Court Opinion

ID: 4550916
Source: CourtListenerOpinion
Date Created: 2020-07-24 13:08:23.412002+00
Date Added: 2024-06-11T13:03:00.782634
License: Public Domain

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                 THE SUPREME COURT OF NEW HAMPSHIRE

                           ___________________________

7th Circuit Court-Dover District Division
No. 2019-0328

                              TEATOTALLER, LLC

                                        v.

                                FACEBOOK, INC.

                           Argued: March 10, 2020
                         Opinion Issued: July 24, 2020

      Emmett Soldati, non-lawyer representative appearing by approval of the
Supreme Court under Rule 33(2), on the brief and orally, for the plaintiff.

      Paul Frank + Collins P.C., of Burlington, Vermont (Stephen J. Soule on
the brief); Keker, Van Nest & Peters, LLP, of San Francisco, California (Matan
Shacham and Victor Chiu on the brief); and Primmer, Piper, Eggleston &
Cramer, PC, of Manchester (Doreen F. Connor orally), for the defendant.
.
      HANTZ MARCONI, J. The plaintiff, Teatotaller, LLC (Teatotaller), appeals
an order of the Circuit Court (Gardner, J.) dismissing its small claim complaint
against the defendant, Facebook, Inc. (Facebook). We reverse and remand.
       The relevant facts follow. Teatotaller alleged that in June 2018,
Facebook “deleted [Teatotaller’s] Instagram . . . account without notice.”1
Teatotaller further alleged that Facebook “sent two contradicting statements as
to the reason for deletion and provided no appeal or contact to get more
information.” Teatotaller also alleged that Facebook “had a duty of care to
protect [Teatotaller] from an algorithmic deletion as it hampers [Teatotaller’s]
business” and that Teatotaller has “continue[d] to lose business and customers
due to [Facebook’s] negligence.” In addition to seeking $9,999 in damages,
Teatotaller sought restoration of its Instagram account.2

      Facebook moved to dismiss Teatotaller’s complaint on several grounds.
Pertinent to the instant appeal, Facebook argued that Teatotaller’s claims are
“barred under Section 230(c)(1) of the Communications Decency Act . . . ,
which immunizes [it] from claims that seek to hold it liable for deciding
whether to publish, withdraw, postpone or alter content.” (Quotation omitted.)
See 47 U.S.C. § 230(c)(1) (2012). In addition, Facebook asserted that
Teatotaller’s complaint failed to establish that the trial court had personal
jurisdiction over Facebook.

       Teatotaller objected to the motion, urging the trial court not to accept
Facebook’s defense under section 230(c)(1) of the federal Communications
Decency Act (CDA) at this stage of the proceedings, and asserting that the
court had personal jurisdiction over Facebook pursuant to Instagram’s “Terms
of Use” appended to Teatotaller’s objection. In a subsequent pleading,
Teatotaller asserted that its “claim against Facebook . . . stems from [its] failure
to act in accordance with [the Terms of Use] in the treatment of [Teatotaller’s]
account and intellectual property owned.” Facebook countered that “the
contract [Teatotaller] now claims it agreed to with Facebook explicitly provides
1
 According to Facebook, Instagram is a wholly-owned subsidiary of Facebook. In the trial court,
Facebook argued that Teatotaller had failed to allege any claims against Facebook. The trial court
apparently ruled to the contrary, and because Facebook has not cross-appealed that
determination, we assume it to be correct.
2
  Because the parties have not yet litigated the issue, we express no opinion as to whether the
trial court has authority to order Facebook to restore Teatotaller’s Instagram account in the
context of this small claim action. See Friedline v. Roe, 166 N.H. 264, 266 (2014) (observing
that the district division of the circuit court “does not have jurisdiction to resolve . . . actions in
equity”); Holloway Automotive Group v. Lucic, 163 N.H. 6, 11-12 (2011) (holding that, because
piercing the corporate veil is an equitable remedy, district court lacked authority to grant that
remedy regardless of whether it had jurisdiction over the underlying contract case); Matte v.
Shippee Auto, 152 N.H. 216, 223 (2005) (rejecting tenant’s argument that district court could
properly deny eviction based upon principles of equity because the district court lacks equity
jurisdiction); cf. Beer v. Bennett, 160 N.H. 166, 173-74 (2010) (observing that, although
rescission is an equitable remedy, and although the district court lacks a general grant of
equitable power, the court had authority to order rescission under the facts of the case
pursuant to the Uniform Commercial Code).

