Baldinos Lock & Key Service, Inc. v. Google, LLC. ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
BALDINO’S LOCK & KEY SERVICE,
INC., et al.,
Plaintiffs,
Case No. 1:16-cv-02360 (TNM)
v.
GOOGLE LLC, et al.,
Defendants.
MEMORANDUM OPINION
In 2014, Baldino’s Lock & Key Service, Inc. (Baldino’s) brought suit against Google
LLC and two online directories in the United States District Court for the Eastern District of
Virginia. The suit alleged that the defendants had violated the Lanham Act and the Racketeer
Influenced and Corrupt Organizations Act (RICO) by listing numerous scam locksmiths on their
websites, thus harming the plaintiff’s business. Baldino’s Lock & Key Serv., Inc. v. Google, Inc.,
88 F. Supp. 3d 543, 546 (E.D. Va. 2015). The district court dismissed the case, reasoning that the
defendants enjoyed immunity under the Communications Decency Act (CDA) as providers of an
“interactive computer service” against a suit trying to hold them “liable for content originating
with a third-party information content provider,” and that each count independently failed to
state a claim. Id. at 546-47. The Fourth Circuit affirmed the district court’s decision without
mention of the CDA, since Baldino’s had abandoned all RICO claims on appeal, and the Lanham
Act claim failed because the district court had “correctly determined” that the “locksmiths who
generated the information that appeared on Defendants’ websites are solely responsible for
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making any faulty or misleading representations.” Baldino’s Lock & Key Serv., Inc. v. Google
Inc., 624 F. App’x 81, 82 (4th Cir. 2015).
The instant suit relies on similar factual allegations, but with a slightly different array of
defendants, plaintiffs, and claims. This time, the suit names search engine providers Google,
Yahoo! Inc., and Microsoft Corporation (the Providers) as defendants. Baldino’s is now the lead
plaintiff in a putative class action, joined by licensed locksmiths from around the country (the
Locksmiths), who allege that the Providers are burying legitimate locksmiths under scam
locksmiths in search results on the Providers’ websites, forcing legitimate locksmiths to pay for
premium advertising slots or face the reality of an eroding customer base. First Am. Compl. 8-9
(Compl.). The Locksmiths allege violations of the Lanham Act and the Sherman Antitrust Act,
and assert five state law causes of action. In an effort to avoid a repeat outcome, the Locksmiths
emphasize that the Providers create mapping information based on scam locksmiths’ allegedly
false location claims, contending that the Providers have thus created original content not
immunized by the CDA. Nonetheless, the Providers move to dismiss, claiming that they enjoy
immunity under the CDA for seven of the eight counts, that all counts independently fail to state
a claim, and that claim preclusion bars Baldino’s allegations against Google. Defs.’ Mot.
Dismiss i, 4-24. For the reasons that follow, I conclude that CDA immunity bars all of the
Locksmiths’ claims except for breach of contract, and that the Locksmiths have failed to
adequately plead that claim. Accordingly, all counts will be dismissed.
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I. BACKGROUND
The Locksmiths allege that the Providers control 90% of “organic and map internet
search[es] originating in the United States.”1 Compl. 8. “‘Organic’ search results are the unpaid
list of links displayed . . . ordinally ranked by their respective ‘relevanc[e]’ to a consumer’s
search term.” Id. According to the complaint, the Providers “knowingly and deliberately flood
organic search results [for] queries such as ‘locksmith’ . . . with scam locksmith listings” that
they know to be fictitious and fraudulent, thus forcing the Locksmiths to pay for advertising
highlighted earlier in searches for “locksmith” and related terms. Id. at 8-9.
According to the complaint, scam locksmiths operate without required licensing, and they
“usually lack the experience and specialized tools needed . . . tell[ing] the customer the problem
is worse than expected and [then] tak[ing] some drastic, destructive action (like drilling out the
caller’s lock).” Id. at 13. Exorbitant payment is often required. Id. Because “[l]ocation-based
internet search . . . is the primary means by which prospective customers seek locksmith
services,” these “[s]cam locksmiths publish hundreds or thousands of unique websites targeting
nearly every heavily populated geographic location . . . around the country,” portraying
themselves as locally-based businesses when they often actually operate via call-centers that
dispatch mobile, non-licensed scam locksmiths. Id. at 12-13. In contrast, the Locksmiths allege
that they are licensed and/or registered to perform their trade pursuant to the requirements of
their respective jurisdictions. Id. at 3-8, 11-12. Because states publish public lists of licensed
locksmiths and registered businesses, the Locksmiths allege that the Providers have actual
knowledge of which locksmiths are scammers. Id. at 17-18.
