December 29, 2009
Consumer Review Website Wins 230 Dismissal in Fourth Circuit--Nemet Chevrolet v. ConsumerAffairs.com
By Eric Goldman
Nemet Chevrolet Ltd. v. ConsumerAffairs.com, Inc., 2009 WL 5126224 (4th Cir. Dec. 29, 2009)
Citing 47 USC 230, today the Fourth Circuit upheld a 12(b)(6) dismissal of defamation and related claims against a consumer review website. This case is noteworthy because the court rejected some common allegations that plaintiffs make to evade 230, so this case may help defendants get 12(b)(6) motions to dismiss more easily.
ConsumerAffairs.com is a consumer review website with a twist: it works in conjunction with a law firm that mines the submitted complaints for potential class action lawsuits. In June 2008, I blogged about the district court's 12(b)(6) dismissal of the case.
Development of the Reviews
Nemet tried two tactics in its complaint to draft around 230. First, it alleged that ConsumerAffairs.com partially developed 20 reviews. Nemet pled:
Upon information and belief, Defendant participated in the preparation of this complaint by soliciting the complaint, steering the complaint into a specific category designed to attract attention by consumer class action lawyers, contacting the consumer to ask questions about the complaint and to help her draft or revise her complaint, and promising the consumer that she could obtain some financial recovery by joining a class action lawsuit. Defendant is therefore responsible, in whole or in part, for developing the substance and content of the false complaint . . . about the Plaintiffs.
These allegations do not survive a 12(b)(6) motion to dismiss.
* the website "structure and design" argument fails, despite Nemet's attempt to invoke Roommates.com, because ConsumerAffairs’ structure was not illegal. To me, the court's discussion reinforces that Roommates.com’ real holding is “If you don’t encourage illegal content, or design your website to require users to input illegal content, you will be immune.” Chalk this case up as yet another citation of Roommates.com for the defense.
* Asking users questions about their posts does not qualify as development.
* The unsupported assertion that ConsumerAffairs edited posts did not pass the Iqbal standard. Plus, as Zeran indicated, 230 protects editorial decisions, so the allegations needed to assert some editing beyond this protected zone.
Second, Nemet alleged that ConsumerAffairs fabricated 8 reviews. Nemet pled:
Because Plaintiffs cannot confirm that the [customer] complaint . . . was even created by a Nemet Motors Customer based on the date, model of car, and first name, Plaintiffs believe that the complaint. . . was fabricated by the Defendant for the purpose of attracting other consumer complaints. By authoring the complaint . . . the Defendant was therefore responsible for the substance and content of the complaint.
This allegation has an obvious (and IMO embarrassing) logic flaw. Even if Nemet can't use its records to validate the facts in a consumer review, ConsumerAffairs.com’s fabrication of the post is only one of many possible explanations. The court notes some other possible explanations: "the post could be anonymous, falsified by the consumer, or simply missed by Nemet." (I would also add the possibility of weak recordkeeping by Nemet). To try to get around this logical deficiency, Nemet marshals up some additional allegations:
(1) that Nemet has an excellent professional reputation, (2) none of the consumer complaints at issue have been reported to or acted upon by the New York City Department of Consumer Affairs, (3) Consumeraffairs.com’s sole source of income is advertising and this advertising is tied to its webpage content, and (4) some of the posts on Consumeraffairs.com’s website appeared online after their listed creation date
But all of these facts are non-sequiturs; none of them show that ConsumerAffairs fabricated the posts, and post-Iqbal these allegations are not enough to state a claim. The dissent disagreed with this conclusion (about the alleged fabrication) and would have allowed those claims to proceed.
230 as an Immunity Redux
In FN 4, the court notes that the Seventh Circuit questioned if 230(c)(1) was just a definitional section. Citing Zeran, which addressed this issue explicitly, the court says "Of whatever academic interest that distinction may be, our Circuit clearly views the § 230 provision as an immunity:" As a result, the court "aim[s] to resolve the question of § 230 immunity at the earliest possible stage of the case because that immunity protects websites not only from 'ultimate liability,' but also from 'having to fight costly and protracted legal battles.'" It looks like there could be a brewing catfight between circuits over whether 230(c)(1) is an immunity, an affirmative defense, a definitional section or something else.
Given that this court was bound by the Zeran precedent, it's perhaps not surprising that the court found 230 protection for a consumer review website. Nevertheless, by rejecting another plaintiff’s attempt to make hay from Roommates.com and rejecting weakly supported allegations of fabrication, this court gave defendants even more support to fend off claims that are, at their core, based on third party content.
The updated census of Roommates.com citations:
Roommates.com Cited for Defense (11 cases): GW Equity v. Xcentric, Best Western v. Furber, Goddard v. Google (and second ruling) Joyner v. Lazzareschi, Atlantic Records v. Project Playlist, Barnes v. Yahoo (note: although the case was a partial loss for the defendant, the Roommates.com discussion came in the defense-favorable part), Doe IX v. MySpace, Doe II v. MySpace, Dart v. Craigslist, Shiamili v. Real Estate Group, Nemet v. ConsumerAffairs
Posted by Eric at December 29, 2009 02:53 PM | Derivative Liability
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