                                                   2
that [Teatotaller] will not seek to hold Facebook . . . liable in any way for [the]
deletion” of Teatotaller’s Instagram account.

       Following a hearing, the trial court granted Facebook’s motion,
determining that the Terms of Use gave the court personal jurisdiction over
Facebook, but also precluded Teatotaller’s claims. Specifically, the court
determined that, “given the language in the [Terms of Use],” Teatotaller “cannot
state a claim or demonstrate any breach of contract that gives rise to a cause of
action.” In response to Teatotaller’s subsequent motion to reconsider, the trial
court stated that Facebook is entitled to immunity under the CDA for “the acts
that are alleged by [Teatotaller].” This appeal followed.

      On appeal, Teatotaller essentially argues that the trial court erred by: (1)
ruling that Teatotaller failed to state a cause of action for breach of contract;3
and (2) determining that its claim is barred by the CDA. We address each
argument in turn.

       In reviewing a trial court’s decision to grant a motion to dismiss, we
examine whether the allegations in the plaintiff’s pleadings are reasonably
susceptible of a construction that would permit recovery. Pro Done, Inc. v.
Basham, 172 N.H. 138, 141 (2019). We assume the facts alleged in the
plaintiff’s pleadings to be true and construe all reasonable inferences in the
light most favorable to the plaintiff. See id. However, we do not assume the
truth of statements in the plaintiff’s pleadings that are merely conclusions of
law. Sanguedolce v. Wolfe, 164 N.H. 644, 645 (2013). We then engage in a
threshold inquiry that tests the facts in the complaint against the applicable
law, and if the allegations constitute a basis for legal relief, we must hold that it
was improper to grant the motion to dismiss. Id.

       We apply the above-stated standard of review liberally in the instant case
because it involves a small claim proceeding. RSA chapter 503 establishes a
“simple, speedy, and informal procedure” for the determination of small claims.
RSA 503:2 (2010); see Thomas v. Crete, 141 N.H. 708, 709 (1997). In such
proceedings, formal discovery is not allowed unless specifically ordered at the
pretrial hearing, Dist. Div. R. 4.5, and the rules of evidence do not apply. RSA
503:7 (2010). The pleading requirements in small claim actions are minimal.
Dist. Div. R. 4.1. Substantively, a small claim complaint need only provide “a
description setting forth with specificity the reason(s) the plaintiff believes that

3 Although Teatotaller’s original complaint alleged breach of a duty of care and negligence, on
appeal Teatotaller does not argue that it alleged, or that the trial court erred by dismissing, a tort
claim. Rather, in its appellate brief, Teatotaller challenges only the trial court’s dismissal of its
breach of contract claim. To the extent that, at oral argument, Teatotaller alluded to a claim for
breach of the implied covenant of good faith and fair dealing, Teatotaller did not raise such a claim
in its trial court pleadings, and did not include any arguments in its appellate brief regarding such
a claim. Accordingly, we consider any appellate arguments regarding such a claim to be waived.
See In re Estate of King, 149 N.H. 226, 230 (2003).

                                                  3
the defendant owes money to the plaintiff” and “[t]he amount that the plaintiff
claims that the defendant owes.” Id. Thus, in a small claim proceeding, in
ruling on a motion to dismiss, a trial court may consider factual allegations
made by the plaintiff in a motion or objection, in addition to those in the small
claim complaint. See Dist. Div. R. 1.8(B) (“The Court will not hear any motion
grounded upon facts, unless the moving party indicates in writing an
understanding that making a false statement in the pleading may subject that
party to criminal penalties, or the facts are apparent from the record or from
the papers on file in the case, or are agreed to and stated in writing signed by
the parties or their attorneys; and the same rule will be applied as to all facts
relied on in opposing any motion.”)

