Court Fetishizes Facebook’s TOS Statement That It Takes “Appropriate” Content Moderation Actions–Calise v. Meta

This is the remand of the disastrous Ninth Circuit decision, where a TAFS judge launched a wrecking ball into the Ninth Circuit’s Section 230 jurisprudence. When the dust settled, the 9th Circuit ruling enables plaintiffs to plead around Section 230 by arguing that their claim imposes a “duty” on the defendant that isn’t based on 3rd party content, even if everyone knows that’s exactly what the plaintiff is trying to do.

At issue in this case are scammy third-party ads on Facebook:

• Calise bought a car assembly kit from a vendor, complained about the ad, Facebook kicked off the ad, but the advertiser came back under a new alias.
• Bohl saw an ad for a “Nightmare Before Christmas” cuckoo clock (you know I would not make that up), paid for the item via PayPal, and felt like the delivered item was inferior. (Note: on Amazon, there are two such cuckoo clocks. An expensive limited edition Bradford Exchange clock and a self-identified knockoff that sells for 1/10 the price).
• Faerber saw an ad for a car swap in Facebook Marketplace (a Mazda Miata for a Toyota MR2). The advertiser, an alleged recidivist, instead stole Faerber’s car.

Contract Breach

Here is the TOS language at issue:

In the TOS, Meta promises to “take appropriate action – for example, offering help, removing content, removing, or restricting access to certain features, disabling an account, or contacting law enforcement.” In the COS, Meta promises to “remove content that purposefully deceives, willfully misrepresents or otherwise defrauds or exploits others for money or property.”

There are some obvious problems here. First, did Facebook PROMISE to take these actions, or did it reserve its right to do so? In other words, is this an affirmative promise to take these actions, or a statement of the possible content moderation remedies that Facebook might use against a user if the user violates the TOS or other content guidelines?

Second, focus for a moment on the language “take appropriate action.” Is that statement a promise or the equivalent of puffery? One could view the language as hortatory and unspecific.

Third, who determines what actions are “appropriate”?  Is appropriateness measured subjectively, objectively, by the implied covenant of good faith, or some other way? Notice how any measurement other than Facebook’s subjective interpretation puts the court in a position to second-guess Facebook’s editorial decisions regarding third-party content–exactly what Section 230 is supposed to prevent.

Fourth, did Facebook actually breach the purported promise? For example, Facebook did block the advertiser who scammed Calise, though the advertiser came back through deceptive means. Was that initial block sufficiently “appropriate,” or did Facebook need to do more (and what would that be?).

Further, Facebook can’t supervise most of the transactions it enables when the parties transact off-Facebook (such as the in-person car swap). One way of reading the plaintiffs’ claims is that they seek to hold Facebook liable for all Facebook Marketplace transactions gone wrong–an impossible standard. Also, every self-service ad platform will always enable some scams and fraud, so this case could shift liability to Facebook for all of them. Given these stakes, Facebook HAS to win this case.

The court’s handling of these issues was not very satisfying. The court says Facebook argued that the TOS binds the user and not Facebook–a confusing recap for my first point, which is that the language in question may have been a reservation of Facebook’s rights, not a promise to the user. The court says that Facebook’s declaration of who is bound by the TOS is ambiguous, but the “promises” are unambiguous. All of this confused me.

Facebook pointed to its TOS disclaimers and this doesn’t go any better for Facebook:

• the warranty disclaimer doesn’t apply because the plaintiffs didn’t allege a warranty breach
• the dollar cap doesn’t apply because it’s unconscionable: Facebook “seeks to avoid all liability for breach of any of its promises relating to promoting and benefiting from known fraudulent content, or to otherwise cap damages at a level so low that no party would seek to vindicate its rights under the agreement”

The court says the plaintiffs adequately alleged a contract breach:

Plaintiffs have plausibly alleged that Meta did not “take appropriate action” to combat scam ads: Plaintiffs allege that Meta actively courts scam advertisers, instructs its employees to ignore known scam accounts, and permits scammers to reopen accounts or repost ads after closure and takedowns. These activities plausibly breach the promise to “take appropriate action.”

Implied Covenant of Good Faith and Fair Dealing

The court says “Meta may have breached the covenant even if it complied with its promise to “take appropriate action” if its actions were taken with bad faith and intentionally enabled the scam content to continue.” The complaint gave enough examples to satisfy the court.

Implications

This ruling reaches a type of legal terra nova for Section 230. The court is entertaining Facebook’s liability for third-party scammy ads despite Section 230, all because the Calise case opened up this line of litigation by adding a “duty” element to the defense. Section 230 may never recover.

I read this opinion to suggest that Facebook lost the narrative battle before the judge. I’m not sure how that happened, but Facebook needs to get it corrected ASAP. Perhaps Facebook feels like it will be able to win on summary judgment once it can introduce more facts and fully defend its conduct.

Case Citation: Calise v. Meta Platforms, Inc., 4:21-cv-06186-JSW (N.D. Cal. Sept. 22, 2025)