Craigslist Denied Section 230 Immunity for Classified Ads from 2008–ML v. Craigslist

FOSTA always targeted Backpage; but with Backpage gone before FOSTA became law, it seemed inevitable that plaintiffs would eventually figure out how to deploy FOSTA against other targets. Yet, if you’d asked me to name a top 100 list of alternative targets, Craigslist would not have made my list. After all, Craigslist famously shut down its adult category a decade ago (in 2010), which gave rise to Backpage; plus Craigslist responded to FOSTA by shutting down its entire personals category (and nuking lots of completely legal speech in the process). Surely those moves put Craigslist in the clear, right?

Nope. This judge says that (even without FOSTA) Craigslist does not fully qualify for Section 230 based on third-party ads ran in 2008. This mind-blowing conclusion suggests that plaintiffs could have potentially successfully sued Craigslist a dozen years ago (but didn’t), and that plaintiffs never needed FOSTA to sue either Craigslist or Backpage. Yet here we are, adjudicating the legitimacy of Craigslist’s conduct from a dozen years ago, without full Section 230 cover.

This case is also one of the first cases to apply the new FOSTA claims that bypass Section 230, but the case doesn’t provide much insight on that claim for technical reasons. Still, if the Section 230 door is now open against Craigslist, who needs FOSTA???

The Magistrate’s Report

Statute of Limitations

The plaintiff was allegedly advertised on Craigslist in 2007 and 2008. That makes it seem like this case should have an obvious statute of limitations problem. However, the applicable statute of limitations is tolled until the victim reaches age 18, which happened in 2009; and it can be further tolled for other reasons that could (but probably don’t) apply here. The magistrate says that the statute of limitations is an affirmative defense, so the plaintiff didn’t have to allege tolling to survive the motion to dismiss. Nevertheless, the magistrate instead wants to see an early summary judgment motion on this topic. This case may end then.

Section 230 and FOSTA

The magistrate says that FOSTA excluded 1595 claims from Section 230, but not state law claims, which are still preempted by Section 230. This is a pretty straightforward reading of the statute, but I think it’s the first court to actually say this.

This means Section 230 still nominally applies to the plaintiff’s non-1595 claims. Thus, the court runs through the standard Section 230 three-part test:

1) ICS provider/user. Craigslist counts as a website.

2) Publisher/speaker claim. The magistrate says that complaint sufficiently alleged that Craigslist materially contributed to the illegality of the ads because

plaintiff is alleging that craigslist provided the guidelines to facilitate and promote the trafficker’s illegal activity. Further, plaintiff alleges that there was a relationship between craigslist and the traffickers by which craigslist actively facilitated and induced the content underlying the plaintiff’s cause of action…. the amended complaint alleges sufficient facts to plausibly state a claim that craigslist was a content creator, not merely a publisher of third party created content. Therefore, as to plaintiff’s allegations that craigslist actively participated in creating content and inducing others to create illegal content, craigslist is not entitled to CDA immunity from plaintiff’s state law claims

What? What are these “guidelines” that the court says converted the ads from third-party content to first-party content? The complaint provides no details about the “guidelines,” other than the fact that the applicable paragraphs also reference Craigslist’s TOU and its “requirements,” without providing any further detail about those, either. If the “guidelines” are simply Craigslist’s standard editorial and technical policies for advertising generally, and do not relate directly to the illegality at issue in this case, then they can’t possibly constitute a material contribution to the ads’ alleged illegality.

[UPDATE: on this point, consider Doe v. Backpage.com, LLC, 817 F.3d 12, 22 (1st Cir. 2016) (“[C]laims that a website facilitates illegal conduct through its posting rules necessarily treat the website as a publisher or speaker of content provided by third parties and, thus, are precluded by section 230(c)(1).”).]

Because the magistrate didn’t probe the plaintiff’s factual allegations at all, the magistrate deferred too much to the plaintiff’s vague pleadings. Instead, the magistrate should have: (1) required the plaintiff to provide some details about the guidelines; (2) acknowledged that every 230-immunized website has “guidelines” for third party content; (3) distinguished Craigslist’s guidelines from those other guidelines; and (4) required the plaintiff to explain how the guidelines contributed to or induced the illegal content. By not scrutinizing the plaintiff’s asserted facts, the magistrate basically rubber-stamps the plaintiff into discovery.

