The 7th Circuit’s Section 230 Jurisprudence’s Impact on FOSTA Cases

May 2, 2024 · by Eric Goldman · in Content Regulation, Derivative Liability

Last August, in GG v. Salesforce, a split Seventh Circuit panel ruled that Salesforce didn’t qualify for Section 230 in a FOSTA case. I never blogged that opinion for two reasons. First, it came at a busy time (I was just ramping up for the semester). Second, the opinion was so clearly wrong and garbled that I expected the Seventh Circuit would take the case en banc and issue a more coherent and less terrible opinion that I would then blog. In October, the Seventh Circuit denied an en banc rehearing, leaving the jurisprudential mess in place.

I can’t bring myself to go back and blog that opinion now. I’ll leave an analysis of that ruling to hyper-motivated readers. However, with two recent cases citing it, we can start to evaluate the ruling’s effects.

Doe (S.M.A.) v. Salesforce, Inc., 2024 WL 1337370 (N.D. Tex. March 28, 2024)

This case involves the same allegations as the GG v. Salesforce case. A sex trafficking victim was allegedly promoted on Backpage, and Salesforce should be liable for that promotion because it was a vendor to Backpage.

[Readers with good memories will recall that I have blogged several other cases against Salesforce with similar allegations, with mixed results in court. I have noted how these cases seek to impose tertiary liability, i.e., the wrongdoer is the sex trafficker, the secondary violator is Backpage, and the tertiary violator is Salesforce. We should carefully scrutinize the extension of liability to tertiary violators because at some point the liability becomes boundless and vendors cannot work with any customers for fear of incurring unmanageable liability. The GG v. Salesforce opinion leaned into tertiary liability in a way that potentially swept in very distant vendors].

Echoing the GG v. Salesforce decision closely, the court concludes that Salesforce doesn’t qualify for Section 230 immunity in the FOSTA case. Salesforce invoked the Fifth Circuit’s Doe v. MySpace ruling, which is binding on this court (whereas the GG decision is not). The MySpace precedent is shaky in the Fifth Circuit after the recent Doe v. Snap litigation. The court sides with the GG ruling nonetheless, saying the MySpace case involved publishing (an ahistorical conclusion–the plaintiffs sought to hold MySpace liable for negligent age verification) whereas Salesforce’s liability “did not stem from defendant’s publication of content, nor did plaintiffs challenge a policy which implicated the defendant’s publishing function….Salesforce, however, did not publish the sex-trafficking advertisements at issue here or otherwise exercise editorial control over this content, and Plaintiffs do not seek to hold Salesforce liable for doing so.”

Putting aside the mischaracterization about what the MySpace case said and why, it’s impossible to justify this distinction. Both the MySpace and Backpage decisions trace their ultimate liability to the publication of content (the MySpace messages and the Backpage ads, respectively). Section 230 says there can be only one defendant for those items of third-party content, and it isn’t the tertiary player Salesforce. The GG court got that wrong, and now the bad conclusion is spreading to Texas.

(I am incapable of talking about Salesforce being denied Section 230 immunity without snarkily reminding you that Salesforce’s CEO, Benioff, myopically called for the repeal of Section 230. Still hate 230, Benioff?)

Without Section 230, Salesforce nevertheless gets its motion to dismiss. The court says the claim fails on its prima facie elements because “Plaintiffs have failed to establish that Salesforce had constructive knowledge that Backpage violated relevant sex-trafficking laws as to Plaintiff.” The court explains: “If participant liability could attach without any knowledge the venture committed the specific violation sued upon, then § 1595(a) would impose strict liability for participants in the event they have constructive knowledge of any violation.” (This is a typical dilemma with constructive knowledge standards–constructive knowledge of “what”?).

The court says the plaintiff didn’t meet this standard:

while the allegations are sufficient to charge Salesforce with constructive knowledge of the fact that Plaintiffs were advertised on Backpage’s platform, Plaintiffs have failed to demonstrate that Salesforce had constructive knowledge that those advertisements were violative of § 1591

I question the first part of the court’s conclusion. The court says “Given Salesforce’s knowledge of the nature of Backpage’s business and the fact that Salesforce had access to content on Backpage’s platform, the Court may infer that Salesforce should have known that Plaintiffs were advertised.” That’s a pretty expansive inference, no? The court seems to be saying that Salesforce should have “known” the identities and details of every person featured in every ad run by just one of its thousands of customers, even though odds are no Salesforce employee ever looked at any of that content.

