Why should you read this case?  If you have ever heard a friend of a friend say, “OMG, did you hear . . .” and assumed that someone was guilty based on the “where there’s smoke there’s fire” theory, you should read this case.  And if you’ve ever thought “the guy must be guilty or the police wouldn’t have gone through all the trouble,” you should read this case.   It happened to Todd & Nicole Chism.  If it could happen to them, it could happen to you, and as Todd Chism stated, “it could happen to any of us.”  Here’s a link of Todd Chism speaking in 2008:  Todd Chism Speaks Out Watch the video first, then read on. 

Todd & Nicole Chism are married.  They’re parents.  Before this, Todd worked as a firefighter with the Spokane Fire Department in Washington.  The Chisms claimed that their civil rights were violated when Todd was investigated and arrested for child pornography.  What you need to know right off the bat is that: “No child pornography was found, and criminal charges were never filed against Todd.”

 The Chisms argue that their Fourth Amendment rights were violated through “judicial deception.”  Basically, the Chisms argue that the officers lied to the magistrate judge in order to get a search warrant – - a really broad search warrant – - that  included his home computer and his computer at work with the Spokane Fire Department. The Chisms also claim that the same false information used to support the search warrant was used to support the arrest warrant alleging Todd violated Washington’s child pornography laws.  The officers executed both warrants.  They arrested Todd.  They searched his home.  They searched his work.  “The investigation did not reveal any evidence of child pornography.”

How did this happen?

First, Washington received a tip from the National Center for Missing and Exploited Children (NCMEC) that Yahoo! had archived images of child pornography on a website and provided an email address as the “suspect.”  The address was: qek9pj8z9ec@yahoo.com.  The tip stated that the IP address 68.113.115 was used to open the first user account on the website.  And as the Ninth Circuit has explained, “[e]very computer or server connected to the Internet has a unique IP address.” United States v. Forrester, 512 F.3d 500, 510 n.5 (9th Cir. 2008).  But, as the Ninth Circuit noted, the tip did not provide the time or date that the child pornographic images were uploaded to the website, nor did it provide the IP address from which the child pornographic images were uploaded.

 Second, Washington received another tip from NCMEC similar to the first one, but with a different website name, a different email user account, and a different IP address.  It also did not provide the time or date that the child pornographic images were uploaded to the website, nor did it provide the IP address from which the child pornographic images were uploaded.

 Third, the detectives start investigating. As to the first tip, Yahoo!’s records indicated that the first user account listed the name, “Mr. Nicole Chism” with a birthday of May 20, 1966.  Yahoo!’s records also indicated that “Mr. Nicole Chism” lived in Chile and showed the user logging into the account from a different IP address than the one listed in the tip that was used to create the website.  Yahoo!’s records showed the billing information for the user account listed Nicole Chism, contained the Chism’s correct residential address, telephone number, and a credit card.  Yahoo!’s records showed that two months of the website’s domain service was paid with the Chisms’ credit card and their credit card statements confirm that they were twice charged a monthly fee for domain service for the website.

 As to the second tip, the same name, “Mr. Nicole Chism” was provided, but this time with the birthday March 11, 1977 and indicated that “Mr. Nicole Chism” lived in Chile.  Yahoo!’s records showed that the second user had logged in twice since opening the account – once from the same IP address used by the first user in the first tip and once from a new IP address.  There was no billing information, but again the Chism’s credit card statements showed them being charged  for a hosting fee.

 Fourth, the officers trace 2 of the IP addresses used to create the websites.  One traced to Cheryl Corn of Walla Walla, Washington.  Another traced to Vitina Pleasant of Federal Way, Washington.  The officers had 4 IP addresses to work with, but only traced 2. 

 Fifth, at this point Detectives Shelby Wilcox and Rachel Gardner notice that both accounts use “Mr. Nicole Chism” and both website were accessed at some point by IP address 69.147.83.181.  Note, this was one of the IP addresses that the officers DID NOT TRACE.

 Sixth, Det. Gardner contact the Chisms bank regarding the credit card used to pay the hosting fees for the websites.  Det. Gardner learned that the Chisms had reported a lost credit card and the card number in question was the replacement card.  Det. Gardner was informed that the Chisms had no fraudulent activity on the card and confirmed that the Chisms had paid the bill with the website hosting charge fees.  BIG FOOTNOTE:  This information was, in fact, false. The Chisms reported fraudulent activity on their 6907 card in August 2007, roughly one month after Gardner received the NCMEC tips and roughly one month before Gardner spoke to Bank of America. Because the officers were not aware of this reported fraud at the time Gardner drafted her affidavit, we place no significance on the omission of this relevant information from the affidavit.

 Read Carefully Here:  It was on this information above that Detective Gardner concluded that there was probable cause to believe that Todd Chism had committed a crime, specifically “[s]ending, bringing into the state depictions of minor engaged in sexually explicit conduct and [p]ossession of depictions of [m]inor engaged in sexually explicit conduct.”

 Todd was arrested, detained, and interrogated.  Agents scoured Todd & Nicole’s home.  Agents seized the Chisms’ computers.  NO CHILD PORNOGRAPHY WAS FOUND.

 You don’t need a law degree to be confused here.  Common sense should make this case a head scratcher.  Really?  This was enough information to arrest someone and seize their personal and work computers?

 The Chisms’ Law Suit Against Washington, the Washington State Police, and Detectives Gardner and Sager

 Well here’s what happened and why the Chisms are suing on the theory that the police lied and duped the magistrate judge into signing off on the search and arrest warrants.

 As part of the application to support the finding of probable cause, Detective Gardner submitted an affidavit.  The Ninth Circuit began its analysis with: “We first observe that Gardner’s affidavit contained several false statements and omissions.”

 #1: Detective Gardner’s affidavit said: “[b]ased on the information received from NCMEC about the images downloaded by Todd M. Chism, it is likely to believe he was using internet service at his residence and/or his business office.”

 Incorrect:  The Ninth Circuit noted that when the detective drafted the affidavit, she possessed no information that Todd ever accessed any child pornography, let alone the specific images uploaded to the websites.  And there was no evidence that the images were ever downloaded by anyone.   The only evidence linking Todd to the websites was the fact that a credit card he shared with his wife was used to pay the hosting fees for the site.  Writes the circuit, “Thus, Gardner’s assertion that Todd downloaded images of child pornography was not a truthful representation of the evidence she had gathered.”

