On July 24, 2020, the New Hampshire Supreme Court overruled the trial court’s dismissal of a breach of contract lawsuit against Facebook, Inc. – the parent company of Instagram.
I) Trial Court Proceedings
The plaintiff in the case, Teatotaller, runs a bubble tea delivery service in Somersworth, N.H. Teatotaller initially filed a small claims case against Facebook based on an alleged erroneous deletion of their Instagram account without notice. The complaint alleged damages for the loss of business and customers due to the account deletion.
Facebook asserted several defenses to the lawsuit in a motion to dismiss, including the claim was barred under Section 230(c)(1) of the Communications Decency Act (CDA). This federal statute immunizes social media companies from claims seeking to hold them liable for deciding whether to publish, withdraw, postpone, or alter content.
The trial court dismissed Teatotaller’s lawsuit based on:
- the immunity provisions of the CDA.
II) New Hampshire Supreme Court Holding
In reviving the plaintiff’s lawsuit, the New Hampshire Supreme Court held that:
- it was premature to apply the CDA’s immunity provision to the claim at the motion to dismiss stage of the lawsuit.
Under New Hampshire law, a breach of contract occurs when there is a failure without legal excuse to perform any promise which forms all or part of a contract. The court found Teatotaller had sufficiently alleged a breach of contract claim by alleging:
- Teatotaller lost business and customers; and
- Teatotaller was entitled to damages and the restoration of its account.
b) Immunity under CDA
The supreme court also held it was improper to dismiss Teatotaller’s lawsuit based on the immunity provision in the CDA statute. The court held the CDA’s barrier to Teatotaller’s breach of contract claim was not evident from the face of the complaint and should be allowed to continue. This essentially means it was too early in the lawsuit to conclusively decide whether the CDA prevents the lawsuit.
When the case moves forward, the application of CDA primarily will turn on whether or not the plaintiff is trying to hold Facebook liable as a “publisher.” If Facebook is acting as a “publisher,” the CDA applies and prevents liability. Publication involves reviewing, editing, and deciding whether to publish or to withdraw from publication third-party content. Prior judicial holdings have consistently stressed that decisions as to whether existing content should be removed from a website does fall within the editorial prerogative. This means when the case returns to the trial court:
- If the trial holds Teatotaller’s claim is premised upon Facebook’s decision to remove its Instagram account, including all the content, data, and followers that had been accumulated through paid and unpaid activity, it may require the court to treat Facebook as a publisher and preclude liability.