competition in the market of ideas isn't commercial competition

Children’s Health Defense v. Facebook Inc., 2021 WL 2662064, No. 20-cv-05787-SI (N.D. Cal. Jun. 29, 2021)

CHD, an anti-vaccination group (that also considers pesticides and wireless tech dangerous), sued Facebook and other defendants for violating the First and Fifth Amendments, Lanham Act false advertising, and RICO violations. It didn’t like having some of its content on its FB page labeled “false,” out of date, or unreliable. Prepandemic, FB also allegedly barred CHD from disputing any actions taken by FB, and allegedly began to demote its content (“shadowbanning”). FB deactivated the “donate” button on CHD’s page and barred it from buying new ads. After repeated violations, FB put a Warning Label at the top of its page: “This Page posts about vaccines. When it comes to health, everyone wants reliable, up-to-date information. The Centers for Disease Control (CDC) has information that can help answer questions you may have about vaccines. Go to CDC.gov.” Then, after the pandemic hit, CHD shared an article about the flu vaccine written by a third party website. PolitiFact labeled the title of the article as “false,” noting that the title is “ambiguous and misleading,” and the site changed the title to clarify that it was not about the novel coronavirus.

CHD alleged the usual fringe argument that the United States government — through Congressman Adam Schiff, the Centers for Disease Control (CDC), and the World Health Organization (“WHO”), as the CDC’s “proxy” — has “privatized” the First Amendment by “teaming up” with Facebook to censor CHD’s vaccine safety speech.

The court spent a bunch of time on the state action issues; I will only mention the theory that “government immunity [under Section 230 of the CDA] plus pressure (Rep. Schiff) … should turn Facebook and Zuckerberg’s private-party conduct into state action.” The pressure included an alleged threat to rethink §230 if FB didn’t take more action. No, because “Section 230 does not require private entities to do anything, nor does it give the government a right to supervise or obtain information about private activity.” Nor did the general “threat” to revisit §230 constitute direction to a specific entity to take a specific allegedly unconstitutional action against a specific person such as CHD.

Lanham Act: the warning labels and fact checks allegedly told consumers to abandon CHD and “instead to follow CDC’s recommendations to get the vaccines produced by its major advertisers, Merck, GSK, Sanofi, and Pfizer, who buy $1 billion per annum in advertisements from Facebook.” Thus, CHD alleged, “Facebook and CHD may reasonably be considered commercial competitors with respect to the messaging regarding vaccines and 5G that they promulgate to Facebook users.”

But if this is a political speech case, as CHD alleged, it was hard to see how it fell in the Lanham Act’s zone of interests. “[T]he warning label and fact-checks are not disparaging CHD’s ‘goods or services,’ nor are they promoting the ‘goods or services’ of Facebook, the CDC, or the fact-checking organizations ….” They didn’t encourage users to donate to anyone, but to look for reliable information at the CDC. “Thus, all of the alleged misrepresentations – the warning label and the fact-checks – are simply providing information, albeit information with which CHD disagrees.” “Information” was not a relevant service; “[u]nder CHD’s expansive and novel theory of false advertising, any Facebook warning label identifying an alternative source of information and any fact-check with an explanation would constitute false advertising under the Lanham Act because of an injury to ‘messaging.’”

Courts have held that “[t]he mere fact that the parties may compete in the marketplace of ideas is not sufficient to invoke the Lanham Act.”  In past suits where nonprofits’ Lanham Act claims were entertained, “the non-profit alleged an injury to a commercial interest in sales or reputation.” Thus, CHD was neither within the Lanham Act’s zone of interests nor did it allege that the warning label and fact-checks constituted “commercial advertising or promotion,” even assuming that Lexmark abrogated a commercial competition requirement in the test for the latter.

RICO claims failed because they were RICO claims.