Divino Group LLC v. Google LLC

Background

Divino Group LLC and the other named plaintiffs are LGBTQ+ content creators, viewers, users, and consumers who filed a proposed class action against Google LLC and YouTube LLC. They alleged that defendants discriminated against them based on sexual or gender orientation, identity, and/or viewpoints by censoring, restricting, demonetizing, or otherwise interfering with videos uploaded to YouTube.

Earlier in the case, the court dismissed several claims without leave to amend. It also dismissed the implied-covenant claim because the plaintiffs had not clearly identified the agreements or contract terms supporting it, but allowed them to amend that claim by identifying the relevant Terms of Service and other agreements. The fourth amended complaint reasserted the implied covenant of good faith and fair dealing as the plaintiffs’ sole remaining claim.

Motions and ruling

Google and YouTube moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal for failure to state a legally sufficient claim. They also moved under Rule 12(f) to strike portions of the complaint. Plaintiffs separately moved for leave to amend.

The plaintiffs relied primarily on the Terms of Service, YouTube’s policies, and language in the Community Guidelines stating that the Guidelines are applied to everyone equally, regardless of the creator’s background, political viewpoint, position, or affiliation. They alleged that defendants nevertheless removed, restricted, or demonetized their videos based on their LGBTQ+ identities, viewpoints, or affiliations rather than the videos’ content.

The court held that the complaint did not plausibly allege an implied-covenant claim. It explained that the implied covenant protects benefits promised by a contract and cannot vary the contract’s express terms. The plaintiffs did not claim that an express contract provision required defendants to post their videos, and they acknowledged that defendants had broad discretion to remove, restrict, or demonetize content.

The court determined that public statements, congressional testimony, and YouTube’s Mission Statement were not shown to be contractual promises. The court considered the Community Guidelines’ equal-application language more than merely descriptive, and found that the complaint plausibly suggested that the Guidelines could constrain defendants’ discretion. But defendants argued, and plaintiffs did not dispute, that this language was added in 2021, after the moderation decisions underlying the complaint. The court also noted that the Guidelines did not appear to govern all challenged features, including Restricted Mode and monetization. The plaintiffs therefore had not plausibly alleged agreements or contract terms supporting their claim.

Leave to amend

Plaintiffs proposed adding allegations about videos that remained restricted or demonetized, advertisements, a removed video, and allegedly similar videos posted by other users that were not restricted. The court found that most proposed amendments concerned moderation decisions made before 2021 and did not explain how plaintiffs could rely on a promise that did not yet exist. The court also found that the proposed allegations did not plausibly show that defendants treated other users’ comparable videos more favorably because those users did not have LGBTQ+ identities or affiliations. The court rejected plaintiffs’ reliance on continuous accrual because the claim concerned discrete moderation decisions rather than recurring breaches of the alleged promise.

The court concluded that further amendment would be futile because plaintiffs had already amended their complaint at least four times and the proposed amendments would not cure the identified deficiencies. It granted defendants’ Rule 12(b)(6) motion to dismiss the sole remaining claim without further leave to amend. It denied plaintiffs’ motion for leave to amend, although the court granted their request to replace an incorrect copy of an exhibit with a corrected one; the court denied the motion in all other respects. The court denied defendants’ motion to strike as moot, directed the clerk to enter judgment, and closed the file.