Background Reports Protected by Section 230–Dennis v. MyLife

Plaintiffs sued MyLife for selling background reports about them and furnishing “public reputation scores.” MyLife aggregates its data from third-party sources, but the plaintiffs “seek to hold Defendant liable for packaging and re-publishing this information on its website without their permission.”

Article III Standing. The plaintiffs have standing because “both Plaintiffs have pleaded a concrete harm under a disclosure theory, as they allege that MyLife disseminated private and/or inaccurate information about them to third parties through their website.”

Section 230. The case fails due to Section 230:

  • MyLife qualifies as an ICS provider (citing Shah v. MyLife). The plaintiffs argued that MyLife wasn’t “interactive,” but that’s not the statutory test. Instead, “Defendant enables consumers to access and search through various databases on its website.” Additional cites to Henderson v. Source for Public Data and Obado v. Magedson.
  • The plaintiffs conceded that their claims treated MyLife as a publisher.
  • “Plaintiffs admittedly seek to hold Defendant liable for information created by third parties. Further, to the extent that Plaintiffs argue that Defendant created the reputation scores on its website, the reputation scores appear to derive solely from information generated by third parties.” [cite to Gentry v eBay.]

The plaintiffs argued that Section 230 nevertheless does not apply to credit reporting agencies as defined in the Fair Credit Reporting Act (FCRA). The Shah v. MyLife case rejected this argument. The plaintiffs also argued that 230 doesn’t apply to FCRA claims, but earlier this year the Henderson case held that Section 230 can preempt FCRA claims. The Henderson ruling is under appeal, and the FTC has strongly criticized it, so I don’t think we’ve heard the final word on that subject. For now, this court bolsters its conclusion by noting that the FCRA isn’t listed in 230’s statutory enumerated exceptions, plus 230 has applied to other federal civil claims.

The court summarizes:

Section 230 immunizes Defendant from Plaintiffs’ claims. This immunity applies to the claims related to the information’s accuracy and those related to the private nature of the information, as each claim seeks to hold Defendant liable for publishing information on its website that originated from third parties

Implications. The court doesn’t engage with the many other cases currently percolating through the courts involving the collision between Section 230 and privacy law, including the data broker cases and the yearbook cases. Overall, 2021 was a pretty good year for plaintiffs in those cases, as they survived motions to dismiss more often than not. It’s odd seeing this ruling reaching a contrary result without acknowledging that trend or at least distinguishing the adverse opinions. It’s also hard to get too excited about this opinion while the Henderson ruling is on appeal; and if the appellate court affirms that 230 preempts FCRA claims, Congress will amend 230 to fix that conclusion.

Case citation: Dennis v., Inc., 2021 WL 6049830 (D.N.J. Dec. 20, 2021)