Divino Group LLC et al v. Google LLC et al

Filing 65

Order by Magistrate Judge Virginia K. DeMarchi granting 25 Motion to Dismiss. Plaintiffs' amended complaint due by 1/20/2021. (vkdlc1S, COURT STAFF) (Filed on 1/6/2021)

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Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 1 of 19 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 DIVINO GROUP LLC, et al., Plaintiffs, 9 10 United States District Court Northern District of California 11 12 Case No. 19-cv-04749-VKD ORDER GRANTING MOTION TO DISMISS v. GOOGLE LLC, et al., Re: Dkt. No. 25 Defendants. 13 14 Plaintiffs Divino Group LLC d/b/a GlitterBombTV.com, Chris Knight, Celso Dulay, 15 Cameron Stiehl, BriaAndChrissy LLC d/b/a “BriaAndChrissy,” Bria Kam, Chrissy Chambers, 16 Chase Ross, Brett Somers, Lindsey Amer, Stephanie Frosch, Sal Cinquemani, Tamara (Sheri) 17 Johnson, and Greg Scarnici assert the following claims against defendants Google LLC 18 (“Google”) and YouTube, LLC (“YouTube”): (1) violation of plaintiffs’ First Amendment rights 19 under 42 U.S.C. § 1983; (2) violation of Article I, section 2 of the California Constitution; (3) 20 violation of the Unruh Act, California Civil Code § 51, et seq.; (4) unfair competition under 21 California Business and Professions Code §§ 17200, et seq.; (5) breach of the implied covenant of 22 good faith and fair dealing; and (6) false advertising and false association in violation of the 23 Lanham Act, 15 U.S.C. § 1125, et seq. In addition, plaintiffs seek a declaration that Section 230 24 of the Communications Decency Act (“CDA”), 47 U.S.C. § 230(c), on which plaintiffs expect 25 defendants to rely as an affirmative defense, is unconstitutional. Finally, plaintiffs separately seek 26 a declaration that defendants have violated the rights and obligations pled as the bases for all of 27 defendants’ other claims. Dkt. No. 20. 28 Defendants move to dismiss all claims in the second amended complaint (“SAC”) for Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 2 of 19 1 failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and as barred under Section 2 230 of the CDA. Dkt. No. 25. The Court heard oral argument on defendants’ motion on June 2, 2020. Dkt. No. 58. 3 4 Having considered the parties’ submissions and the arguments made at the hearing, the Court 5 grants defendants’ motion to dismiss the SAC with limited leave to amend. 6 I. BACKGROUND1 YouTube’s Services 7 A. 8 A subsidiary of Google, YouTube is the world’s most widely used online video hosting 9 platform. Dkt. No. 20 ¶¶ 46, 50, 53. Content creators may upload videos to the YouTube platform without charge, enabling YouTube’s billions of users to view them, comment on them, 11 United States District Court Northern District of California 10 and subscribe to their favorite creators’ channels. Id. ¶¶ 52-53. Use of YouTube’s services requires agreement to YouTube’s Terms of Service, which 12 13 incorporate YouTube’s Community Guidelines.2 Id. ¶¶ 10, 14, 59. The Terms of Service in 14 operation at the time the SAC was filed state that “YouTube reserves the right to discontinue any 15 aspect of the Service at any time” and that “YouTube reserves the right to remove Content without 16 prior notice.”3 Dkt. No. 25-1, Ex. 2 at 2, 3. YouTube’s Restricted Mode 17 B. 18 To accommodate sensitive viewers, YouTube offers a feature called Restricted Mode, an 19 optional, opt-in setting that allows viewers to screen out content flagged as age-restricted or 20 “potentially adult.” Dkt. No. 20 ¶¶ 77-79. Defendants employ Restricted Mode to “limit[] viewer 21 22 23 24 25 26 27 28 1 Unless otherwise noted, the following factual allegations are taken from the SAC and from documents that are incorporated by reference in the SAC or that are the subject of judicial notice. 2 The SAC repeatedly refers to the Terms of Service then in effect and the incorporated Community Guidelines, and these documents serve as the basis for plaintiffs’ claims. See, e.g., Dkt. No. 20 ¶ 331 (“Plaintiffs and Defendants entered into written contracts in which Defendants agreed to provide YouTube platform access, hosting, streaming, and advertising services to Plaintiffs.”). The Court may properly consider these documents even though they are not attached to the SAC. See Section II.A. The version of YouTube’s Terms of Service in operation at the time defendants filed their motion to dismiss states: “YouTube is under no obligation to host or serve Content.” Dkt. No. 251, Ex. 1 at 2, 3. 2 3 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 3 of 19 access by younger, sensitive audiences to video content that contains certain specifically 2 enumerated ‘mature’ aspects,” including: talking about drug use or abuse or drinking alcohol in 3 videos; overly detailed conversations about or depictions of sex or sexual activity; graphic 4 descriptions of violence, violent acts, or natural disasters or tragedies; mature subjects such as 5 terrorism, war, crime, and political conflicts resulting in death or serious injury, even if no graphic 6 imagery is shown; profane language; or incendiary and demeaning content directed toward an 7 individual or group. Id. ¶¶ 77, 85. Videos may qualify for Restricted Mode in two ways: (1) 8 YouTube’s software may automatically designate a video for Restricted Mode based on an 9 examination of “signals,” such as the video’s metadata, title, and language used in the video, or (2) 10 a team of human reviewers may deem a video to have violated YouTube’s Community Guidelines 11 United States District Court Northern District of California 1 after a viewer “flags” the video as “inappropriate.” Id. ¶ 81; see also Dkt. No. 25-1, Ex. 12 12 (YouTube Help website discussing Restricted Mode); Prager Univ. v. Google LLC (“Prager III”), 13 951 F.3d, 991, 996 (9th Cir. 2020) (describing Restricted Mode). Restricted Mode “operates in 14 tandem with separate, more stringent ‘Age Based Restriction’ filtering criteria, intended to block 15 all mature content to viewers under the age of 18,” which focuses on vulgar language (including 16 sexually explicit language or excessive profanity), violence and