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Section 230 Helps Amazon Defeat False Advertising Lawsuit Over Printer Ink Cartridges–Planet Green v. Amazon

The plaintiff sells remanufactured printer ink cartridges. The plaintiff claims that Amazon listings falsely claim that other merchants’ cartridges are “remanufactured” or “recycled.” For reasons unclear to me, the plaintiff thought it would be a good idea to sue Amazon over its competitors’ alleged misdeeds, going so far to breathlessly issue a press release that it had “filed a $500 million lawsuit against tech giant Amazon.” The techlashing and David-v-Goliath framing generated fawning press coverage when the lawsuit was filed. However, with scant followup media attention, this lawsuit (filed in August, dismissed in December) rocket-docketed to failure faster than remanufactured printer cartridges run out of ink.

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Note: The litigation GoFundMe page is still up. They have raised a total of $150 of their $500k goal. So close. Maybe they were banking on greater charitable largesse from Amazon-haters? Or maybe they overestimated how much goodwill the public has towards manufacturers of printer ink cartridges, new or remanufactured?

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Section 230

ICS Providers. Amazon is an ICS provider:

Plaintiff alleges that Defendants “market” and “sell” products to retail consumers “through internet websites.” In addition, Plaintiff admits that its allegations concern products “available for purchase on Amazon’s website.” Moreover, the overwhelming majority of courts that have considered the issue have concluded that Defendants are providers of interactive computer services within the meaning of Section 230.

Cites to McCarthy v. Amazon, Ratermann v. Pierre Fabre, Eberhart v. Amazon, Joseph v. Amazon, Almeida v. Amazon.

Publisher/Speaker Claims. The court says that Amazon “easily satisfies” this factor:

Plaintiff’s claims are all based on the theory that Defendants ‘continue to allow unlawful sellers to maintain their accounts’ and ‘permit them to advertise’ on Defendants’ website.

The plaintiff claimed that Amazon bears the responsibility to verify advertiser claims and product authenticity. Seriously? This argument has failed so many times. See, e.g., the cited Ynfante v. Google opinion. The court simply responds: “the Ninth Circuit has held that Section 230 immunity applies to false advertising claims and other claims that are based on purportedly false representations.” Cites to Perfect 10 v. ccBill, LW v. Snap, Prager U v. Google.

The court also says: “Plaintiff treats Defendants as publishers or speakers in its UCL claim because each of the statutes cited by Plaintiff concerns false or misleading
statements,” all of which the complaint alleges are third-party content.

To get around this conclusion, the plaintiff argued “its allegations that Defendants resell used or returned third-party ink cartridges via its “Amazon Warehouse” business demonstrate that its claims are not entirely dependent on Defendants’ conduct as a publisher or a speaker.” I didn’t really understand this point. The court responds that: “Defendants cannot be held liable for third-party content merely because it resold third-party products and reposted third-party content,” citing the outlier decision Corker v. Costco. (Indeed, as discussed below, many courts have held Amazon liable for reselling third-party products). The court was on firmer ground saying “Plaintiff does not (and cannot) allege that Defendants created any of the third-party statements in the product listings.” Cites to Brodie v. Green Spot, Lasoff v. Amazon.

Third-Party Content. The court already discussed third-party content in the prior factor but reiterates that the plaintiff was suing over third-party content:

Plaintiff expressly alleges that the “seller listings” that contain the purportedly false advertising are “third-party seller listings.” In addition, Plaintiff alleges that Defendants contacted third parties to change their product listings to remove the purportedly false content because the “third party sellers are [the ones who are] falsely advertising their listings, products, and packaging.”

The plaintiff tries to get around this factor by arguing:

Amazon contributes to the dissemination of the offending content by “creat[ing] promotional emails and search engine marketing content” that brings traffic to its website; “controls all customer service and returns and responds directly to consumers who leave negative reviews for products”; and “has a special badge called Amazon’s Choice, which endorses products.

The court responds: “neutral and generic actions, even if they spread the reach of some of the offending material, do not defeat Section 230 immunity.”

Say what? I’ve complained before about the semantic incoherence of the Roommates.com phrase “neutral tools.” Tools are never neutral. Here, the court rearticulates that phrase as “neutral and generic actions,” which only confuses me more. I’m not sure if actions are ever neutral, I don’t know if neutral actions are the same as neutral tools, I don’t know what generic actions are, and the Roommates.com never mentioned generic tools (or actions).

The court says Amazon engaged in “neutral and generic actions” with respect to the allegedly false listings:

Plaintiff has alleged content neutral actions by Defendants related to the dissemination of the purportedly false or misleading content. For example, Plaintiff alleges that, for all products, Amazon serves as an “online catalog marketer, driving traffic, promoting, selling, and distributing products.” Plaintiff also cites routine responses by Defendants to customers about fulfillment. In addition, Plaintiff admits that the “Amazon Choice” badge is based on a neutral algorithm that “endorse[s] products based on customer feedback, highlighting ratings, price, popularity, availability and delivery,” and does not involve any evaluation of the allegedly false or misleading content. Because Plaintiff’s allegations that Defendants’ actions in connection with the purportedly false or misleading content are neutral, Defendants are entitled to immunity pursuant to Section 230 because the purportedly false or misleading content consists exclusively of third party content.

