United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTION TO DISMISS WITH PREJUDICE RE:
DKT. NO. 40
H. KOH UNITED STATES DISTRICT JUDGE.
Federal Agency of News LLC (“FAN”) and Evgeniy
Zubarev (collectively, “Plaintiffs”) bring suit
against Defendant Facebook, Inc. (“Facebook”)
because Facebook removed FAN's Facebook account and page.
The Court previously granted Facebook's motion to dismiss
without prejudice. ECF No. 33. Before the Court is
Facebook's second motion to dismiss. ECF No. 40. Having
considered the parties' submissions, the relevant law,
and the record in this case, the Court GRANTS Facebook's
motion to dismiss with prejudice.
FAN is a “corporation organized and existing under the
laws of the Russian Federation” that “gathers,
transmits and supplies domestic and international news
reports and other publications of public interest.” ECF
No. 36 (“First Amended Complaint” or
“FAC”) ¶¶ 2, 5. Plaintiff Evgeniy
Zubarev is “the sole shareholder and General Director
of FAN.” Id. ¶ 6. Defendant Facebook
operates an online social media and social networking
platform on which users like FAN can disseminate content by
publishing on the users' Facebook page “posts and
other content for its Facebook followers.” Id.
¶¶ 3, 30. Facebook users' utilization of
Facebook is governed by Facebook's Terms of Service that,
if violated, may result in the deletion of users'
Facebook accounts and pages. Id. ¶¶ 4, 58,
about December 2014, FAN started “a Facebook page
through which FAN has published its posts and other content
for its Facebook followers.” Id. ¶ 3.
After the 2016 United States presidential election,
“Facebook began to shut down ‘inauthentic'
Facebook accounts that allegedly sought to inflame social and
political tensions in the United States.” Id.
¶ 10. Facebook allegedly shut down such accounts because
the accounts' activities were “similar to or
connected to that of Russian Facebook accounts during the
2016 United States presidential election which were allegedly
controlled by the Russia-based Internet Research Agency
(‘IRA').” Id. FAN's Facebook
account and page were among those that were shut down.
Id. ¶ 57. FAN's Facebook account and page
were shut down on April 3, 2018. Id.
FAN's Role in Russian Interference in the 2016 United
States Presidential Election
aforementioned, Facebook shut down Facebook accounts with
connections to Russian Facebook accounts allegedly controlled
by the IRA. Id. ¶ 10. The IRA was “an
agency which allegedly employed fake accounts registered on
major social networks . . . to promote the Russian
government's interests in domestic and foreign
policy.” Id. ¶ 11. Specifically, in a
United States Intelligence Community report regarding alleged
Russian interference in the 2016 presidential election, the
IRA was described as an agency of “professional trolls
whose likely financier is a close Putin ally with ties to
Russian intelligence.” Id. ¶ 14 (internal
quotation marks omitted). Notably, from “the time of
FAN's incorporation and until in or about the middle of
2015, FAN and the IRA were located in the same
building” in Saint Petersburg, Russia. Id.
addition, FAN's founder and first “General
Director” is Aleksandra Yurievna Krylova. Id.
¶ 34. The Special Counsel investigation into Russian
interference in the 2016 presidential election that was
headed by Robert Mueller determined that Krylova was employed
by the IRA from about September 2013 to about November 2014.
Id. ¶¶ 19, 34. However, FAN proclaims that
it does not know the veracity of the Special Counsel's
finding. Id. ¶ 34. Nevertheless, on February
16, 2018, the Special Counsel indicted Krylova, who was
accused of participation in the IRA's “interference
operations targeting the United States.” Id.
on October 19, 2018, the United States District Court for the
Eastern District of Virginia unsealed a criminal complaint.
Id. ¶ 41. The criminal complaint divulged that
the Federal Bureau of Investigation (“FBI”) had
uncovered “a Russian interference operation in
political and electoral systems targeting populations within
the Russian Federation, and other countries, including the
United States” codenamed “Project Lakhta.”
Id. In support of the criminal complaint, the FBI
asserted that Project Lakhta used “inauthentic user
names to create fictitious Facebook profiles” and
“published false and misleading news articles intended
to influence the U.S. and other elections.”
Id. ¶¶ 46, 48. Notably, the FBI also
attested that FAN, as well as the IRA, were entities within
Project Lakhta. Id. ¶ 42. Furthermore, the
criminal complaint was filed against Elena Alekseevna
Khusyaynova, who has been FAN's chief accountant since
August 2, 2016. Id. ¶¶ 41, 51. However,
FAN maintains that it was not involved in Project Lakhta and
that it had no “direct connection” to the IRA.
Id. ¶¶ 45, 56.