disturbing imagery, nudity and 17 sexually suggestive content, or portrayal of harmful or dangerous activities. Dkt. No. 20 ¶ 82. Of 18 YouTube’s daily views, 1.5% (or approximately 75 million of the nearly 5 billion daily views) are 19 from viewers who have activated Restricted Mode. Id. ¶ 80. YouTube’s Advertising Policies 20 C. 21 YouTube allows content creators whose channels meet certain minimum viewership 22 requirements to earn revenue from, or “monetize,” their videos by running advertisements with 23 them as part of the YouTube Partner Program. To be eligible for monetization, content creators 24 are required to agree to certain additional terms of service, including YouTube’s Partner Program 25 Terms and the Google AdSense Terms of Service.4 See Dkt. No. 20 ¶ 331; Dkt. No. 25-1, Exs. 6, 26 10. Creators seeking to monetize their videos must also agree to comply with YouTube’s 27 28 4 These documents are also incorporated by reference into the SAC. See Section II.A. 3 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 4 of 19 1 monetization policies, including YouTube’s advertiser-friendly content guidelines. See Dkt. No. 2 20 ¶¶ 152, 248, 331; Dkt. No. 25-1, Exs. 5-11. YouTube uses automated software to identify 3 content it deems inappropriate for advertising. Content creators may appeal a decision finding 4 their content inappropriate for advertising and may request further review. See Dkt. No. 20 ¶¶ 94- 5 95; Dkt. No. 25-1, Ex. 9 at 1. 6 The YouTube Partner Program Terms provide that “YouTube is not obligated to display 7 any advertisements alongside your videos and may determine the type and format of ads available 8 on the YouTube Service.” Dkt. No. 25-1, Ex. 6 at 1. The AdSense Terms of Service state that 9 Google reserves the rights to “refuse or limit [a content creator’s] access” to advertising services 10 and to “refuse to provide” those services in connection with a creator’s content. Id., Ex. 10 at 1. Summary of Plaintiffs’ Allegations United States District Court Northern District of California 11 D. 12 Plaintiffs are Lesbian, Gay, Bisexual, Transgender, Transsexual or Queer (“LGBTQ+”) 13 content creators who use YouTube’s service. Dkt. No. 20 ¶¶ 1, 35-44. Each plaintiff operates or 14 contributes to at least one YouTube channel that posts content related to LGBTQ+ interests. Id. 15 Plaintiffs have collectively uploaded thousands of videos to YouTube. Id. ¶¶ 35, 37-41. At least 16 some plaintiffs have sought to monetize their content by participating in defendants’ advertisement 17 programs. See id. ¶¶ 55, 89, 122, 132-135, 144, 170, 225, 228, 230, 233. 18 Plaintiffs allege that YouTube “holds itself out as one of the most important and largest 19 public forums for the expression of ideas and exchange of speech available to the public,” and that 20 defendants have represented that “YouTube is, has been and will remain the premier space for 21 freedom of expression in video content on the Internet.” Id. ¶¶ 46, 57; see also id. ¶ 59 22 (“Google/YouTube claim to be the largest public forum for video-based speech in California, the 23 United States, and the world . . . .”). Specifically, plaintiffs point to defendants’ statements that 24 their “mission” is to “give people a voice” in a “place to express yourself” and in a “community 25 where everyone’s voice can be heard,” and to defendants’ promises that “everyone’s voice” will 26 be heard, subject only to neutral, content-based rules and filtering that “apply equally to all” 27 regardless of the viewpoint, identity, or source of the speaker. Id. ¶¶ 59-60. Plaintiffs also point 28 to YouTube’s testimony before Congress asserting that it enforces its policies in a neutral manner. 4 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 5 of 19 1 2 Id. ¶ 61. Plaintiffs allege that, despite YouTube’s purported viewpoint neutrality, defendants have 3 discriminated against plaintiffs based on their sexual or gender orientation, identity, and/or 4 viewpoints by censoring or otherwise interfering with certain videos that plaintiffs uploaded to 5 YouTube. Id. ¶¶ 3, 7. According to plaintiffs, this censorship takes the form of placing age 6 restrictions on some of plaintiffs’ videos and/or limiting access to their videos through YouTube’s 7 Restricted Mode setting. Id. ¶¶ 28, 167, 170, 185, 195-197. Specifically, plaintiffs allege that 8 defendants have restricted access to some of plaintiffs’ videos based on defendants’ discriminatory 9 animus toward plaintiffs’ sexual orientation, gender, or political identities or viewpoints. Id. ¶¶ 19-21, 299 (“No compelling, significant, or legitimate reason justifies restricting or 11 United States District Court Northern District of California 10 demonetizing Plaintiffs’ videos.”). Plaintiffs also allege that defendants have “demonetized” some 12 of their videos—by preventing advertisements from running on those videos—in a viewpoint- 13 discriminatory manner. See id. ¶¶ 26.f, 100, 158, 164, 170, 180, 193, 217, 225, 233, 236, 247. 14 Plaintiffs do not allege, however, that YouTube permanently removed any of their videos. 15 Plaintiffs allege only that some of their videos have been demonetized or censored (in the form of 16 an age restriction or exclusion through the Restricted Mode setting) based on defendants’ 17 intolerance towards plaintiffs’ gender, sexual orientation, and political viewpoints. 18 In addition to Restricted Mode, age restriction filtering, and demonetization, plaintiffs 19 allege that YouTube has engaged in other discriminatory acts based on their LGTBQ+ identities 20 and viewpoints. These include advertising restrictions, use of discriminatory artificial intelligence 21 and algorithms, demonetizing channels wholesale, “shadow banning” (i.e., not showing videos in 22 search results), deleting LGBTQ+ video thumbnails, preventing subscribers from receiving 23 notifications of plaintiffs’ new videos, excluding LGBTQ+ content from recommended “Up Next” 24 content, recommending anti-LGBTQ+ content in the “Up Next” feature, playing anti-LGBTQ+ 25 advertisements immediately before plaintiffs’ videos, and permitting anti-LGBTQ+ comments to 26 appear on plaintiffs’ content. Id. ¶¶ 88-118. 