 #2:  Detective Gardner’s affidavit sad that the Chisms’ credit card was “used to purchase the images of child pornography from the website.”

 Incorrect: The Ninth Circuit called this “patently false” as there was apparently no evidence that the Chisms’ credit card was used to buy images of child pornography. 

 Addressing the lies directly, the Ninth Circuit writes:

 A truthful version of Gardner’s affidavit would have indicated that the sole evidence connecting Todd Chism to the child pornographic images was the fact that the credit card he shared with Nicole was charged three times for hosting the websites that contained child pornographic images.

 The Ninth Circuit noted that looking at the evidence Detective Gardner knew that the IP addresses used to register the accounts and websites were traced to other people – - not Todd & Nicole Chism.  Detective Gardner knew that the identifying information for the Yahoo! accounts was “nonsensical” but her affidavit did not include any of this information.  The Ninth Circuit concluded that a reasonable fact finder could find that the officers acted with at least “reckless disregard for the truth.”  Additionally, the Ninth Circuit held that a reasonable fact finder could find that the officers acted recklessly or intentionally because the false statements or omissions contained in the affidavit “all bolster the case for probable cause which were not the product of mere negligence.” 

 Basically, Detective Gardner’s affidavit was “purged” of any (and there was a lot) of evidence referencing the possibility that it was someone other than Todd Chism who was responsible for the child pornography websites. 

 The Ninth Circuit reversed the district court’s grant of immunity.  Specifically, it noted that government employees are not entitled to qualified immunity on judicial deception claims.  Specifically it stated that: 

 if an officer submitted an affidavit that contained statements he knew to be false or would have known  were false had he not recklessly disregarded the truthand no accurate information sufficient to constitute probable cause attended the false statements, . . . he cannot be said to have acted in a reasonable manner,and the shield of qualified immunity is lost.

 Branch v. Tunnell, 937 F.2d 1382, 1387 (9th Cir. 1991) (overruled on other grounds by Galbraith v. City and Cnty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002) (quoting Olson v. Tyler, 771 F.2d 277, 281 (7th Cir. 1985).

 The majority (Judges Fletcher and Paez) reversed the district court’s grant of immunity and remanded the case for trial.

 Judge Ikuta dissented:

Judge Ikuta writes:  In United States v. Gourde, we endorsed this maxim, holding that payment of subscription fees to a site on which child pornography is available was sufficient to support probable cause for a search warrant. 440 F.3d 1065, 1071 (9th Cir. 2006) (en banc).  Despite the fact that this case involved a direct connection between the Chisms’ credit card and two websites populated with child pornography, the majority holds that the evidence was insufficient to support probable cause, and therefore the district court erred in granting summary judgment to the police on the basis of qualified immunity. In doing so, the majority tramples on controlling precedent and defies common sense. I respectfully dissent.

 Judge Ikuta’s 9 page dissent discusses Gourde in depth and is the type of dissent likely to grab the attention of other circuit judges if a call is made to rehear this case en banc.  Notably, the case Judge Ikuta considers directly on point and controlling the outcome of this case in the other direction is a en banc decision.  In sum, Judge Ikuta places little emphasis on the “patently false” information the detective provided in the affidavit, and the conspicuously missing information about other people, and instead focuses almost completely on the fact that the Chisms’ credit card was used to pay for the websites.  The fact that the credit card was used and the billing information for the credit card was correct carries the day for Judge Ikuta regardless of the information pointing to the fact that the card was likely stolen and used by people hundreds of miles away.  Judge Ikuta goes so far as to say that she believes that the evidence supported probable cause to arrest either  Todd or Nicole Chism.

 And there’s more to the story!

 Todd Chism has now filed another civil action against the Washington State Patrol arising out of an incident in April 2010 where Chism claims that two WSP troopers used excessive force. 

 The complaint includes claims for harassment, false imprisonment, malicious prosecution, intentional infliction of emotional distress and retaliation, and others.  The incident with the troopers occurred in the  morning outside Chism’s Nine Mile Falls home after troopers received reports of a fight.  They arrived at the location and only found Chism trying to remove

Chism claims that the SWP troopers assaulted him and used a Taser on his seven times.  Said his attorney, “I would have never guessed that [Mr. Chism] would have been stopped by the State Patrol and have the State Patrol announce ‘We know who you are; we’re going to arrest you . . . You’ve got to believe there’s some element of retaliation here.”

 In Lucent, Defendant’s former employee (Johnson), proceeding pro se, filed suit against his former employer, Lucent, on August 11, 2008 for terminating his long-term disability benefits in retaliation for previously filing suit against the company in 2005.  Notably, Johnson’s long-term disability benefits stemmed from separate litigation between Johnson, again acting in pro se, and Lucent beginning in 1982 and continuing through 2006.

 Lucent moved to dismiss Johnson’s retaliation claim on the grounds that Johnson’s claim was time-barred under the relevant California statue of limitations under California Code of Civil Procedure Section 335.1 providing for a two (2) yearstatute of limitations.  The district court dismissed the matter, and Johnson amended his complaint.  Upon receipt of the second complaint, Lucent again moved to dismiss.  The district court once more ruled that Johnson’s claims were time-barred and refused to grant Johnson equitable tolling.  Johnson appealed to the Ninth Circuit.The Court began its opinion by detailing the controlling statutory provisions and relevant case law. 

Of paramount importance to the Court’s decision was Section 1981 of the Civil Rights Act of 1866 (“Section 1981”). Section 1981 provides:  “All persons within the jurisdiction of the United State shall have the same right in every State and Territory to make and enforce contracts…as is enjoyed by white citizens.”

Section 1981 does not contain a statute of limitations.  Prior to 1991, where claims were brought pursuant to Section 1981, the Supreme Court stated that federal courts should apply “the most appropriate of analogous statute of limitations.”  Goodman v. Lukens Steel Co., 482 U.S. 656, 660 (1987).  In Lucent, that would have resulted in the Ninth Circuit applying the applicable California statute of limitations, which is two (2) years.  However, in 1991, three (3) years after the decision in Goodman, Congress passed a catchall four (4) year statute of limitations for actions arising under an “Act of Congress”.  28 U.S.C. section 1658  (a) (“Section 1658”).  