       “Under New Hampshire law, a breach of contract occurs when there is a
failure without legal excuse to perform any promise which forms the whole or
part of a contract.” Basham, 172 N.H. at 142 (quotation and brackets omitted).
Construing Teatotaller’s complaint and objection liberally, and assuming all of
the facts alleged by Teatotaller to be true, we conclude that Teatotaller has
sufficiently alleged a claim for breach of contract for the purposes of its small
claim action.

        Teatotaller alleged that it entered into the Terms of Use with Facebook
regarding Teatotaller’s use of Instagram in exchange for fees. Teatotaller
further alleged that Facebook deleted Teatotaller’s Instagram account in
violation of the Terms of Use, causing Teatotaller to “lose business and
customers,” for which Teatotaller requested “damages and the restoration of
[its] account.” Assuming the facts alleged by Teatotaller to be true, we hold
that these allegations suffice in the context of a small claim action to state a
cause of action for breach of contract. See id.

       In reaching a contrary conclusion, the trial court relied upon the
following provision in the Terms of Use:

      You agree that we won’t be responsible . . . for any lost profits,
      revenues, information, or data, or consequential, special, indirect,
      exemplary, punitive, or incidental damages arising out of or related
      to [the Terms of Use], even if we know they are possible. This
      includes when we delete your content, information, or account.

The trial court ruled that this provision precluded Teatotaller’s breach of
contract action. In so ruling, the trial court erred.

      We review a trial court’s interpretation of a contract de novo. Id. When
interpreting a written agreement, we give the language used by the parties to
the agreement its reasonable meaning, considering the circumstances and the
context in which the agreement was negotiated, and reading the document as a
whole. Id. We give an agreement the meaning intended by the parties when

                                         4
they wrote it. Id. Absent ambiguity, we determine the parties’ intent from the
plain meaning of the language used in the contract. Id.

      The very next sentence of the provision upon which the trial court relied
provides: “Our aggregate liability arising out of or relating to these Terms will
not exceed the greater of $100 or the amount you have paid us in the past
twelve months.” Reading the provision as a whole, we conclude that it does not
preclude Teatotaller’s action. Rather, the last sentence of the provision
constitutes an agreement by the parties that Facebook’s “aggregate liability
arising out of or relating to” the terms of the agreement would “not exceed the
greater of $100 or the amount [Teatotaller has] paid [Facebook] in the past
twelve months.” Because the parties have not yet litigated the issue, we
express no opinion as to whether this provision is enforceable.

       We next consider whether Facebook is entitled to immunity under the
CDA for Teatotaller’s breach of contract claim. Generally speaking, immunity
under the CDA is considered to be an affirmative defense. See Klayman v.
Zuckerberg, 753 F.3d 1354, 1357 (D.C. Cir. 2014). As such, it may support a
motion to dismiss only if the CDA’s “barrier to suit is evident from the face of
the . . . complaint.” Force v. Facebook, Inc., 934 F.3d 53, 63 n.15 (2d Cir.
2019) (quotation omitted), cert. denied, No. 19-859, 2020 WL 2515485 (U.S.
May 18, 2020); see Marshall’s Locksmith Service Inc. v. Google, LLC, 925 F.3d
1263 (D.C. Cir. 2019) (affirming dismissal of claims at pleading stage based on
CDA immunity); see also National Ass’n of the Deaf v. Harvard University, 377
F. Supp. 3d 49, 68 (D. Mass. 2019) (observing that “[a] plaintiff is not required
to anticipate and plead around affirmative defenses raised by a defendant”
(quotation and brackets omitted)). Here, because we conclude that the CDA’s
barrier to Teatotaller’s breach of contract claim is not evident from the face of
the complaint, we hold that dismissal on this ground was improper. See
Pirozzi v. Apple, Inc., 913 F. Supp. 2d 840, 849 (N.D. Cal. 2012). To the extent
that the parties argue the merits of Teatotaller’s breach of contract claim, they
do so prematurely, and we decline to address those arguments.

       Determining whether the CDA entitles Facebook to immunity for
Teatotaller’s breach of contract claim requires that we engage in statutory
interpretation. We review the trial court’s statutory interpretation de novo. See
Petition of Estate of Braiterman, 169 N.H. 217, 221 (2016). We interpret
federal statutes and regulations “in accordance with federal policy and
precedent.” Id. (quotation omitted). “When interpreting statutes and
regulations, we begin with the statutory or regulatory language, and, if
possible, construe that language according to its plain and ordinary meaning.”
Id.