27 28 Plaintiffs also allege that defendants have begun producing and distributing content that competes with plaintiffs’ content and therefore have a financial motivation to behave in 5 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 6 of 19 1 anticompetitive ways. Id. ¶¶ 69-75. Plaintiffs say these anticompetitive acts include use of 2 filtering through Restricted Mode, age restriction, and use of AI algorithms as described above, 3 restricting monetization or advertising reach, replacing thumbnails, removing or preventing users 4 from subscribing to plaintiffs’ channels, and excluding LGBTQ+ content from the “Up Next” 5 feature—all in a manner that disadvantages plaintiffs and favors defendants’ preferred content. 6 Id. ¶¶ 75, 92, 95, 103, 160, 165. 7 II. 8 LEGAL STANDARD “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation 10 Force v. Salazar, 646 F.3d 1240, 1241–42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 11 United States District Court Northern District of California 9 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts 12 as true all well-pled factual allegations and construes them in the light most favorable to the 13 plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). While a 14 complaint need not contain detailed factual allegations, it “must contain sufficient factual matter, 15 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 16 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is 17 facially plausible when it “allows the court to draw the reasonable inference that the defendant is 18 liable for the misconduct alleged.” Id. 19 The Court is not required to “‘assume the truth of legal conclusions merely because they 20 are cast in the form of factual allegations.’” Prager Univ. v. Google LLC (“Prager I”), No. 17- 21 CV-06064-LHK, 2018 WL 1471939, at *3 (N.D. Cal. Mar. 26, 2018) (quoting Fayer v. Vaughn, 22 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam)). Nor does the Court accept allegations that 23 contradict documents attached to the complaint or incorporated by reference, Gonzalez v. Planned 24 Parenthood of L.A., 759 F.3d 1112, 1115 (9th Cir. 2014), or that rest on “allegations that are 25 merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead 26 Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). 27 28 A court generally may not consider any material beyond the pleadings when ruling on a Rule 12(b)(6) motion. If matters outside the pleadings are considered, “the motion must be treated 6 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 7 of 19 1 as one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d). However, documents 2 appended to the complaint, incorporated by reference in the complaint, or which properly are the 3 subject of judicial notice may be considered along with the complaint when deciding a Rule 4 12(b)(6) motion. Khoja v. Orexigen Therapeutics, 899 F.3d 988, 998 (9th Cir. 2018); see also Hal 5 Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). 6 Likewise, a court may consider matters that are “capable of accurate and ready determination by 7 resort to sources whose accuracy cannot reasonably be questioned.” Roca v. Wells Fargo Bank, 8 N.A., No. 15-cv-02147-KAW, 2016 WL 368153, at *3 (N.D. Cal. Feb. 1, 2016) (quoting Fed. R. 9 Evid. 201(b)). 10 III. DISCUSSION United States District Court Northern District of California 11 A. 12 Plaintiffs ask the Court to take judicial notice of an Executive Order issued on May 28, Request for Judicial Notice 13 2020 entitled “Preventing Online Censorship.” Dkt. No. 57. Defendants do not object to 14 plaintiffs’ request. Nevertheless, the Court finds the Executive Order has no bearing on 15 defendants’ motion to dismiss, and therefore denies the request. See infra Section III.D. 16 17 18 B. Federal Claims 1. First Amendment claim Plaintiffs assert a violation of their First Amendment rights under 42 U.S.C. § 1983. Dkt. 19 No. 20 ¶¶ 283-303. To state a claim under § 1983, plaintiffs must plead facts showing that a 20 person acting under color of state law proximately caused a violation of their constitutional or 21 other federal rights. Crumpton v. Gates, 947 F.2d 1418, 1420 (9th Cir. 1991). Defendants argue 22 that plaintiffs’ § 1983 claim necessarily fails because defendants are private entities, not state 23 actors. Dkt. No. 25 at 13–16; Dkt. No. 37 at 3–4. 24 Plaintiffs do not dispute that defendants are private entities. However, they contend that 25 defendants should be considered state actors subject to First Amendment constraints for two 26 reasons. First, plaintiffs argue that defendants have unreservedly “designated” YouTube as a 27 public forum for free expression and have therefore taken on the traditional and exclusive 28 government function of regulating speech in that forum according to the requirements of the First 7 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 8 of 19 1 Amendment. Dkt. No. 36 at 33. Second, plaintiffs say that by invoking the protections of a 2 federal statute—Section 230 of the CDA—to unlawfully discriminate against plaintiffs and/or 3 their content, defendants’ private conduct becomes state action “endorsed” by the federal 4 government. Id. at 31. 5 Defendants’ first theory is expressly foreclosed by the Ninth Circuit’s recent decision in 6 Prager University v. Google LLC (“Prager III”), which held that YouTube’s hosting of speech on 7 a private platform is not a traditional and exclusive government function. 