OnlyFans Defeats “Chatter Scam” Claim–N.Z. v. Fenix

The court summarizes the plaintiffs’ “chatter scam” contentions:

Plaintiffs allege that Fenix Defendants, in cooperation with the Agency Defendants, operate a fraudulent scheme whereby Fenix Defendants charge OnlyFans subscribers to communicate directly with creators, purport to connect subscribers with creators, and instead connect subscribers with “professional chatters” hired to impersonate creators and convince users to spend more money on the website.

This is my first time blogging about “chatter scams,” but I’ve blogged about other types of inauthetic Internet conversations for a long time. For example, 20 years ago, I blogged about dating services that kept publishing profiles of terminated users to make their database look more enticing (Anthony v. Yahoo); and in 2013, I tested on how Ashley Madison sent automated messages to increase dater engagement and goad customers to pay to respond to those automated messages (Exam, sample answer). With AI taking over online conversations, we will see many more lawsuits over undisclosed AI online engagements when people expected to be engaging with humans.

The court dismisses the case with leave to amend.

Section 230

Citing Calise, the court says

The court finds that Plaintiffs’ claims are not barred to the extent they rely on Fenix Defendants’ own representations about promising authentic relationship between Fans and Creators….The court is not persuaded that Fenix Defendants’ alleged role in the Chatter Scams hinges on a “monitoring obligation” to exclude material, but rather focuses on Fenix Defendants’ fulfillment of the alleged promises and representations. However, to the extent Plaintiffs seek to hold Fenix Defendants liable for “facilitating communication” between Plaintiffs and Agency Defendants, the court finds that Plaintiffs’ claims are barred.

VPPA

• Service providers. The plaintiffs adequately alleged that “Fenix Defendants and Agency Defendants are video tape service providers because they are in the business of delivering video content to Fans and structure their business on these interactions”
• Consumers. “Plaintiffs allege that they subscribed to Creator accounts and paid for access to PPV videos, which were sent through chat and message-based unlocks.”
• Disclosure. “Plaintiffs allege that, each time a Fan interacts with a Creator’s account, the platform collects and transmits sufficient information to identify the specific Fan, including Fan’s username, which can be used to locate and view the Fan’s profile.” The court says this isn’t enough: “the alleged information disclosed would not readily permit an ordinary person to identify the specific person.”

Wiretap Claims

“Plaintiffs do not adequately allege that Chatters are reading these messages “in transit,” but rather that Chatters are viewing the messages after they were received and mirrored from the Creator’s inbox.”

Breach of Contract

Some of the breach of contract claims survived Section 230. Nevertheless, due to the integration clause, the court rejects efforts to bring in contract language from outside the TOS. Plus, the TOS “disclaims Fenix Defendants responsibility, stating that they “are not responsible for any Fan/Creator Transaction” and “All Fan/Creator Transactions are contracts between Fans and Creators.””

Fraud

“Fenix Defendants made explicit disclosures regarding the use of third parties, its inability to control how Fan content is used, and the materials provided to Fans.”

Hallucinated Citations 🤖😵

Plaintiffs’ counsel Hagens Berman outsourced brief-drafting to co-counsel Celeste Boyd. “Hagens Berman did not perform a full cite-check on her work. It turned out Boyd had used AI to draft the briefs.” Boyd was experiencing some personal issues at the time, and

Boyd failed to realize when, and to what extent, ChatGPT was modifying her research and writing—supplementing and/or cross-pollinating concepts and authorities from outside sources despite being explicitly instructed not to do so. Boyd failed to check the accuracy of the Opposition Briefs because she ran out of time. And finally, Boyd failed to communicate with her colleagues that she used ChatGPT to assist with the briefs and that she failed to review the AI-generated material.

The court rejects the plaintiffs’ request to file corrected briefs. (Also, “the court observes that there are still errors in the corrective briefing Plaintiffs wish to file.”) The court orders Hagens Berman to pay $10k in sanctions and Boyd to pay $3k in sanctions. The order was also sent to the applicable licensing authorities.

Case Citation: N.Z. v. Fenix Int’l Ltd., 2025 WL 3627591 (C.D. Cal. Dec. 12, 2025). The hallucinated citations ruling is 2025 WL 3626155.