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The Hon. John Koeltl of the Southern District of New York has dismissed the class action lawsuit filed by Jonathan Tasini on behalf of Huffington Post bloggers who were not paid for their efforts. Judge Koeltl's 24-page opinion is here.

The decision was a ruling under Fed. R. Civ. P. 12(b)(6) -- essentially, that even if everything Tasini pleaded was true, he still didn't make out a case for relief under the law -- in this case, NY unjust enrichment and deceptive business practices law, or as the Judge puts it:

The plaintiffs claim that they are entitled to a portion (namely, $105 million) of the $315 million that AOL tendered in acquiring The Huffington Post. The plaintiffs assert a claim of unjust enrichment arising from the alleged failure of the defendants to compensate the plaintiffs adequately for adding value to, and thus boosting the purchase price of, The Huffington Post. The plaintiffs allege that they added value by submitting content to the website and promoting that content. The defendants argue that the plaintiffs’ claim should be dismissed for failure to demonstrate that equity and good conscience require restitution and, in the alternative, that the plaintiffs’ unjust enrichment claim is barred by the existence of an implied contract between the plaintiffs and the defendants.
So, why do the bloggers lose? For the reason you'd expect.
[T]he plaintiffs entered into their transactions with the defendants with full knowledge of the facts and no expectation of compensation other than exposure. In such circumstances, equity and good conscience counsel against retroactively altering the parties’ clear agreements.

There is no question that the plaintiffs submitted their materials to The Huffington Post with no expectation of monetary compensation and that they got what they paid for — exposure in The Huffington Post. Courts applying New York law require a plaintiff to allege some expectation of compensation that was denied in order to demonstrate that equity requires restitution....

[E]quity and good conscience plainly do not support the plaintiffs in this matter. 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....  

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.

The deceptive practices claim was dismissed because the bloggers did not constitute "consumers" protected by the law; moreover, the Court ruled, HuffPo's alleged failure to provide the bloggers with accurate pageview data for their articles and the like was not deemed to be materially misleading anyway.

Case dismissed.  Yes, they can appeal.

Originally posted to Adam B on Fri Mar 30, 2012 at 01:53 PM PDT.

Also republished by Daily Kos.

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