it was important that Boing Boing be able to speak about the lawsuit, including the amount of fees it incurred and the amount it ultimately came out-of-pocket for its defense. Ms. Parker advised me that this proposal was unacceptable, that MagicJack did not want discussion ofthe lawsuit on the "Blogosphere," and that MagicJack had hoped that the settlement agreement would put an end to any further publicity about the matters at issue in the lawsuit. "


Opposition to Motion for Attorneys Fees and Costs [PDF]
Reply memorandum in support of motion for fees [PDF]
Ruling Re: fees [PDF]
Ruling Re: costs [PDF]

Money talk. The judge ultimately orders MagicJack pay us $52,754, approximately the amount of the proposed settlement but still less than our actual bill. Suggested listening: Beatles: You Never Give Me Your Money.

"Most of the fees that MagicJack complains about in its Opposition might never have been incurred if MagicJack had, for example, not wasted Boing Boing's time with a settlement agreement that it apparently never intended to sign, asserted claims for damages that it knew it could not recover, or forced Boing Boing to file its motion for fees (and then to revise that motion after MagicJack reneged on the settlement agreement)."


Judgment [PDF]

The end. Suggested listening: Whitesnake.

Thumbnail photo: Horrgakx's photostream

Published 7:00 am Tue, Feb 23, 2010

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About the Author

Rob Beschizza is the Managing Editor of Boing Boing. He's @beschizza on Twitter and can be found on Facebook too. Try your luck at besc...@gmail.com  

24 Responses to “MagicJack Legal Documents”

  1. mgfarrelly says:

    The soundtrack…THE SOUNDTRACK!

    Any time you can make robust and apt use of “Baby Elephant Walk” is a fine time indeed. Congratulations to you all on this and thanks for taking the hard road in standing up for the free press.

  2. SamSam says:

    Wow, some nice reading. Amazing how many pages it takes to say a lot of garbage.

    I did notice in my quick skimming their ludicrous defense that their counter showing “how many people took a free trial!” was not, as you said, “fake” because of the fact that they were roughly estimating page visits and then auto-ticking their counter. I was glad to see that both you and the judge took them to task for that.

  3. No Imagination says:

    Thanx for this info! I find MagicJack commercials so obnoxious that I use the “mute” button to help me ignore them. (For most of them, I can just tune out advertisements as I usually am also reading a book or magazine while the tube is on.)

  4. angusm says:

    “lusty and imaginative”?

    I want that on my business card. And my tombstone.

  5. Tagishsimon says:

    It would be educational to know how much the Boingers are out of pocket on the whole affair. You asked for $77k and got $53k. That’s quite a difference to fund amongst the few of you. Presumably there were costs in addition to the $77k – not least your time.

    • David Pescovitz says:

      Our final legal bill was definitely more than $77k. I’m actually not sure if the final bill has been tallied yet. And it’s also not yet clear how much, if any at all, will be covered by insurance due to the deductible. But believe me, having good insurance (shout out to Ed Szylko/EJMS!) allowed us to sleep at night.

  6. Rob Beschizza says:

    We’re in the hole, but do have insurance. But the deductible is substantial, too. I’m not actually sure how much.

  7. L33tminion says:

    Looks like the judge was constrained by the anti-SLAPP statute in what they could award, but they awarded as much as they could justify, they rejected MagicJack’s argument that the relevant fees were unreasonable.

  8. Marty says:

    Good job! You got more fees than you would have by settling, and you are not constrained by an odious confidentiality agreement.

  9. Anonymous says:

    Well Done, BB!

    HAHA! The CAPTCHA text below my comment field entry box reads: “snooping legislation” !!!

  10. warreno says:

    It’s always nice to see bullying behavior SLAPPed down. Well done.

  11. Ceronomus says:

    Yeah, being out $24k (or more), whether out of pocket, or paying for it later in higher insurance premiums, just SUCKS.

    MagicJack has now really earned the backlash of bad press that it is going to get from this. Sad thing is, if they had just manned up and said, “Sorry, we were wrong, we’ll pay your costs,” they could have at least gotten through this without looking like TOTAL douchebags.

  12. Antinous / Moderator says:

    Jeez. I guess I’m spoiled by land use lawsuits. We always get triple damages.

  13. Anonymous says:

    I’ve been reading through this stuff like I was tearing through an old William Gibson book. nom nom nom.

  14. Anonymous says:

    Super sad! I like their product, and now I hate the company. Boo on your MagicJack!

    WORSE for them, I had never heard of their abusive EULA before this post. Thanks, MagicJack, for creating media around the very issue you don’t want public!

    Solution:

    1. Fix your EULA.
    2. Apologize to your customers and potential customers
    3. Make good products
    4. PROFIT!

    Anything less would look half-assed. You are in a small media shit-storm now; but you can turn it around and look better if you fix things.

  15. xaei says:

    Didn’t they say that you would get a “free trial?” Perhaps a follow-on breach of contract suit is in order? It would be at least as non-frivolous as the original.
    (seriously though, the result is nearly unalloyed great news. thanks for standing up.)

