DocketNumber: Case No. 1:16–cv–02360 (TNM)
Citation Numbers: 285 F. Supp. 3d 276
Judges: McFadden
Filed Date: 1/11/2018
Status: Precedential
Modified Date: 7/25/2022
In 2014, Baldino's Lock & Key Service, Inc. (Baldino's) brought suit against Google *278LLC 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. ,
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.
I. BACKGROUND
The Locksmiths allege that the Providers control 90% of "organic and map internet search[es] originating in the United States."
*279According 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.
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 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 *280locksmiths 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 ,
III. ANALYSIS
A. Immunity Under the Communications Decency Act
"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 ,
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 ,
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
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
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."
"[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 ,
*282Both Klayman and Nemet distinguish the Ninth Circuit's decision in Fair Hous. Council of San Fernando Valley v. Roommates.com, LLC ,
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."
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 ,
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.
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."
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 contract will become clear during discovery."
[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?
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 ,
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 prejudice. The breach of contract claim, Count VI, is dismissed without prejudice. A separate order will issue.
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.").
Federal question jurisdiction exists under
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."
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.")
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.