Masry v. Lowe's Companies, Inc.

Background

This putative class action concerns a non-disparagement provision in the terms of use for Lowes.com. The provision prohibited users from posting content that defamed, misrepresented, or contained disparaging remarks about Lowe’s, its products, or other people. Plaintiffs Omar Masry and Elliot Mass alleged that the provision violated California Civil Code § 1670.8(a)(1) and (a)(2). Those provisions generally prohibit certain consumer contracts from waiving a consumer’s right to make statements about the seller, its employees or agents, or its goods or services, and prohibit threats or enforcement of such provisions.

Defendants Lowe’s Companies, Inc. and Lowe’s Home Centers, LLC removed the case from Alameda County Superior Court and moved to dismiss the first amended complaint. Plaintiffs moved to remand, meaning they asked the federal court to return the case to state court. The court decided the motions based on the written filings.

Court’s Analysis

The court held that remand was proper because plaintiffs had not established Article III standing. Standing is the requirement that a plaintiff show a concrete injury connected to the challenged conduct that a favorable court decision could likely remedy. In a pre-enforcement free-speech case, the plaintiff must show a credible threat that the challenged provision will be enforced.

The court identified two reasons plaintiffs had not shown an injury in fact. First, they did not allege an intent to violate the challenged provision “with some degree of concrete detail.” The complaint did not allege that plaintiffs had posted comments violating the terms, intended to post such comments in the future, or even intended to use the website again.

Second, the court rejected defendants’ argument that plaintiffs had adequately alleged self-censorship. Although the complaint stated that the terms had limited plaintiffs’ ability to make statements about Lowe’s and had foreseeably caused unlawful self-censorship, it did not identify any specific act of self-censorship or allege that plaintiffs had actually refrained from making particular statements because they feared violating the terms.

Disposition

The court concluded that plaintiffs had not established Article III standing. It granted plaintiffs’ motion to remand and denied as moot defendants’ motion to dismiss. The opinion did not decide whether the Lowe’s website provision violated California Civil Code § 1670.8.