Auction Platform Protected by 47 USC 230 for a Rogue Auction–Simmons v. Danhauer

By Eric Goldman

Simmons v. Danhauer & Associates, LLC, 2010 WL 4238856 (D. S.C. Oct. 21, 2010)

Proxibid provides an online auction platform similar to eBay, except that Proxibid vets auctioneers before they can conduct an auction. Danhauer used Proxibid’s platform to conduct an auction. Simmons cast the high bid in a Danhauer auction that had two alleged irregularities. First, with the help of a Proxibid CSR, Danhauer unilaterally extended the auction’s closing time. Second, Danhauer allegedly cast shill bids in the auction under a different account. The plaintiffs were understandably miffed, and they sued both Danhauer and Proxibid. Simmons apparently settled with Danhauer, leaving open for this ruling the claims against Proxibid. The court dismisses those claims on summary judgment.

The court buzzes through Simmons’ claims based on the prima facie elements. It dismisses the negligence claim because the core harm here is an alleged breach of contract (Danhauer’s failure to consummate the transaction with the high bidder), and the contract breach can’t support a tort claim. Without a tort claim, the unfair practices claim also fails. The conversion claim fails because Simmons had not yet obtained a possessory interest in the goods. The fiduciary breach claim fails because Proxibid only provided customer support to Danhauer. The contract interference claim fails because, at most, Proxibid simply followed Danhauer’s instructions.

In addition to the claims’ failures on their faces, the court concludes that Proxibid qualifies for 47 USC 230 immunity. The court’s entire discussion of the issue:

Plaintiffs have essentially asserted that Proxibid is liable to them in tort for tortious interference with a contract, aiding and abetting a breach of a fiduciary duty, negligence, unfair trade practices, and conversion because Proxibid allegedly helped Danhauer deprive Plaintiffs of the items for which they were the highest bidder in the auction at 4:00 a.m. Plaintiffs’ sole bases for maintaining these claims against Proxibid arise from Proxibid’s facilitation of Danhauer’s reopening of the auction and Proxibid’s alleged failure to thwart Danhauer’s efforts to bid in its own auction in violation of the website rules. Plaintiffs do not dispute the fact that Proxibid is a website service provider, much like Ebay. Plaintiffs also do not dispute that Danhauer was responsible for conducting all aspects of the auction. There is no evidence that Proxibid posted any information or conducted any actions other than those provided by or at the direction of Danhauer. In this case, Proxibid is nothing more than an interactive computer

service provider and cannot be held liable for the information and actions originating from Danhauer. Accordingly, Proxibid is also entitled to the immunity provided under the CDA, and Plaintiffs may not pursue the tort claims in their

Complaint against Proxibid.

The case doesn’t break much new ground. It’s just another easy defense win in an obvious 230 case.