Compounding this lackadaisical review, the magistrate misapplies the Roommates.com standard. The Roommates.com standard isn’t whether the defendant “actively facilitated and induced” the third-party content. Every UGC service satisfies that standard. Facilitating and inducing third-party content is their raison d’etre. Instead, the applicable standard is whether the defendant facilitated/induced *illegal* content. The magistrate ignores the illegality requirement.

Furthermore, despite relying on the Roommates.com en banc decision, the magistrate overlooked FN33 of that decision discussing the 7th Circuit’s Craigslist case (emphasis added):

the Seventh Circuit held the online classified website craigslist immune from liability for discriminatory housing advertisements submitted by users. Craigslist’s service works very much like the “Additional Comments” section of Roommate’s website, in that users are given an open text prompt in which to enter any description of the rental property without any structure imposed on their content or any requirement to enter discriminatory information: “Nothing in the service craigslist offers induces anyone to post any particular listing or express a preference for discrimination”

So the Ninth Circuit has already indicated that Craigslist qualifies for Section 230 because it doesn’t structure the content or require the input of illegal content. It would have been fair for the magistrate to distinguish this discussion by showing that the facts were different with respect to sex trafficking ads compared to discriminatory housing ads. That’s not what the magistrate did–even as it relied on the opinion to support a contrary conclusion.

Finally, it’s anomalous to discuss Craigslist as a content creator under the publisher/speaker claims prong rather than the ICP prong (discussed below). The magistrate seemingly misunderstood this factor.

The Section 230 news isn’t all bad for Craigslist. The magistrate adds that:

if any of plaintiff’s state law claims are based on allegations that seek to hold craigslist liable solely for failing to remove third party content that is illegal, this conduct would fall within Section 230, and craigslist may have immunity for this alleged conduct as the functions of a publisher. Finally, simply allowing users to post anonymously without more is conduct for which craigslist would be immune under Section 230.

So the plaintiff’s pleadaround to Section 230 won’t necessarily lead to a final victory. The plaintiff has to show that Craigslist’s guidelines (whatever those are) induced or materially contributed to the third-party ads’ illegality. Given how Craigslist operated, I’m extremely skeptical that the facts support this legal standard.

3) Provided by another information content provider. Everyone agrees the ads came from third parties.

Because the plaintiff was able to plead around Section 230 on the motion to dismiss, the court then evaluates the merits of each state law claim individually.

Negligence. The magistrate says that Craigslist does not have “a general duty to ensure that their website does not endanger minors.” There is also not a statutory duty; 1595 does not say that “a website or company must take the affirmative step to ensure that third parties are not using their websites for sex trafficking.” Plus, that would ensnare the claim in the Section 230 immunity that the magistrate recognized.

Outrage (a/k/a IIED). The magistrate rejects Craigslist’s argument that its “conduct consisted of providing a neutral platform for people to post and search content on the internet.” Instead, the complaint alleges “a relationship between craigslist and the traffickers by which craigslist actively facilitated and induced advertisements trafficking plaintiff,” and that’s enough to survive the motion to dismiss. How often do you see an IIED claim survive a motion to dismiss, especially for a UGC service defendant like Craigslist? Amazing.

“Criminal Profiteering.” This claim also survives because:

plaintiff’s complaint alleges that the traffickers contracted and conspired with craigslist to promote the illegal advertisements selling plaintiff and evade law enforcement. And, plaintiff alleges that craigslist received fees for each advertisement. Plaintiff also alleges that the traffickers who were allegedly part of this relationship were prosecuted for trafficking plaintiff through craigslist for commercial prostitution.

Amazing.

“Sexual Exploitation of Children Act.” The magistrate says there’s no private right of action, but the act permits attorneys’ fees and costs, so the claim should survive to that extent if the plaintiff navigates through several hoops. I’m not familiar with this state law claim, but the magistrate apparently breaks new ground here.

Vicarious Liability. This is not an independent claim.

Unjust Enrichment. The plaintiff never entered into a contract with Craigslist.

Civil Conspiracy. This claim survives because:

plaintiff’s amended complaint alleges sufficient facts to plausibly state viable claims under federal and state law against craigslist. Additionally, plaintiff’s complaint alleges an agreement existed between craigslist and the traffickers to promote the illegal advertisements by which plaintiff was sold as a sexual slave and by which the defendants as well as individual sex traffickers and sex purchasers evaded law enforcement. Plaintiff’s complaint also alleges that craigslist developed features and guidelines so that the traffickers could continue to achieve their illegal means while evading law enforcement.

