The 100 Million Dollar Lawsuit That Should Void Big Tech’s CDA Immunity

A Ninth Circuit Court of Appeals brief on the Jason Fyk v. Facebook dismissal by a district court makes a strong argument that does not look good on the lower court or social media companies.

The case was originally filed against Facebook by businessman Jason Fyk who said that Facebook is supposed to be “all about connecting people yet all they are doing is disconnecting everyone.”

Fyk said he is “fed up and doing something about it.”  So, he sued Facebook for censorship where he claims the social media giant devalued his pages for monetary gain.

Here’s the rub.  The story Fyk is telling, in this case, goes beyond the question of whether Facebook is a publisher or a platform, which has been the subject of a lot of talk lately.  The argument Fyk is making is that Facebook acted as a “Developer of information,” thus making Facebook an “internet content provider” by legal definition under Section 230(f)(3), and that Facebook is pretty much competing with its own users and there is zero legal immunity for that.

The argument of publisher vs platform is a publisher can be held liable for things published on their site, while a platform gets immunity. The confusion has been that a publisher and a platform both have editorial and publishing ability, whereas a passive publisher that is simply hosting 3rd party content is protected by C(1) of the CDA while active publishing as a “developer of information provided on the internet” in “whole or in part” is NOT protected.

It is widely understood that a platform can censor posts that they find objectionable or break laws, like posting threats of violence or otherwise. Facebook arguably does block speech based on political ideology. The misconception is that to maintain immunity as a platform they cannot block free speech just because they disagree with the post.  Fyk’s points out that: “the CDA C(2)(A) also states ‘even if the material is Constitutionally protected.’ The idea of stopping social media companies exploitation of CDA immunity on Free Speech grounds is slim to none.”

Fyk runs a business based primarily on Facebook, and has built his business up to earn millions of dollars from ad revenues on Facebook.  He once employed 16 people to run his business.

What Fyk is arguing is that Facebook unlawfully restricted the content of his Facebook business pages, then worked to develop HIS content for his competitor by reinstating and revaluing that same EXACT content they had previously deemed objectionable, the plan being to “muscle out” his Facebook posts to make room for sponsored ads that generated more money for Facebook.  In other words, Facebook unpublished 14 million of his fans and claimed he violated Community Standards. Fyk went to a competitor who tried to help get the pages restored. Facebook declined to help Fyk but offered to restore the pages if – and only if – Fyk’s competitor owned them. As soon as the pages were sold, magically the content that was “objectional” to Facebook no longer was objectionable for the competitor, which proved without a doubt that Facebook was lying about it being objectionable in the first place. It was Fyk that Facebook wanted to get rid of, not the content.

The argument Fyk makes is, Facebook’s actions to “develop” (advance, grow, increase) his content for his competitor makes them an “information content provider” which has no immunity under the CDA.  If Fyk wins his argument, Facebook could be subjected to losing its status as a neutral platform, which could prove detrimental for the company.

Facebook’s counter-argument is that Fyk “Plaintiff” had used Facebook’s free online platform to create a series of, among other amusing things, pages dedicated to videos and pictures of people urinating.” Fyk’s brief flushes this factually inaccurate statement out. (pun intended) “Upon information and belief” because, as would have been explained to the District Court had the District Court not deprived Fyk of his literal day in court (i.e., the June 2019 hearing), Fyk does not know much about the business/page because such was not Fyk’s business/page. More specifically, as would have been explained to the District Court (in a fleshing out of footnote 1 of the Response in Opposition to Motion to Dismiss, ER 40 at n. 1, though such explanation should not have been required because the District Court should have been construing the subject matter of footnote 1 in a light most favorable to Fyk in never interspersing the public urination “fact” into the dismissal analysis), Fyk inadvertently included this businesspage in paragraph 22 of the Complaint. See ER 14-15 at ¶ 22. “Inadvertently” because this was not a business/page that Fyk owned, it was a business/page of somebody else bearing the first name “Jason.”  To be clear, Fyk did not own a business/page dedicated to public urination … and, actually, to the contrary, Fyk has reported public urination pages to Facebook as filthy and Facebook did not take action.

Fyk inadvertently transferred an incorrect domain into his complaint, and the court assumed Facebook’s factual assertion was correct, but it was WRONG. The term “take a piss funny” is an often-used Australian term meaning irreverence, poking fun at anything or anyone…the more sacrosanct, the better. You take the piss out of your best friends, your mother, your children, your dog, the priest, the doctor….funny criticisms. He was denied the opportunity to explain the mistake and the district court waywardly dismissed his case without proper review of the facts. In fact, it is the courts’ obligation to see facts in the most favorable light of Fyk during the dismissal stage, which it clearly did not. Fyk never owned the page! To add insult to injury, Fyk has reported several public urination videos including Facebook said that the video does NOT violate their community standards. Apparently, the rules only apply to Fyk and not others.

Fyk earned up to $300,000 a month running humorous pages on Facebook aimed at college students, and in his lawsuit he claims that Facebook “destroyed” his business and coerced him to pay tens of thousands of dollars to promote his web pages.

His case is one of many where Facebook encouraged companies and individuals to build their businesses on Facebook’s platform, often paying Facebook for services to promote their business pages on the site, and then Facebook turns around and screws them by blocking their content for either political or monetary gains.

The brief’s argument starts off: “This court’s review of a district court’s failure to state a claim dismissal with prejudice is de nova.”  De nova means it will start over again.

It goes on: “And dismissal without leave to amend is improper unless it is clear, upon de nova review, that the complaint could not be saved by any amendment.

In other words, the lower district court strongly deviated from the dismissal standard.

The brief argues that in a ruling on a Federal Rule of Civil Procedure, motion to dismiss for failure to state a claim would lack a cognizable legal theory, on its face, and a district court must observe the standard.

It goes on to say: “This lawsuit is about the business strategy employed by Facebook to develop information for select, “high-quality” valued individuals/entities (who pay Facebook more), while fraudulently exploiting the protections of CDA immunity in order to tortiously interfere with businesses’ ability to make money by “disrupt[ing] the[ir] incentives,” thus creating a lawless marketplace immersed in unfair competition.  Put more specifically as to Fyk, this lawsuit is about the several unlawful methods (e.g., fraud, extortion, unfair competition) selectively and discriminatorily employed by Facebook to “develop” Fyk’s “information content” for an entity Facebook values more (Fyk’s competitor, who paid Facebook more) in tortious interference with the economic advantage of an individual Facebook values less (Fyk, who paid Facebook less) and in augmentation of its corporate profit.”

Here’s a copy of the dismissal by the district court:


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