1
But see Compl. 8 (alleging that Google controls 70%, Microsoft controls 20%, and Yahoo
controls 12% “of all organic internet search queries conducted in the United States.”).
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The Locksmiths allege that the Providers not only re-publish information generated by
the scam locksmith websites, but also “enhance those listings . . . by creating brand new original
content not found on the original web sites.” Id. at 16. Specifically, the Providers’ “original
content includes fictitious addresses, photos, map locations, and map pinpoints for scam
locksmiths as well as driving directions to and from the fictitious locations.” Id. at 19. For
example, “if a scam locksmith states that it is located in Falls Church, Virginia, but gives no
location information, the search engine will create a map and arbitrarily place a pinpoint
someplace in Falls Church. The map and pinpoints are created entirely by the search engine
provider, not by ‘another.’” Opp. to Defs.’ Mot. Dismiss 5 (Opp.).
By thus burying legitimate locksmiths under scam listings that appear legitimate and
local, the Locksmiths allege that the Providers have caused “a large number of formerly viable
locksmiths” to go “out of business entirely,” while the Plaintiffs themselves “have lost 30-60%
of their gross revenue since 2009 in the specific business arena of outbound consumer service
calls.” Compl. 9. And since the Providers not only list the scammers, but also allow scam
locksmiths to themselves purchase advertising, the Locksmiths allege that the Providers pressure
them to pay for expensive advertising. Id. at 30. If the Providers banned scam locksmiths from
their search results, the licensed Locksmiths aver that they would likely appear among the first
local results. Id. at 29.
Furthermore, the Locksmiths allege that the Providers collude in adopting this policy
towards the scam locksmiths, thus abusing their monopoly power and restraining trade in
violation of federal antitrust laws. Id. at 26-28. The Providers also allegedly violate the Lanham
Act by making false representations pertaining to the scam locksmiths, and commit five
violations of state law: fraud, tortious interference with an economic advantage, unfair
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competition, breach of contract, and conspiracy. Id. at 28-37. The Locksmiths seek injunctions
that would require the Providers to stop publishing the scam locksmiths’ information in
jurisdictions where licensing is required, as well as damages, attorney fees, and costs associated
with the litigation. Id. at 37-38.
Baldino’s originally filed this suit on its own behalf in December 2016. In January 2017,
the Court granted leave to amend the complaint. The first amended complaint, currently
operative, added 13 new locksmiths and the class action allegations. Microsoft successfully
moved to stay the claims against it made by Baldino’s and Joe East Enterprises pending a
decision on the motion to dismiss, on the ground that contracts with those parties arguably
required that all such claims be decided in arbitration. The Providers now jointly move to
dismiss the remaining claims.
II. LEGAL STANDARDS
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim
crosses from conceivable to plausible when it contains factual allegations that, if proved, would
‘allow the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.’” Banneker Ventures, LLC v. Graham, 798 F.3d 1119, 1129 (D.C. Cir. 2015) (alteration
omitted) (quoting Iqbal, 556 U.S. at 678). In undertaking this inquiry, a court will “accept all the
well-pleaded factual allegations of the complaint as true and draw all reasonable inferences from
those allegations in the plaintiff’s favor.” Id.
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III. ANALYSIS
A. Immunity Under the Communications Decency Act2
“Preemption under the Communications Decency Act is an affirmative defense, but it can
still support a motion to dismiss if the statute’s barrier to suit is evident from the face of the
complaint.” Klayman v. Zuckerberg, 753 F.3d 1354, 1357 (D.C. Cir. 2014). The statute
provides that “[n]o 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” and
that “[n]o 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(c)(1), (e)(3). Accordingly, the
D.C. Circuit has held that:
The Communications Decency Act mandates dismissal if (i) [the
Defendant] is a “provider or user of an interactive computer
service,” (ii) the information for which [the Plaintiff] seeks to hold
[the Defendant] liable was “information provided by another
information content provider,” and (iii) the complaint seeks to hold
[the Defendant] liable as the “publisher or speaker” of that
information.
Klayman, 753 F.3d at 1357 (quoting 47 U.S.C. § 230(c)(1)). All three of these requirements are
satisfied here.
The first and third prongs of Klayman are not in dispute. Each of the Defendants is a
“provider . . . of an interactive computer service” because each is a quintessential example of an
“information service, system, or access software provider that provides or enables computer
access by multiple users to a computer server, including specifically a service or system that
provides access to the Internet.” See id. at § 230(f)(2). The Locksmiths clearly seek to hold the
2
Federal question jurisdiction exists under 28 U.S.C. § 1331, given the Locksmiths’ federal
claims under the Sherman Antitrust Act and the Lanham Act. Compl. 7. The Defendants do not
dispute personal jurisdiction, given the nature of their businesses in the District. Id. 7-8.
