Dangaard v. Instagram, LLC

Background

This diversity and putative class action asserted claims for unfair competition and tortious interference with contracts and business relationships. Dawn Dangaard, Kelly Gilbert, and Jennifer Allbaugh alleged that the defendants participated in an anticompetitive scheme to increase OnlyFans’ popularity and revenue by reducing traffic to competing adult-entertainment platforms. According to the allegations, the Meta defendants suppressed or removed plaintiffs’ Instagram and Facebook accounts and posts, and Fenix defendants paid or otherwise provided consideration to Meta defendants in connection with the alleged scheme.

The prior order denied both the Meta and Fenix defendants’ motions under Federal Rule of Civil Procedure 12(b)(6), which challenges whether a complaint adequately states a claim. The court had held the Fenix defendants’ Rule 12(b)(2) motion in abeyance, meaning it postponed ruling on that motion, while the parties conducted jurisdictional discovery. After additional discovery and briefing, plaintiffs withdrew the complaint allegations and original whistleblower evidence concerning bribery.

Personal jurisdiction

Only specific personal jurisdiction was at issue; plaintiffs did not assert general jurisdiction. Specific personal jurisdiction permits a court to hear claims connected to a nonresident defendant’s contacts with the forum. Because the case asserted no federal claims and no federal statute supplied a jurisdictional basis, the court applied California’s long-arm statute, which it said reaches as far as federal due-process requirements allow.

For tort claims, the relevant first step was whether each Fenix defendant purposefully directed an intentional act at California. The court stated that plaintiffs had to show an intentional act, express aiming at California, and harm the defendant knew was likely to occur in California. Although plaintiffs had withdrawn their specific bribery allegations, the court treated the remaining allegation of a quid pro quo—an exchange of consideration—as satisfying the intentional-act element for all three Fenix defendants.

The court found that plaintiffs failed to show express aiming at California. The alleged scheme was described as wide-ranging and directed at adult entertainers using competing platforms, rather than at a particular geographic region. Meta’s California headquarters did not automatically establish that Fenix defendants expressly aimed their conduct at California, and a defendant’s contacts with a co-conspirator or with people connected to California were not enough by themselves.

The court also found no factual allegation connecting any Fenix defendant’s conduct in the alleged scheme to California. General information about OnlyFans’ California revenue, customers, vendors, or bank accounts did not establish the required connection because plaintiffs did not explain how those contacts related to the alleged scheme. After the available jurisdictional discovery, plaintiffs still could not identify California conduct by the Fenix defendants as part of the scheme. The court therefore held that plaintiffs had not demonstrated specific personal jurisdiction and did not need to reach whether exercising jurisdiction would be reasonable.

Sealing and redaction motions

The court applied the “compelling reasons” standard to the requests to seal or redact filings concerning the dispositive jurisdictional issue. It explained that exact financial figures, bank-account information, and some confidential business information could support sealing, but generalized information about revenue, contractors, business operations, or California activity generally did not.

The court ruled as follows:

- Plaintiffs’ request concerning the Taylor deposition transcript was DENIED WITHOUT PREJUDICE. Plaintiffs were ordered to resubmit a request covering only the relevant transcript portions, with the requested redactions highlighted, within seven days. - Plaintiffs’ request concerning the Beeby deposition transcript was DENIED WITHOUT PREJUDICE, with the same seven-day resubmission requirement. - The requests concerning Fenix International Limited’s interrogatory responses, the consulting agreement, Fenix Internet’s interrogatory responses, the email from Sternberg to Azar, the contractor agreements, plaintiffs’ response, the defendants’ supplemental brief, the Taylor declaration, plaintiffs’ reply, and the Davies declaration were each GRANTED IN PART and DENIED IN PART, with sealing or redaction allowed only in the portions identified in the order. - The request concerning Leonid Radvinsky’s interrogatory responses was DENIED. - The request concerning the email from Sternberg to Azar identified as Dkt. No. 122-13 was GRANTED.

Disposition

The court GRANTED the Fenix defendants’ motion to dismiss for lack of jurisdiction. It granted the motions to file under seal only to the extent described in the order and required revised materials to be filed within twenty-one days.