And yet, Salesforce avoids liability because “knowledge that Plaintiffs were advertised for sex does not, by itself, amount to knowledge of a violation of § 1591….Plaintiffs must
separately show that Salesforce knew or should have known that Plaintiffs would be forced to engage in commercial sex acts through force, fraud, or coercion,” and I guess Salesforce’s omniscience about its customers’ advertisers’ featured individuals didn’t extend that far. The court explains:

the Complaint alleges facts which are sufficient to have put Salesforce on notice of a widescale sex trafficking problem on Backpage’s platform…However, in this case, there is crucial a distinction between knowledge that sex traffickers used a website and knowledge that the website itself is a sex trafficker—here Plaintiffs only allege that Salesforce participated in a venture with Backpage, not the street-level traffickers. Thus, the fact that Salesforce may have had knowledge that sex traffickers used Backpage to violate § 1591 is insufficient because Salesforce did not participate in a venture with these traffickers.

Tertiary liability is a doctrine too far for this judge, even after all of the plaintiff-favorable inferences made along the way.

Note 1: As I have lamented before, yes, FOSTA cases are routinely this baroque and confusing.

Note 2: For those of you tracking such things, this is another case where modifying Section 230 would not change the outcome. Indeed, Congress expressly amended Section 230 to facilitate the plaintiffs’ claims, and the outcome is still a defense win. Then again, the plaintiffs have the ability to amend the complaint, so maybe they can recharacterize Salesforce’s omniscience enough to satisfy this judge. Furthermore, an appeal of this case will go to the Fifth Circuit, and I can easily imagine they will mangle the law as they usually do.

* * *

Unknown Parties v. Google LLC, 2024 WL 1892291 (N.D. Cal. April 29, 2024). The complaint.

This case started in W.D. Michigan as “Sarah v. Google.” I haven’t tracked it through its permutations to see how its caption evolved into “Unknown Parties v. Google,” though that is an unusual case caption because presumably the lawyers representing the plaintiffs know their clients.

The court summarizes:

The plaintiffs allege that Onision “ran several YouTube channels” that “targeted minor audiences” and allowed Onision to “groom and lure underage girls.” According to the plaintiffs, YouTube is liable because it provided a platform for Onision to reach young girls and because it shared advertising revenue with him.

Stated that way, Section 230’s applicability is obvious. The court says “Such allegations clearly seek to treat YouTube as a ‘publisher’ of Onision’s content.”

To get around this, the plaintiffs alleged that YouTube “partnered” with Onision through its “YouTube Partnership Program” (the court disregards the “partnership” titling). The court says the program is just a revenue-share, not an effort by YouTube to exercise control over Onision’s content.

The plaintiffs also invoked FOSTA. The court says “the plaintiffs must allege that a defendant-website’s own conduct demonstrates that it knowingly benefitted from knowingly participating in child sex trafficking,” and at most the plaintiffs assert a “mere association.” Furthermore,

Apart from the plaintiffs being introduced to Onision through his YouTube videos, none of the subsequent alleged interactions between the plaintiffs and Onision took place on YouTube. And there are no allegations that YouTube was ever made aware of any illegal conduct between the plaintiffs and Onision.

The court distinguishes GG v. Salesforce because the “only allegation suggesting a business relationship between YouTube and Onision is the YPP, which is a standard advertising revenue agreement that YouTube offers to many content creators.” That seems to lead squarely into the Ninth Circuit’s Gonzalez v. Google ruling, which seemingly created a Section 230 exception for revenue-sharing programs like YouTube’s. I’ve repeatedly wondered what’s left of Gonzalez v. Google after the Supreme Court ruling, and I still don’t know.

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The 7th Circuit’s Section 230 Jurisprudence’s Impact on FOSTA Cases

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