Facebook's Role in the United States' Investigation
of Russian Interference in the 2016 Presidential
September 6, 2017, Facebook's Chief Security Officer Alex
Stamos announced that “Facebook found approximately
$100, 000.00 in advertisement spending” between June
2015 and May 2017 “associated with more than 3, 000
advertisements in connection with approximately 470 allegedly
inauthentic Facebook accounts and Pages.” Id.
¶ 15. Stamos stated that “Facebook conducted a
sweeping search looking for all ads that might have
originated in Russia.” Id. ¶ 16
(quotation marks omitted). Facebook then “shared these
findings with United States authorities” and provided
Congress “with information related to the 3, 000
advertisements.” Id. ¶¶ 16-17.
September 21, 2017, Facebook's cofounder, chairman, and
chief executive officer Mark Zuckerberg released a video
stating that “Facebook is actively working with the
U.S. government on its ongoing investigations into Russian
interference” and that Facebook is providing
information to the Special Counsel. Id. ¶ 19.
The Removal of FAN's Facebook Account and Page
April 3, 2018, Facebook shut down FAN's Facebook account
and page. Id. ¶ 57. In an email, Facebook
explained that FAN's Facebook account and page were shut
down because FAN allegedly violated Facebook's Terms of
Service. Id. ¶ 58. FAN was among the more than
270 Russian language accounts and pages that Facebook shut
down on April 3, 2018. Id. ¶ 20. On the same
day, Zuckerberg published a blog post explaining
Facebook's actions. Id. ¶ 21. Zuckerberg
wrote that the accounts and pages taken down on April 3, 2018
were removed because “they were controlled by the
IRA” and not because of “the content they
shared.” Id. Specifically, Zuckerberg wrote
that the IRA “has repeatedly acted deceptively and
tried to manipulate people in the US, Europe, and Russia,
” and since 2016, when the IRA “had set up a
network of hundreds of fake accounts to spread divisive
content and interfere in the U.S. presidential election,
” Facebook has improved its “techniques to
prevent nation states from interfering in foreign
elections.” Mark Zuckerberg,
visited January 9, 2020); see FAC ¶ 21
(referencing Zuckerberg's blog post).
November 20, 2018, Plaintiffs filed their complaint against
Facebook. ECF No. 1 (“Compl.”). Plaintiffs
originally alleged five causes of action: (1) a
Bivens claim for violation of the First Amendment;
(2) “damages under Title II of the U.S. Civil Rights
Act of 1964 and 42 U.S.C. Section 1983”; (3)
“Damages under the California Unruh Civil Rights
Act”; (4) breach of contract; and (5) breach of the
implied covenant of good faith and fair dealing. Id.
April 15, 2019, Facebook filed a motion to dismiss
Plaintiffs' Complaint. ECF No. 25. The Court granted
Facebook's motion to dismiss without prejudice on July
20, 2019. ECF No. 33. The Court first dismissed
Plaintiff's second cause of action under Title II of the
U.S. Civil Rights Act of 1964 and 42 U.S.C. § 1983
because Plaintiffs did not allege that any party was acting
under color of state law. Id. at 7.
Court then addressed Defendant's argument under 47 U.S.C.
§ 230(c)(1) (“Section 230”), or the
Communications Decency Act (“CDA”). Under Section
230, “[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). The Court
concluded that Facebook fulfilled all three prerequisites
necessary to claim Section 230 immunity. ECF No. 33 at 8-13.
First, Facebook qualified as an “interactive computer
service” based on Plaintiffs' allegations and ample
case law. Id. at 8-9. Second, Plaintiffs sought to
hold Facebook liable for removing information provided by an
“information content provider” that was not
Facebook. Id. at 9. Specifically, Plaintiffs sought
to hold Facebook liable for content provided by FAN.
Id. at 9-10. Third, Plaintiffs sought to hold
Facebook liable as a publisher or speaker of Plaintiff's
content because “Plaintiffs' claims [were] based on
Facebook's decision not to publish FAN's
content.” Id. at 11. Accordingly, the Court
determined that the CDA barred all of Plaintiffs' causes
of action except for Plaintiffs' Bivens claim
for a violation of the First Amendment. Id.
the Bivens claim, the Court concluded that Facebook
could not be held liable for violating the First Amendment
because Facebook was not a “public forum” and
Facebook's actions did not amount to state action.
Id. at 14-22. As a result, the Court dismissed all
of Plaintiffs' causes of action with leave to amend. The
Court notified Plaintiffs that “failure to cure the
deficiencies identified in this Order or in Defendant's
briefing will result in dismissal with prejudice of the
claims dismissed in this Order.” Id. at 22.
