Dangaard v. Instagram, LLC

District Court, N.D. California·Decided September 23, 2024·No. 3:22-cv-01101·Unknown

Opinion

NORTHERN DISTRICT OF CALIFORNIA

JENNIFER ALLBAUGH, and all other No. C 22-01101 WHA similarly situated,

Plaintiffs, ORDER REGARDING DEFENDANTS’ MOTION FOR v. SUMMARY JUDGMENT AND MOTION TO STRIKE OPERATIONS, LLC, META PLATFORMS, INC., and JOHN DOES 1- 10, Defendants.

In this putative class action, plaintiffs allege that defendants are engaged in unfair competition, and intentional interference with contracts and business relationships. Defendants have filed a motion for summary judgment and motion to strike expert testimony. A period of supplemental discovery and briefings was then permitted (Dkt. No. 273). Now that the supplemental filings are complete, the motion for summary judgment is hereby GRANTED, and the motion to strike is GRANTED IN PART. 1. FACTUAL HISTORY Plaintiffs Dawn Dangaard, Kelly Gilbert, and Jennifer Allbaugh are adult entertainment Plaintiffs post links on social media to adult entertainment websites, which allow users to watch plaintiffs’ content for a price. Currently, one of the most heavily used online platforms for adult entertainment is a website called “OnlyFans.” While some of the plaintiffs may have used this adult entertainment website, plaintiffs have also contracted with competitors of OnlyFans. Defendant Meta Platforms, Inc., owns and operates defendants Instagram, LLC, and Facebook, LLC (collectively, “Meta defendants”). John Does One through Ten were employees of Meta defendants when the claims arose. This action included three additional defendants when it was first filed in 2022: Fenix International, Ltd., Fenix Internet, LLC, and Leonid Radvinsky who were associated with OnlyFans. In 2022, the BBC published an interview with an anonymous adult performer and an anonymous adult entertainment platform. The performer stated that their social media account had been flagged by an employee of a social media platform which led to reduced visibility of the account. Plaintiffs’ counsel subsequently received anonymous tips regarding alleged wire transfers affiliated with the Fenix defendants. With this whistleblowing article and anonymous tips, plaintiffs filed the instant action in February 2022 with the following allegations: plaintiffs experienced a precipitous drop in web traffic from 2018 to 2019 which could only be attributed to a blacklisting scheme that was directed towards plaintiffs because they were utilizing adult entertainment platforms that compete with OnlyFans. Plaintiffs allege that defendants conspired in an anticompetitive scheme to boost the popularity of OnlyFans to the detriment of plaintiffs through two tactics: bribery and blacklisting (Second Amd. Compl. ¶¶ 63, 84). Fenix defendants allegedly paid Meta defendants to delete or decrease the visibility of plaintiffs’ accounts and posts on Instagram. In return for accepting bribes from Fenix defendants, Meta defendants allegedly reduced the web traffic of competitors of OnlyFans, in part by suppressing their online visibility. More specifically, plaintiffs allege a blacklisting scheme whereby Meta defendants caused such demotion or removal by manipulating Facebook and Instagram databases to include plaintiffs in lists of dangerous individuals or organizations (“DIO List”). Such lists remove terrorist content. Plaintiffs also allege that Meta defendants share their lists of terrorists with other social media platforms via the “Global Internet Forum to Counter Terrorism” (“GIFCT”) shared hash database. Taken together, plaintiffs allege that both tools “would have served as the ideal training data for a classifier/filtering tool to create this blacklisting effect, particularly in 2018 and 2019. No other tool then in existence could have produced this effect” (Second Amd. Compl. ¶ 61). Plaintiffs argue that this conduct constitutes unfair competition and tortious interference with plaintiffs’ contracts and business relationships (with competitors of OnlyFans). Plaintiffs seek to hold Meta defendants vicariously liable for the actions of Doe defendants. The allegations and claims of relief have shifted throughout the course of this action. This order will therefore briefly review this action’s procedural history. 2. PROCEDURAL HISTORY Plaintiffs filed the original complaint as a putative class action in February 2022 and filed their first amended complaint in September in 2022 (Dkt. No. 4). Meta defendants moved to dismiss all claims under Rule 12(b)(6) and California’s anti-SLAPP statute (Dkt. No. 41). During the hearing for defendant’s motion, plaintiffs informed the Court that they had information outside of the pleadings that may support their claims for bribery and blacklisting. The Court granted plaintiffs leave to file a second amended complaint and ordered defendants to re-brief their motions based on the new complaint. Again, all defendants moved to dismiss the second amended complaint under Rule 12(b)(6). Defendants’ motion to dismiss was denied and an order permitted the case to go forward on the grounds that, at that time, plaintiffs had sufficiently alleged that web-traffic had precipitously dropped off during the relevant period and plaintiffs sufficiently alleged claims of bribery and blacklisting (Dkt. No. 101). Specifically, that order found that the whistleblower article referenced in the second amended complaint supported plaintiffs’ claims (ibid.). For this reason, that same order permitted broad discovery for plaintiffs to take discovery and to further investigate the existence of the alleged bribes. In March 2023, all parties appeared for a case management conference. During that hearing, plaintiffs were ordered to serve subpoenas on several banks and third parties in order to prove up their bribe allegations. Likewise, Meta defendants were permitted to serve plaintiffs with reasonable sets of document requests relating to the bribe allegations. By July 2023, however, plaintiffs withdrew the allegations of bribery because they could “no longer certify that the particular factual contentions . . . will likely have evidentiary support after a reasonable opportunity for further investigation” (Dkt. No. 172). Shortly thereafter, an order dismissed defendants Fenix International Limited, Fenix Internet LLC, and Leonid Radvinsky for lack of specific personal jurisdiction (Dkt. No. 178). In another hearing in August 2023, the undersigned judge, being concerned that plaintiffs’ counsel had sweeping allegations but slow to seek proof, urged the parties to invest in this action and again authorized broad discovery into the merits. And again, in September 2023, an order was issued reiterating that discovery was open (Dkt. No. 193). In March 2024, plaintiffs filed a motion to dismiss their own case for lack of subject- matter jurisdiction. Mere hours later, Meta defendants filed a motion for summary judgment on all claims. Meta defendants also filed a motion to exclude and strike plaintiffs’ proffered experts who are in fact two of the named plaintiffs: Dawn Dangaard and Kelly Gilbert. Also of note, plaintiffs never moved for class certification. Counsel fully briefed all three motions. In preparation for oral argument, the undersigned judge also asked several questions, which will be discussed in due course. This order will now briefly summarize the main issues and concerns raised during oral argument in May 2024 and the subsequent period of supplemental discovery. A. MAY 2024 HEARING Each side presented their respective dispositive motions during the May 2024 hearing. Again, the central claims in this action involve the alleged misuse of databases for “terrorist content” and “dangerous individuals and organizations” (Br. at 9). Specifically, plaintiffs have alleged that one or more DOI Lists combined with the GIFCT shared hash database has created a blacklisting effect that has impacted adult artists who have promoted or affiliated with OnlyFans’ competitors (Second Amd. Compl. ¶ 58). (i) Meta’s Use of a DOI List Meta’s

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Dangaard v. Instagram, LLC, (N.D. Cal. 2024).

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