Monday, December 07, 2015

is "this video has been removed for violating the ToS" commercial advertising?

Darnaa, LLC v. Google, Inc., 2015 WL 7753406, No. 15-cv-03221 (N.D. Cal. Dec. 2, 2015)
Darnaa posted a music video, Cowgirl, to YouTube.  At one point, YouTube removed the video from its original location, later reposting it at a new URL with its view count reset to zero because of an alleged violation of section 4.H of YouTube’s Terms of Service, which prohibits the use of automated tools for increasing the view count of videos posted on its site.  Darnaa denied any such attempt and alleged that the removal, and YouTube’s posting of a notice that the video had been removed because it violated YouTube’s Terms of Service, harmed its business and reputation.
Darnaa argued that YouTube’s terms of service were unconscionable and thus unenforceable, because they granted Google unlimited discretion, limited Google’s liability, and shortened the statutory limitations period for all claims to one year.  Indisputably, the ToS were a contract of adhesion, which is enough to establish some degree of procedural unconscionability.  Here, though, the degree was slight.  There are alternative websites for sharing music videos, so Darnaa had meaningful choices.  YouTube didn’t hold Darnaa’s job hostage to agreeing, as in other cases, and Darnaa was free to take its content elsewhere.  Even if Darnaa didn’t read the terms, these terms weren’t hidden in the contract; Darnaa had a real opportunity to read the terms.
Substantively, the terms weren’t so one-sided as to be unconscionable.  None of the three provisions challenged by Darnaa shocked the conscience.  As for YouTube’s unbounded discretion, it was reasonable for YouTube to retain broad discretion and minimize its exposure to damages because it offers its hosting services for free.  Some California courts have found certain contractually shortened statutes of limitations to be unconscionable and unenforceable. But shortening the period to one year in this case was not unreasonable.
Darnaa’s claims were therefore dismissed as time-barred, unless Darnaa could amend the complaint to show that it was entitled to equitable tolling (based, I assume, on a timely filed state court suit prior to this one).
Google argued that the breach of contract and tortious interference claims were barred by the ToS’s Section 10: “In no event shall YouTube … be liable to you for any direct, indirect, incidental, special, punitive, or consequential damages whatsoever resulting from … (iv) any interruption or cessation of transmission to or from our services … [or] (v) any errors or omissions in any content … whether based on warranty, contract, tort, or any other legal theory[.]”  Such exculpation clauses were particularly appropriate where, as here, Google offered its service for free.  Darnaa argued that all of its claims—with the exception of negligent interference with prospective economic advantage—were intentional torts, which prevented the ToS from exculpating Google under California law.  This was correct—in California, “contractual releases of future liability for fraud and other intentional wrongs are invariably invalidated”—so only the negligence-based claim was barred.
As for the breach of the implied covenant of good faith and fair dealing, Google argued that the ToS allowed it to relocate or remove videos in its sole discretion “at any time, without prior notice and in its sole discretion,”  and to “discontinue any aspect of the Service at any time.” Darnaa argued that the relevant terms applied only to content, not to services such as video hosting, and that Google reserved only the right to terminate any aspect of its service as to all users, not to terminate service for a particular user. The court found the relevant terms ambiguous, because the provision for “Content” that violates the ToS didn’t include view counts in the definition of “Content.” Even if view counts were “Content,” it wasn’t clear that the ToS authorized the removal of the associated video, not just the offending view count.  It was also ambiguous whether the ToS permitted YouTube to remove any “Content” without prior notice, or whether it referred only to the Content that “infringes on another’s intellectual property rights.”  Further, it was not clear that YouTube reserved the right to discontinue any aspect of its service provided to a particular user, without restriction. Thus, it wasn’t clear that YouTube eliminated the implied promise of the good faith and fair dealing normally contained in every contract.  Thus, the contract must be interpreted against the drafter, and the implied covenant of good faith and fair dealing applied.
As for intentional interference with prospective economic advantage, Google argued that tortious interference didn’t apply to alleged interference with a large, anonymous group such as the public or a musician’s fanbase.  The claim based on Darnaa’s relationship to its fans was thus dismissed with prejudice.  However, Darnaa sufficiently pled Google’s knowledge of its relationship with Clear Channel and independently wrongful conduct (breach of the implied covenant of good faith). Darnaa alleged that “Clear Channel constitutes a major advertising industry competitor of Google” and that “[t]hrough the use of sophisticated tracking software,” defendants were “able to ascertain that the large majority of the viewers accessing the ‘Cowgirl’ video on YouTube came to the video by clicking links embedded in various of the hundreds of Clear Channel Internet radio websites.” Darnaa referred to Clear Channel in its email to YouTube protesting the removal of the video.
Defamation and Lanham Act claims were based on YouTube’s posting, at the original URL, of a message that the video had been removed for violation of the YouTube Terms of Service.  Google argued that Darnaa hadn’t pled “commercial advertising or promotion.”
Darnaa argued that the notice was inserted, at least in part, if not in whole, to influence viewers to buy or use Google’s goods or services because it showed that “defendants are on the job policing the Website and enforcing their policies for the protection of the Website and its users.” The complaint, however, alleged that the notice was made as part of YouTube’s service, perhaps for the purpose of “disparag[ing] the integrity” of Darnaa, which wasn’t enough; the court dismissed the claim with leave to amend. 
Defamation: Darnaa didn’t sufficiently plead that the notice was “of or concerning” them, that it had defamatory meaning, or that it suffered special damages.  Because the plaintiff was Darnaa, LLC, not the recording artist, there was no allegation that the plaintiff was a public figure; it need only plead negligence as to the truth or falsity of the statement.  However, the notice referred to the video, rather than the poster of the video.  There were no allegations about how the notice identified Darnaa, LLC.  Other courts have found that a statement alleging breach of contract or policy, including a breach of ToS, isn’t defamatory per se.  In the absence of any detail about the type of violation allegedly underlying the removal, a notice that a “video has been removed for violation of the YouTube Terms of Service” couldn’t constitute defamation per se.  Danaa would have to plead extrinsic circumstances that would make the notice defamatory is granted, as well as special damages.

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