August 19, 2019, Plaintiffs filed their First Amended
Complaint (“FAC”). ECF No. 36. The FAC makes
minor grammatical edits and adds ten paragraphs. Id.
¶¶ 23-27, 70-71, 75, 96-97. Five paragraphs mainly
pertain to allegations involving the 2018 midterm elections
and Facebook's alleged “partnership with government
and law enforcement agencies, ” id. ¶ 25,
but none of these allegations, however, relate to
Facebook's decision to remove FAN's profile and
content following the 2016 presidential election.
Id. ¶¶ 23-27. Two other paragraphs add
allegations about Facebook's user agreements,
id. ¶¶ 70-71; one paragraph makes a
conclusory allegation that Facebook's work with the U.S.
government “constitutes a conspiracy to deny FAN its
free speech rights, ” id. ¶ 75, and the
final two paragraphs simply allege that FAN did not publish
obscene, indecent, or sexual content and that Facebook
“operated in bad faith.” Id.
Plaintiffs elected not to reallege their cause of action
pursuant to “Title II of the U.S. Civil Rights Act of
1964 and 42 U.S.C. Section 1983.” Compare
Compl. ¶¶ 59-117, with FAC ¶¶
64-116. Instead, the FAC alleges five causes of action
similar to those pled in Plaintiffs' Complaint: (I) a
Bivens claim for violation of the First Amendment; (II)
a claim for “Damages under the California Unruh Civil
Rights Act”; (III) a claim for breach of contract; and
(IV) and (V) two claims of breach of the implied covenant of
good faith and fair dealing. FAC ¶¶ 64-116. Counts
IV and V both plead breaches of the implied covenant of good
faith and fair dealing. FAC ¶¶ 101-116. It is not
entirely clear how Plaintiffs' theories of liability
differ as to each count, as both counts allege that FAN
“lost subscribers and revenues from subscriber
services” or that “Facebook has made [FAN's]
performance under [its agreements with subscribers] expensive
or difficult or impossible.” Id. ¶¶
September 16, 2019, Facebook filed a motion to dismiss
Plaintiffs FAC. ECF No. 40 (“Mot.”). On October
11, 2019, Plaintiffs filed an opposition to Facebook's
motion to dismiss. ECF No. 41 (“Opp.”). On
October 8, 2019, Facebook filed a reply. ECF No. 42
Motion to Dismiss Under Federal Rule of Civil Procedure
8(a)(2) of the Federal Rules of Civil Procedure requires a
complaint to include “a short and plain statement of
the claim showing that the pleader is entitled to
relief.” A complaint that fails to meet this standard
may be dismissed pursuant to Federal Rule of Civil Procedure
12(b)(6). The United States Supreme Court has held that Rule
8(a) requires a plaintiff to plead “enough facts to
state a claim to relief that is plausible on its face.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). “The plausibility
standard is not akin to a probability requirement, but it
asks for more than a sheer possibility that a defendant has
acted unlawfully.” Id. (internal quotation
marks omitted). For purposes of ruling on a Rule 12(b)(6)
motion, the Court “accept[s] factual allegations in the
complaint as true and construe[s] the pleadings in the light
most favorable to the nonmoving party.” Manzarek v.
St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031
(9th Cir. 2008). The Court, however, need not “assume
the truth of legal conclusions merely because they are cast
in the form of factual allegations.” Fayer v.
Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam)
(internal quotation marks omitted). Additionally, mere
“conclusory allegations of law and unwarranted
inferences are insufficient to defeat a motion to
dismiss.” Adams v. Johnson, 355 F.3d 1179,
1183 (9th Cir. 2004).
Leave to Amend
Court determines that a complaint should be dismissed, it
must then decide whether to grant leave to amend. Under Rule
15(a) of the Federal Rules of Civil Procedure, leave to amend
“shall be freely given when justice so requires,
” bearing in mind “the underlying purpose of Rule
15 to facilitate decisions on the merits, rather than on the
pleadings or technicalities.” Lopez v. Smith,
203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations
and internal quotation marks omitted). When dismissing a
complaint for failure to state a claim, “a district
court should grant leave to amend even if no request to amend
the pleading was made, unless it determines that the pleading
could not possibly be cured by the allegation of other
facts.” Id. at 1130 (internal quotation marks
omitted). Accordingly, leave to amend generally shall be
denied only if allowing amendment would unduly prejudice the
opposing party, cause undue delay, or be futile, or if the
moving party has acted in bad faith. Leadsinger, Inc. v.
BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008).
At the same time, a court is justified in denying leave to
amend when a plaintiff “repeated[ly] fail[s] to cure
deficiencies by amendments previously allowed.” See
Carvalho v. ...