        Section 230 of the CDA provides “broad immunity to entities . . . that
facilitate the speech of others on the Internet.” Universal Communication v.
Lycos, Inc., 478 F.3d 413, 415 (1st Cir. 2007); see 47 U.S.C. § 230(c) (2012).

                                        5
“Congress enacted this statute partially in response to court cases that held
internet publishers liable for defamatory statements posted by third parties on
message boards maintained by the publishers.” Jane Doe No. 1 v.
Backpage.com, LLC, 817 F.3d 12, 18 (1st Cir. 2016), superseded on other
grounds by statute as stated in Stokinger v. Armslist, Docket
Number:1884CV03236F, 2020 WL 2617168, at *5 (Mass. Super. Ct. Apr. 28,
2020). “Section 230(c) limits this sort of liability in two ways.” Id. First, under
section 230(c)(1), “it shields website operators from being ‘treated as the
publisher or speaker’ of material posted by users of the site.” Id. (quoting 47
U.S.C. § 230(c)(1)). “Relatedly, [under section 230(c)(2),] it allows website
operators to engage in blocking and screening of third-party content, free from
liability for such good-faith efforts.” Id.; see 47 U.S.C. § 230(c)(2). “There has
been near-universal agreement that section 230 should not be construed
grudgingly,” but rather should be given “broad construction.” Backpage.com,
817 F.3d at 18-19 (citing cases).

      Section 230(c), states in full:

      (c) Protection for ‘‘Good Samaritan’’ blocking and screening of
      offensive material

      (1) Treatment of publisher or speaker
          No provider or user of an interactive computer service shall be
      treated as the publisher or speaker of any information provided by
      another information content provider.

      (2) Civil liability
          No provider or user of an interactive computer service shall be
      held liable on account of—

          (A) any action voluntarily taken in good faith to restrict access
          to or availability of material that the provider or user considers
          to be obscene, lewd, lascivious, filthy, excessively violent,
          harassing, or otherwise objectionable, whether or not such
          material is constitutionally protected; or

          (B) any action taken to enable or make available to information
          content providers or others the technical means to restrict
          access to material described in paragraph (1).

(Bolding omitted.)

      Facebook “relies exclusively” on section 230(c)(1), “which bars courts
from treating certain internet service providers as publishers or speakers.”
Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1100 (9th Cir. 2009). Section 230(c)(1),
“which after all is captioned ‘Treatment of publisher or speaker,’ precludes

                                         6
liability only by means of a definition.” Id. (quoting 47 U.S.C. § 230(c)(1)). It
provides that “[n]o provider or user of an interactive computer service shall be
treated as the publisher or speaker of any information provided by another
information content provider.’’ 47 U.S.C. § 230(c)(1). Section 230(e)(3) “makes
explicit the relevance of this definition, for it cautions that ‘[n]o cause of action
may be brought and no liability may be imposed under any State or local law
that is inconsistent with this section.’’’ Barnes, 570 F.3d at 1100 (quoting 47
U.S.C. § 230(e)(3) (2012)).

      Thus, reading these two subsections together, as to state law claims,
“subsection (c)(1) only protects from liability (1) a provider or user of an
interactive computer service (2) whom a plaintiff seeks to treat, under a state
law cause of action, as a publisher or speaker (3) of information provided by
another information content provider.” Id. at 1100-01 (footnote omitted); see
Lycos, Inc., 478 F.3d at 418 (construing subsections (c)(1) and (e)(3), and
setting forth the same three-factor test).

       “To satisfy the first prong of the Section 230’s immunity test, the
defendant must be an ‘interactive computer service.’” Federal Agency of News
LLC v. Facebook, 432 F. Supp. 3d 1107, 1117 (N.D. Cal. 2020) (quoting 47
U.S.C. § 230(c)(1)). An “interactive computer service” is “any information
service, system, or access software provider that provides or enables computer
access by multiple users to a computer server, including specifically a service
or system that provides access to the Internet.” 47 U.S.C. § 230(f)(2) (2012)
(quotation omitted). “Facebook is unquestionably an interactive computer
service . . . .” Federal Agency of News LLC, 432 F. Supp. 3d at 1117. In its
brief, Teatotaller states that it “does not dispute that [Facebook] is an
‘interactive computer service.’” Thus, as the plaintiff concedes, the first prong
of the test articulated above is met.