The crucial inquiry for the Ninth Circuit in Johnson was whether Johnson’s cause of action arose under the amended language of Section 1981, and thereby subjected the claim to the four (4) year statute of limitations established by Section 1658, or if the statute of limitations as originally enacted by Section 1981 (the applicable statute of limitations of the forum state) applied.  If the latter, then the cause of action would be subject to the statute of limitations of the forum state.

To determine which section applied, the Court looked to recent Supreme Court precedent.  In Jones v. R.R. Donneley & Sons, 541 U.S. 369 (2004), the Supreme Court held that a cause of action “arises under an Act of Congress,” for purposes of the four (4) year statute of limitations, where the plaintiff’s claim against the defendant is made possible by a post-1990 enactment.  In Jones, the appellant’s claims were found to have arose under the amended Section 1981 since the post-1990 enactment allowed for claims deriving from the “termination of contracts.”  42 U.S.C. section 1981.  As such, the claims were subject to the four (4) year statute of limitations.

The court ruled that Johnson’s allegations of retaliation, predicated on the termination of his long-term disability benefits, were subject to a four (4) year statute of limitations pursuant to Section 1658 because the retaliation claim being brought by Johnson was only capable of being pursued due to the post 1990 enactment. 

The main conclusion to be drawn from Johnson v. Lucent is that claims of retaliation brought pursuant to Section 1981 are now subject to a four (4) year statute of limitations and not the statute of limitations of the forum state.

Todd B. Scherwin was assisted by co-author Colin Calvert, an associate at Fisher & Phillips

Many of us have searched the web to find our local Department of Motor Vehicles (or “DMV”) in response to a traffic violation, registering a car, or renewing a driver’s license.  If you typed DMV into your search engine, you may have come across the website DMV.org with information about all your DMV related questions.  You may have believed that this was an official state DMV site, and according to DMV.org’s competitors, you wouldn’t have been alone in thinking DMV.org was affiliated somehow with your state’s DMV.  

Plaintiffs, who are direct competitors of the defendants who own DMV.org, claimed that the defendants violated federal and state unfair competition and false advertising laws by intentionally marketing themselves as an official state DMV website or at least affiliated or endorsed by a state DMV.  In reality, DMV.org is a business that assists consumers with essentially anything your local DMV can help you with and beyond, including obtaining driving records and car insurance to locating DUI/DWI attorneys.  Under this business model, the defendants profit from the number of visits to the site and from sales of sponsored links and referrals to vendors.  Essentially, the more visitors, the more money they generate.

Defendants contend on appeal that the plaintiffs lacked standing to bring their claims.  In analyzing the plaintiffs’ state law unfair competition claims, the district court found that the plaintiffs did not suffer an injury in fact or lose any money or property resulting from defendants’ actions.  However, the district court failed to analyze standing under Article III, which has a broader requirement for an “injury” than the state law claims and is required to establish the jurisdiction of a federal court.

The only aspect of the three prong Article III standing test before the Ninth Circuit was whether there was an injury in fact.  In a false advertising claim to establish Article III injury, the plaintiff must show that some consumers purchased the defendant’s products due to defendant’s false advertisements, and otherwise, would have purchased the plaintiff’s products.  The plaintiff, in essence, needs to provide evidence of actual and probable market behavior; that is showing through a chain of inferences that defendant’s deceptive advertising could harm plaintiff’s market shares.  As the plaintiffs did in this case, ample evidence of direct competition is key.  Plaintiffs also showed that an endorsement that the site was “recommended by the DMV” highly affected consumers’ decisions.  In turn, the defendants will gain a larger percentage of the referral market because consumers are misled into believing that DMV.org’s referrals are actually recommended by their state’s DMV as opposed to a privately owned company’s recommendation.  This “injury” was sufficient to establish Article III standing.

Moreover, the Ninth Circuit found that the plaintiffs had standing under the Lanham Act because a false advertising plaintiff only needs to show that it is likely to be injured.  Under the Lanham Act standing test established in another Ninth Circuit decision,[1] a plaintiff must show that there was a commercial injury based upon a misrepresentation about a product, and that the injury harmed the plaintiff’s ability to compete with the defendant.

A commercial injury generally is presumed when the parties are direct competitors and where the consumers can be misled by the defendant’s misrepresentations.  The parties here are competitors in the traffic school and driver’s education referral markets in numerous states.  While plaintiffs weren’t able to prove an identifiable injury to themselves, the Ninth Court held that this doesn’t preclude a commercial injury.  The Court explained that a plaintiff doesn’t need to show an actual injury, but instead that it is likely to be injured to show commercial injury.  Thus, the plaintiff doesn’t need to establish, for example, that the advertisements caused loss of sales.  The reasoning is that the Lanham Act was established as a consumer protection statute; as such, an onerous level of injury would defeat the purpose of protecting the public. 

The second half of the injury test revolves around the question of whether DMV.org misled consumers into believing DMV.org was affiliated with a government agency.  The evidence established that consumers, in fact, were misled.  Not only did this affect actual consumers, but law enforcement officials and actual DMV employees also were believed that DMV.org was their state’s official DMV site.  Additionally, two California cities, a private law firm in Texas, and numerous newspapers mistakenly linked their website to DMV.org instead of a state DMV site.  This is probably in part due to the fact that the DMV.org website copied slogans and state symbols of official DMVs on its website.  It also linked to webpages to help in DMV related transactions, like applying for a license. 

Further, in California, when you did an internet search, the website for DMV.org popped up with “ca.” and “california.” prefixes in the domain names so as to suggest an affiliation with the State of California.  In addition, plaintiffs’ survey, although flawed, showed that a majority of California residences searching for traffic schools online thought that DMV.org’s site was the California DMV’s and that a search engine listing for DMV.org was endorsed or sponsored by the California DMV.  While DMV.org had a disclaimer disavowing any connection with any state DMV, the disclaimer was in small font at the bottom of each page, which consumers could easily miss. 

