General Steel Domestic Sales, L.L.C. v. Chumley , 840 F.3d 1178 ( 2016 )

FILED
United States Court of Appeals
Tenth Circuit
PUBLISH November 1, 2016
Elisabeth A. Shumaker
UNITED STATES COURT OF APPEALS Clerk of Court
TENTH CIRCUIT
GENERAL STEEL DOMESTIC
SALES, L.L.C., d/b/a General Steel
Corporation, a Colorado limited
liability company,
Plaintiff - Appellee,
v. No. 15-1293
ETHAN DANIEL CHUMLEY,
individually; ATLANTIC BUILDING
SYSTEMS, L.L.C., a Delaware
corporation, d/b/a ARMSTRONG
STEEL CORPORATION,
Defendants - Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 1:14-CV-01932-REB-CBS)
David S. Gingras of Gingras Law Office, Phoenix, Arizona (Craig R. May and
Kenneth E. Stalzer of Wheeler, Trigg, O’Donnell, L.L.P., with him on the briefs,
Denver, Colorado), for Defendants - Appellants.
David S. Fein (Patrick D. Frye, with him on the brief) of Building Services
Group, L.L.C., Littleton, Colorado, for Plaintiff - Appellee.
Before KELLY, McKAY, and McHUGH, Circuit Judges.
KELLY, Circuit Judge.
Defendants-Appellants Atlantic Building Systems, LLC d/b/a Armstrong
Steel Corporation and its CEO, Ethan Chumley (collectively, “Armstrong Steel”),
appeal from the district court’s denial of immunity under the Communications
Decency Act (“CDA”). Gen. Steel Domestic Sales, Inc. v. Chumley, No. 14-cv-
01932-REB-CBS, 2015 WL 4911585, at *5–9 (D. Colo. Aug. 18, 2015). We
dismiss this appeal for lack of jurisdiction. We conclude that the CDA provides
immunity from liability, not suit, and the district court’s order does not qualify
under the collateral order doctrine.
Background
This case involves a dispute between two competing prefabricated steel
building companies in Colorado. General Steel employed Mr. Chumley until
2005, when he left to start his own competing steel building company, Armstrong
Steel. The parties have been engaged in numerous legal disputes ever since.
The underlying dispute involves Armstrong Steel’s negative online
advertising campaign against General Steel. When internet users searched for
“General Steel,” negative advertisements from Armstrong Steel would appear on
the results page. 1 Aplt. App. 28–29. Clicking on the advertisements would
direct users to Armstrong Steel’s web page entitled, “Industry Related Legal
Matters” (“IRLM Page”).
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The IRLM Page contained thirty-seven posts, twenty 1 of which form the
basis of General Steel’s complaint. 3 Aplt. App. 387–488. To varying degrees,
the twenty posts summarize, quote, and reference lawsuits involving General
Steel. Each lawsuit is listed with a title, a brief description of the case, and a
link, by which the reader could access the accompanying court document. The
majority of the case descriptions contained quotes that were selectively copied
and pasted from the underlying legal documents.
General Steel brought four claims: (1) unfair competition and unfair trade
practices under the Lanham Act, (2) libel and libel per se, (3) intentional
interference with prospective business advantage, and (4) civil conspiracy.
Armstrong Steel sought summary judgment, claiming immunity from suit and
liability under Section 230 of the CDA.
The district court found that Armstrong Steel was entitled to immunity for
three posts because those posts simply contained links to content created by third
parties. The court refused, however, to extend CDA immunity to the remaining
seventeen posts and the internet search ads. The court found that the “defendants
created and developed the content of those ads,” and were therefore not entitled to
immunity. Gen. Steel, 2015 WL 4911585, at *7. With respect to the remaining
seventeen posts, the court found that the defendants developed the content by
1
The posts that General Steel asserts are improper are posts 1, 5, 6, 9, 11,
13, 14, 17, 20, 22, 23, 25, 26, 27, 29, 32, 33, 35, 36, and 37.
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selectively quoting and summarizing court documents in a deceiving way. Id. at
*8. It also held that the CDA’s immunity provision does not apply to the Lanham
Act. Id. at *9. Armstrong Steel appeals from the denial of immunity and claims
appellate jurisdiction under the collateral order doctrine.
Discussion
This court has jurisdiction over “final decisions” made by district courts.
28 U.S.C. § 1291. Under the collateral order doctrine, we may exercise
jurisdiction over non-final decisions if the appellant shows that the district court’s
order “[1] conclusively determine[d] the disputed question, [2] resolve[d] an
important issue completely separate from the merits of the action, and [3] [is]
effectively unreviewable on appeal from a final judgment.” P.R. Aqueduct &
Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144 (1993) (internal
quotations omitted). See generally Cohen v. Beneficial Indus. Loan Corp., 337
U.S. 541, 546 (1949). Thus, we lack jurisdiction over non-final orders unless
these three requirements are met. United States v. Copar Pumice Co., 714 F.3d
1197, 1204 (10th Cir. 2013). Because we find that Armstrong Steel cannot meet
the third factor, it is unnecessary to address the first two. See Stringfellow v.
Concerned Neighbors in Action, 480 U.S. 370, 375 (1987).
We apply the collateral order doctrine narrowly so as not to undercut the
final-judgment rule. Dig. Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868
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(1994). The requirements for collateral-order appeal are stringent. Id. Although
the Supreme Court “has been asked many times to expand the ‘small class’ of
collaterally appealable orders, [it has] instead kept it narrow and selective in its
membership.” Will v. Hallock, 546 U.S. 345, 350 (2006). Indeed, this court has
recognized the Supreme Court’s “increasingly emphatic instructions that the class
of cases capable of satisfying this ‘stringent’ test should be understood as ‘small,’
‘modest,’ and ‘narrow.’” United States v. Wampler, 624 F.3d 1330, 1334 (10th
Cir. 2010) (quoting Dig. Equip. Corp., 511 U.S. at 868, 878; Will, 546 U.S. at
350).