Cites to Dyroff v. Ultimate, LW v. Snap, Goddard v. Google. The court’s characterizations make it sound like the plaintiff tried the often-advanced, never-successful argument that 230 doesn’t apply to a defendant’s amplification of third-party content. Though it’s just a variation on the amplification argument, the “Amazon Choice” discussion appeared novel. I did a quick Westlaw search this morning and couldn’t find another case discussing the 230 implications of the “Amazon Choice” designation.

Prima Facie Elements

The case also fails on its lack of merit. Thus, once again, Section 230 isn’t the only reason why the plaintiff fails, and any Section 230 reform wouldn’t change the outcome of this case.

Falsity. Even without Section 230, the court says that Amazon didn’t make any false statements itself (again citing the quirky Corker opinion). The court says:

Plaintiff has failed to allege that Defendants manufactured, produced, or packaged any of the products at issue and Plaintiff has also failed to allege that Defendants created or otherwise contributed to the purportedly false product descriptions…Plaintiff does not allege that Defendants created or otherwise contributed to any of the purportedly false product descriptions

Passing Off. “Plaintiff does not allege that any of the products that purportedly contain false advertising use its marks “Planet Green” or “Doorstepink.” Instead, Plaintiff admits that consumers who purchase the third-party products may not even “know the name of [Planet Green]” at all. In addition, the FAC includes numerous screenshots showing that the identified third-party products use their own brand names and not Plaintiff’s names or brands.”

Negligence. “a website operator, like Defendants, does not assume a duty of care merely by creating and operating its website…courts have repeatedly dismissed negligence claims against website operators similar to the claim alleged by Plaintiff for failure to identify a legally cognizable duty.” Cites include Dyroff, Ginsberg v. Google, Kangaroo Manufacturing v. Amazon. That first sentence is hotly contested by plaintiffs nationwide.

Implications

So it seems like the plaintiff isn’t going to get $500M. Or even $500k. But at least it got $150 in GoFundMe donations. Take your wins where you can find them.

The plaintiff’s apparent game plan confused me. They knew Amazon would argue Section 230. The plaintiff’s attempted 230 workarounds, at least as characterized by the court, sounded routine and uninspired. If you’re going to demand half-a-billion dollars and jeopardize Amazon’s cash cow, you really need to bring A-level arguments.

Having said that, the court didn’t engage with plaintiff-favorable precedent that I (and probably the plaintiff) would have thought warranted at least some discussion. For example, the court doesn’t mention the Ninth Circuit HomeAway case, which held that Section 230 doesn’t apply to processing marketplace transactions. Furthermore, at least three California state appellate court cases–the Bolger, Loomis, and Lee cases–have held that Amazon is the “seller” of everything on its site, including marketplace items. (As my blog coverage makes clear, I am not a fan of those opinions). The Lee case, in particular, involved Amazon’s failure to make mandatory disclosures about the third-party items it was selling–pretty much the same line of attack the plaintiff took in this case. So why weren’t these cases discussed? I can only speculate, but I’m guessing that Amazon’s lawyers won the narrative battle to frame this as a false advertising case, not a case over the sales themselves. (The plaintiff’s argumentation may have helped with that framing). Section 230 more clearly applies to third-party ad copy than to the resulting sales. Still, I’m wondering how Amazon completely dodged all of this adverse precedent.

Last week I blogged M.S. v. Amazon, which potentially imposed liability on Amazon for marketplace sales of surreptitious spycams. That case was framed differently–the plaintiff was a consumer, not a competitor, and the case was principally a negligence case, not a false advertising case. Still, the MS court held that Amazon had a duty to police the third-party marketplace ad copy. Oddly, the MS court didn’t discuss Section 230 at all, even though the claim was based on third-party content and items, which I figured was due to the court collapsing the content/conduct distinction and focusing on Amazon’s insufficient review process. I’m not sure if this case or the MS case is the outlier, but I cannot confidently predict the outcomes of any Amazon marketplace cases right now.

I assume this decision will be appealed, so I doubt this opinion is the last word in this case.

Case Citation: Planet Green Cartridges, Inc. v Amazon.com, Inc., 2023 U.S. Dist. LEXIS 217574 (C.D. Cal. Dec. 5, 2023). The CourtListener page. TroyGould PC represented the plaintiff. Hueston Hennigan represented Amazon.

The post Section 230 Helps Amazon Defeat False Advertising Lawsuit Over Printer Ink Cartridges–Planet Green v. Amazon appeared first on Technology & Marketing Law Blog.

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