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Providers liable as the “publisher or speaker” of the scam locksmiths’ information, since the
gravamen of the complaint is that the Providers are injuring the Locksmiths by publishing scam
locksmith information. Compl. ¶¶ 132 (Count I), 140 (Count II), 159 (Count III), 157 (Count
IV), 164 (Count V), 172 (Count VII), 184-86 (Count VIII).
As for the second prong, I conclude that the Locksmiths are indeed seeking to hold the
Providers liable for “information provided by another information content provider.” See 47
U.S.C. § 230(c)(1).
The statute defines an “information content provider” as “any person or entity that is
responsible, in whole or in part, for the creation or development of information provided through
the Internet or any other interactive computer service.” Id. at § 230(f)(3). The Locksmiths
contend that the Providers are “responsible for the creation or development of some of the [scam
locksmith] information that they publish.” Opp. 5. The Locksmiths specifically rely on the
Providers’ alleged creation of mapping information: when a scam locksmith reports that it is in a
certain city, the Providers provide an array of mapping information that supplements the
scammer’s claim, including “fictitious addresses, photos, map locations, and map pinpoints for
scam locksmiths as well as driving directions to and from the fictitious locations.” Compl. 19;
Opp. 5-6. However, Baldino’s has made these same arguments before, Second Am. Compl. at ¶¶
5, 32, Baldino’s, 88 F. Supp. 3d at 546, No. 14-cv-00636 (alleging that Google publishes “falsely
placed map pinpoints”); Br. of App., Baldino’s, 624 F. App'x 81 (arguing that “Google is aiding
and abetting a fraud by . . . providing an enhanced platform . . . now allowing pictures, reviews,
and map locations with pinpoints, creating a picture of legitimacy for an illegal and fraudulent
listing”), and the Fourth Circuit affirmed the district court’s conclusion that “[scam] locksmiths
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. . . are solely responsible for making any faulty or misleading representations.” Baldino’s, 624
F. App’x at 82. A review of the CDA immunity jurisprudence confirms this conclusion.
“[A] website does not create or develop content when it merely provides a neutral means
by which third parties can post information of their own independent choosing online.”
Klayman, 753 F.3d at 1358 (finding CDA immunity for Facebook regarding threats posted by the
Third Palestinian Intifada). Even when a website’s “structure and design” is aimed at developing
legal information based on the input of allegedly illegal content from elsewhere, the website
creator cannot be considered the provider of the original information. Nemet Chevrolet, Ltd. v.
Consumeraffairs.com, Inc., 591 F.3d 250, 256-58 (4th Cir. 2009). In Nemet, the Fourth Circuit
considered an allegation that Consumeraffairs.com had “developed” defamatory online
comments regarding the automobiles sold by Nemet Chevrolet, because the “structure and
design” of the relevant website “develop[ed] information related to class-action lawsuits.” Id. at
257. Nemet reasoned that because “there is nothing unlawful about developing this type of
content,” id., and the complaint “does not show, or even intimate” that the website was
responsible for the defamatory content at issue, id. (quoting Iqbal, 556 U.S. at 683), it was not
plausible or “even a likely possibility” that Consumeraffairs.com had provided the information at
issue. Id. at 257-58.3
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In this vein, the Locksmiths attempt to rely on Anthony v. Yahoo Inc., in which a district court
concluded that the CDA did not shield Yahoo from allegations that two of its dating sites
“create[d] . . . false and/or nonexistent profiles . . . to trick people . . . into joining the service,”
and also convinced users to renew their subscription by “circulat[ing] profiles of actual,
legitimate former subscribers whose subscriptions had expired, thus giving the misleading
impression that these individuals are still available for dates.” 421 F. Supp. 2d 1257, 1259 (N.D.
Cal. 2006); Opp. 7. As to the allegation of Yahoo-created profiles, Anthony concluded that “No
case . . . has immunized a defendant from allegations that it created tortious content.” Id. at
1262-63 (emphasis in original). And even though “third parties created the[] [expired] profiles”
that Yahoo allegedly represented as currently active, Anthony reasoned that “the CDA only
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Both Klayman and Nemet distinguish the Ninth Circuit’s decision in Fair Hous. Council
of San Fernando Valley v. Roommates.com, LLC, 521 F.3d 1157 (9th Cir. 2008). Klayman, 753
F.3d at 1358; Nemet, 591 F.3d at 257. In Roommates.com, the Ninth Circuit held that a housing
website was not entitled to CDA immunity for its conduct in requiring new subscribers to
“disclose [their] sex, sexual orientation and whether they will bring children to the household,”
as well as their own preferences regarding those same three criteria, and then structuring results
in the website based on that information. 521 F.3d at 1164-65. Here, unlike in Roommates.com,
there is no allegation that the Providers require the scam locksmiths to provide the allegedly
fraudulent information at issue, or that the Providers have created a stand-alone platform for the
provision of services.