The Ninth Circuit also agreed that the evidence substantiated plaintiffs’ false advertising claims.  For an internet false advertising claim, a plaintiff must show that (1) a statement made in an advertisement or promotion is false or misleading, (2) that it deceives or is likely to deceive a substantial segment of the target audience, (3) whose purchasing decisions will be influenced, and (4) that the plaintiff has been or likely to be injured by the false advertisement.  The DMV.org URL, defendants’ search engine marketing, and the DMV.org webpage design also likely – and in fact did – confuse consumers.  The evidence established that DMV.org actually deceived a substantial portion of its consumers, and that consumers were swayed into making purchasing decisions based on the idea that the products were “recommended by the DMV.”  Plaintiffs, as a result, suffered when consumers visited DMV.org instead of plaintiffs’ sites. 

As way of remedy, the District Court ordered DMV.org to place a splash screen on its site for each visitor.  The splash screen stated, in all caps, that the site was privately owned and not owned or operated by any state agency.  The visitor then had to click continue to view any of the website’s content.  Defendants argued this remedy was overbroad and violated the First Amendment.  While the Ninth Circuit did not find that the court’s injunction was overbroad, it did find overreach into protected speech.  In general, permanent injunctions are allowed when enjoining false or misleading advertising.  The DMV.org site, however, not only contained deceptive statements, it also contained informational content that is constitutionally protected by the First Amendment.  The Ninth Circuit found that the district court should have formed the injunction so it did not unnecessarily burden protected speech.  The splash screen deters some potential visitors and it interferes with search engines; thus, making it more difficult for consumers to find the protected material on the site.  On remand, the district court had to reconsider the duration of the splash screen in the face of any changes in the site’s content and/or marketing as well as remedying any deception from the site’s past practices.  If the district court requires the continued use of the splash screen, it has to justify the burden on the protected content and what defendants can do to satisfy removal of the splash screen.

The splash screen is still up and running on DMV.org, so for the time being, if visiting this website for vehicle related questions, you’ll know that it isn’t the Real McCoy. 

TrafficSchool.com, Inc. v. Edriver Inc. (No. 08-56588, July 28, 2011) (full opinion available here)

Twenty-two Argentinian residents filed suit against DaimlerChrysler Aktiengesellschaft (“DCAG”) contending that a wholly-owned subsidiary of DCAG, Mercedes Benz Argentina (“MBA”), collaborated with the Argentinian military and police forces to punish plant workers perceived as union agitators.  As a result, the Argentinian security forces kidnapped, detained, tortured, and/or killed these workers during a dark period in Argentina’s history stemming from 1976 to 1983 known as the “Dirty War.”  The Plaintiffs further contend that MBA knew that its collaboration with Argentinian security forces would result in these human rights abuses, and that MBA was pleased with the results because it ended a strike at the plant, thus, restoring maximum production. 

The Plaintiffs are all Argentinian residents who are either former plant workers who allege that they were kidnapped, detained, and/or tortured, or relatives of former workers who have “disappeared” and are assumed killed.  While the cause of action did not occur in California, or the United States, and the Plaintiffs are not residents of the United States, they were able to bring their claims in federal court in the Northern District of California under the Alien Tort Statue (“ATS”), 28 USC § 1350 and the Torture Victims Protection Act of 1991 (“TVPA”), 106 Stat. 73, which allows suits by foreign residents in federal court.  The number of ATS and TVPA claims brought against multinational corporations (“MNCs”) alleging human rights abuses in another region of the world have steadily increased over the years.  For those MNCs who operate in the United States as well as abroad, these companies need to understand that federal courts are an available forum for plaintiffs alleging human rights abuses abroad. 

Defendant DCAG, a German stock company with dual operational headquarters in Germany and Michigan, brought a motion to dismiss based on lack of personal jurisdiction.  Personal jurisdiction is a threshold matter that determines if a party can even litigate a suit or if a party needs to even defend itself in a foreign jurisdiction.  A motion to dismiss for lack of personal jurisdiction is a necessary tool in any litigator’s belt if she wants to keep her MNC client out of litigation.  However, today’s global marketplace may make it difficult for these MNCs to avoid American courts.  The Ninth Circuit overturned the district court’s holding, and found that DCAG was subject to personal jurisdiction in California through the contacts of its subsidiary and agent Mercedes-Benz USA (“MBUSA”). 

First and foremost, an MNC cannot avoid litigation by restructuring its business after being served with a lawsuit so that there is no jurisdictional reach by the federal courts.  The courts are aware of this possible tactic and look at the relationship at the time the complaint was filed.

At the time the suit was initiated, DCAG, like many large MNCs, had many subsidiaries, including a wholly-owned subsidiary by the name of DaimlerChrysler North America Holding Corporation (“DCNA”).  DCNA, in turn, had its own wholly-owned subsidiary, Mercedes-Benz USA, LLC (“MBUSA”), which was a Delaware corporation with its principal place of business in New Jersey.  The Ninth Circuit focused on the General Distributor Agreement between DCAG and MBUSA to determine the extent of the relationship between the parties and whether personal jurisdiction of MBUSA could be imputed to DCAG.  This may seem like a side-step towards reaching MBA, but remember that all these seemingly disparate companies are under the umbrella, and protection, of a larger corporation – namely DCAG. 

In this case, where the cause of action occurred in Argentina, the court examines if DCAG had the requisite contacts and if the assertion of jurisdiction was fair and reasonable.   

First, in order to see if requisite contacts were met, the Ninth Circuit reviewed whether there were substantial, continuous and systematic activities in the forum state even if the cause of action was unrelated to those activities.  The Ninth Circuit used the agency test in determining the special importance of the services performed by MBUSA.  The court found that MBUSA, as a subsidiary, functions as DCAG’s representative in that it performs services sufficiently important to DCAG that if MBUSA did not have a representative to do them, then DCAG’s own officials would perform substantially similar services. 

The agency test requires two components:  (1) sufficient importance used to determine if the acts of a subsidiary are a manifestation of the parent’s presence; and (2) the parent’s control over the subsidiary.  Now, whether the alleged agent was a subsidiary or independent contractor of the company is irrelevant.  The Ninth Circuit held that the services provided by MBUSA were sufficiently important to DCAG that if MBUSA went out of business, DCAG would continue selling cars in this vast market either selling itself or alternatively by selling through a new representative.  MBUSA sales in the United States consisted of 19% overall with 2.4% of sales in California, which are significant market shares that DCAG would not want to lose.  Further, MBUSA maintained several regional offices in California. 