      To satisfy the third prong of the test, the information at issue must be
provided by “an information content provider” other than Facebook. See id.;
Federal Agency of News LLC v. Facebook, Inc., 395 F. Supp. 3d 1295, 1305
(N.D. Cal. 2019); see also F.T.C. v. Leadclick Media, LLC, 838 F.3d 158, 174
(2d Cir. 2016) (the third prong of the immunity test “applies only if the
interactive service provider is not also an ‘information content provider’ of the
content which gives rise to the underlying claim”). The CDA defines an
“information content provider” as “any person or entity that is responsible, in
whole or in part, for the creation or development of information provided
through the Internet or any interactive computer service.” 47 U.S.C. § 230(f)(3)
(2012) (quotation omitted). For the purposes of this appeal, we assume that
this prong is met as well. See Federal Agency of News LLC, 395 F. Supp. 3d at
1306 (holding that the third prong was met where the complaint alleged that
the plaintiffs’ Facebook “account, posts, and content were created and
disseminated by [one of the plaintiffs], not Facebook”); see also Fyk v.
Facebook, Inc., No. 19-16232, 2020 WL 3124258, at *2 (9th Cir. June 12,

                                          7
2020) (unpublished) (explaining that “[t]he reference to ‘another information
content provider’ in § 230(c)(1) distinguishes the circumstances in which the
interactive computer service itself meets the definition of ‘information content
provider’ with respect to the information in question” and that “[a]s to
Facebook, [the plaintiff] is ‘another information content provider’” (quotation
and brackets omitted)).

      The second prong of the test requires that Teatotaller seek to hold
Facebook “liable as a publisher or speaker.” Federal Agency of News LLC, 395
F. Supp. 3d at 1306. “The prototypical cause of action seeking to treat an
interactive computer service provider as a publisher or speaker is defamation.”
Fields v. Twitter, Inc., 217 F. Supp. 3d 1116, 1121 (N.D. Cal. 2016), aff’d on
other grounds, 881 F.3d 739 (9th Cir. 2018). However, “the language of the
statute does not limit its application to defamation cases.” Barnes, 570 F.3d at
1101. “Thus, courts have invoked the prophylaxis of section 230(c)(1) in
connection with a wide variety of causes of action, including housing
discrimination, negligence, and securities fraud and cyberstalking.’’
Backpage.com, 817 F.3d at 19 (citations omitted).

        “To determine whether a plaintiff’s theory of liability treats a defendant
as a publisher, what matters is not the name of the cause of action,” but rather
“whether the cause of action inherently requires the court to treat the
defendant as the ‘publisher or speaker’ of content provided by another.” Sikhs
for Justice “SFJ”, Inc. v. Facebook, Inc., 144 F. Supp. 3d 1088, 1094 (N.D. Cal.
2015) (quotations omitted), aff’d, 697 F. App’x 526 (9th Cir. 2017); see Force,
934 F.3d at 64 n.18. “Consequently, courts must ask whether the duty that
the plaintiff alleges the defendant violated derives from the defendant’s status
or conduct as a publisher or speaker. If it does, section 230(c)(1) precludes
liability.” Sikhs for Justice, 144 F. Supp. 3d at 1094 (quotations omitted).

        ‘‘Publication involves reviewing, editing, and deciding whether to publish
or to withdraw from publication third-party content.’’ Id. (quotation and
brackets omitted); see Zeran v. America Online, Inc., 129 F.3d 327, 330 (4th
Cir. 1997) (“[L]awsuits seeking to hold a service provider liable for its exercise
of a publisher’s traditional editorial functions—such as deciding whether to
publish, withdraw, postpone or alter content—are barred.”). “Thus, a publisher
. . . decides whether to publish material submitted for publication.’’ Sikhs for
Justice, 144 F. Supp. 3d at 1094 (quotation omitted). “[I]t is immaterial
whether this decision comes in the form of deciding what to publish in the first
place or what to remove among the published material.’’ Barnes, 570 F.3d at
1102 n.8. “In other words, any activity that can be boiled down to deciding
whether to exclude material that [a party other than the defendant] seek[s] to
post online is perforce immune under section 230.’’ Sikhs for Justice, 144 F.
Supp. 3d at 1094 (quotation omitted).