However, the Ninth Circuit’s logic is nonetheless helpful. Roommates.com emphasized
that “providing neutral tools to carry out what may be unlawful or illicit searches does not
amount to ‘development’ for purposes of the immunity exception.” 521 F.3d at 1169. “If an
individual uses an ordinary search engine to query for a ‘white roommate,’” the Ninth Circuit
reasoned, “the search engine has not contributed to any alleged unlawfulness in the individual’s
conduct.” Id. The court also explained that the same reasoning governed Carafano v.
Metrosplash.com, Inc., 339 F.3d 1119 (9th Cir. 2003)—in which a prankster created a fake,
libelous dating profile for an actress—because “the website provided neutral tools, which the
entitles Yahoo! not to be ‘the publisher or speaker’ of the profiles. It does not absolve Yahoo!
from liability for any accompanying misrepresentations. Because Anthony posits that Yahoo!’s
manner of presenting the profiles—not the underlying profiles themselves—constitute fraud, the
CDA does not apply.” Id. at 1263. The instant case is not controlled by the logic of Anthony.
Although the Locksmiths do allege that the Providers create the mapping information, it is the
scam locksmiths’ underlying location claim that is allegedly false; no “accompanying
misrepresentations” are adequately plead. Moreover, in Anthony, Yahoo was acting as a host
and creator of proprietary dating sites, quite unlike the generic search aggregation function that is
at issue here.
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anonymous dastard used to publish the libel, but the website did absolutely nothing to encourage
the posting of defamatory content—indeed, the defamatory posting was contrary to the website’s
express policies.” Id. at 1171. The same reasoning applies here, where the Providers’ offer
neutral mapping functionality with no encouragement for websites to provide false or misleading
location claims. The fact that scam locksmiths make use of these neutral mapping tools does not
constitute “development” of the underlying location claims by the Providers, for purposes of the
CDA.
Under the logic of Roommates.com, the “development” of content is “not merely . . .
augmenting the content generally, but . . . materially contributing to its alleged unlawfulness.”
Roommates.Com, 521 F.3d at 1167–68; see also Jones v. Dirty World Entm't Recordings LLC,
755 F.3d 398, 410 (6th Cir. 2014) (citing Roommates.Com as the “leading” circuit decision
providing a “workable” definition of information “development.”). To the extent that the
Locksmiths press this argument, I conclude that the Providers’ mapping information does not
materially contribute to the alleged unlawfulness of the underlying information. As the Sixth
Circuit reasoned in O’Kroley v. Fastcase, Inc., the CDA immunizes a search engine’s
“automated editorial acts.” 831 F.3d 352, 355 (6th Cir. 2016). When a search engine re-
publishes information originally created by a third party, CDA immunity applies even when
confusion may result. Id. Here, it is the scam locksmiths who provide the original location
claim, and the Providers have created a website that simply re-publishes that information along
with associated mapping information. The extra information is wholly dependent on the original
location claim, and does not materially contribute to the alleged unlawfulness of the original
claim. After all, the Locksmiths do not even allege that the Providers should ban those who
make false location claims. Compl. 17-18. It is the scam locksmiths’ unlicensed status that
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Plaintiffs claim should prompt a ban, and they infer from this fact that “we’re a local business”
claims are questionable.4 In short, the maps are essentially unrelated to any unlawful conduct.
In common sense terms, it is the scam locksmiths and not the Providers who are
providing the information that potentially creates liability here. The complaint strains to avoid
this conclusion, alleging that the mapping information “independently and deliberately deceives
consumers beyond the original deception purveyed by the scam locksmiths,” and “facilitate[s],
enhance[s], and legitimize[s]” the scam locksmiths. Compl. 19-20. But most websites that
incorporate content from elsewhere could be said to “facilitate, enhance, and legitimize” original
content by amplifying its reach or improving its relevance and presentation. By presenting
Internet search results to users in a relevant manner, Google, Yahoo, and Microsoft facilitate the
operations of every website on the internet. The CDA was enacted precisely to prevent these
types of interactions from creating civil liability for the Providers.5 The fundamental legal
question is whether the Defendants “provided” the specific information for which Plaintiffs seek
to hold them liable. The gravamen of this complaint is precisely that the Providers are
financially liable for re-publishing the scam locksmiths’ information. Accordingly, I conclude
that the Locksmiths seek to hold the Providers liable for “information provided by another
4
See, e.g. Compl. 12 (“Scam locksmiths’ websites . . . include false claims that they are local
businesses with local phone numbers. They do this deliberately, to misrepresent themselves to
consumers as nearby businesses. When a user calls the local-area phone number for the scam
locksmith, he or she may be put through to a call center, in another city or even another country.
