MANHATTAN (CN) – Unpaid Huffington Post bloggers cannot sue for a slice of the profits that the site made by merging with AOL, a federal judge ruled.
Lead plaintiff Jonathan Tasini, the former head of the National Writers Union, filed suit last year, seeking $105 million in damages after AOL bought the blog for $315 million.
Tasini said he never received any payment for 216 of his articles that appeared on The Huffington Post. Four other writers are also named as plaintiffs in the amended complaint against HuffPo, AOL, and the blog’s co-founders, Arianna Huffington and Kenneth Lerer.
U.S. District Judge John Koetel dismissed the entire complaint with prejudice last week.
By the time of its January 2011 merger with AOL, Huffington Post had generated 26 million unique visitors per month and a large amount of advertising revenue, using an assortment of content from paid staff, other websites and unpaid bloggers.
The complaint claims the site exploited the bloggers under the New York General Business Law by violating its unjust enrichment and deceptive practices clauses.
The plaintiffs, all of whom have contributed a “significant amount” of content to the site, agreed not to be paid for their work from the beginning.
Claiming, however, that the lucrative merger could not have occurred without their articles, they say the companies owe them for the value they added to the purchase price.
“The unpaid submissions are arguably the website’s most valuable content, both because of their effect of ‘optimizing’ the website’s ranking in search engines such as Google (thus attracting more viewers to the website) and because they allow The Huffington Post to keep production costs low,” according to the court’s summary of the first amended complaint.
The writers also claimed that the defendants deceptively hid the number of page views their articles generated to keep them in the dark about how much ad revenue they raked in.
These arguments nevertheless failed to persuade Koetel that the class had a claim for unjust enrichment. “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,” he wrote.
The equity and good conscience clause of the law does not justify “giving the plaintiffs a piece of the purchase price when they never expected to be paid,” he added.
Deceptive practices must harm consumers. While the writers claim that they are the consumers in this case, Koetel concluded otherwise. “The plaintiffs are not ‘consumers’ in any reasonable interpretation of the word; rather, they participate in producing the content that is consumed by visitors to The Huffington Post,” he wrote.
Koetel also disagreed that concealed page views were illegal. Because the contributors knew from the beginning that this information would not be released, “there is no plausible claim that the practice of withholding page-view data was materially misleading,” he wrote.
The contributors were never under the impression that the site was a nonprofit or that it was not profiting from their articles, and “at most complain that they were unaware of just how much revenue the defendants could or would generate,” the decision states.