                                        8
       “In keeping with this expansive view of the publisher’s role, judicial
decisions in the area consistently stress that decisions as to whether existing
content should be removed from a website fall within the editorial prerogative.”
Cohen v. Facebook, Inc., 252 F. Supp. 3d 140, 156 (E.D.N.Y. 2017), aff’d in
part sub nom., Force, 934 F.3d 53, cert. denied, No. 19-859, 2020 WL 2515485
(U.S. May 18, 2020); see Barnes, 570 F.3d at 1103 (“[R]emoving content is
something publishers do, and to impose liability on the basis of such conduct
necessarily involves treating the liable party as a publisher of the content it
failed to remove.”); Green v. America Online (AOL), 318 F.3d 465, 471 (3d Cir.
2003) (“[D]ecisions relating to the monitoring, screening, and deletion of
content from [a defendant’s] network . . . quintessentially relate[ ] to a
publisher’s role.”); Federal Agency of News LLC, 395 F. Supp. 3d at 1306-07
(dismissing with prejudice the plaintiffs’ claims under section 230(c)(1) because
they were “based on Facebook’s decision not to publish [one plaintiff’s]
content”); Dipp-Paz v. Facebook, 18-CV-9037 (LLS), 2019 WL 3205842, at *3
(S.D.N.Y. July 12, 2019) (dismissing with prejudice the plaintiff’s claim that
Facebook “violated his rights to free speech by blocking his Facebook account”
because the actions “to which Plaintiff objects fall squarely within the CDA’s
exclusion from liability”); Ebeid v. Facebook, Inc., Case No. 18-cv-07030-PJH,
2019 WL 2059662, at *5 (N.D. Cal. May 9, 2019) (deciding that Facebook’s
“decision to remove plaintiff’s posts undoubtedly falls under ‘publisher’
conduct”); Fields, 217 F. Supp. 3d at 1123 (“[P]roviding [Twitter] accounts to
ISIS is publishing activity, just like monitoring, reviewing, and editing
content.”).

      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. See Federal
Agency of News LLC, Inc., 432 F. Supp. 3d at 1119-20 (holding that Facebook
was entitled to immunity under section 230(c)(1) for the plaintiffs’ breach of
contract claim, which alleged that Facebook breached its “Terms of Service” by
removing their Facebook account, posts, and content, without legitimate
reason, and dismissing that claim with prejudice).

       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. See Barnes, 570 F.3d at
1107, 1109 (concluding that the defendant website was not entitled to
immunity under the CDA for the plaintiff’s breach of contract claim under a
theory of promissory estoppel because “the duty the defendant allegedly
violated springs from a contract—an enforceable promise—not from any non-
contractual conduct or capacity of the defendant”); Hiam v. Homeaway.com,
Inc., 267 F. Supp. 3d 338, 346 (D. Mass. 2017) (determining that “the Plaintiffs
are able to circumvent the CDA” as to certain claims by asserting that “through
[the defendant’s] policies, [the defendant] promises (1) a reasonable

                                       9
investigatory process into complaints of fraud and (2) that the website
undertakes some measure of verification for each posting”), aff’d on other
grounds, 887 F.3d 542 (1st Cir. 2018).

       Thus, because it is not clear on the face of Teatotaller’s complaint and
objection whether prong two of the CDA immunity test is met, we conclude that
the trial court erred by dismissing Teatotaller’s breach of contract claim on
such grounds. See Pirozzi, 913 F. Supp. 2d at 849. We simply cannot
determine based upon the pleadings at this stage in the proceeding whether
Facebook is immune from liability under section 230(c)(1) of the CDA on
Teatotaller’s breach of contract claim. See id. For all of the above reasons,
therefore, although Teatotaller’s breach of contract claim may ultimately fail,
either on the merits or under the CDA, we hold that dismissal of the claim is
not warranted at this time.

                                            Reversed and remanded.

      HICKS, BASSETT, and DONOVAN, JJ., concurred.

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