951 F.3d, 991, 997–98 8 (9th Cir. 2020). Observing that its conclusion involved a “straightforward application of the First 9 Amendment,” the Ninth Circuit noted that the Supreme Court has consistently declined to find that private entities engage in state action, except in limited circumstances. Id. at 997–99. Most 11 United States District Court Northern District of California 10 recently, the Supreme Court summarized its relevant precedent as follows: 12 13 14 15 16 17 18 19 20 [W]hen a private entity provides a forum for speech, the private entity is not ordinarily constrained by the First Amendment because the private entity is not a state actor. The private entity may thus exercise editorial discretion over the speech and speakers in the forum. . . . Providing some kind of forum for speech is not an activity that only governmental entities have traditionally performed. Therefore, a private entity who provides a forum for speech is not transformed by that fact alone into a state actor. After all, private property owners and private lessees often open their property for speech. . . . In short, merely hosting speech by others is not a traditional, exclusive public function and does not alone transform private entities into state actors subject to First Amendment constraints. Manhattan Cmty. Access Corp. v. Halleck, 139 S. Ct. 1921, 1930 (2019). To the extent plaintiffs suggest that defendants have effectively declared themselves the 21 equivalent of “state actors” and must be treated as such for purposes of the First Amendment, 22 plaintiffs cite no authority for such a radical proposition. See Prager III, 951 F.3d at 999 23 (“Whether a property is a public forum is not a matter of election by a private entity.”); Florer v. 24 Congregation Pidyon Shevuyim, N.A., 639. F.3d 916, 922 (9th Cir. 2011) (“We start with the 25 presumption that conduct by private actors is not state action. [Plaintiff] bears the burden of 26 establishing that Defendants were state actors.”) (internal citation omitted). The Court notes that 27 the Ninth Circuit in Prager III specifically rejected plaintiffs’ arguments, based on Marsh v. 28 Alabama, 326 U.S. 501 (1946), that the ubiquity of YouTube’s service is analogous to a private 8 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 9 of 19 1 entity assuming the traditional functions of government in operating a company town. Prager III, 2 951 F.3d at 998. 3 Plaintiffs’ second theory—that the availability of protections under Section 230 of the 4 CDA amounts to government endorsement of defendants’ alleged discrimination—fails for at least 5 two reasons. First, plaintiffs’ thesis is that, by virtue of this federal statute, the federal government 6 endorses YouTube’s alleged discrimination. However, § 1983 applies only to action taken under 7 color of state law—not federal law. See Kali v. Bowen, 854 F.2d 329, 331 (9th Cir. 1988) (noting 8 that “[f]ederal officials who violate federal rights protected by § 1983 generally do not act under 9 ‘color of state law’”) (internal quotation marks and citation omitted); Lewis v. Google LLC, 461 F. Supp. 3d 938, 955 (N.D. Cal. May 20, 2020) (“[E]ven if Plaintiff’s allegations were sufficient to 11 United States District Court Northern District of California 10 hold [Defendants] liable for conduct by the federal and by foreign governments, such allegations 12 do not allege conduct under color of state law.”) (emphasis original). A claim for a federal 13 violation of constitutional rights must be brought as a Bivens claim. See Bivens v. Six Unknown 14 Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971). Plaintiffs do not plead a Bivens 15 claim here. 16 Second, while a private entity may be considered a state actor when the government 17 compels the private entity to take a particular action, Blum v. Yaretsky, 457 U.S. 991 (1982), 18 plaintiffs fail to plead any such compulsion. In Skinner v. Railway Labor Executives’ Association, 19 489 U.S. 602 (1989), on which plaintiffs rely, federal regulations (1) required private railroad 20 companies to administer drug and alcohol tests to railroad employees involved in certain railway 21 accidents and (2) authorized but did not require such tests for employees who violated certain 22 safety rules in other circumstances. 489 U.S. at 606–11. The Supreme Court held that the 23 regulations mandating testing constituted government action within the purview of the Fourth 24 Amendment because a railroad that complies with such regulations does so by “compulsion of 25 sovereign authority” and therefore must be viewed as an instrument or agent of the government. 26 Id. at 614. The Supreme Court further held that the regulations allowing but not mandating testing 27 nevertheless established that the government “did more than adopt a passive position toward the 28 underlying private conduct” but had instead “encourage[ed], endors[ed], and participat[ed]” in the 9 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 10 of 19 1 testing. Id. at 615–16. Here, by contrast, nothing about Section 230 is coercive. As defendants 2 persuasively argue, Section 230 reflects a deliberate absence of government involvement in 3 regulating online speech: “Section 230 was enacted, in part, to maintain the robust nature of 4 Internet communication, and accordingly, to keep government interference in the medium to a 5 minimum.” Batzel v. Smith, 333 F.3d 1018, 1027 (9th Cir. 2003) (internal quotation marks and 6 citation omitted) (emphasis added); see also 47 U.S.C. § 230(b)(2) (“It is the policy of the United 7 States . . . to preserve the vibrant and competitive free market that presently exists for the Internet 8 and other interactive computer services, unfettered by Federal or State regulation.”) (emphasis 9 added). Unlike the regulations in Skinner, Section 230 does not require private entities to do anything, nor does it give the government a right to supervise or obtain information about private 11 United States District Court Northern District of California 10 activity. Furthermore, nothing in the SAC suggests that any governmental actor has actively 12 encouraged, endorsed, or participated in particular conduct by YouTube. Specifically, plaintiffs 13 do not allege that YouTube applied Restricted Mode designations to some of plaintiffs’ videos or 14 demonetized them “by compulsion of sovereign authority,” or that the United States “actively 15 encouraged, endorsed, and participated” in discriminatory decisions to apply Restricted Mode 16 designations to certain videos or to make them ineligible for monetization. 