Ninth Circuit Helpfully Amends Barnes v. Yahoo Opinion

June 22, 2009 · by · in Derivative Liability

By Eric Goldman

Barnes v. Yahoo, Inc., 05-36189 (9th Cir. Amended Opinion June 22, 2009)

The Ninth Circuit has issued an amended opinion in last month’s Barnes v. Yahoo opinion. The amended opinion makes two changes to the initial opinion, both of significant value.

First, the opinion deletes the entire old section II, a two paragraph section where the panel declared that, under Ninth Circuit law, 47 USC 230 is an affirmative defense that could not support a 12b6 motion to dismiss. That discussion was poorly researched, sloppy and completely gratuitous. Rather than try to fix the section, the panel wisely decided just to kill it. This still leaves open the possibility that a district court will reject a 230 defense to a 12b6 motion, although I think the better result is that 230 can support a 12b6 motion as the Gibson v. Craigslist case just held.

Second, the panel added a new footnote to its recap of the prima facie elements of a 47 USC 230 defense. You may recall that in my initial blog post, I excoriated the panel for saying, in plain language, that 47 USC 230 only applied to state law claims. To fix this obvious error, the panel added the following footnote:

“We limit our restatement of section 230(c)(1) to state law claims because we deal in this case with state law claims only. We have held that the Amendment’s protection also extends to federal law causes of action, see, e.g., Fair Housing Council of San Fernando Valley v. Roommates.com, 521 F.3d 1157 (9th Cir. 2008) (en banc) (applying the Amendment to a cause of action under the Fair Housing Act, 42 U.S.C. § 3601 et seq.). Because no federal law cause of action is present in this case, we need not decide how or whether our discussion of section 230(c)(1) would change in the face of such a federal claim.”

I don’t know why the last sentence of the footnote is there. I guess this is super-CYA, but everyone knows that the 230(c)(1) analysis doesn’t change one bit between federal and state law claims. Nevertheless, this footnote should eliminate any efforts by plaintiffs’ lawyers to misuse the prior unnecessarily sloppy language.

Both of the changes in this amended opinion were directly responsive to the requests Yahoo and its amici made. I suspect both groups are pleased with these changes. I certainly am, although I remain disappointed that the entire exercise was necessitated by the panel’s sloppy work up-front. Given that this is the second time in 2 years that the Ninth Circuit has had to fix badly drafted 47 USC 230 opinions, I remain (over?)optimistic that the Ninth Circuit will be more careful with its 230 jurisprudence in the future.

In conjunction with the amendments, the Ninth Circuit rejected both sides’ request for an en banc hearing, although the amendments were so responsive to the defense requests that they largely mooted the defense’s requests. (My intuition is that the plaintiffs never expected to get an en banc hearing but made their request just because Yahoo and the amicis had put an en banc hearing in play). I would be surprised if there are further appeals to the Supreme Court at this point. As a result, I believe this case is now effectively ready for further proceedings on remand on the promissory estoppel claim. Personally, from the limited material I’ve seen, Yahoo might find it prudent to cut short further proceedings and settle up rather than have its choices scrutinized too carefully. So I would not be surprised if this amended opinion prompts a settlement soon.

The case library:

* Amended Ninth Circuit Opinion

* Barnes’ petition for rehearing

* Public Citizen et al amicus brief in support of rehearing

* Yahoo’s petition for rehearing

* Ninth Circuit opinion and my blog post on it

* Ninth Circuit oral arguments

* District court opinion and my blog post on it

* Barnes’ response to Yahoo’s motion to dismiss

* Yahoo’s brief in support of its motion to dismiss

* Yahoo’s motion to dismiss

* Yahoo’s notice of removal to federal court (which contains Barnes’ initial complaint)

The Justia page has even more materials from the district court proceedings.