In addition, the Ninth Circuit found DCAG had more than enough control for the agency test considering that based on the parties’ Agreement, DCAG had the right to control nearly every aspect of MBUSA’s business operations.  Contrary to DCAG’s claims, control doesn’t need to be exerted on a day-to-day basis.  The Ninth Circuit doesn’t provide any guidance on how much control the parent company must exercise, but leaves it to a case-by-case basis to determine.

The second component of determining personal jurisdiction is whether the assertion of jurisdiction is reasonable.  Courts weigh seven factors weighed in making this determination.  It is up to the defendant to show that jurisdiction is unreasonable. 

The first factor is the extent of purposeful interjection in the forum state.  The Ninth Circuit found that DCAG interjected itself into the California market through MBUSA.  DCAG, among other things, also designed cars and built fuel cells specifically for the California market.  In addition, DCAG availed itself of the California court system by initiating lawsuits there and retained permanent counsel in California.  This factor weighed heavily toward personal jurisdiction.  

Second, a court examines the burden that is placed on the defendant by forcing it to litigate in a foreign jurisdiction.  Here, DCAG is a large MMNC; the Ninth Circuit found that in light of the advances of modern technology, the burden was not that great.  Although, this factor weighed somewhat in DCAG’s favor because there is some burden in litigating in a foreign country, it was not a significant factor. 

Third, a court will examine the extent of conflict with the sovereignty of the defendant’s state.  The Ninth Circuit found that this is not dispositive because if given controlling weight, then it would always prevent suit against a foreign national in an American court.  While this factor weighed slightly in DCAG’s favor, the Ninth Circuit made note of DCAG’s extensive business presence in the American market overall and not just the forum state, California.  Thus, the Ninth Circuit determined that the federal court would not be violating Germany’s sovereignty if it heard the matter, because DCAG chose to place itself at risk of litigation by its extensive business operations in the United States.   

Fourth, the forum state’s interest in adjudicating the suit is examined.  This case was brought under two laws that are frequently used by foreign nationals who allege international human rights abuses.  The Ninth Circuit noted that American federal courts have a strong policy interest in adjudicating these global human rights cases, and that this factor weighed in favor of the exercise of personal jurisdiction. 

Fifth, a court determines the most efficient judicial resolution of the dispute.  In this case, both the witnesses and evidence are in Argentina; thus, they would be equally available to the German and American courts.  Finally, due to Argentina’s limited statute of limitations on human rights claims stemming from the Dirty War, Argentina is not actually a viable forum.  Moreover, due to the advent of modern technology, courts no longer heavily weigh this factor. 

The Ninth Circuit evaluated the sixth and seventh factors together, respectively being the convenience and effectiveness of relief for the plaintiff and the existence of an alternative forum.  Due to concerns with the viability of statute of limitations, having an actual cause of action, and/or availability of service of process, the Ninth Circuit found that neither Germany or Argentina were available alternative forums.  As such, these two factors weighed in favor of the Plaintiffs.  Either way, an alternative forum is not a deciding factor in personal jurisdiction analysis. 

The lesson from this case for any foreign entity is that if you avail yourself of the American marketplace, then the American judicial system also can hold you accountable for any alleged actions abroad.

Many of us suspected this case was coming, but — even so – it still knocks the wind out of an immigration attorney. 

Background.  Controlled substance convictions (simple possession, under the influence, possession for sale, etc.) are by and large a disaster in immigration.  They make you inadmissible (and ineligible for a waiver of that inadmissibility except for one conviction for a very small amount of marijuana), they make you deportable, and they make you an aggravated felon (when related to sale).  In other words, they’re usually a life-ruiner. 

But ”America is a second-chance nation.”  Judge Pregerson.  To that end, the federal government enacted the Federal First Offender Act (FFOA), which allows someone convicted of a first federal controlled substance crime to eliminate that conviction for all purposes as long as they successfully complete a rehabilitation program.  Even though expungement-like post-conviction activity will not usually eliminate a conviction for immigration purposes, an FFOA expungement is actually honored. 

So then come FFOA-like state rehabilitation expungements.  Over ten years ago, California voters opted to extend FFOA-like treatment to state controlled substance convictions as well, and many other states did the same.  While the requirements for and implementation of these programs vary slightly from the FFOA, they are designed to achieve the same end: give people a second chance when it comes to minor drug possession charges. 

The question remained whether immigration would honor state FFOA-like expungement statutes as well.  In 2000, the Ninth Circuit gave us an answer: yes.  The Court held in Lujan-Armendariz v. INS that equal protection mandated state expungements for first offenders be honored for immigration purposes as well.  We, as immigration lawyers, like (well, liked…ugh) Lujan.  For our clients who got caught in 2001 with an extremely small amount of marijuana (what is now commonly referred to as a “pot ticket”), successfully completed Prop 36 diversion, and have never been involved in any other criminal activity, Lujan let them move on. 

Unfortunately, no one else on the planet agreed.  The Board of Immigration Appeals and every other circuit who has decided this issue all held that a state expungement cannot eliminate a first-offense drug possession charge for immigration.  The Ninth Circuit has now reversed itself and overruled Lujan.  The primary focus was whether there was a rational basis for Congress not including state rehabilitation programs in the statute, of which they found at least two (each of which had been articulated by other circuits).  Now, state rehabilitative expungements will not eliminate a conviction for immigration.  Rats.

The good news is that this will only apply to people who accept Prop 36 treatment after today.  The Ninth Circuit did hold that Lujan had been relied on by so many people, that it would be wrong to apply the new rule anything but prospectively.  Which — incidentally — saved my partner and I a day of pulling files to see who used to be eligible for relief from deportation.

In BNSF, property in Stockton California was contaminated over the course of 20 years when multiple petroleum spills at a nearby industrial site migrated onto the property at issue via an underground french drain pipe installed underneath a railroad as part of the railroads effort to keep water away from the tracks

Unlike other pipe systems, a french drain utilizes buried perforated pipe (i.e. holes in the pipe) to help manage rain water.  Since the pipe is perforated, water – and in this case petroleum runoff – can enter and exit the pipe along the entire length of the pipe.

 The Stockton Redevelopment Agency (“Agency”) spent several million dollars cleaning up the property at issue.  In 2005, the Agency sued several Railroad companies for the costs of cleanup based on the Railroads operational control over the french drain during the period of time when the contamination spread onto the property.

