(CN) - The 5th Circuit revived claims by a Texas lawyer whom the state has banned him from using the words "workers' comp" in the domain name of his legal blog.
John Gibson filed a federal complaint against the Texas Department of Insurance in February 2011 after he received a cease-and-desist letter that threatened him with fines of $5,000 a day over his website texasworkerscomplaw.com.
The letter forbad Gibson from using the terms "Texas Workers' Compensation" or using the word "Texas" or "a picture or map of the state of Texas" along with the words "Workers' Compensation" or "Workers' Comp," on his blog or elsewhere.
Gibson said the state accused him of violating Section 419.002 of Texas Labor Code without benefit of a hearing and without due process.
The statute says the use of the terms is forbidden in connection with "any impersonation, advertisement, solicitation, business name, business activity, document, product or service."
In his complaint, Gibson said the words are in the public domain and do not represent intellectual property of the state. He said the regulations serve no governmental interest, and that the ban constitutes an impermissible restraint on free speech.
A federal judge dismissed the case for failure to state a claim, but the New Orleans-based federal appeals court revived the allegation that Texas applied the law unconstitutionally against Gibson.
The three-judge panel noted that there is no precedent on how to decide whether a domain name is commercial speech or a more vigorously protect form of speech.
"A domain name, which in itself could qualify as ordinary communicative speech, might qualify as commercial speech if the website itself is used almost exclusively for commercial purposes," Judge Edith Brown Clement wrote for the panel Tuesday. "Even if the domain name amounts to commercial speech, [the plaintiff] has nevertheless stated a claim under the First Amendment. Therefore, we reverse and remand the case for further proceedings on that basis."
The court evaluated whether the law is a valid restriction on commercial speech under the U.S. Supreme Court's ruling in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York.
"In order for speech to fall outside of the First Amendment's protection, the speech must either be 'inherently likely to deceive,' or 'the record [must] indicate that a particular form or method of advertising has in fact been deceptive,'" Clement wrote.
Texas presented case law that fails to support its argument that Gibson's domain name is inherently misleading speech, according to the ruling.
"They cite to a series of cases in which courts have held that domain names that use trademarks to misidentify the source of a product are outside the reach of the First Amendment," the 16-page opinion states. "The case law cited by appellees, however, is unique to the field of trademark infringement and does not necessarily extend to a case such as this one, where Texas is prohibiting Gibson from using words that are otherwise in the public domain."
Trademark suits involve inherently deceptive speech because they contain a significant risk of freeloading on the goodwill created by the original mark, but there is no such risk in this case, the judges found.
"Texas has made no showing that its own talents and energy contributed to the creation of any goodwill in the name 'texasworkerscomplaw.com,'" Clement wrote. "Instead the regulation at issue is forward-thinking; intended to prohibit confusion for individuals seeking information from the government agency."
Though the court revived the case, it affirmed dismissal of most of Gibson's claims, such as the alleged violation of his equal protection rights.
"The mere fact that a law impacts different individuals in different ways does not subject it to constitutional challenge unless Gibson can show that Texas's law is so extreme as to lack a rational basis," Clement wrote. "It is clear from the text of the statute that Texas's law is intended to prevent individuals from masquerading as representatives of the [Division of Workers' Compensation] or distributing information that may be misconstrued as bearing an endorsement of the DWC."
Gibson's due process claim also failed.
"While the private interests at issue are significant ($25,000 or more, depending on the extent of the violation), the procedures adequately safeguard against the risk of erroneous deprivations, especially given the availability of judicial review," the opinion states. "This scheme gives Gibson sufficient notice and an opportunity to be heard prior to any deprivation, and it is difficult to determine any additional procedures that would further reduce his risk."
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