ANALYSIS: Product Claims Spike as SCOTUS Ponders Section 230 Fix

Last week, the US Supreme Court heard two social media cases, one of which questioned the scope of immunity under Section 230 of the Communications Decency Act. The statute has provided broad protection to social media platforms, particularly with respect to defamation claims arising from third-party content.

But defamation claims aren’t what the social media platforms have been primarily concerned with as of late. Lisa Blatt, counsel for Google, noted during the Feb. 21 oral argument at the high court in the Section 230 case, Gonzalez v. Google, that social media platforms are worried about product liability claims—and specifically those alleging that the platforms were defectively designed and caused addiction and mental health issues among youths.

A Bloomberg Law analysis of federal complaints filed since 2016 shows that these companies may have good reason to worry, as the findings show a dramatic increase in the number of social media-related product liability complaints filed just within the last 12 months.

Product Liability Troubles Ahead

The recent rise in the number of product liability claims filed against the platforms is one reason for social media platforms to be on guard.

Of the 186 federal complaints involving major social media platforms since 2016, 179 of them were filed in the last 12 months. Notably, 100 of those complaints have been filed since October 3, when the Supreme Court granted certiorari in Gonzalez.

For this analysis, we used Bloomberg Law’s dockets tool to search for federal complaints containing certain keywords and involving the following the social media companies: Meta and its subsidiaries Facebook and Instagram; Alphabet and its subsidiaries Google and YouTube; Snap, known for its product SnapChat; and ByteDance and its subsidiary TikTok. These companies are defendants in an ongoing litigation in California, which we delve into below.

We specifically searched for complaints that mentioned the words “social media” and strict liability, duty of care, duty to warn, “product liability,” “design defect,” “defective design,” “failure to warn,” “negligent design,” or “negligent warning.” In addition, we filtered our docket search by the “product liability” nature of suit code.

Unfavorable Precedents

Recent federal court decisions on the applicability of Section 230 immunity are likely causing additional concern for social media platforms.

In Lemmon v. Snap, Inc., for example, the Ninth Circuit found that Section 230 didn’t shield Snap from liability where the plaintiff’s defective design claims treated the platform as a product manufacturer, not a publisher. Likewise, in A.M. v. Omegle.com, LLC, the District Court for the District of Oregon found that Omegle, a “free online chat room that randomly pairs strangers from around the world for one-on-one chats,” wasn’t immune from liability under Section 230 when faced with claims of defective design, defective warning, negligent design, and negligent warning.

Nevertheless, social media platforms continue to rely on Section 230 in hopes of gaining immunity, while plaintiffs preemptively argue in their complaints that the platforms aren’t entitled to be shielded by the law.

Bloomberg Law keyword searches of all federal dockets—not just the ones involving social media platforms—also show a general upward trend in the annual number of motions to dismiss that cite Section 230, along with a corresponding rise in the annual number of complaints that refer to the law. The graphic below illustrates how many of these motions and complaints have been filed annually over the last 10 years.

Given the steady pattern of rising reliance on Section 230 as a tool for promptly disposing of claims, it’s a safe bet that the platforms will attempt to leverage the law in one particular ongoing legal battle over social media addiction.

The Tenacity of Product Liability Claims

There’s currently a multi-district litigation (MDL) in the Northern District of California, in which the plaintiffs allege that American children are suffering a mental health crisis fueled by the defendants’ addictive and dangerous social media products. The defendants include the giants: Meta (Facebook and Instagram); Alphabet (Google and YouTube); Snap; and TikTok.

In their recently filed master complaint, the plaintiffs allege that the defendants “defectively designed their platforms—in foreseeably unsafe ways and in dereliction of their basic duties of care—to induce harmful, unhealthy, and compulsive use by kids.” The plaintiffs further charge the social media platforms with using “engagement-optimized algorithms to control users’ main feeds.” These algorithms tend to generate engagement and thus spread “extreme content,” which is a design defect that foreseeably leads to dangerous activities by users, the plaintiffs allege.

As of Feb. 16, there were more than 130 actions consolidated against the social media platforms, according to the US Judicial Panel on Multidistrict Litigation’s MDL Statistics Report. More are likely to come.

A comparison can be drawn against similar claims that were filed against Juul, the electronic cigarette company, beginning in 2019. The complaints alleged that Juul targeted youths in their operation and marketing strategies, which consequently gave rise to the e-cigarette crisis among young people. Juul faced 6,940 actions, and recently settled thousands of those claims.

While the causes of action may be similar, Juul didn’t have the benefit of Section 230 immunity. It’s Google’s position—and certainly that of other social media platforms—that these types of product liability claims concern the publication of third-party content, which is precisely the type of activity protected by Section 230.

The MDL social media platform defendants have until April 17 to file a motion to dismiss, in which they will undoubtedly raise the Section 230 defense. However, Judge Yvonne Gonzalez Rogers, who is overseeing the consolidated cases, said that she won’t issue a ruling until the Supreme Court decides Gonzalez.

The Ultimate Arbiter

Now the scope of Section 230 is in the hands of the Supreme Court. If the court determines in Gonzalez that Section 230 was never intended to shield platforms from liability when their algorithms make targeted recommendations, the platforms will see a rise in product liability claims.

Alternatively, the Supreme Court may decide to sidestep the question raised in Gonzalez about Section 230, and focus instead on the question in Twitter v. Taamneh—the second social media case heard by the court last week—as to whether the plaintiffs can even pursue a claim of “aiding and abetting” terrorism under the Anti-Terrorism Act against the social media platforms.

If the high court elects not to weigh in on the scope of Section 230, then the lower courts will be left to decide the product liability claims on a case-by-case basis, with the help (or hindrance) of jurisdictional precedents. This includes Rogers in the MDL, who will have to consider whether the plaintiffs’ product liability claims amount to publication.

Either way, social media platforms can expect a continued rise in product liability claims—and will want to address them as efficiently as possible, when they arise.

Plaintiffs’ Endeavor to Challenge the Law

The broad protection afforded to online platforms by Section 230 hasn’t stopped plaintiffs from challenging the law’s applicability to certain matters or from attempting to meet one of its codified exceptions.

If the recent surge in social media-related product liability complaints serves as any indication, we can probably expect another big wave of filings that test Section 230 immunity in 2023. And if plaintiffs achieve any semblance of victory through the product liability approach, it could very well inspire the adoption of other types of creative legal theories aimed at getting around the Big Tech shield.

Bloomberg Law subscribers can find related Practical Guidance documents, tools for keeping track of new laws, and in-depth reference materials on our our Privacy & Data Security Practice Center and Litigation Practical Guidance Library. In addition, subscribers can find related content on our Supreme Court Today Tracker, US Law Week’s Supreme Court Today newsletter, our Advanced Dockets Search, and our Practical Guidance on Using Bloomberg Law Dockets page.

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