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Court Says Twitter Misused Litigation to Punish Defendants for Their Speech–X v. CCDH

Self-proclaimed free-speech absolutist Elon Musk is notoriously thin-skinned when it comes to criticism directed at him. (As the phrase goes, “he can dish it out, but he can’t take it“). This well-publicized lawsuit is an example of Musk waging lawfare over a critic’s speech. Judge Breyer of the Northern District of California had none of it. He calls out Twitter for its bad choice:

This case is about punishing the Defendants for their speech…X Corp. has brought this case in order to punish CCDH for CCDH publications that criticized X Corp.—and perhaps in order to dissuade others who might wish to engage in such criticism.

As a result, the court finds that much of the lawsuit is a SLAPP. If the case stands on appeal, Twitter will write a check to CCDH to compensate it for the litigation harms Twitter has imposed on it. The check to CCDH may not dent Musk’s finances, but it has painful symbolism. It’s a reminder of why Twitter will never be profitable again (it’s dissipating its cash on wasteful litigation instead of building a non-cesspool business), and that check will be yet another embarrassing confirmation of Musk’s hypocrisy and fragile ego.

The case relates to CCDH reports showing Twitter’s struggles with hate speech and misinformation following Musk’s changes to Twitter’s content moderation policies. These reports allegedly caused advertisers to pause their Twitter advertising campaigns, starving Twitter of much-needed revenues. However, Twitter didn’t claim the reports were defamatory. Instead, Twitter sued CCDH for scraping violations in collecting the data for the report. In a highly technical ruling, the court rejects Twitter’s CFAA claim on a motion to dismiss and rejects Twitter’s other claims, including breach of contract, on an anti-SLAPP motion to strike.

By declaring the lawsuit a SLAPP, the court concludes that Twitter misused the court system in an attempt to suppress CCDH’s speech. Anti-SLAPP laws are a crucial bulwark against such abuses, especially by billionaires who embrace Pyrrhic litigation with the goal of draining their opponents’ bank accounts.

Nominally, Twitter brought this lawsuit to rehabilitate its reputation by undermining CCDH. Instead, this lawsuit reinforces that the old free-speech Twitter is dead and the post-Musk Twitter embraces its new identity as an anti-speech bully. #RIPTwitter.

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Most readers should stop reading the blog post here. The remainder groks the details of a technical 52-page opinion. If these details confuse you, you’re not alone.

Anti-SLAPP

The court says CCDH’s publications advance its free speech rights. “CCDH also makes a compelling case that gathering the data used in its publications is also an act in furtherance of its free speech rights….the acquisition of X Corp. data was newsgathering in furtherance of CCDH’s protected rights,” even if such newsgathering relied on “improper” methods.

Twitter challenged both CCDH’s newsgathering and its publications (“the complaint is littered with allegations emphasizing CCDH’s communicative use of the acquired data”). Twitter argued that it didn’t bring a defamation claim, so it wasn’t targeting CCDH’s publications. The court says this is disingenuous. “X Corp. wishes to have it both ways—to be spared the burdens of pleading a defamation claim, while bemoaning the harm to its reputation, and seeking punishing damages based on reputational harm.” (The court also notes Musk threatened and brought a “thermonuclear lawsuit” against Media Matters for similar motivations). In any event, the claims/labels don’t matter to anti-SLAPP motions:

even though X Corp. did not include a cause of action explicitly premised on CCDH’s speech,…speech is a harmful act at the heart of the complaint…

the allegations about CCDH’s misleading publications provide the only support for X Corp.’s contention that it has been harmed

Finally, CCDH’s reports address a public issue. As a result, CCDH met the first prong of the anti-SLAPP protections that the lawsuit targeted socially important speech. This shifts the burden to Twitter to show that it has a probability of prevailing on its claims. Twitter fails this burden.

Breach of Contract

Twitter’s TOS bans scraping. The court says Twitter doesn’t have a probability of prevailing because it can’t establish damages. This is one of the most complex parts of the ruling. You’re excused if it makes your head hurt.

The court says there are no general damages because the alleged damages (loss of advertiser revenue) “do not flow directly and necessarily from CCDH’s breach of the ToS’s scraping provision.” Instead, the court looks to see if Twitter properly alleged special damages, such as consequential damages (Hadley v. Baxendale gets a shoutout). The court says Twitter didn’t properly allege foreseeability of the purported damages:

X Corp.’s complaint does not allege that CCDH knew at the time of contracting, or should have known at the time of contracting, that breach of the ToS’s scraping provision would result in damages of “at least tens of millions of dollars.” X Corp. alleges that “CCDH engaged in its unlawful scraping with the intent to improperly obtain data that would be used to cause X Corp. to lose significant advertising revenues.” It alleges nothing about CCDH’s intent or knowledge when it agreed to the ToS in 2019. This is a fatal flaw

Instead, the court says that CCDH couldn’t have anticipated in 2019, when it agreed to the TOS, that Musk would take over Twitter and hard-shove it towards becoming a hate-filled cesspool.

To me, it seems like the court may be collapsing the distinction between the need to show that the contract breach harmed the plaintiff and the ways in which damages are computed once the plaintiff has established its prima facie contract breach case. In other words, a contracting party can breach a contract and cause legally recognizable harms that exist only because of the evolved context around the time of the breach, even if those context evolutions weren’t “foreseeable” at the time of contracting. Indeed, unless the parties put caveats into their contract, the point of a contract is that the parties remain bound even as circumstances change (unless there’s a force majeure, not applicable here).

