Instagram User’s Lawsuit Over Terminated Account Gets Revived (But Not For Long)–Teatotaller v. Facebook

The plaintiff, a “queer hipster oasis” tea/coffee shop in Somersworth, NH, claims Instagram terminated its account without notice. It sued Instagram in small claims court for $9,999 and account restoration. There must be dozens or hundreds of similar lawsuits against social media services, and all of them will lose–even those filed in small claims court, which routinely bends over backwards to help pro se plaintiffs. Indeed, the small-claims judge dismissed this lawsuit.

Apparently, in New Hampshire, appeals from small-claims court go directly to the state Supreme Court. The NH Supreme Court has an expedited procedure for non-precedential decisions–I’m not sure why the court didn’t use that here. The business proprietor went up, without a lawyer, against Facebook’s four lawyers from three different law firms. (I’m not sure how/why New Hampshire lets an LLC appear in court without a lawyer, but that’s only one of the many procedural quirks in this case). It seems like the deck was massively stacked against the plaintiff…and yet…

Breach of Contract. Facebook’s TOS specified that it wouldn’t be liable for lost profits or consequential damages. The small-claims judge said that this provision negated the breach of contract claim. The Supreme Court says the TOS also limits damages to $100 (or the amount it got from the plaintiff in the past 12 months). The Supreme Court says that because the parties agreed to cap damages, the plaintiff can litigate up to that amount (or more if the damages clause is unenforceable).

I’m not sure how the case got to this weird place. Of course a consequential damages waiver doesn’t eliminate a contract claim, though it may negate the damages substantially or completely. So why the small-claims judge relied on that provision to dismiss the claim entirely is a little weird. Even with the second chance, the plaintiff will not be able to show a breach of contract, get damages of more than $100 (more likely zero), or get specific performance to restore the account. While the court revives the claim, I see that as the Supreme Court fixing what it perceived as doctrinal corner-cutting by a small-claims judge, which Facebook should have no problem fixing on remand.

Section 230. The court says 230 is an affirmative defense, but it can be granted if obvious on the complaint’s face. The court does the standard three-element Section 230 review:

  • ICS Provider. The plaintiff conceded Facebook qualifies, plus the court cites FAN v. Facebook.
  • Third-Party Content. The plaintiff’s content is not Facebook’s content. Cites to FAN v. Facebook, Fyk v. Facebook.
  • Publisher/Speaker Claim. The court provides a defense-favorable backgrounder, then summarizes:
    • “To the extent that Teatotaller’s claim is premised upon Facebook’s decision to remove its ‘Instagram account, including all the content, data, and followers that had been accumulated through paid and unpaid activity,’ its claim may require the court to treat Facebook as a publisher.” Cite to FAN v. Facebook.
    • “However, to the extent that Teatotaller’s claim is based upon specific promises that Facebook made in its Terms of Use, Teatotaller’s claim may not require the court to treat Facebook as a publisher.” Cites to Barnes v. Yahoo and Hiam v. HomeAway. Ugh, the reference to “specific promises in Facebook’s TOS” is an unfortunate choice of words. The court’s citations to FAN v. Facebook confirm that the court knows and acknowledges that FAN said Section 230 can preempt contract breach claims. The court could have more precisely said that promissory estoppel is excluded from Section 230–that was the literal holding of Barnes–but I doubt Instagram’s TOS can support promissory estoppel. The Hiam citation is even more frustrating. HomeAway won that case (both in the district court and appellate court), and the district court opinion relied heavily on Section 230 to wipe out most of the plaintiffs’ claims. So exactly what was the court trying to distinguish in carving out “specific promises” from Section 230? Ugh.

The court remands the Section 230 issue because the plaintiff’s complaint ambiguously framed the contract breach claim. Presumably, if the plaintiff can’t show that Facebook made it “specific promises,” then Section 230 should independently wipe out whatever contract breach claim otherwise might be tenable.

This is a great example of how a judicial system can benefit from having intermediate judicial review between a small-claims court and the Supreme Court. With an intermediate review, some of the pleading problems could have been better developed before consuming the Supreme Court’s time. Also, an intermediate review might have produced a better appealable opinion in the case to contextualize the NH Supreme Court’s review. Without that, the NH Supreme Court issues what I believe is their first-ever opinion on Section 230 aided by a small-claims opinion and an unrepresented plaintiff. With that weak preparation, the Supreme Court has issued an essentially unchangeable legal interpretation of Section 230 for the state of New Hampshire.

The worst part is that the Supreme Court bent over backwards to support a small-claims plaintiff whose case unquestionably will fail. I understand why the judges provide these kinds of assists to unrepresented plaintiffs–it helps preserve the veneer that the state court system is rigidly adhering to the “rule of law.” Nevertheless, the court’s imprecision on Section 230 is an expensive long-term price to pay for giving the plaintiff another doomed iteration. Everyone would have benefited if the NH Supreme Court had found some grounds to affirm the small-claims opinion.

Case citation: Teatotaller LLC v. Facebook, Inc.,2020 WL 4248507 (NH Supreme Ct. July 24, 2020)