 The Agency sued the Railroads in State Court under theories of nuisance and under the State Redevelopment Act, Cal. Health & Safety Code § 33459.  The Railroads removed the case to the Eastern District of California under Diversity jurisdiction.  Though not discussed in the case, it is interesting that the Agency did not attempt to bring Federal causes of action against the Railroads under the Federal Clean Water Act (33 USC 1321 et seq.) or the  Federal Oil Pollution Act (33 USC 2701 et seq), both of which provide for strict liability against parties that are “responsible” for oil spills.  The District court ruled that the Railroads were liable to the Agency for eight-hundred thousand ($800,000) dollars in cleanup costs. 

 On appeal, the main issue for the 9^th circuit was whether the Railroad companies, as mere operators of the french drain, should be held responsible for the spread of the petroleum contamination through the french drain.

The 9^th Circuit held that the Railroads’ operation of a french drain designed to transmit storm water did not impose liability on the Railroads when unforeseen contamination entered and was spread by the french drain.  “Because the Railroads’ conduct with regard to the specific nuisance condition – the contamination – was not active, affirmative, or knowing, the Railroads simply did not create or assist in the creation of the nuisance on the Property.  They did not spill the petroleum or otherwise release it into the environment.  They did not affirmatively direct its flow or knowingly permit it to mitigate into the french drain and onto the Property.  While the Railroads may have acted affirmatively with regard to the installation of the French drain, that conduct was wholly unrelated to the contamination…The drainage improvements on the site were designed to move water, not contaminants.”

 In short, the 9^th Circuit “decline[d] to hold that an otherwise innocent party who builds or installs a conduit or structure for an unrelated purpose which happens to affect the distribution of contamination released by someone else is nonetheless liable for creating or assisting in the creation of a nuisance.”

 This case is interesting in that it seems to highlight an internal conflict in the 9^th Circuit over how to deal with the issue of liability for passive migration.

• When reviewing claims under the Federal  Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the 9^th Circuit has held that there is no liability for passive migration. (Carson Harbor Village Ltd. V. Unocal Corp. (9^th Cir. 2001) 270 F.3d 863).
• When reviewing claims under the Federal Clean Water Act (“CWA”), the 9^th Circuit has held that a party can be held responsible for the passive migration of contamination.  (NRDC v. County of Los Angeles (2011) 636 F.3d 1235)  As the Court stated in the NRDC decision, the CWA does not distinguish between those who add pollutants to water and those who simply convey pollutants in water – “the [CWA] is indifferent to the originator of water pollution…[The CWA] bans the discharge of any pollutant by any person regardless of whether that person was the root cause or merely the current superintendent of the discharge.”
• And most recently, in the above discussed BNSF decision, the 9^th circuit refused to hold Railroads liable for passive migration for contamination under state nuisance claims.

 The differences in these outcomes can be explained by the differences in the statutory schemes at issue.  Unlike the Carson Harbor case, which dealt with CERCLA claims (no permit at issue), or the BNSF case, which focused on nuisance claims (no permit at issue), the NRDC decision focused on violations of permit requirements under the CWA.  Therefore, the likely conclusion that can be drawn from these cases is that the 9^th Circuit will not hold a party liable for damages for the passive migration of contamination if no permit is at issue, but if a party does have a permit requiring that discharges be limited to certain amounts, the court will not care if a party did not actually generate the contamination, but merely transmitted it.  A party will be found liable for violations of permit standards even if the discharges were only attributable to the party because of passive migration from someone else’s discharge.

So there are two types of situations that don’t fit squarely into this framework. 

The first: whistleblowers who expose government corruption.  Asylum law protects whistleblowers by fitting them into the political opinion ground (“Whistle-blowing against government corruption is an expression of political opinion.”  Baghdasaryan v. Holder, 592 F.3d 1018, 1023 (9th Cir. 2010)).The second: people who fear retaliation from private citizens for reporting criminal activity to law enforcement authorities.  This is considered personal retribution not related to the expression of a political opinion. 

Both situations have the same feeling, in that we generally want to protect people who report crime and corruption.  But until Antonyan v. Holder, only the first group was protected.  In Antonyan, the Ninth Circuit was presented with a mixture of these two situations.  The applicant reported a crime to the Armenian authorities…the crime of a private citizen.  What she soon found out was that this private citizen was extremely well-connected with the police and prosecutors.  Her reports were ignored; the prosecutions were dismissed.  As she continued up the government chain looking for someone who would listen, the gang of thugs associated with the criminal attacked her and threatened to kill her.  In doing so, she was also exposing the corrupt government employees.  Finally, the police themselves tried to quiet her, at which time she left Armenia.

The Immigration Judge and the Board of Immigration Appeals both dismissed her claim, holding that she really only feared the retaliation of a private criminal.  The Ninth Circuit disagreed.  This is a significant expansion of the whistleblowing doctrine, as it broadens the asylum protection given to those who expose criminals with corrupt ties to the government. 

In 2005, California passed a law regulating “violent” video games, requiring special packaging and forbidding their sale to minors under 18.  A group of video game and software industry representatives challenged the law, claiming it violated free speech protections.  The Northern District of California blocked its enforcement, and on appeal Judges Kozinski, Thomas and Callahan upheld the injunction (previous discussion here).  Applying strict scrutiny, the Supreme Court ruled that the law violates the First Amendment and affirmed the decision of the Ninth Circuit.

Justice Scalia writes the majority opinion, joined by Justices Kennedy, Ginsburg, Sotomayor and Kagan.  The Justices are forced to deal with the collision of new technologies with centuries-old free speech precedent, and their opinion is largely on point to the earlier Ninth Circuit decision.The Stevens holding (federal statute regulating animal cruelty) controlled the outcome here, at least according to the majority opinion.  This 2010 case was an example of “a State’s attempt to shoehorn speech about violence into obscenity.”  California did not go quite as far as violence=obscenity with their video game regulations; it tried to create a new category of content-based regulations that is constitutional only as to speech directed at minors.  The majority felt this new category was unprecedented, while the dissent felt that this category has existed since before the creation of the Constitution.