17 Plaintiffs suggest that the mere availability of Section 230 immunity demonstrates that the 18 government encourages discrimination. Dkt. No. 36 at 32. In Moose Lodge No. 107 v. Irvis, the 19 Supreme Court expressly rejected a similar theory of state action in the context of an alleged 20 Fourteenth Amendment violation: 21 27 The Court has never held, of course, that discrimination by an otherwise private entity would be violative of the Equal Protection Clause if the private entity receives any sort of benefit or service at all from the State, or if it is subject to state regulation in any degree whatever. Since state-furnished services include such necessities of life as electricity, water, and police and fire protection, such a holding would utterly emasculate the distinction between private as distinguished from state conduct set forth in The Civil Rights Cases, supra, and adhered to in subsequent decisions. Our holdings indicate that where the impetus for the discrimination is private, the State must have ‘significantly involved itself with invidious discriminations,’ in order for the discriminatory action to fall within the ambit of the constitutional prohibition. 28 407 U.S. 163, 172–73 (1972) (internal citation omitted). In that case, the Supreme Court held that 22 23 24 25 26 10 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 11 of 19 1 a state liquor control board’s issuance of a liquor license to a private club that refused to serve a 2 Black man because of his race did not constitute the state’s “significant involve[ment] with 3 invidious discrimination.” Id. at 175–77 (internal quotation marks omitted). 4 Citing Roberts v. AT&T Mobility LLC, 877 F.3d 833 (9th Cir. 2017) and Denver Area 5 Educational Telecommunications Consortium, Inc. v. FCC, 518 U.S. 727 (1996), plaintiffs 6 nevertheless argue that government action exists where Congress permits selective censorship of 7 particular speech by a private entity. Dkt. No. 45 at 4–5. This argument is not persuasive. As the 8 Ninth Circuit has explained, Denver Area does not depart from the Supreme Court’s long-standing 9 state action jurisprudence: 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 We read Denver Area very narrowly. The case—its six opinions, with a majority opinion as to only one issue, plurality opinions as to others, and separate concurring and dissenting opinions—is “the epitome of a splintered opinion.” . . . Moreover, the plurality opinion on which Plaintiffs rely is not binding. Thus, if any controlling state action analysis emerged from Denver Area, it would be the “common denominator” of the four-Justice plurality opinion and Justice Kennedy’s opinion, joined by Justice Ginsburg—the only opinions to explicitly address state action. . . . Justice Kennedy, joined by Justice Ginsburg, wrote: In [two of the challenged provision], Congress singles out one sort of speech for vulnerability to private censorship in a context where content-based discrimination is not otherwise permitted. The plurality at least recognizes this as state action, avoiding the mistake made by the Court of Appeals. . . . That is, state action exists when “Congress singles out one sort of speech for vulnerability to private censorship in a context where content-based discrimination is not otherwise permitted.” . . . This narrow reading also accounts for Denver Area’s unique context, where cable operators were empowered by statute to censor speech on public television, and as a result were “unusually involved” with the government given their monopolistic-like power over cable systems. 23 Roberts, 877 F.3d at 840–41 (internal citations and alterations omitted); see also Prager I, 2018 24 WL 1471939, at *8 (finding that Denver Area did not address the circumstances in which a private 25 property owner must be treated as a state actor for constitutional purposes). Unlike the cable 26 systems operators in Denver Area, YouTube is not a government-regulated entity charged with 27 providing public broadcasting services. And unlike the statute at issue in Denver Area, which 28 permitted cable system operators to ban specific content, Section 230 of the CDA does not single 11 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 12 of 19 1 out particular types of speech as suitable for private censorship. At most, Section 230 provides 2 protection from civil liability for interactive computer service providers who elect to host 3 information provided by another content provider, or who in good faith act to restrict materials 4 that the provider or user considers “obscene, lewd, lascivious, filthy, excessively violent, 5 harassing, or otherwise objectionable,” regardless of whether that material is constitutionally 6 protected. 28 U.S.C. § 230(c); see also Roberts, 877 F.3d at 837 (concluding that a permissive 7 federal statute giving a private entity the choice to arbitrate does not “encourage” arbitration such 8 that the private entity’s conduct is attributable to the government). 9 10 United States District Court Northern District of California 11 12 Accordingly, the Court finds that plaintiffs do not state a claim under 42 U.S.C. § 1983 for violation of the First Amendment because defendants are not state actors. 2. Lanham Act claim In the SAC, plaintiffs assert violations of the Lanham Act, 15 U.S.C. § 1125(a)(1), based 13 on allegations of false association as well as false advertising. Dkt. No. 20 ¶¶ 337-348. In 14 particular, plaintiffs say that defendants’ improper application of Restricted Mode to their videos 15 constitutes false advertisement, because it degrades and stigmatizes plaintiffs’ content by falsely 16 labeling it as or implying that it contains “shocking,” “inappropriate,” “offensive,” “sexually 17 explicit,” or “obscene” content or is otherwise unfit for minors. Id. ¶¶ 344-345. Additionally, 18 plaintiffs say that defendants’ inclusion of homophobic or hateful content in close proximity to 19 plaintiffs’ content through video recommendations, playing anti-LGBTQ+ ads on their videos, and 20 permitting hateful comments on plaintiffs’ videos as described above constitutes false association, 21 because it misleads viewers as to plaintiffs’ association or connection with the hateful anti- 22 LGBTQ+ speech or viewpoints. Id. ¶¶ 341, 346. 