Forrest v. Meta Platforms, Inc.

Background

Dr. Andrew Forrest sued Meta Platforms, Inc. over Facebook advertisements that allegedly used his name and likeness to endorse fraudulent cryptocurrency and other investment products. Some advertisements allegedly included fake investor testimonials and doctored videos of Forrest. Forrest alleged that Meta’s advertising systems helped determine what the completed advertisements looked like and which users saw them, including through tools that mixed and matched advertiser-supplied material and used generative artificial intelligence to optimize advertisements.

Forrest asserted six California state-law claims and sought damages and an injunction. Meta removed the case from California state court to the U.S. District Court for the Northern District of California. The operative amended complaint was filed after the case had been stayed while a separate private criminal prosecution in Australia proceeded. Meta moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not plausibly state a claim for relief.

Section 230 Defense

Meta argued that Section 230(c)(1) of the Communications Decency Act barred all of Forrest’s claims. The court treated Section 230 as an affirmative defense and held that, at the motion-to-dismiss stage, Meta had to establish that the defense applied beyond factual dispute.

The court rejected Forrest’s argument that Section 230 was unavailable because the conduct underlying his claims occurred outside the United States. The court held that Section 230 limits liability in U.S. litigation rather than directly regulating conduct abroad. It therefore concluded that Meta was not barred from invoking Section 230 merely because some conduct allegedly occurred outside the United States.

The court held that the complaint established that Meta acted as an interactive computer service provider in operating its advertising business. But the complaint also alleged that Meta’s advertising tools affected the content and appearance of the challenged advertisements. Those allegations created a factual dispute about whether Meta materially contributed to content that was allegedly illegal, rather than merely providing neutral tools used by others. The court therefore denied Meta’s motion to dismiss based on Section 230.

Claims

The court held that Forrest adequately pleaded his California common-law misappropriation claim. The complaint plausibly alleged that Meta itself played a role in producing advertisements that used Forrest’s identity, rather than merely displaying unrelated advertisements next to third-party content. The court also held that Forrest plausibly alleged that Meta gained a commercial advantage because advertisements featuring his likeness generated user engagement. The court rejected Meta’s argument that the claim was barred by the two-year statute of limitations, reasoning that the claim concerned advertisements Forrest learned about around March 2019, not the earlier imposter pages he learned about in 2014. The motion to dismiss the misappropriation claim was denied.

The court also held that Forrest adequately pleaded negligence. He alleged that Meta owed a duty to operate its advertising business in a commercially reasonable manner and breached that duty by producing or facilitating scam advertisements and using defective screening and review procedures. The court declined to resolve at this stage Meta’s factual argument that third parties created the advertisements. The motion to dismiss the negligence claim was denied.

The negligent-failure-to-warn claim was dismissed with leave to amend. The court interpreted that claim as challenging Meta’s failure to warn users about third-party content, rather than Meta’s own alleged role in producing the advertisements. The court found that Forrest’s allegations did not clearly establish the required special relationship or a clear causal connection between Meta’s failure to warn users and Forrest’s own injuries.

The unjust-enrichment claim was dismissed with leave to amend. Forrest sought repayment of Meta’s revenue from the challenged advertisements, but the court held that he had not alleged that the remedies available for his legal claims would be inadequate.

The declaratory-judgment claim was dismissed without leave to amend. Forrest sought a declaration that Meta could not assert a Section 230 defense to his other claims. The court held that this issue would necessarily be addressed while resolving those claims, making the declaratory-judgment claim duplicative. The dismissal was without prejudice to either party’s later arguments concerning the Section 230 defense.

Forrest had agreed to voluntarily dismiss the promissory-estoppel claim without prejudice, subject to a tolling agreement.

Disposition

The order states that Meta’s motion to dismiss was granted in part and denied in part. The misappropriation and negligence claims were not dismissed. The negligent-failure-to-warn and unjust-enrichment claims were dismissed with leave to amend. The declaratory-judgment claim was dismissed without leave to amend, while later Section 230 arguments remained available. The court set July 11, 2024, as the deadline for an amended complaint addressing claims dismissed with leave to amend, and stated that discovery and Meta’s deadline to answer remained stayed subject to the order’s further instructions.