Since the California law is a content based restriction, SCOTUS applied SS just as the Ninth Circuit did.  They must show a specific problem (violent video games harm children) that would be remedied by restricting the speech.  Although California admits that they cannot prove a direct connection between violent video games and harm to minors,  the concurring and dissenting opinions both cite to hoards of studies and research that support this link.  The majority concludes that California’s evidence shows “at best some correlation between exposure to violent entertainment and minuscule real-world effects….”  On top of this failure to show that limiting exposure actually prevents harm to minors, the law is also overinclusive (applies to some parents who do not think video games are harmful) and underinclusive (excludes portrayals other than video games).

Justice Alito (concurring with Justice Roberts) did not even get to the SS analysis, since he concluded that the law’s definition of “violent video game” is impermissibly vague.  ”For better or worse, our society has long regarded many depictions of killing and maiming as suitable features of popular entertainment, including entertainment that is widely available to minors.”  Although the law was based on the obscenity standard (a tactic that has worked previously for these types of laws), there was no threshold requirement.[1] He also disagreed with the majority on whether this type of new technology increases violence in kids).

Justices Thomas and Breyer dissented, concluding that the law is not facially unconstitutional and should be remanded to the district court.  Justice Thomas believes that freedom of speech, as understood by the Founding Fathers, should not include a right to speak to minors without parent/guardian consent.  The dissenters felt that the First Amendment provisions controlling here should be interpreted as they were when written in the 18th century.[2]  Therefore, speech to minor children which bypasses parents is a category of excluded speech not permitted by the Constitution.[3]

The split between Thomas’ dissent and the majority highlights a common argument appearing in SCOTUS decisions.  Should the Constitution be interpreted as a living document, or according to the Founders’ original intent? Does it make sense to examine Puritan practices in 1646 when attempting to analyze a 21st century regulation aimed at a new technology that was far from the Founders’ imaginations?  The dissent admits this much: “the original public understanding of a constitutional provision does not always comport with modern sensibilities.”  However, this longstanding rift between methods of interpretation will continue to appear in SCOTUS decisions with no resolution in sight; it is just another interesting aspect of the constitutional battle over new technologies and free speech.

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[1] The current adult obscenity test requires an obscenity statute to contain a threshold limitation that restricts the statute’s coverage to specifically defined “hard core” depictions.  ”[N]othing similar can be said about much of the conduct covered by the California law. It provides that a video game cannot qualify as ‘violent’ unless ‘the range of options available to a player includes killing, maiming, dismembering, or sexually assaulting an image of a human being.’”

[2] “When interpreting a constitutional provision, ‘the goal is to discern the most likely public understanding of [that] provision at the time it was adopted.’  Because the Constitution is a written instrument, ‘its meaning does not alter.’  ’That which it meant when adopted, it means now.’”

[3] Justice Breyer (dissenting) applies strict scrutiny - the California law must be “narrowly tailored to further a compelling interest, without there being a less restrictive alternative that would be at least as effective.”  (internal quotations omitted)  Justice Breyer concluded that California backed up the claim of harm with considerably stronger evidence.

 I.       Case Background and Overview

 I admit that the Mastro’s in Beverly Hills may be my favorite steakhouse, and I’m happy that this opinion regarding compelling arbitration has very little to do with Mastro’s Restaurants.  Nonetheless, John Momot filed the underlying action alleging complaints concerning his investments in three of the Mastros’ Restaurants.  The Mastros had sold several companies in 2007, including the three Mastros in which Mr. Momot had invested.  The Mastros, Mr. Momot, and other investors all executed an Allocation Agreement as part of the sale, to essentially clarify the valuation of each of the restaurants so that the sale proceeds could be allocated among the investors.

 The Allocation Agreement contained the following relevant arbitration clause:

 4. Resolution of Disputes.

(a) Arbitration. If a dispute arises out of or relates to this Agreement, the relationships that result from this Agreement, the breach of this Agreement or the validity or application of any of the provisions of this Section 4, and, if the dispute cannot be settled through negotiation, the dispute shall be resolved exclusively by binding arbitration. A Party may submit the dispute to binding arbitration administered by the American Arbitration Association under the Commercial Arbitration Rules upon notice to the other Party subject to the dispute….

 Mr. Momot filed suit in Nevada state court in April of 2009 alleging that the Mastros had improperly taken steps to profit at the expense of private investors such as himself, and that more proceeds should have been allocated from the 2007 sale to the restaurants in which he had invested. 

 Within a month, the Mastros took multiple steps to instead arbitrate the dispute, initiating arbitration through the American Arbitration Association and filing a petition to the District Court of neighboring state Arizona to compel arbitration pursuant to section 4 of the FAA.  They likewise filed a motion to stay the Nevada state action pursuant to section 3 of the FAA.  The Mastros also managed to remove the state-court action to the District Court of Nevada based on diversity jurisdiction, filing a motion to dismiss or stay the litigation pursuant to section 3 of the FAA.

 For reference, the relevant text of FAA section 3 (9 U.S.C. § 3) states the following regarding stay of court proceedings pending arbitration: 

 If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement….

 It is noteworthy that section 3 does clarify that courts have the discretion to deny staying judicial proceedings if not “satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement [to arbitrate].  The related provisions in section 4 of the FAA (9 U.S.C. § 4) state the following in relevant part regarding petitions to compel arbitration: 

 A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction …for an order directing that such arbitration proceed in the manner provided for in such agreement. …The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. …If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof….

 Thus, based on the plain words of the statute, courts also appear to have discretion to deny arbitration if there is any impropriety or “issue” in the formation of the arbitration agreement.  Together, sections 3 and 4 are generally considered sources of courts’ authority to determine the arbitrability of particular disputes.

 The Arizona District Court denied the Mastros’ motion for a temporary restraining order and preliminary injunction, allowing the litigation in Nevada state court to proceed.  The Court’s decision could have been based upon the authority in sections 3 and 4 of the FAA, but the Court instead justified its decision by arguing that: (1) the Nevada action was filed first and that Court had the authority to decide that arbitration was improper; (2) no irreparable harm was shown justifying injunctive relief; and (3) an injunction would encourage forum shopping for courts willing to compel arbitration.