Armstrong Steel argues that Section 230 of the CDA bars not just liability,
but also suit. Aplt. Br. at 55–58. A district court order denying immunity from
suit is effectively unreviewable because immunity from suit “is effectively lost if
a case is erroneously permitted to go to trial.” Mitchell v. Forsyth, 472 U.S. 511,
526 (1985). Thus, the Supreme Court has “repeatedly . . . stressed the importance
of resolving immunity questions at the earliest possible stage in litigation.”
Hunter v. Bryant, 502 U.S. 224, 227 (1991). If, however, Section 230 of the CDA
only protects against liability, then we lack jurisdiction because a district court
order denying liability is certainly reviewable on appeal. See Lauro Lines S.R.L.
v. Chasser, 490 U.S. 495, 500 (1989). For the following reasons, we conclude
that Section 230 of the CDA provides immunity only from liability, not suit.
Congress passed the CDA to “protect children from sexually explicit
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internet content.” FTC v. LeadClick Media, LLC, No. 15-1009-cv, 2016 WL
5338081, at *11 (2d Cir. Sept. 23, 2016). Congress later added Section 230
because it “recognized the threat that tort-based lawsuits pose to freedom of
speech in the new and burgeoning Internet medium.” Zeran v. Am. Online, Inc.,
129 F.3d 327, 330 (4th Cir. 1997). It is the policy of the United States “to
preserve the vibrant and competitive free market that presently exists for the
Internet and other interactive computer services, unfettered by Federal or State
regulation.” 47 U.S.C. § 230(b)(2). The immunity provision of Section 230
states: “No provider or user of an interactive computer service shall be treated as
the publisher or speaker of any information provided by another information
content provider.” 47 U.S.C. § 230(c)(1).
Whether Section 230 provides immunity from suit or liability such that a
denial would permit an interlocutory appeal is an issue of first impression for this
court. 2 To find that the CDA bars suit, the CDA must contain “an explicit
statutory or constitutional guarantee that trial will not occur.” Midland Asphalt
Corp. v. United States, 489 U.S. 794, 801 (1989); Decker v. IHC Hosps., Inc., 982
F.2d 433 (10th Cir. 1992) (dismissing appeal because the statutes did not
expressly provide protection from suit). The CDA does not contain such
2
Our description of the CDA as providing immunity from suit in our case
of Ben Ezra, Weinstein, & Co. v. America Online Inc., 206 F.3d 980, 983 (10th
Cir. 2000), did not resolve this question, as this issue was not before us in that
case.
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language.
Armstrong Steel argues that 47 U.S.C. § 230(e)(3) contains plain language
barring suit, not just liability. Aplt. Br. at 56. Section 230(e)(3) states: “Nothing
in this section shall be construed to prevent any State from enforcing any State
law that is consistent with this section. No cause of action may be brought and no
liability may be imposed under any State or local law that is inconsistent with this
section.” 47 U.S.C. § 230(e)(3). Armstrong Steel asserts that the phrase “[n]o
cause of action may be brought,” id., indicates that CDA immunity bars suit.
Aplt. Br. at 56. However, reading the text in its entirety reveals that 47 U.S.C.
§ 230(e)(3) is merely a preemption provision. That Congress added § 230(e)(3)
to the CDA later is of no moment because the provision does not contain an
explicit bar to suit.
Armstrong Steel also argues that we should construe Section 230 as a bar
against suit because doing so would fulfill Congress’s intent. Aplt. Reply Br. at
6. But the best indicator of intent is the statutory language. When deciding
whether a class of people qualify for immunity from suit, we look for that intent
to be expressed in an explicit statutory or constitutional guarantee of immunity.
See Szehinskyj v. Attorney Gen., 432 F.3d 253, 256 (3d Cir. 2005) (“The law is
what Congress enacts, not what its members say on the floor.”).
Furthermore, we are hesitant to extend immunity from suit to a private
party without a statutory basis. Immunity from suit is a benefit typically only
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reserved for governmental officials. Wyatt v. Cole, 504 U.S. 158, 167 (1992)
(qualified immunity); see Farmer v. Perrill, 275 F.3d 958, 961 (10th Cir. 2001)
(limited waiver of immunity under Federal Tort Claims Act). There are three
instances when courts may extend qualified immunity to private parties. First, if
the private parties are “closely supervised by the government.” Rosewood Servs.,
Inc. v. Sunflower Diversified Servs., Inc., 413 F.3d 1163, 1167 (10th Cir. 2005);
see also DeVargas v. Mason & Hanger-Silas Mason Co., 844 F.2d 714, 722 (10th
Cir. 1988). Second, if there is a historical basis for providing immunity to that
type of private entity. Richardson v. McKnight, 521 U.S. 399, 404 (1997). Third,
if extending immunity implicates “special policy concerns involved in suing
government officials.” Wyatt, 504 U.S. at 167. We need not delve into this
analysis because this suit in no way involves the government, and Armstrong
Steel has not identified a historical basis for providing private parties immunity
from suit under the CDA.
Given that Section 230 does not contain the grant of immunity from suit
contended for, it is unnecessary to discuss its applicability to the Lanham Act
false advertising claims.
APPEAL DISMISSED. As we have decided this case after full briefing and
oral argument, General Steel’s emergency motion seeking more prompt relief is
denied.
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