23 At the hearing on defendants’ motion to dismiss, plaintiffs withdrew their claim based on 24 false association. Dkt. No. 62 at 29:9-13 (“THE COURT: . . . Do the plaintiffs also allege an 25 1125(a)(1)(A) false association claim or are you limiting your claim under the Lanham Act to 26 false advertisement? MR. OBSTLER: At this point we’re limiting under false advertising.”). In 27 addition, plaintiffs appear to have abandoned allegations that defendants violate the Lanham Act 28 by describing YouTube as a viewpoint-neutral community that values freedom of expression, as 12 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 13 of 19 1 they do not oppose defendants’ motion to dismiss their claim on this basis. See Dkt. No. 25 at 17– 2 18; Dkt. No. 36 at 24–27.5 Accordingly, the Court considers only whether plaintiffs state a claim 3 for false advertising in violation of the Lanham Act. To establish a claim for false advertising under § 1125(a)(1)(B), plaintiffs must plausibly 4 5 allege that defendants made a false or misleading representation of fact in commercial advertising 6 or promotion about defendants’ own or plaintiffs’ goods, services, or commercial activities. 7 Prager III, 951 F.3d at 999 (citing Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 8 (9th Cir. 1997)). The Ninth Circuit has explained that “commercial advertising or promotion” 9 within the meaning of § 1125(a)(1)(B) requires the following: 10 (1) commercial speech; (2) by a defendant who is in commercial competition with plaintiff; (3) for the purpose of influencing consumers to buy defendant’s goods or services. While the representations need not be made in a “classic advertising campaign,” but may consist instead of more informal types of “promotion,” the representations (4) must be disseminated sufficiently to the relevant purchasing public to constitute “advertising” or “promotion” within that industry. United States District Court Northern District of California 11 12 13 14 Coastal Abstract Serv. Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 735 (9th Cir. 1999). 15 Here, plaintiffs allege that by making their videos inaccessible through application of 16 Restricted Mode, YouTube falsely implies that the videos contain shocking or inappropriate 17 content, such as alcohol or drug abuse; detailed descriptions of sex or sexual activity; graphic 18 descriptions of violence, violent acts, or natural disasters or tragedies; terrorism, war, crime, and 19 political conflicts resulting in death or serious injury; profane language; or incendiary and 20 demeaning content directed toward an individual or group. Dkt. No. 20 ¶¶ 342-346. Plaintiffs 21 22 claim to have been injured “in the form of diverted views, decreased subscriber numbers, and lost advertising revenues, and other harm to channel and video reach, distribution, and monetization.” 23 Dkt. No. 36 at 26. 24 Again, plaintiffs’ theory is foreclosed by the Ninth Circuit’s decision in Prager III. 25 26 27 28 Plaintiffs’ arguments on this point are limited to a single sentence suggesting a decision regarding the viability of a claim based on such allegations is “premature.” Dkt. No. 36 at 27; see also Dkt. No. 62 at 21:81-21 (explaining that “statements about freedom of expression and all” are “not the basis for a Lanham [Act] claim”). 13 5 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 14 of 19 1 Considering precisely the same claim, the Ninth Circuit held that defendants’ statements about 2 videos being unavailable in Restricted Mode were not actionable as “commercial advertising or 3 promotion”; they were simply accurate explanations of the application of defendants’ content 4 review and monitoring procedures. Prager III, 951 F.3d at 1000 (“The statements about 5 Restricted Mode were made to explain a user tool, not for a promotional purpose to ‘penetrate the 6 relevant market’ of the viewing public.”) (quoting Fashion Boutique of Short Hills, Inc. v. Fendi 7 USA, Inc., 314 F.3d 48, 57 (2d Cir. 2002)). In addition, the Ninth Circuit explained that 8 defendants’ decision to make certain videos inaccessible in Restricted Mode did not imply any 9 specific representation, as the Lanham Act requires: 10 [T]he fact that certain PragerU videos were tagged to be unavailable under Restricted Mode does not imply any specific representation about those videos. Although a false advertising claim may be based on implied statements, those statements must be both specific and communicated as to deceive a significant portion of the recipients. The only statement that appears on the platform is that the video is ‘unavailable with Restricted Mode enabled.’ This notice does not have a tendency to mislead, confuse or deceive the public about the nature of PragerU’s videos. United States District Court Northern District of California 11 12 13 14 15 Id. (internal quotation marks, citations, and alterations omitted). Plaintiffs here attempt to distinguish their claims from those in Prager III, arguing that 16 17 they have alleged that defendants directly compete with plaintiffs for viewers and advertisers 18 because they produce and post similar content, and that designating plaintiffs’ videos for 19 Restricted Mode drives views toward defendants’ content instead. Dkt. No. 45 at 1–2. But even if 20 plaintiffs’ allegations of competition are true, plaintiffs rely on the same statements as those the 21 Ninth Circuit considered and rejected in Prager III. Plaintiffs do not explain how the purported 22 competition between plaintiffs and defendants transforms defendants’ explanatory statements into 23 commercial advertising and promotion or into specific representations of fact about particular 24 videos. Accordingly, the Court dismisses plaintiffs’ claim for false advertising under the Lanham 25 26 Act. 27 C. 28 Plaintiffs’ remaining claims are based on California state law. Specifically, plaintiffs State Claims 14 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 15 of 19 1 assert claims for: (1) violation of Article I, section 2 of the California Constitution; (2) violation of 2 the Unruh Act, California Civil Code § 51, et seq.; (3) unfair competition under California 3 Business and Professions Code §§ 17200, et seq.; and (4) breach of the implied covenant of good 4 faith and fair dealing. 