 Meanwhile, the Nevada District Court issued a stay of the Arizona arbitration commenced by the Mastros to evaluate the appropriate jurisdiction and arbitrability of the dispute.  In response, the Mastros filed a motion to compel arbitration in Arizona District Court, which the Court denied because (1) it did not believe it had discretion to compel arbitration and (2) it thought that granting arbitration would further complicate the various court proceedings in both Arizona and Nevada. 

 The Nevada Court also ordered the parties to litigate the dispute in court, issuing a permanent injunction staying arbitration in Arizona.  The Court reasoned that even though arbitration is generally preferred, the particular dispute involved alleged mishandling of investments prior to the sale and thus, the dispute was not subject to the arbitration provision entered into during the sale.  The Mastros appealed this decision based upon section 3 of the FAA to the Ninth Circuit.  

 II.     Ninth Circuit Analysis and Holding

 The Court argued that the intention of the parties is controlling and that the terms of their agreement should be enforced like any other contract.  Interestingly though, the Court looked no further than the language of the arbitration provision to conclude the parties “clearly and unmistakably” intended to arbitrate the underlying dispute (largely ignoring the fact that the underlying dispute involved allegations of misconduct well before the arbitration agreement was executed during the sale of the investments).

 Going further, the Court concluded that the arbitration clause language that “the validity or application of any of the provisions of this [arbitration provision]…shall be resolved exclusively by binding arbitration” was an express “clear and unmistakable” delegation of powers to the arbitrator to decide the “gateway” or “threshold issues concerning the arbitration agreement”.  Thus, even though such issues of arbitrability are traditionally decided or at least thoroughly evaluated by courts based upon sections 3 and 4 of the FAA, the Ninth Circuit decided that the simple allotment agreement arbitration provision was “clear and unmistakable” evidence that the parties intended to subject a wide range of related disputes to an arbitrator, and that the parties’ wishes should also be respected such that an arbitrator should decide the arbitrability of such disputes.   

 The Court casually noted, “gateway issues of arbitrability presumptively are reserved for the court”.  Nonetheless, the Court quickly turned to the Supreme Court’s recent decision in Rent-A-Center, West, Inc. v. Jackson (2010) 130 S.Ct. 2772, 2777-78 (“Rent-A-Center “) to support the position that “courts must enforce the parties’ ‘agreement to arbitrate threshold issues’ regarding the arbitrability of their dispute, and may do so by staying federal litigation under section 3 of the FAA or compelling arbitration under section 4.”  Thus, the Ninth Circuit reversed and remanded the underlying opinion, holding that “the district court erred in failing to stay the action under section 3 of the FAA and in enjoining the arbitration.”

 III.   Commentary: The Trend of Federal Courts to Overextend the FAA and Grant Improper Authority to Arbitrators, Favoring Parties in Positions of Power that Usually Draft Arbitration Agreements.

 While I wholeheartedly support arbitration, I am cautious that recent opinions such as Momot and Rent-A-Center may have provided arbitrators with too much authority, perhaps misapplying the discretion of sections 3 and 4 of the FAA, which grant discretion to courts, particularly as to issues of arbitrability, to fully evaluate whether an arbitration provision is valid and enforceable and the scope of disputes subject to such arbitration.  By allowing parties to override the traditional cursory evaluation, including evaluation of the validity of the provision pursuant to contract formation principles, by simply stating that they want all issues decided by an arbitrator may lead to a slippery slope of granting arbitrators unanticipated authority while stripping weaker parties of any protections Courts might normally provide to avoid potentially unconscionable arbitration.

 Similar to the instant matter, in Allen v. Regions Bank (5th Cir. August 11, 2010) No. 09-60705 (“Allen”), the Fifth Circuit also applied the “clear intention” standard to allow an arbitrator to decide if a dispute was arbitrable.  Remarkably, the Court concluded banking customers had “clearly intended” such a result merely because it was stated within an arbitration provision in a booklet mailed to the customers from the bank.  The Fifth Circuit even argued that continuing to use the bank and signing debit cards issued by the bank further showed such “clear intention” to abide by the specific arbitration directive regarding arbitrability. 

 The Second Circuit has also extended the “clear and unmistakable” intent of parties to agree to particular arbitration provisions to powers not only potentially improper, but also not even included within the actual provision.  The Court in In ReliaStar Life Ins. Co. of New York v. EMC National Life Co. (2nd Cir. 2009) 564 F.3d 81, concluded that an arbitrator has “inherent authority” to issue virtually unlimited fees and sanctions, even though the arbitration agreement only stated that each party was to bear its own fees.

Clearly, Courts are increasingly willing to accept nearly all terms within any printed arbitration agreement as “clear and unmistakable” evidence of the intention of all parties.  I would advise consumers to pay close attention to any transactions or even potential agreements containing arbitration provisions.  I question the increasing trend to give nearly any arbitrator the same deference and powers as are vested in judges.

 It is not surprising that the dissenting opinion in Rent-A-Center, 130 S.Ct. at 2781-82 (“Rent-A-Center”) cautioned that there are a number of already-discussed “gateway matters” that “raise questions the parties ‘are not likely to have thought that they had agreed that an arbitrator would’ decide” such as “whether the parties have a valid arbitration agreement at all” and “whether an arbitration clause in a concededly binding contract applies to a particular type of controversy”.  As the term “arbitrability” implies, the dissent made a good point that “It would be bizarre to send these types of gateway matters to the arbitrator as a matter of course [precisely] because they raise a `question of arbitrability.’”  Id.

 Interestingly, this line of cases has very recently inspired Senators Al Franken and Richard Blumenthal as well as Representative Hank Johnson to introduce the Arbitration Fairness Act of 2011, S. 987 and H.R. 1873, which is a revision of attempted similar legislation in 2009.  The Act would amend the FAA to ban mandatory arbitration agreements in employment agreements and possibly protect consumers from unexpectedly and unknowingly being held to the terms of arbitration agreements casually added onto service agreements, bank accounts, and credit cards, much like the arbitration booklet mailed to consumers in Allen, supra. (5th Cir. August 11, 2010; No. 09-60705). 

 Of course the fate of such legislation is highly uncertain.  Consequently, being that courts appear inclined to grant arbitrators wide-reaching authority to decide issues including arbitrability, parties should carefully detail not only the powers they intent to give arbitrators, but also any possible limitations and/or authority that they do not intent to be exercised by the arbitrator.  And don’t forget to read the fine print when your bank sends you something in the mail!