Maffick LLC v. Facebook Inc.

Background

Maffick LLC operates the “In the Now,” “Waste-Ed,” and “Soapbox” pages on Facebook’s platform. In June 2020, Facebook placed a notice on those pages stating that they were “Russia state-controlled media.” Maffick alleged that the notice was false and caused reputational harm, harm to business relationships, and harm to business opportunities.

Maffick’s complaint asserted claims for libel per se, interference with contractual relations, interference with prospective economic relations, negligent interference with prospective economic relations, a claim under Section 43(a) of the federal Lanham Act, and unfair competition under California law. The Lanham Act claim was the sole asserted basis for federal subject-matter jurisdiction.

Facebook moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not plausibly state a legal claim. Facebook also filed a special motion to strike the California claims under California’s anti-SLAPP statute, a law addressing claims based on protected speech or petitioning activity.

Lanham Act claim

The court explained that Section 43(a) of the Lanham Act addresses false association and false advertising connected to the sale of goods or services. It is not a general federal remedy for every form of unfair competition or allegedly misleading conduct.

The court found that Maffick had not plausibly alleged the required commercial connection. Although the complaint referred generally to e-commerce merchandise and monetization of media content, it did not provide facts connecting Maffick’s social-media content or Facebook’s label to the sale of goods or services. The complaint also did not plausibly allege that Facebook’s label diverted sales, allowed Facebook to profit from Maffick’s goodwill, or otherwise constituted the type of commercial conduct covered by Section 43(a).

The court rejected Maffick’s false-association theory because the challenged label applied to content created and posted by Maffick, not to Facebook’s own goods or services. The court also rejected the false-advertising theory because the complaint did not plausibly allege that Facebook’s conduct was a commercial advertisement or promotion. Maffick’s assertion that Facebook used the label to promote its image as a responsible social-media company was characterized as a conclusion rather than a factual allegation showing commercial advertising or promotion.

The court further held that Maffick had not adequately pleaded an injury to a commercial interest in sales or business reputation, or a sufficiently direct connection between Facebook’s label and the alleged economic injuries. Statements that Maffick’s advertising, e-commerce, reach, sales, and business interests were “down” did not explain what those losses meant commercially or how they resulted from the label.

State-law claims and anti-SLAPP motion

Because the court dismissed the Lanham Act claim, it declined to exercise supplemental jurisdiction—the court’s authority to hear related state-law claims—over Maffick’s California claims. The court did not resolve those claims on their merits.

The court denied Facebook’s special motion to strike as moot in light of the dismissal under Rules 12(b)(6) and 12(h)(3).

Disposition

The complaint was dismissed without prejudice. Maffick was allowed to file an amended complaint consistent with the order by June 11, 2021, but could not add new claims or defendants without the court’s permission. The order stated that failure to amend by the deadline would result in dismissal under Rule 41(b).