Federal Agency of News LLC v. Facebook, Inc.

Background

Federal Agency of News LLC (FAN) and Evgeniy Zubarev sued Facebook after Facebook shut down FAN’s Facebook account and page on April 3, 2018. FAN is described in the complaint as a corporation organized under Russian law, and Zubarev is FAN’s sole shareholder and general director. Facebook said FAN had violated its Terms of Service.

The plaintiffs’ amended complaint asserted five causes of action: (1) a claim labeled a Bivens claim alleging a First Amendment violation; (2) a claim for damages under California’s Unruh Civil Rights Act; (3) breach of contract; and (4) and (5) two claims alleging breach of the implied covenant of good faith and fair dealing.

The court had previously dismissed the original complaint without prejudice and allowed the plaintiffs to amend. It warned that failure to fix the identified problems would result in dismissal with prejudice. The plaintiffs then filed a First Amended Complaint, which the court found added no facts that changed the analysis.

Communications Decency Act claims

Facebook argued that Section 230 of the Communications Decency Act protected it from the plaintiffs’ nonconstitutional claims. Section 230 generally prevents treating an interactive computer service as the publisher or speaker of information supplied by another content provider.

The court applied the three-part test for Section 230 immunity. First, it held that Facebook was an interactive computer service. Second, it held that FAN, not Facebook, provided the account, posts, and content at issue. The court rejected the plaintiffs’ argument that Facebook’s data mining, recommendations, advertising, or profit motive made Facebook the provider of FAN’s content. Third, the court held that the plaintiffs’ claims treated Facebook as a publisher because they were based on Facebook’s decision to remove FAN’s account and content.

The court also rejected an argument that Section 230 contains an exception for political speech. It concluded that Section 230 immunizes Facebook from the plaintiffs’ second through fifth causes of action and therefore did not reach the merits of those claims. The court dismissed the Unruh Act claim, the breach-of-contract claim, and both implied-covenant claims with prejudice.

First Amendment claim

The court separately considered the plaintiffs’ Bivens claim alleging that Facebook violated the First Amendment. A Bivens claim is a damages claim seeking to hold a federal actor responsible for a constitutional violation. The court explained that the First Amendment generally restricts government action, not private companies.

The court held that Facebook’s removal of FAN’s profile, page, and content was private conduct. The plaintiffs did not allege that the federal or a state government was involved in that specific removal decision. The court rejected the plaintiffs’ argument that Facebook was a public forum, reasoning that operating a private social-media website and hosting users’ speech are not functions traditionally and exclusively reserved to the government.

The court also rejected the plaintiffs’ joint-action theory. It found that allegations about Facebook’s cooperation with government and law-enforcement agencies did not show that the government participated in the April 3, 2018 decision concerning FAN. The court further found that providing information to the government was not enough to establish joint action, and that the plaintiffs’ allegation of a conspiracy lacked specific facts showing an agreement or meeting of the minds to violate their rights.

Disposition

The court held that the First Amendment claim failed because Facebook was not a government actor and the plaintiffs had not established joint action or a conspiracy with the government. It dismissed the first cause of action with prejudice.

The court therefore granted Facebook’s motion to dismiss with prejudice as to all five causes of action: the Unruh Act claim, the breach-of-contract claim, the two implied-covenant claims, and the First Amendment claim.