5 Where a federal court has original jurisdiction over claims based on the existence of a 6 federal question, the court may exercise supplemental jurisdiction over state law claims if those 7 claims meet the requirements of 28 U.S.C. § 1367(a). In this case, it is not clear whether plaintiffs 8 rely on the exercise of supplemental jurisdiction or some other ground with respect to their state 9 law claims. The SAC does not refer to 28 U.S.C. § 1367(a) but instead refers only to 28 U.S.C. §§ 1331 and 1337(a), both of which address jurisdiction of claims arising under federal law. Dkt. 11 United States District Court Northern District of California 10 No. 20 ¶ 48. Assuming the SAC includes a typographical error and that plaintiffs mean to rely on 12 28 U.S.C. § 1367(a)—and not § 1337(a)—to support an exercise of supplemental jurisdiction over 13 their state law claims, the Court considers whether to do so, given that this order dismisses 14 plaintiffs’ pending federal claims. 15 A court may decline to exercise supplemental jurisdiction where it “has dismissed all 16 claims over which it has original jurisdiction.” 28 U.S.C. § 1367(c)(3); see also Albingia 17 Versicherungs A.G. v. Schenker Int’l, Inc., 344 F.3d 931, 937–38 (9th Cir. 2003), as amended 350 18 F.3d 916 (9th Cir. 2003) (holding that § 1367(c) grants federal courts the discretion to dismiss 19 state law claims when all federal claims have been dismissed). In considering whether to retain 20 supplemental jurisdiction, a court should consider factors such as “economy, convenience, 21 fairness, and comity.” Acri v. Varian Assocs., 114 F.3d 999, 1001 (9th Cir. 1997) (en banc) 22 (citations and internal quotation marks omitted). However, “in the usual case in which all federal- 23 law claims are eliminated before trial, the balance of factors . . . will point toward declining to 24 exercise jurisdiction over the remaining state-law claims.” Carnegie-Mellon Univ. v. Cohill, 484 25 U.S. 343, 350 n.7 (1988). 26 Here, the factors of economy, convenience, fairness, and comity support dismissal of 27 plaintiffs’ remaining state law claims. This case is still at the pleading stage, and no discovery has 28 taken place. Dismissing plaintiffs’ state law theories of relief at this stage conserves federal 15 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 16 of 19 1 judicial resources. Further, the Court finds that dismissal promotes comity, as it enables 2 California courts to interpret questions of state law. This is an especially important consideration 3 here because plaintiffs assert a claim that demands an analysis of the reach of Article I, section 2 4 of the California Constitution and the Unruh Act in the context of content hosted by private 5 entities on the Internet—an area in the which application of those laws is less well-developed. For 6 these reasons, the Court declines to exercise supplement jurisdiction over plaintiffs’ state law 7 claims. 8 9 Although neither party raises the issue, it is unclear whether plaintiffs intend also to assert that this Court has independent original jurisdiction over the entire action under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). Floyd v. Am. Honda Motor Co., Inc., 966 F.3d 11 United States District Court Northern District of California 10 1027, 1035–36 (9th Cir. 2020) (district court erred in focusing only on supplemental jurisdiction 12 under 28 U.S.C. § 1367 and not considering whether plaintiffs’ state law claims met requirements 13 for original jurisdiction under CAFA). Although the SAC contains class action allegations, see 14 Dkt. No. 20 ¶¶ 248-257, plaintiffs do not expressly invoke the Court’s CAFA jurisdiction by name 15 or by citation to the statute. See Dkt. No. 20 ¶ 48. However, even if plaintiffs had cited § 1332(d), 16 they have not adequately pled CAFA jurisdiction, which requires minimal diversity, 100 or more 17 putative class members, and more than $5 million in controversy. 28 U.S.C. § 1332(d). Plaintiffs 18 say that they have lost revenue as the result of defendants’ actions, but they do not plead an 19 aggregate amount of damages, and they refer only in a conclusory manner to an amount in 20 controversy exceeding $5 million. Id. ¶¶ 48, 157, 173-175, 190, 211, 217, 234. Because plaintiffs 21 do not expressly invoke CAFA jurisdiction and do not allege facts that plausibly support such 22 jurisdiction, the Court does not exercise jurisdiction over plaintiffs’ state law claims under CAFA 23 at this time. 24 In sum, the Court declines to exercise supplemental jurisdiction under § 1367(a) over 25 plaintiffs’ state law claims and instead dismisses those claims without prejudice. The Court will 26 consider exercising supplemental jurisdiction if and when plaintiffs successfully plead a federal 27 claim for relief. The Court also finds no basis to exercise original jurisdiction under § 1332(d). 28 Plaintiffs may amend their complaint to attempt to plead CAFA jurisdiction under § 1332(d) if 16 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 17 of 19 1 they wish. 2 D. 3 Plaintiffs assert a claim seeking a declaration that Section 230 of the CDA is Claim for Declaratory Relief Regarding CDA Section 230 Immunity 4 unconstitutional. Dkt. No. 20 ¶¶ 258-282; Dkt. No. 36 at 19–21. Defendants move to dismiss all 5 claims in the SAC as barred under Section 230 of the CDA. Dkt. No. 35 at 7–13. For the reasons 6 explained below, the Court dismisses plaintiffs’ claim for declaratory relief and does not consider 7 defendants’ contention that all of plaintiffs’ claims are barred under Section 203. 8 Section 230 of the CDA “immunizes providers of interactive computer services against liability arising from content created by third parties . . . .” Fair Hous. Council of San Fernando 10 Valley v. Roommates.com, LLC, 521 F.3d 1157, 1162 (9th Cir. 2008) (en banc). “[A]ny activity 11 United States District Court Northern District of California 9 that can be boiled down to deciding whether to exclude material that third parties seek to post 12 online is perforce immune under section 230.” Id. at 1170–71. Immunity under Section 230 13 “protect[s] websites not merely from ultimate liability, but [also] from having to fight costly and 14 protracted legal battles.” Id. at 1175. Plaintiffs contend that Section 230 immunizes constitutional 15 violations and that it is, therefore, unconstitutional. Dkt. No. 36 at 20–21. 