  16. Anonymous says:

    Wow. Teh Stumble magically brought me here and saved me from getting jac… taken for a ride. I was honestly considering researching MJ, but I won’t proceed since they act like this.

    In my OPINION: The example of surrendering privacy in exchange for some service was popularized by Google, in their (to paraphrase) ‘we only use your data to provide you with suggested information based on the content of your messages/searches/chats/whatever’. Can’t blame MJ for trying to make a buck, but we definitely must blame MJ for such cowardly retaliation when consumers take the time to openly discuss the terms.

    BTW: the Captcha for this post: ‘widespread preach’. On BoingBoing. Yup, definitely ironic. What are you folks feeding that captcha thing?

  17. avt_tor says:

    Really, right or wrong, who would think that Boing Boing is likely to respond to a libel suit with “Oops, our bad, we’ll shut up now”?

  18. Anonymous says:

    London Symphony Orchestra – The Final Countdown
    Easily the best thing throughout history ever. I have nothing else to live for.
    All i ask is that it’s played on loop at my funereal.

    Thanks for the fish.

  19. Cowicide says:

    I think the entirety of the lawsuit docs above should serve as a warning for udder would-be litigious assholes and can be summed up with this subversive cross stitch:

    http://www.subversivecrossstitch.com/kits/donotfuck.html
    (You should get the idea of the content from the URL)

    Music for cross stitch (and for YOU would-be litigious assholes out there):
    http://www.youtube.com/watch?v=AkFqg5wAuFk
    (Pantera)

    Followed up with this song (with Boing Boing fans singing along in background):
    http://www.youtube.com/watch?v=ebqcbn0ieKU
    (Radiohead)

    And this song for a chaser of sorts:
    http://www.youtube.com/watch?v=BdA7W2xvyOE
    (White Stripes)

  20. Anonymous says:

    So i understand that this excerpt from their TOS;
    “you must read and agree to these Terms of Service and the following terms and conditions and policies, including any future amendments (which we refer to collectively as the “Agreement”).” is pretty much standard content for almost all EULAs, but what about this;
    “we may choose to notify you when changes are made to these Terms of Service”
    Is that normal?

  21. Anonymous says:

    Thanks BoingBoing for exposing the truth, despite the remaining expenses you were left with!

  22. Anonymous says:

    Amazingly, many “experts” rate the MagicJack device positively. They play with it for a bit, and then decide it’s a great product.

    Unfortunately for those of us in the real world, these “experts” aren’t always wise enough to offer the consumer valuable advice. Magicjack is a perfect example of this.

    HERE’S THE ROOT OF MAGICJACK’S TECHNICAL PROBLEMS:

    A consumer’s MagicJack device will route its signals through the nearest MagicJack server. These servers experience different levels of activity at different times.

    Many of these servers are not capable of handling heavy traffic. Obviously the MagicJack organization did not anticipate the amount of traffic these servers would have to handle, and for many markets (like Las Vegas), during peak call times — like the weekend, holidays, etc — calls are dropped, become choppy and lose sound quality. These decreases in quality and terminations of calls are the servers’ way of handling the unexpectedly high traffic.

    Remember what happened to AOL in the 90s? They became so popular their dial-up locations couldn’t handle the traffic. Many would set up their modems to attempt the maximum 25 call-ins, still not get through, and start the whole dial-up attempt all over again. Eventually, customers got fed up with not being able to even connect to the internet during peak times, and went elsewhere.

    MAGICJACK, listen up: you’re headed the same way AOL went. UPGRADE YOUR SERVERS.

    ..!..

  23. Desert Rat Bill says:

    Chat Conversation with magicJack regarding call from HK blocked

    Please wait for a site operator to respond.
    You are now chatting with ‘Jaden’
    Your Issue ID for this chat is LTK43603428963X
    Jaden: Hello, how may I help you?

    Bill: My sister-in-law just tried to call us from Hong Kong and could not get thru????

    Jaden: Please wait while I check that for you
    Jaden: Thank you for waiting
    Jaden: May I know if you she was able to hear any prompt when she call the number?

    Bill: no prompt, some kind of beeping was all she heard

    Jaden: Is the magicJack device currently plugged in right now on the port of her computer tower with the blue light on?

    Bill: she is not calling on magicjack

    Jaden: Is she using a cell phone registered?

    Bill: what is a “cell phone registered”???
    Bill: and why would that matter it’s just a call to my phone!!!!

    Jaden: May I know what did she use to call those numbers please?
    Jaden: She was trying to call Hong Kong to your phone number is that correct?
    Bill: and why can’t I actually talk to someone, a real peson< at magicJack, you are a phone company, right?
    Bill: she called from HK to Our phone

    Jaden: I mean from Hong Kong to your phone number is that correct?
    Bill: yae
    Bill: 'yes

    Jaden: Okay.
    Jaden: Would it be possible for her to chat us here so that we can let her run the upgrade http://upgrades.magicjack.com/upgrade/upgrade.exe for XP/VISTA/and 7.
    Jaden: Do you know her computer operating system?

