Vargas v. Facebook, Inc.

District Court, N.D. California·Decided August 20, 2021·No. 3:19-cv-05081·Unknown

Opinion

1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 4 ROSEMARIE VARGAS, et al., Case No. 19-cv-05081-WHO

5 Plaintiffs, ORDER GRANTING MOTION TO 6 v. DISMISS WITH PREJUDICE

7 FACEBOOK, INC., Re: Dkt. No. 92 Defendant. 8

9 10 In an Order dated January 21, 2021, I dismissed plaintiffs’ Second Amended Complaint 11 with leave to amend, requiring plaintiffs to add specific facts regarding the searches they 12 performed looking for housing on defendant Facebook, Inc.’s platform in order to attempt to plead 13 a plausible injury in support of their standing. January 2021 Order, Dkt. No. 86. I directed them 14 to state facts regarding matters within their knowledge about their use of Facebook to search for 15 housing, specifically what type of housing they searched for, during what time frames, and what 16 results were returned. Id. at 10-11. 17 On March 3, 2021, plaintiffs filed the Third Amended Complaint (“TAC”). Dkt. No. 89. 18 While plaintiffs have added additional details regarding the searches they performed, those 19 additional details do not plausibly demonstrate that they were injured by any housing advertiser’s 20 possible use of Facebook’s now-discontinued targeting criteria that could be used to direct paid 21 ads at specific categories of persons.1 And even if plaintiffs had been able to allege facts plausibly 22 supporting a harm to any of them sufficient to confer standing, the claims plaintiffs’ assert are 23 barred by the Communications Decency Act. The TAC is DISMISSED WITH PREJUDICE. 24

25 1 Plaintiffs note that Facebook was sued over the use of the targeting criteria tools by “the National Fair Housing Alliance and others, which resulted in a settlement in which Facebook purportedly 26 vowed to revise its housing advertising practices to comply with the FHA by the end of 2019.” TAC ¶ 3; see also id. ¶ 52 n.5 (“Based on settlement agreements Facebook has entered into with 27 various fair housing organizations, Facebook has publicly claimed it no longer illegally targets 1 BACKGROUND 2 The TAC reasserts claims under the federal Fair Housing Act2 and analogous California3 3 and New York4 laws challenging Facebook, Inc.’s former practice of allowing advertisers to self- 4 select target audiences for their paid housing advertisements (“Targeted Ads” or “Ads”), 5 theoretically excluding protected classes of consumers from seeing those advertisers’ particular 6 housing ads. 7 I dismissed plaintiffs’ Second Amended Complaint (“SAC”), following the analyses of 8 two other Northern District of California cases that dismissed challenges to Facebook’s Targeted 9 Ad tools under other anti-discrimination laws for lack of standing. I held that plaintiffs’ standing 10 allegations were deficient because:

11 There are, in short, no facts showing that any of the plaintiffs were plausibly injured personally by the ad-targeting tools that advertisers 12 purportedly used to possibly target housing ads in areas that plaintiffs possibly searched that plausibly resulted in plaintiffs not receiving ads 13 for housing based on the aspects of their protected classifications that they otherwise would have been in a position to pursue 14 January 2021 Order at 9. I directed that plaintiffs plead: 15 [T]he facts within their exclusive knowledge, explaining what they 16 actually did with respect to their use of Facebook to look for housing, how they know their white compatriot saw different ads, and facts 17 regarding their then-current intent and ability to secure housing had they been shown a full range of ads through Facebook. Those facts – 18 which are wholly absent from the SAC – are necessary to raise a plausible inference that Vargas or the other plaintiffs were injured in 19 fact by the potential use of [] Facebook’s discriminatory tools by housing advertisers. 20 Id. at 10-11. I did not reach Facebook’s other arguments that the SAC should be dismissed with 21 prejudice and granted leave to amend. 22 The TAC adds some facts regarding each plaintiff’s use of Facebook during identified 23 times to search for housing based on identified criteria. See TAC ¶¶ 79-152. Their allegations 24 25 2 FHA, 42 U.S.C. § 3604 et seq. 26

3 California Fair Employment and Housing Act (FEHA), Cal. Govt. Code § 12940 et seq. and 27 California Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200 et seq. 1 regarding Facebook’s Ad Platform’s design and tools allowing advertisers to target specific 2 groups for their paid Ads remained largely the same as in the SAC. See also January 2021 Order 3 at 2-3. 4 Facebook’s motion to dismiss argues that (i) plaintiffs lack standing because they fail to 5 allege facts about their use of Facebook to search for housing ads sufficient to plausibly allege 6 injury in fact, (ii) Facebook’s publishing conduct is protected and immune under Section 230 of 7 the Communications Decency Act (CDA, 47 U.S.C. § 230), and (iii) plaintiffs fail to state their 8 claims under the FHA, California, and New York laws. 9 LEGAL STANDARD 10 A motion pursuant to Federal Rule of Civil Procedure 12(b)(1) tests whether the court has 11 subject matter jurisdiction to hear the claims alleged in the complaint. A Rule 12(b)(1) motion 12 may be either facial, where the inquiry is limited to the allegations in the complaint, or factual, 13 where the court may look beyond the complaint to consider extrinsic evidence. Wolfe v. 14 Strankman, 392 F.3d 358, 362 (9th Cir. 2004). Here, Facebook brings a facial attack on the 15 sufficiency of the allegations in the SAC. See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 16 1039 (9th Cir. 2004) (in a facial attack under Rule 12(b)(1), “the challenger asserts that the 17 allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction.”). 18 A district court, “resolves a facial attack as it would a motion to dismiss under Rule 12(b)(6): 19 Accepting the plaintiff’s allegations as true and drawing all reasonable inferences in the plaintiff’s 20 favor, the court determines whether the allegations are sufficient as a legal matter to invoke the 21 court’s jurisdiction.” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). As with a Rule 22 12(b)(6) motion, however, a court is not required “to accept as true allegations that are merely 23 conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. 24 Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). 25 DISCUSSION 26 I. STANDING 27 In the TAC, each plaintiff adds details about the types (costs, size, location and other 1 Facebook to conduct those searches, and states that they did not receive any housing ads that 2 matched their criteria.5 They generally allege that if they had received Ads for housing that 3 matched their criteria, they would have pursued those housing opportunities. TAC ¶¶ 79-152. 4 Facebook contends that these more detailed allegations are still not sufficient to confer 5 standing because they do not plausibly allege that any plaintiff was in fact injured by Facebook’s 6 advertisers’ use of the now-defunct Ad targeting tools. I agree.

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