The court makes a similar point that Twitter is seeking reputational damages from scraping (“if CCDH had scraped the X platform and never spoken, there would be no damages”). The court says these damages aren’t foreseeable, when I really think there’s a problem tracing the harm to the breach. After more confusing discussion, the court summarizes: “the Court can hold as a matter of law that the damages alleged are impermissible defamation-like publication damages caused by the actions of third parties to CCDH’s report.”

Twitter argued that it should get a chance to amend its complaint so it could allege harm from the breach of contract in the form of its incident response costs. These rationales don’t persuade the judge either. “While security and safety are noble concepts, they have nothing to do with this case” because the allegedly scraped tweets were all posted publicly. Twitter argued that users might want to remove those tweets, but the judge responds:

even assuming that it is “very important” to a user that he be able to amend or remove his pro-neo-Nazi tweets at some point after he has tweeted them, a user can have no expectation that a tweet that he has publicly disseminated will not be seen by the public before that user has a chance to amend or remove it

Thus, “CCDH would not, and should not, have foreseen at the time of contracting that X Corp. would need to expend money to address “safety and security” issues following the scraping of ten users’ public tweets.”

Twitter also said it needed to protect its system’s integrity, but this rang hollow. “Although social media platforms do not like it, scraping, for various ends, is commonplace.” Furthermore, Twitter (now) knows exactly what happened: “CCDH is alleged to have used Twitter’s own search tool to collect 9,615 public tweets from ten Twitter users.” The court says this data collection isn’t enough to warrant an incident response:

Nor was this the kind of large-scale, commercial scraping—as in hiQ, as alleged in Bright Data—that could conceivably harm the X platform or overburden its servers. It is not plausible that this small-scale, non-commercial scraping would prompt X Corp. to divert “dozens, if not over a hundred personnel hours across disciplines,” of resources toward the repair of X Corp.’s systems. Nor would such expenditures have been foreseeable to CCDH in 2019. In 2019, if CCDH had thought about the no-scraping provision in the ToS at all, it would have expected X Corp. to incur damages only in response to breaches of that provision that could actually harm the X platform. It would not have expected X Corp. to incur damages in connection with a technical breach of that provision that involved the use of Twitter’s search tool to look at ten users and 9,615 public tweets.

It is clear to the Court that if X Corp. was indeed motived to spend money in response to CCDH’s scraping in 2023, it was not because of the harm such scraping posed to the X platform, but because of the harm it posed to X Corp.’s image…. In 2019, CCDH would not have understood, and should not have understood, that Twitter would wish to prevent scraping in order to keep cumulative information about the platform from the public view. CCDH would certainly not have known that Twitter would change course on some of its content-moderation policies, reinstating what CCDH later described as “tens of thousands of accounts, including neo-Nazis, white supremacists, misogynists and spreaders of dangerous conspiracy theories,” and then desire to shield the financial ramifications of that policy shift from the public

In a footnote, the court adds:

At times, it seemed as if X Corp. was suggesting that whenever a user breaches any term within X Corp.’s nineteen-page ToS, X Corp. is entitled to spend money to prevent further breaches of that term, and then to be compensated for that expenditure. That is not the law. If it was, then a plaintiff could state a claim merely by alleging the existence of a contract, its performance, and the defendant’s breach; there would be no separate requirement of proving foreseeable damages. But there is such a requirement

This seems to suggest that this judge will not tolerate minor TOS breach claims that bootstrap the harms (i.e., every breach of contract is per se harm sufficient to support a breach of contract claim). This reminded me of the old uncited JetBlue ruling.

The court’s contract breach analysis could be relevant to other cases involving scraping, trespass claims more generally, and TOS enforcement. It’s fair to say that this judge felt that Twitter was making a mountain out of a molehill by alleging that CCDH breached the TOS by a modest amount of targeted scraping, even if it technically was a breach of the TOS terms. But change the facts around and would a different judge reach the same conclusion? This felt like a one-off to me.

The court ultimately rejects Twitter’s proposed amendment: “the Court is concerned that X Corp.’s desire to amend its breach of contract claim has a dilatory motive—forcing CCDH to spend more time and money defending itself before it can hope to get out from under this potentially ruinous litigation.” As the court notes, such tactics are exactly what anti-SLAPP laws are designed to combat. Anti-SLAPP laws end pernicious cases early. We need more of that.

CFAA

The CFAA is a federal statutory claim, which California’s anti-SLAPP law doesn’t apply to. (We urgently need a federal anti-SLAPP law to squash billionaire abuse). Instead, the court grants CCDH’s motion to dismiss.

Citing Van Buren, the court notes that only technological harms are counted against the CFAA’s financial threshold. The court says Twitter’s investigation costs are “not technological in nature”). Further, the UGC “data that CCDH accessed does not belong to X Corp., and there is no allegation that it was corrupted, changed, or deleted.”

CCDH obtained some Twitter data through Brandwatch, which accessed the data through Twitter’s API. The court says this means CCDH didn’t even touch Twitter’s servers in those cases. (I thought the factual allegations here were confusing).

Contract Interference and Breach Inducement

Twitter didn’t properly allege that CCDH induced Brandwatch to breach its contract with Twitter. “Any failure by Brandwatch to secure the Licensed Materials was a precondition to CCDH’s access.” (I didn’t follow this part so well either). Also, Brandwatch’s alleged breach didn’t cause advertisers to flee Twitter.

I don’t have any grand final parting thoughts, except that the phrase “play stupid games, win stupid prizes” came to mind.

Case Citation: X Corp. v. Center for Countering Digital Hate, Inc., 3:23-cv-03836-CRB (N.D. Cal. March 25, 2024)

The post Court Says Twitter Misused Litigation to Punish Defendants for Their Speech–X v. CCDH appeared first on Technology & Marketing Law Blog.

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