    Bill: she DOES NOT have magicJHack, I already told you that, just a phone call to our phone here

    Jaden: Is your magicJack device currently plugged in right now on the port of your computer tower with the blue light on?
    Bill: are you telling me that the only peope who can call us from overseas are those who have magicJack???
    Bill: of course, I nato stupid

    Jaden: They can call your magicJack phone number Bill
    Jaden: Do you see the magicJack “Dial Pad/Soft Phone” in your computer screen right now with a “Stock Symbol:CALL” message?

    Bill: can’t type when Im angry, but not stupid

    Jaden: One moment please…
    Jaden: I am transferring you to one of our top 10% agents as rated by our customers. Please hold while I transfer you.
    Please wait while I transfer the chat to the best suited site operator.
    You are now chatting with ‘Dover’
    Your Issue ID for this chat is LTK43603428963X
    Dover: Welcome to the higher level of support.This is DOVER, and I will be assisting you on your concern today.
    Dover: Please give me a few moments to read your previous conversation and be able to give you further assistance about it. Thank you.

    Bill: no it’s miniized, but that makes no diference
    Bill: so far this is customer DISservice

    Dover: Thank you so much for patiently waiting..
    Dover: May I know when did this issue start to happen?

    Bill: today about 45 mins ago

    Dover: Have you tried to ask someone to call your magicjack number?

    Bill: wait one

    Dover: Sure

    Bill: got “can”t complete call now” from my cell, but I can call my cell successfully

    Dover: can I have your magicjack number please?

    Bill: 951XXXX888 (edit for privacy purposes by Bill after call)
    Bill: thought I gave that when I started

    Dover: Is your magicjack plugged in now directly to the USB port of your computer?
    Dover: No accounts found for phone number = ‘9512685888”
    Bill: what is the cutomer service PHONE NUMBER????

    Dover: We only do chat support here

    Bill: sorry, I’m dis lexic 951XXXX888 (as above)

    Dover: It’s okay
    Dover: Is your magicjack plugged in now directly to the USB port of your computer?

    Bill: Please, I justtold you I called on it

    Dover: At this time you MUST restart your magicJackâ„¢.
    Dover: To do so you may click the ‘Menu’ button, over the ‘Advanced users’ menu item and click ‘Restart’.
    Dover: Let me know once done

    Bill: done, it is not MY COMPUTER ITS your system
    Dover: Okay
    Dover: PLease try to call your magicjack again now

    Bill: in and out rings thru

    Dover: Did you able to received the call now?

    Bill: above!!!
    Dover: PLease try to ask someone to call you again now Bill.
    Dover: Let see if it will work or not.

    Bill: I told you I just called and it rang
    Bill: both ways
    Bill: but that doesn’t solve the overseas problem

    Dover: PLease try to contact your sister-in-law now to call your magicjack number.

    Bill: she has goneto bed

    Dover: After all the things we’ve done, I know it is working fine now Bill.
    Dover: I just refreshed your service here on our end and it helped your magicjack connection to work fine.

    Bill: are you suggesting that you guys have ba software, like MS, that has to bge rebooted if it stays on overnight??

    Dover: No

    Bill: well then why did you have to reset?
    Dover: we do have your service here on our end Bill.

    Bill: so why was it NOT on before?
    Bill: you are avoiding the question

    Dover: I am doing my best here to help you Bill

    Bill: OK,I understand the limitations they put you underr, please have someone with the approiate authority CALL me to explain and discuss what is being done to actually correct the problem

    Dover: since you have tried already to call your magicjack number and it rang, I know the issue has been fixed already..

    Bill: Igot magicJack to get overseas calls raher than use our cell phones

    Dover: The best thing for us to know is to have an overseas call your magicjack phone number.

    Bill: that does not explain what happenedbefore, i do not want ot go thru this every time we are supposed to get an overseas call, as far as I can tell you’ve produced a temp solution for my locdal calls

    Dover: Again. try to ask someone to call you now from overseas.

    Bill: check the time in HK, I thinnk you can see that is not very practical

    Dover: Yes bill

    Bill: OK I give up – please turn this conversation over to your management, let’s see f they actually care about Customer Service

    Dover: You are now chatting with a supervisor Bill

    Bill: Yes and you are not able or permitted to address the actual problem apparently

    Dover: Okay
    Dover: PLease follow this now Bill
    Dover: Please Click Start Button
    Dover: And then click Control Panel
    Dover: Double click Security Center
    Dover: And then Windows Firewall

    Bill: what are we trying to do here, my computer does not care where the call comes from, does nothave the abilitytomake that distinction,this seems a ruse

    Dover: what we are doing now is to fix the issue tnat you are having with your magicjack Bill
    Bill: and why do you assume that the problem is with MY magiocJack rather than you system??

    Dover: Our system is doing fine Bill. There is no problem here on our end.

    Bill: my firewall will not catch a call based on the oigination point it goes to magicJack that it

    Dover: I respect your decision, however I need your full cooperation in order for me to resolve your concerns, however if you don’t cooperate I am forced to end this session.
    Since we haven’t heard from you, we must release this chat. Please click here should you need further assistance:
    http://www.magicJack.com/techchat