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Snap, Amazon Appellate Rulings Pave New Paths to Tech Liability

May 14, 2021, 10:00 AM

A new lawsuit alleging Snap Inc. failed to protect teens from cyberbullying with fatal results stands to benefit from a recent ruling expanding liability against web platforms and sites by curtailing the online publisher defense, attorneys say.

The recent ruling from the Ninth Circuit, which also involved teen deaths, rejected the online publisher defense for Snap. It came soon after a California state appeals court ruling finding Amazon.com Inc. a “seller” of products offered on its marketplace.

The two in combination are expected to create more legal exposure for electronic retailers who had, until not long ago, successfully argued that their business models didn’t lend themselves to product liability under traditional state law.

The rulings are already translating into business changes—as Snap showed May 11 when it suspended two anonymizing chat apps in response to the previous day’s suit filed by an anti-bullying organization and the mother and estate of a bullied teenager, Carson Bride, who committed suicide.

Amazon, too, may need to change its business practices to account for potential liability for defective products sold on its web marketplace, attorneys say.

But despite the recent blows to the online companies’ publisher and seller defenses, significant legal fights lie ahead, especially on the crucial question of when an online product versus online speech is involved.

Not Content Publishing

In last week’s legal setback for Snap, the U.S. Court of Appeals for the Ninth Circuit said in Lemmon v. Snap, Inc. that immunity under Section 230 of the federal Communications Decency Act of 1996 isn’t available in a suit over a speed-recording feature in its Snapchat mobile app that allegedly led to two teen deaths in a high-speed crash.

The appeals court revived the lawsuit, saying the families’ claims didn’t revolve around Snap acting as the publisher of someone else’s content, so the CDA defense didn’t apply.

“The Lemmon decision unequivocally recognizes that platforms are products and that their operations are distinct from their role as a publisher,” plaintiffs’ attorney and victims’ advocate Carrie A. Goldberg told Bloomberg Law.

That decision is expected to bolster cases like the newly filed one over cyberbullying by whittling back a key threshold defense that online companies had used to get cases dismissed early in the litigation process.

“The plaintiffs in the Bride case have as strong a chance of overcoming Section 230 as ever in history,” Goldberg said in an email. Goldberg, who practices in New York, represented a man who sued dating app company Grindr Inc. over alleged harassment several years ago but isn’t involved in Bride.

Electronic Frontier Foundation attorney Sophia Cope, in San Francisco, said the Ninth Circuit’s decision in Lemmon “is of a piece with other cases that have come down over the past couple of years where courts are finding ways not to apply Section 230.”

“There does seem to be a slow trend,” she said. “Courts are recognizing that Section 230 doesn’t always apply.”

Product or Speech?

But the last part of Cope’s observation is significant because Snap could have better success defending itself from the bullying suit than the speed-recording suit under the CDA.

Professor Justin (Gus) Hurwitz of the University of Nebraska College of Law said it’s hard to see user-generated content at the center of the speeding case. “So I’m not at all surprised that the court said this isn’t a Section 230 case, that there isn’t immunity here,” he said.

In the bullying case, others’ speech plays a much larger role, and the app maker will have a stronger argument that the content it published—not any inherent product feature—is so central that its role is more of an online publisher than product maker.

Is the new cyberbullying suit against Snap and two other companies, Yolo Technologies Inc. and LightSpace Inc., only about their apps’ architecture? “This is where the line gets blurry and why these cases can be tricky,” Hurwitz said.

“When you’re talking about cyberbullying,” he said, “you are concerned about the speakers who are engaging in speech to harm another person—at which point the platform is a traditional Section 230 interactive computer service.”

“The hard question that Section 230 cases have struggled with for a decade-plus is when the platform is trying to direct the speech,” or when it “encourages certain types of speech,” he said.

Professor Agnieszka McPeak of the Gonzaga University School of Law in Spokane, Wash., pointed to the Ninth Circuit’s speed filter decision as significant for “getting at the crux of what these platforms do,” unlike the question of marketplace liability for tangible goods.

That question was the focus of a California appeals court’s recent decision in Loomis v. Amazon.com LLC, which found that the e-commerce giant could be held liable under California law for defects in products made and sold by others but offered on its marketplace.

“We’re seeing not only this idea of Amazon being held liable as a seller of somebody else’s tangible product,” as in Loomis, McPeak said. Now we’re also seeing Snapchat characterized as the product, and Snap potentially being held liable for a feature of its app, she said.

Snap said May 11 that, “In light of the serious allegations raised by the lawsuit, and out of an abundance of caution for the safety of the Snapchat community, we are suspending both YOLO and LMK’s Snap Kit integrations while we investigate these claims.” It didn’t respond to further requests for comments.

Cope, of the EFF, cautions that other CDA cases have tried to focus on the architecture of the site, but courts have returned to user content. “It’s the architecture of the site plus a complete lack of harm flowing from any content,” she said. “That’s the distinguishing factor.” The EFF promotes free speech on the internet.

That could make it hard for the Bride plaintiffs to get past the publisher defense. But in their complaint, they focus not on the bullying comments themselves. Instead, they allege Snap, Yolo, and LightSpace broke their promises to keep their apps safe from cyberbullying.

“The plaintiffs in Bride set forth a strong and heartbreaking argument that the anonymizing features of the Snap app created a foreseeable likelihood of bullying among kids,” Goldberg, who represented the Grindr plaintiff, said.

“Snap is well aware that adolescents use their product and it’s well documented that adolescents lack the coping skills of adults and can become suicidal from online harassment and cruelty,” she said. The “suicide of children is foreseeable as a result of the design flaws.”

E-Commerce

McPeak says the challenge of Section 230 is that its initial conception concerned defamation claims. Now, goods, services, and apps are in play, she said. “Section 230 is an ill fit for the current, broader landscape of the internet, and the blurring of the physical and online worlds,” she said.

Nebraska Law’s Hurwitz said that in the case of Amazon, when it’s “just playing matchmaker” between buyer and seller, courts are more likely to find it’s just an “interactive computer service facilitating commercial speech,” and so the CDA will apply. But “if Amazon is the seller, then Section 230 doesn’t really apply, and we’re in products liability land,” he said.

As for the changes Amazon may make to address its new liability challenges, business responses could include requiring collateral from new sellers, stopping sellers who close up and reopen under other names, and certifying certain sellers, he said.

Amazon said in a statement after the Loomis decision that it “invests heavily in the safety and authenticity of all products offered in our store including proactively vetting sellers and products before being listed, and continuously monitoring our store for signals of a concern.”

“Amazon is a supporter of legislation that provides protections for consumers wherever they shop online to ensure all stores are held to the same standards,” it said.

Clamping down on bad sellers can be expensive, and Amazon’s role in commerce benefits consumers, Hurwitz said. As a result, Amazon might set aside a product liability fund as a cost of doing business, he said.

But “as a society, we should be looking over Amazon’s shoulder,” he said.

To contact the reporter on this story: Martina Barash in Washington at mbarash@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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