Private Prison Company On The Hook For Legal Fees After Suing Investment Group For Saying It Was Doing Stuff It Was Actually Doing
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Private prison company CoreCivic has just learned a civics lesson. [I'll show myself out.] Possibly a very expensive one.Last March, it sued [PDF] Candide Group, an investment firm that "directs capital away from an extractive global economy towards investments dedicated to social justice and sustainability." CoreCivic was one company Candide reps wanted money directed away from, citing its participation in separating parents from children at our nation's borders. (But really only the Southern border if we're honest.) Candide also claimed CoreCivic lobbies for harsher sentencing and tougher immigration laws since both of those would naturally provide more business for CoreCivic.CoreCivic's libel lawsuit said these two "falsehoods" were spread throughout the web via sites like Forbes and multiple social media platforms. It denied both assertions and said they were stated with a reckless disregard for the truth. Candide responded with an anti-SLAPP motion [PDF], which pointed out that not only could CoreCivic not prove the statements were false but also that it had filed its lawsuit past the one-year statute of limitations.The motion worked. After some back and forth discussion about the merits of the arguments, the court disposed of CoreCivic's lawsuit with a very short dismissal [PDF] in November. The order doesn't say much but it says enough to indicate just how weak CoreCivic's allegations were.A multitude of issues have been tendered on defendants’ motion to dismiss and to strike the complaint for defamation. It turns out, however, that CoreCivic, Inc., did, in fact, operate detention facilities for parents separated from their children pursuant to the Border Patrol’s family separation policy. Thus, even though CoreCivic did not operate the detention facilities in which the children themselves were housed, CoreCivic did house the other half of the afflicted families or at least some of them. Therefore, the allegedly defamatory statements were true enough under the First Amendment and under California defamation law. Truth being a defense, the complaint is DISMISSED WITHOUT LEAVE TO AMEND. It is unnecessary to reach the remaining issues tendered. All other motions are DENIED AS MOOT. Anti-SLAPP laws work. CoreCivic didn't like being publicly criticized, especially by an entity that could shift investors' money elsewhere. That these actions may have damaged CoreCivic's future profitability isn't really relevant -- at least not when its allegations of libel couldn't be sustained.Whatever money is now leaking from CoreCivic is going to be (mildly) compounded by its inability to recognize largely truthful statements as protected speech, rather than the defamation it clearly desires them to be. The court says [PDF] Candide is entitled to collect legal fees from CoreCivic -- an important facet of any good anti-SLAPP law. Candide's legal reps are asking for about $165,000 in fees. However, the tail end of the order suggests it won't be nearly that much.First, defense counsel’s hourly rate is inflated way beyond the amount charged to the client. The anti-SLAPP attorney’s fee provision protects defendants from shouldering the costs of meritless litigation so fees should be limited to what actually “compensate[s] a defendant for the expense of responding to a SLAPP suit,” and not result in a bonus for attorneys.[...]Second, defense counsel spent too long on the motion to strike, especially in light of the experience and expertise of the attorneys which should have allowed them to make quicker work of this matter. Especially where hourly fees are high, there is “an expectation that [counsel] will complete tasks efficiently and that its more senior attorneys will limit their involvement to tasks requiring their level of expertise.” All anti-SLAPP motions are not created equal, but Judge William Alsup says this one is not that much more equal than others.Other courts have determined a reasonable time expenditure for an anti-SLAPP motion to be between 40 and 75 hours, not 407.9 hours as here. Whatever fees are eventually settled on, this case highlights the importance of having a strong anti-SLAPP law to work with. Without it, this case could have gone on for several more months and even a clear win for defendants would rarely result in fee shifting. CoreCivic sued because it didn't like being criticized for doing things it was actually doing. A suit like this is designed to silence critics and deter others from making similar statements. If a defendant bleeds long enough, an eventual victory is ultimately meaningless. The damage has been done and the threat remains.
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posted at: 12:00am on 16-Apr-2021
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Platform Wars Update: Epic Store Losing $330 Million Per Year To Acquire Customers
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It's been a while since we've checked in on how the PC gaming platform war is going. If you'll recall, the Spring of 2019 saw a new entrant into this ongoing battle, with Epic releasing the Epic Store. Epic's plan appeared to be essentially a PR battle at first, drawing in the public by proclaiming that Steam's revenue splits with developers and publishers were bad for the gaming industry and by drawing in publishers and developers with a better version of those splits for them. On top of that, Epic used those splits to gobble up a bunch of exclusive or timed exclusive releases of games, which ended up pissing off many in the gaming public and, of course, Steam. Then came Epic's free game releases, where the platform worked out deals with publishers to offer up AAA game titles for literally no money as a method for getting gamers to adopt the platform.All of this didn't come with zero fallout from what Epic was doing, of course. The public doesn't like exclusives generally. Crowdfunding got weird due to the exclusivity. And the launch of the Epic Store in the early days was not without its hiccups, either. Now that we're 2 years on, how has this all shaken out?Well, Epic is getting a decent chunk of market share with its tactics, even as the platform takes on major losses in doing so. The reason for those losses? Well, largely they have to do with all of those free games and timed exclusives. And we have Epic's battle with Apple to thank for the information.The raw numbers, as reported in a "Proposed Findings of Fact and Conclusions of Law" document Apple filed last week, show massive incurred and projected losses for Epic's game download hub, which launched in late 2018. Documents and testimony from Epic itself show a $181 million loss for the store in 2019 and projected losses of $273 million in 2020 and $139 million in 2021.You might think Epic is incurring those losses because it only takes a 12 percent cut of third-party game revenues, compared to the industry-standard 30 percent cut on other digital storefronts. On the contrary, though—in its own court filings, Epic says that 12 percent revenue chunk has been "sufficient to cover its costs of distribution and allow for further innovation and investment in EGS."The main driver of EGS' losses, instead, is Epic's generous program of "minimum guarantees." These encompass the advance payments Epic has used to attract so many timed exclusives to its storefront and seemingly also cover the free games Epic makes available to Epic Games Store users every week. Now, while this isn't precisely the type of method for using "free" as part of a business model as we've talked about in the past, it's close enough to count. The upshot of all of this is that commentary from Epic's folks makes it clear that they're well aware of these monetary shortfalls... and are largely just fine with them. The whole point of all of this is to make as big a dent in market share in a short time period as possible. And, of the two ways Epic saw to do that, taking on initial losses like this was the better option."There are two ways to bring users into something," Epic Games co-founder and CEO Tim Sweeney told Ars in 2019, just after the launch of the Epic Games Store. "You can run Google and Facebook ads and pay massive amounts of money to them. But we actually found it was more economical to pay developers [a lump sum] to distribute their game free for two weeks... We can actually bring in more users at lower cost by doing all these great things for great people rather than paying Google and Facebook."That effort is starting to work. Last June, Sweeney told PC Gamer that EGS had about 15 percent of the PC gaming market. That's not great, but it's not bad considering the near-monopoly power Steam has in PC gaming downloads (Sweeney estimated Steam's share at 90 percent in 2019, though that could be a bit inflated). In court documents, Epic went on to note that it expects its storefront to start turning a profit in 2023, so it looks like it has some runway there as well.So, what does this all mean? Well, at the very least it's an interesting experiment in using free loss-leaders to gain customers and give them reasons to buy elsewhere on the platform. Epic hasn't pulled some magic trick to suddenly unseat Valve's Steam platform as of yet... but it's also apparently playing the long game here.
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posted at: 12:00am on 16-Apr-2021
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