An operator sends over a putative ‘locksmith’ on behalf of the scam company.”)
5
The result might be different if a plaintiff alleged that the Providers used outdated maps in
violation of some duty of care, or intentionally navigated users across dangerous roads. But that
is not the case. The maps are objectionable because of the underlying information the scam
locksmiths supply, and for no other reason.
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information content provider,” satisfying the CDA’s second requirement. See 47 U.S.C. §
230(c)(1).
Furthermore, none of the CDA’s exceptions apply here, as the Locksmiths concede. Tr.
of Proceedings 10; Opp. 3-7 (never mentioning a statutory exception). One exception requires
that “[n]othing in [Section 230] shall be construed to impair the enforcement of . . . any . . .
Federal criminal statute.” 47 U.S.C. § 230(e)(1). Although the Plaintiffs do plead criminal
violations of the federal antitrust laws, the exception “is limited to criminal prosecutions” and
“excludes civil suits.” Jane Doe No. 1 v. Backpage.com, LLC, 817 F.3d 12, 23 (1st Cir. 2016).
The CDA also has “no effect” on intellectual property law, consistent state laws, or “the
Electronic Communications Privacy Act . . . or any similar State law.” 47 U.S.C. § 230 (e)(2)-
(4). However, none of the Locksmiths’ claims implicate these subject matters. See Defs.’ Mot.
Dismiss 7-8 (addressing each exception).
Accordingly, all of the Locksmiths’ claims are barred by CDA immunity, except for the
breach of contract claim in Count VI.
B. Breach of Contract
The Locksmiths also sue for breach of contract, claiming a violation of the “implied duty
of good faith and fair dealing.” Compl. 32-33. The amended complaint inconsistently alleges
that both one and many plaintiffs have “contracted some of listed defendants for paid advertising
services,” but none of the actual contract(s) are provided. See Compl. 22, 32.
The Providers argue that because the complaint does not identify what particular
contracts exist, it therefore fails to put them on notice of the basis for the claim. Defs.’ Mot.
Dismiss 17. They rely on Bissessur v. Indiana Univ. Bd. of Trustees, a Seventh Circuit case that
dismissed an implied contract claim in which the plaintiff argued “that the exact details of the
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contract will become clear during discovery.” 581 F.3d 599, 603 (7th Cir. 2009). Bissessur
rejected this ‘find-the-contract-in-discovery’ argument, relying on the Supreme Court’s decision
in Twombly, and the recognition that “[o]ur system operates on a notice pleading standard.” Id.
The court reasoned:
[I]t is not enough to give a threadbare recitation of the elements of
a claim without factual support. A plaintiff may not escape
dismissal on a contract claim, for example, by stating that he had a
contract with the defendant, gave the defendant consideration, and
the defendant breached the contract. What was the contract? The
promises made? The consideration? The nature of the breach?
Id. Here, I am reasonably confident that contracts existed between at least two of the 14
locksmiths (Baldino’s and Joe East Enterprises) and Microsoft, since those parties consented to a
stay pending potential arbitration based on the contracts’ existence. But those claims are
precisely the ones not before the Court on this motion to dismiss, and no other specific contracts
have been alleged.
Although other contracts very well may exist, Plaintiffs have not provided sufficient
“factual content” to allow me to “draw the reasonable inference that the defendant is liable.” See
Iqbal, 556 U.S. at 678. Even if I inferred that Defendants’ conduct would violate contractual
duties if a contract existed, I cannot reasonably infer which Defendants are liable to which
Plaintiffs, without any information about the existence of specific contracts. Accordingly, Count
VI must be dismissed as well.
IV. CONCLUSION
For the aforementioned reasons, the Defendants’ Motion to Dismiss is GRANTED.
Pursuant to the Court’s decision on CDA immunity, Counts I-V and VII-VIII are dismissed with
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prejudice. The breach of contract claim, Count VI, is dismissed without prejudice. A separate
order will issue.
/s/
Dated: January 11, 2018 TREVOR N. MCFADDEN
United States District Judge
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