From S.F. Superior Court, filed June 26:
Lovely vs 3taps and G. Kidd (breach of contract, etc)
From George Moses Horton, c.1829 :
Ha, tott’ring Johny, strut and boast,
But think of what your feathers cost;
Your crowing days are short at most,
You bloom but soon to fade;
Surely you could not stand so wide,
If strictly to the bottom tried,
The wind would blow your plume aside
If half your debts were paid.
From US Federal Court, Northern District of CA:
From “Merchant of Venice,” Act 4, Scene 1:
The quality of mercy is not strain’d,
It droppeth as the gentle rain from heaven
Upon the place beneath: it is twice blest;
It blesseth him that gives and him that takes:
Tis mightiest in the mightiest: it becomes
The throned monarch better than his crown;
We are pleased with the Chancellor Chandler’s split decision, which he foreshadowed in his concluding remarks at trial. As the Chancellor opines intoday’s ruling, “more fortunate than Goliath, eBay leaves this field with only a gash across its forehead; less fortunate than David, craigslist leaves this field with something less than total victory.”
He affirmed craigslist’s “Staggered Board Amendments,” finding they were approved “in good faith to prevent eBay, a business competitor, from having access to confidential craigslist board discussions.” He also provided valuable guidance to fiduciaries of closely-held private companies like craigslist, when carrying out their obligations to protect against conflicted, duplicitous, and/or predatory shareholders.
The Chancellor deferred to “the California judiciary” to decide “whether eBay’s use of craigslist’s non-public information or its competitive activity was unlawful.” These and craigslist’s other claims will now be taken up in San Francisco before Superior Court Judge Richard A. Kramer, in craigslist vs eBay, filed May 2008 but stayed pending today’s ruling.
craigslist is committed to being socially responsible, and when it comes to adult services ads, that includes aggressively combating violent crime and human rights violations, including human trafficking and the exploitation of minors. We are working intensively as I write this with experts and thought leaders at leading non-profits and among law enforcement on further substantive measures we can take. We are profoundly grateful to those offering us their expert assistance in this regard.
One of the many recommendations we hear from experts at NGOs, in law enforcement, and from politicians and regulators, is that craigslist is uniquely positioned to lead by example, and to exert influence over other advertising venues to follow in its footsteps. Indeed, as we intensify our efforts to make further forward progress, we continue to be hopeful that other companies will take an interest in adopting measures we have had in place for years.
craigslist implemented manual screening of adult services ads in May of 2009. Since that time, before being posted each individual ad is reviewed by an attorney licensed to practice law in the US, trained to enforce craigslist’s posting guidelines, which are stricter than those typically used by yellow pages, newspapers, or any other company that we are aware of. More than 700,000 ads were rejected by those attorneys in the year following implementation of manual screening, for falling short of our guidelines. Our uniquely intensive manual screening process has resulted in a mass exodus of those unwilling to abide by craigslist’s standards, manually enforced on an ad-by-ad basis.
Manual screening matters. We are proud of the difference it has made, along with the other measures we have taken. However, there is no shortage of US companies that have not yet implemented manual screening for this ad category, or any other of the steps that craigslist has taken, and that have not yet exhibited any interest in combating human trafficking and the exploitation of minors, and other forms of violence and human rights violations.
One of those companies, interestingly, is eBay — despite their touting their sites as a “family friendly” alternatives to craigslist. In response to criticismabout their management of one such site, LOQUO.com, where eBay offers tens of thousands of exceptionally hardcore pornographic ads explicitly offering sex for sale, yesterday eBay blocked access to all US IP addresses, presumably so that eBay investors, journalists, and other interested parties could not see. All the ads are still up, and can be viewed via proxy IPs.
Techcrunch has further coverage on these developments, and notes that eBay plans to eventually take down these types of listings as part of its “process of ensuring all of its sites are in alignment with its family-friendly values.” I’ll make a friendly wager that rather than taking down such listings, which eBay has aggressively marketed over the years to a very high level of profitability, upselling their users to higher and higher fees, eBay will instead soon sell their “non family friendly” sites such as this one to the highest bidder.
Back in the US, another company that does not manually screen adult ads, or take any of the other preventative measures that craigslist takes, is Village Voice Media’s backpage.com. When craigslist implemented manual screening of adult ads in May 2009, adult ads on backpage spiked by a factor of 5-10x, and you can see from the graph below that their page view traffic, which was flat until we implemented manual screening, more than quadrupled in the year following.
In addition to public nudges such as this blog entry, we’d like to offer our help to companies such as eBay and Backpage that may be interested in developing best practices. CEOs of such companies can email me directly, or you can drop us an email at legal@craigslist.org.
True to form, CT AG Blumenthal is once again indulging in self-serving publicity at the expense of the truth and his constituents — touting a subpoena on television and telling whoppers about craigslist “reneging” on promises — even before craigslist had been served with a subpoena.
As AG Blumenthal knows full well, craigslist has gone beyond fulfilling its legal obligations, far beyond classifieds industry norms, has more than lived up to any promises it made, and working together with its partners is in fact a leader in the fight against human trafficking and exploitation.
With his senatorial race in full swing however, AG Blumenthal won’t let the facts get in the way of a good photo op. Or as I heard while in his offices 2 years ago — “The most dangerous place on earth is getting caught between Dick Blumenthal and a television camera.”