16 The Court need not reach the question of whether Section 230 immunity applies to bar 17 plaintiffs’ claims or whether the statute is unconstitutional. First, “declaratory relief is not an 18 independent cause of action” but rather only a remedy. VIA Techs., Inc. v. SONICBlue Claims 19 LLC, No. C 09-2109 PJH, 2010 WL 2486022, at *3 (N.D. Cal. June 16, 2010); see also Fiedler v. 20 Clark, 714 F.2d 77, 79 (9th Cir. 1983); Prager I, 2018 WL 1471939, at *2 n.2; Spangler v. Selene 21 Fin. LP, No. 16-cv-05103-WHO, 2016 WL 5681311, at *7 (N.D. Cal. Oct. 3, 2016). To the 22 extent plaintiffs’ first claim for declaratory relief depends on defendants’ alleged violation of their 23 First Amendment rights, plaintiffs have failed to state a claim for such a violation in the first 24 instance. See supra Section III.B.1. The Court therefore also dismisses plaintiffs’ related claim 25 for declaratory relief. Prager I, 2018 WL 1471939, at *9 (granting motion to dismiss claim for 26 First Amendment violation and claim for declaratory relief, to the extent that it is premised on a 27 First Amendment violation); Lewis, 461 F. Supp. 3d at 963 (dismissing claim for declaratory relief 28 reliant on federal claims because plaintiff failed to state the federal claims). 17 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 18 of 19 1 Second, Section 230 immunity is properly viewed and analyzed as an affirmative defense in the context of this action. Here, plaintiffs appear to have included a claim for declaratory relief 3 in anticipation of defendants’ assertion of Section 230 immunity as an affirmative defense to 4 plaintiffs’ claims. “[U]sing the Declaratory Judgment Act to anticipate an affirmative defense is 5 not ordinarily proper, and numerous courts have refused to grant declaratory relief to a party who 6 has come to court only to assert an anticipatory defense.” Veoh Networks, Inc. v. UMG 7 Recordings, Inc., 522 F. Supp. 2d 1265, 1271 (S.D. Cal. 2007); see also 10B Fed. Prac. & Proc. 8 Civ. § 2758 (4th ed.) (“[I]t is not the function of the federal declaratory action merely to anticipate 9 a defense that otherwise could be presented in a state action.”). Dismissal of a declaratory relief 10 claim intended to anticipate an affirmative defense is appropriate, particularly where, as here, the 11 United States District Court Northern District of California 2 Court need not consider the affirmative defense in order to resolve defendants’ motion to dismiss 12 plaintiffs’ other claims. See Veoh Networks, 522 F. Supp. 2d at 1272. 13 Finally, the Court bears in mind the doctrine of constitutional avoidance. “If there is one 14 doctrine more deeply rooted than any other in the process of constitutional adjudication, it is that 15 we ought not to pass on questions of constitutionality . . . unless such adjudication is 16 unavoidable.” Dep’t of Com. v. U.S. House of Representatives, 525 U.S. 316, 343 (1999) (quoting 17 Spector Motor Serv. v. McLaughlin, 323 U.S. 101, 105 (1944)). Because the Court finds that 18 plaintiffs have not stated a federal claim and declines supplemental jurisdiction over the currently 19 pled state law claims, see supra Section III.C, addressing the constitutional question plaintiffs 20 raise is not appropriate at this juncture. 21 E. 22 Plaintiffs’ eighth claim for declaratory relief is based on all allegations that precede it in Omnibus Claim for Declaratory Relief 23 the SAC. See Dkt. No. 20 ¶ 349. In this claim, plaintiffs ask for a declaration that defendants 24 have violated the U.S. Constitution, the California Constitution, the Unruh Civil Rights, California 25 Business and Professions Code §§ 17200, et seq., the Lanham Act, and the express and implied 26 terms of the parties’ contracts. Id. ¶ 350. Putting aside the impropriety of pleading such an 27 omnibus claim for declaratory relief, the Court dismisses plaintiffs’ eighth claim for declaratory 28 relief because plaintiffs have not stated any federal claims over which the Court may exercise 18 Case 5:19-cv-04749-VKD Document 65 Filed 01/06/21 Page 19 of 19 1 jurisdiction, and because the Court declines to exercise supplemental jurisdiction over plaintiffs’ 2 state law claims. See supra Sections III.B-C. 3 F. 4 While leave to amend generally is granted liberally, the Court has discretion to dismiss a Leave to Amend 5 claim without leave to amend if amendment would be futile. Manzarek v. St. Paul Fire & Marine 6 Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008); Rivera v. BAC Home Loans Servicing, L.P., 756 F. 7 Supp. 2d 1193, 1197 (N.D. Cal. 2010) (citing Dumas v. Kipp, 90 F.3d 386, 393 (9th Cir. 1996)). 8 Because the Court finds that amendment would be futile as to plaintiffs’ § 1983 claim for violation 9 of the First Amendment, that claim is dismissed with prejudice. However, the Court cannot say that amendment would be futile as to plaintiffs’ Lanham Act false advertising claim. Accordingly, 11 United States District Court Northern District of California 10 the Court gives plaintiffs leave to amend their Lanham Act false advertising claim. 12 Because the Court declines to exercise supplemental jurisdiction over plaintiffs’ state law 13 claims, those claims are dismissed without prejudice. If plaintiffs choose to amend their Lanham 14 Act claim as provided in this order, they may also reassert their state law claims at the same time. 15 However, plaintiffs may not assert any new federal or state claims absent leave of Court upon a 16 successful motion for leave to amend. 17 IV. 18 19 20 21 CONCLUSION For the foregoing reasons, the Court grants defendants’ motion to dismiss. Plaintiffs may file an amended complaint by January 20, 2021. IT IS SO ORDERED. Dated: January 6, 2021 22 23 VIRGINIA K. DEMARCHI United States Magistrate Judge 24 25 26 27 28 19

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