Consumer Protection law

Tenth Circuit: No Section 230 Immunity for Website that “Developed” Confidential Information by Publishing It

Michael Erdman Consumer Protection law, FTC Act, Section 230

I previously wrote about the district court’s grant of summary judgment in favor of the Federal Trade Commission in an action alleging unfair practices against Accusearch’s Abika.com (a website advertising access to and selling personal telephone records).  Last summer the 10th Circuit weighed-in.

The panel noted that the acquisition of personal telephone records “would almost inevitably require someone to violate the Telecommunications Act or to circumvent it by fraud or theft.”  It concluded that Section 230 immunity was unavailable to Accusearch, given it acted as an “information content provider” with respect to “the information that subjected it to liability under the FTC Act.”

In reaching its decision, the court focused on the definition of information content provider, specifically “whether confidential telephone records are “developed,” within the meaning of the CDA, when, as here, they are sold to the public over the Internet,” and whether Accusearch was responsible for such development.

The court determined that “when confidential telephone information was exposed to public view through Abika.com, that information was ‘developed.’”  Also concluding that “a service provider is ‘responsible’ for the development of offensive content only if it in some way specifically encourages development of what is offensive about the content,” the panel found that Accusearch was responsible for the aforesaid development, having disclosed the confidential information.

Circuit Judge Tymkovich submitted a concurring opinion, explaining that a Section 230 interpretation was unnecessary here, because “the FTC sought and ultimately held Accusearch liable for its conduct rather than for the content of the information it was offering on the Abika.com website.”  Section 230 “says nothing about immunizing publishers or speakers for their own conduct in acquiring the information.”  My favorite line from the concurring opinion?

In sum, the CDA does not extend to immunize a party’s conduct outside the realm of the Internet just because it relates to the publishing of information on the Internet.

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Court dismisses Avvo.com class action lawsuit

Michael Erdman Class Actions, Consumer Protection law, First Amendment, Online applications

Yesterday District Judge Lasnik of the Western District of Washington granted Avvo.com’s motion to dismiss the class action complaint filed against the site earlier this year, ruling that the plaintiffs’ claims were barred by the First Amendment and Washington’s Consumer Protection Act (“CPA”). If you aren’t familiar with the case,

Plaintiffs’ primary challenge is to the accuracy and validity of the numerical rating system used by Avvo to compare attorneys. Defendants assert that the opinions expressed through the rating system, (i.e., that attorney X is a 3.5 and/or that an attorney with a higher rating is better able to handle a particular case than an attorney with a lower rating), are absolutely protected by the First Amendment and cannot serve as the basis for liability under state law.

Directing that “the key issue is whether the challenged statement could ‘reasonably have been interpreted as stating actual facts’ about plaintiff,” the court found in favor of Avvo. Among its findings-

  • Avvo’s website contains numerous reminders that the Avvo rating system is subjective. The ratings are described as an “assessment” or “judgment,” two words that imply some sort of evaluative process.
  • Neither the nature of the information provided nor the language used on the website would lead a reasonable person to believe that the ratings are a statement of actual fact.
  • [T]he Avvo rating system is an abstraction. (“No reasonable consumer would believe that Avvo is asserting that plaintiff Browne is a ‘5.5.’”)
  • [D]efendants’ rating is . . . virtually impossible to prove wrong.
  • Defendants fairly describe the nature of the information on which Avvo’s ratings are based and make it clear that (a) there may be other relevant data that the rating does not consider and (b) the conversion of the available information into a number involves judgment, interpretation, and assessment.
  • Consumers and the attorneys profiled have access to the underlying information and, while they may disagree with a particular rating and/or the implied comparisons drawn therefrom, “[t]here is no objective standard by which one can measure an advocate’s abilities with any certitude or determine conclusively the truth or falsity of [Avvo’s] statements . . . .”

Thus “[t]o the extent that [plaintiffs] seek to prevent the dissemination of opinions regarding attorneys and judges . . . the First Amendment precludes their cause of action.”

The opinion also includes an analysis and rejection of related claims under the CPA (plaintiffs also argued that (i) Avvo mischaracterized its rating systems, (ii) some of the data included in profiles is inaccurate, and (iii) Avvo’s overall business model is coercive). The court declined to address Avvo’s Section 230 defense, noting that “[p]laintiffs have disavowed any claim based on content that Avvo obtained from a third-party.”

Interestingly, the court seemed to leave the door open to claims against Avvo by individuals who rely on Avvo ratings to their detriment (“Consumers who were misled by the information and ratings provided by Avvo are the direct victims of the alleged wrongdoing.”) However, the remark was made while observing the remoteness of plaintiffs’ asserted damages, and may more properly be construed to mean that consumers directly harmed by an Avvo-rated attorney’s conduct would have a stronger position under the CPA than the plaintiffs do here, and that such a consumer claim would be made against the subject attorney.

Plaintiffs’ request for leave to amend their complaint was denied, so perhaps the Ninth Circuit will be the next stop for their claims.

Kudos to Avvo, which has responded to the decision on its blog. And thank you to Venkat Balasubramani for notifying me last night of Judge Lasnik’s ruling.