We’re receiving inquiries about the gross inaccuracies and absence of fact checking I cited in Monday’s New York Time article by Brad Stone. There are quite a few, but I’ll start walking through them. Let’s start with this one:
The ads, many of which blatantly advertise prostitution, are expected to bring $36 million this year, according to a new projection of Craigslist’s income.
Each ad submitted to “adult services” on CL is manually screened by one or more human reviewers. Ads that “blatantly advertise prostitution” are summarily rejected. The phrase “many of which blatantly advertise prostitution” is so patently false (and damaging) that another phrase comes to mind – “actionably defamatory”. In fact, the NY Times article probably violated multiple tenets of the Society of Professional Journalist’s Code of Ethics. More on that later.
Although you won’t find them in CL “adult services,” there are plenty of places where such ads *can* be found in great abundance.
For example, most if not all adult service ads featured by The Village Voice’sbackpage.com (which carries more adult ads than CL in most US cities) would be rejected by our manual reviewers — and in fact, quite a few of them, if submitted to CL, would be reported by our reviewers to NCMEC’s cybertipline.
Here’s an ad with photos (NSFW) of bare genitalia (CL reviewers reject ads with nude pictures), describing specific sex acts offered (CL reviewers reject ads with sexual language or code words):
******Ev3Ry !!! M@N’s!///!!% W3tt ***Dre@M __ CuM%TruE*** – 24
Watch closely as i bounce my fat luscious, juicy apple bottom booty up & down ure big c*ck!!! 80Roses** Quk $e$$ion 100Roses** Half Hr 140Roses** Full Hr200 Roses.
This ad offers “greek” in exchange for 100 “kisses” in the ad title (CL reviewers reject such ads):
♥ ♥ SexY EXxXOTiC BuSTii B@RB!E (( g/r/3/3/k)) ♥ ♥ 100 kisses – 21
The following ad, if submitted to CL’s review team, would have been reported to NCMEC’s cybertipline:
** I JuST TuRNeD 18 YeSTeRDaYY** FiNaLLY LeGal – 18
my parents are at work and im all alone jus waiting for someone to cum inside and invade my young, barely legal, juicy, suculant love nest.
I’m now hearing that AG Blumenthal was quite taken aback this morning when a CNN reporter had the audacity to ask him why he was spending all of his time on craigslist when Village Voice carries more adult ads of a far more graphic nature — but does not manually screen them or take any of the other steps CL does to combat trafficking. Senatorial candidate AG Blumenthal hemmed and hawed (as he’s done for the past year) but really does not have a good answer for this question.
Trial starts in Delaware today, with eBay claiming craigslist’s directors acted inappropriately in implementing governance measures designed to protect the long term mission and values of craigslist.
The public version of craigslist’s pre-trial brief(PDF) is available, and Alexandria Sage has written a pre-trial “curtain raiser” for Reuters.
Separately, craigslist has filed suit in California charging eBay with unlawful and unfair competition, misappropriation of proprietary information, business interference, false advertising, phishing attacks, and breaches of fiduciary duty. This suit will proceed after the Delaware trial, but will probably not be presented to the jury until late 2011.
Delaware testimony will encompass eBay’s 2004 purchase of craigslist stock from a former shareholder. craigslist is a private company that does not publish its financial information, and eBay and craigslist both agreed that the terms of this transaction should not be made public. However, these details will now likely be subject of testimony at trial.
As a condition for its 2004 stock purchase from a former shareholder, eBay insisted on acquiring special rights over Craig’s and Jim’s shares (e.g. rights-of-first-refusal over any sale of their shares), and special rights from craigslist (e.g. veto rights over mergers and acquisitions), for which it collectively paid $16 million. This sum was distributed to craigslist’s shareholders, in part because had it not been distributed, eBay would have had a pro rata claim on any portion retained by the company, effectively paying itself for the rights it purchased. eBay’s special rights terminated in 2007, when it launched Kijiji in the US.
Also subject to testimony will be eBay’s misconduct, and abuses by eBay of its position as a shareholder of craigslist – evidence of and suspicions regarding which informed the craigslist board when the corporate governance protections in question were researched, deliberated upon, and ultimately adopted.
For additional information, please refer to craigslist’s pre-trial brief.
US District Court Judge John F. Grady has summarily dismissed Sheriff Dart’s suit against craigslist, concluding:
Sheriff Dart may continue to use craigslist’s website to identify and pursue individuals who post allegedly unlawful content. But he cannot sue craigslist for their conduct
Here is the full text of the judge’s ruling
Matt Zimmerman at the EFF has excellent analysis and commentary:
Meritless cases brought by law enforcement officers, amounting to little more than publicity stunts with little to no chance of success, do little to address the officers’ underlying concerns.
Our trial before the Delaware Chancery Court has just been postponed at eBay’s request, but it’s worth noting that the Chancellor has now granted summary judgement dismissing 2 of eBay’s claims.
As to the remaining claims, the evidence at trial will show craigslist and its directors adopted reasonable governance measures to protect craigslist and its mission from, among other things, eBay’s exploitation of its position as stockholder to harm craigslist and obtain unfair commercial advantage.
Here is the public version of craigslist’s trial brief.
The unrelated suit against eBay in California — for unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty — is unaffected.
craigslist blog 
