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Social Media Firms Navigate Product Liability Claims

Sept. 28, 2022, 8:00 AM

Social media and other online platforms are under attack from a growing number of lawsuits that claim plaintiffs were injured because of content on the companies’ platforms. These companies have typically been shielded from liability and previous attempts to bring claims against them have failed to gain traction. But plaintiffs have a new playbook: they are turning to products liability law.

Just this year, the US Court of Appeals for the Ninth Circuit allowed a case to move forward against a social media giant under the theory that the suit’s negligent design claim wasn’t based on third-party content. This development is a potentially paradigm-shifting moment for online platforms.

We have seen novel approaches like this before, including in opioid litigation, and while most courts are often not amenable to these doctrinal contortions, there are real risks for social media companies and other online platforms.

What’s Changed?

Passed in 1996, Section 230 of the Communications Decency Act has shielded social media companies from liability based on content and communications posted by the companies’ users for over a quarter of a century. However, these new lawsuits attempt to skirt Section 230’s “third-party publisher” protections by claiming the platforms are defectively designed.

By targeting companies as product makers rather than publishers, plaintiffs hope this new approach will provide a path under traditional products liability laws to proceed with scores of cases that would dramatically alter the relationship between users and platforms.

Plaintiffs’ Playbook

The latest lawsuits target platform development and functionality—from claims of intentionally addictive designs, to claims that companies’ algorithms expose users to harmful content.

Many lawsuits are brought on behalf of minors, alleging platforms exploit underage users who became depressed, developed eating disorders, became victims of cyberbullying, or suffered other deleterious effects from using social media.

Plaintiffs’ firms only see dollar signs in pursuit of tech giants, and they are moving fast. There is already an entire plaintiffs’ law firm dedicated to litigating only these types of cases. This is in addition to the typical big name plaintiffs’ firms that are actively recruiting new clients in this space.

In August, the Judicial Panel on a Multidistrict Litigation was asked to consolidate over 25 lawsuits accusing social media providers of exploiting underage users and causing them physical and emotional harm. The plaintiffs’ maneuver will likely succeed and encourage even more filings.

Section 230 Defense

A Section 230 defense contains three elements. The service must be a provider or user of an interactive computer service, the cause of action must treat the defendant as the publisher or speaker of the allegedly unlawful content, and the content in dispute must have been provided by another information content provider other than the defendant.

There is no real dispute that the first two prongs apply in these new cases. So, the emphasis is on whether the content at issue was provided by the social media platform or another information provider. Traditionally courts have granted immunity for social media companies under Section 230 and have dismissed cases finding the social media companies had not made material contributions to the content at issue.

However, plaintiffs have more recently prevailed with claims focused on platform designs they call defects, such as social media rewards and recognitions for users that allegedly promote or push content encouraging dangerous behavior or addiction.

Under many states’ product liability laws, social media platforms are not considered products, which can serve as a strong defense beyond the CDA.

Most courts have interpreted “product” under Section 402A of the Restatement (Second) of Torts and, from California to Texas, have held that strict liability extends only to tangible goods—not intangible goods or services like websites, video games, or social media platforms. However, product liability laws vary from state to state and favorable rulings in some courts are unlikely to deter plaintiffs from trying elsewhere.

Risks Remain

Even if social media and other online platforms ultimately win on the legal merits, many of the plaintiffs in these cases are extremely sympathetic. These fights can result in public relations nightmares and massive legal and business costs. Public opinion isn’t friendly either.

A 2020 survey from the Pew Research Center found 64% of Americans say social media has a mostly negative effect on the way things are going in the country today.

These companies are already frequent punching bags in the partisan arena, and there is a real risk of legislative action. State and federal lawmakers are increasingly taking aim at social media companies with proposed legislation—including three recently introduced bills, one in California and two in the US Senate—creating affirmative duties to act to prevent harm to users.

Additionally, Section 230 of the CDA has been the subject of congressional attention and debate.

While this initial litigation has focused on prominent companies, if successful, other smaller companies are likely to see similar litigation. Online gaming platforms and gambling sites could be particularly vulnerable to these product liability lawsuits.

This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Author Information

Danny Barefoot is an associate in Washington, D.C.

William Oxley is an Orrick partner in Los Angeles and fellow in the American College of Trial Lawyers.

Meghan Rohling Kelly is a litigation partner in the firm’s New York and Los Angeles offices.