Daniels v. Alphabet Inc.

Background

Marshall Daniels sued Alphabet Inc., Google LLC, YouTube, LLC, and unidentified defendants. Daniels said he had uploaded videos and live commentary to YouTube under the name “Young Pharaoh.” He alleged that YouTube removed a video about Anthony Fauci and Dr. Judy Mikovits for violating its Community Guidelines, and later removed a video about George Floyd, riots, and Anonymous for violating its harassment-and-bullying policy. He also alleged that YouTube restricted his channel, refused to permit advertising, and retained donations made by viewers through Google’s SuperChat and Super Stickers features.

Daniels asserted nine claims: a First Amendment claim under 42 U.S.C. § 1983; breach of the implied covenant of good faith and fair dealing; conversion; unjust enrichment; breach of contract; money had and received; unfair competition under California law; fraud in the inducement; and wire fraud. He asserted the constitutional claim against all defendants and the remaining claims against YouTube and the unidentified defendants. During the motion proceedings, Daniels voluntarily dismissed the fraud-in-the-inducement and wire-fraud claims.

First Amendment and Section 1983 Claim

The court explained that a claim under 42 U.S.C. § 1983 requires action under color of state law. Daniels acknowledged that the defendants were private entities, but argued that statements and communications by Representative Adam Schiff and Speaker Nancy Pelosi made the defendants government actors. He relied principally on theories that the defendants jointly acted with the government or had a sufficiently close connection to the government.

The court held that Daniels did not allege facts showing joint action, interdependence, substantial cooperation, or a close government connection. The court said that public statements by individual members of Congress, political donations by Google’s political action committee, and Daniels’s speculation about possible congressional pressure did not establish government action. The complaint also did not allege that Schiff or Pelosi personally directed or were personally involved in removing Daniels’s videos. The court therefore concluded that Daniels could not state his First Amendment claim. It dismissed that claim with prejudice, meaning it could not be amended in this action.

Contract and State-Law Claims

Daniels argued that YouTube’s Terms of Service and incorporated policies formed a contract requiring notice of removals, an appeals process, permission to post videos unless they violated the guidelines, and payment based on views and donations. The court found that the Terms of Service did not make those promises in the way Daniels alleged. The terms reserved YouTube’s discretion to remove content, did not guarantee a particular appeals process, and did not address payment based on views or donations. The court noted, however, that a separate YouTube Partner Program agreement might govern monetization and that Daniels had not pleaded a contract claim based on that agreement.

The court dismissed the implied-covenant claim because it relied on the same conduct and sought the same relief as the contract claim. It dismissed the conversion claim because the allegations described only an alleged failure to pay money owed under an agreement, which was insufficient for conversion. It dismissed the unjust-enrichment and money-had-and-received claims because Daniels relied on an alleged valid contract and did not contend that the contract was invalid or unenforceable. It also concluded that Daniels failed to state an unlawful-business-practice claim under California’s unfair-competition statute because he had not stated an underlying claim supporting that theory.

Communications Decency Act

The court also considered immunity under Section 230 of the Communications Decency Act, which generally protects online-service providers from liability based on their handling of content supplied by others. The court held that Section 230(c)(1) barred Daniels’s claims based on YouTube’s removal of or restriction of access to his videos, with the possible exception of a properly pleaded contract claim concerning withheld donations. The court also held that Section 230(c)(2)(A), which protects good-faith efforts to restrict material a provider considers objectionable, applied to Daniels’s state-law claims. Daniels had not plausibly alleged that YouTube acted in bad faith or removed the videos for reasons unrelated to their content.

The court did not reach the defendants’ argument that forcing YouTube to host Daniels’s videos would violate YouTube’s own First Amendment rights.

Disposition

Judge Virginia K. Demarchi granted the defendants’ motion to dismiss. The court granted Daniels leave to amend only his breach-of-contract claim, specifically because the record suggested he might be able to allege obligations concerning SuperChat views and donations under the YouTube Partner Program terms. Daniels was permitted to file an amended complaint by April 14, 2021. The opinion does not state a separate “with prejudice” or “without prejudice” designation for the claims other than the First Amendment claim.