18 USC 1595. This is the new claim enabled by FOSTA. The 1595 claim survives because:

Plaintiff is alleging that craigslist knew that human trafficking was occurring on its website and that plaintiff was being trafficked on the craigslist website. Plaintiff also alleges that craigslist received benefits in the form of the fees paid by the traffickers and from the increase in website usage by the prospective purchasers of plaintiff. Next, the complaint alleges that craigslist not only knew that human trafficking was occurring on its website, but that craigslist was part of an active conspiracy with plaintiff’s traffickers to traffic plaintiff. The complaint alleges that craigslist was a participant in this venture and knew or should have known that the venture was engaged in trafficking plaintiff.

However, the 1595 claim only applies to activity after December 23, 2008, which a key statutory amendment took effect. The complaint alleges that the ads ran in 2007-2008 without being more specific. Unless the ads ran in the last 8 days of 2008, it appears that the 1595 claim should fail.

Implications

What’s Next for this Case? Craigslist will surely challenge this ruling to the district court judge. It’s possible the district court judge will fix some or all of the errors. If the case gets to summary judgment, there are some potentially serious problems with the case’s facts, such as the SOL tolling, the guidelines that constituted material contribution, and the ad timing for the 1595 claim. While it’s surprising that the case survived the motion to dismiss, this ruling does not predict Craigslist’s ultimate liability.

Motion to Dismiss v. Summary Judgment. Among Section 230 litigators, there is a split of opinion about the best time to bring a Section 230 defense. Most litigators prefer to bring it on a motion to dismiss. If that works, it knocks out the claim early and prevents discovery. Other litigators prefer to bring the Section 230 defense on a summary judgment motion, even though that will almost certainly necessitate discovery.

Why wait to summary judgment? The motion to dismiss costs time and money, and it may not work. On the motion to dismiss, the court must assume the plaintiff’s fact claims as true. Some judges will scrutinize the complaint’s facts more carefully than others. However, you can see how a judge’s solicitude towards the plaintiff’s story can screw up the motion to dismiss. This magistrate assumed that the mythical “guidelines” constituted a material contribution to third-party content, but it’s almost certain that the facts won’t be able to survive summary judgment. Similarly, on summary judgment, Craigslist could have resolved the statute of limitations question, whereas the magistrate ignored it on the motion to dismiss. This ruling provides some support for the minority argument that it’s better to skip the Section 230 motion to dismiss and push for an early summary judgment motion.

This ruling reminded me some of the JS v. Village Voice case, one of the Backpage cases. Both cases involved sex trafficking ads and were litigated in Washington state (but JS was in state court, not federal court like this one). In JS, Backpage tried a Section 230 motion to dismiss and it went sideways due to the court’s deference to the plaintiff’s factual claims, producing an adverse Washington Supreme Court ruling. It’s worth noting that the Wisconsin Supreme Court trashed the JS ruling (saying it “ignored the text of the CDA, and the overwhelming majority of cases interpreting it”); but those kinds of major gaffes can occur when the court unquestioningly treats the plaintiff’s story as true.

Effect on the Woodhull Case? A constitutional challenge is pending against FOSTA in DC federal court. The fact that Craigslist might face civil liability under FOSTA doesn’t directly affect that case. However, this ruling highlights how FOSTA can potentially impose liability on run-of-the-mill online classified ad sites. That should heighten the First Amendment concerns about FOSTA’s reach into constitutionally protected publishing.

Was FOSTA Necessary? The magistrate assumes that Section 230 can preempt to the state law claims, but it doesn’t categorically preempt them based on the plaintiff’s allegations. This kind of decision is maddening because, as in the 2018 Doe 1 and Florida Abolitionists cases, it was clear before FOSTA became law that sex trafficking plaintiffs could plead around Section 230. If so, why was FOSTA necessary?

The Future of FOSTA Litigation. Because this case involves such old facts, this magistrate doesn’t do much with the 1595 claim, which is newly excluded from Section 230 by FOSTA. Other cases will have more plaintiff-favorable facts, so this ruling doesn’t provide a good preview of the 1595 issue.

Having said that, this ruling is troubling for the entire Internet industry. Craigslist is one of the most “passive” and unstructured websites in the industry. If they can be viewed as being in league with sex trafficking criminals, then more “active” and structured services will be even more vulnerable to litigation.

Case citation: M.L. v. craigslist, Inc., C19-6153 BHS-TLF (W.D. Wash. April 17, 2020). The complaint.