Last week Sacramento Superior Court judge dismissed most of the California Attorney General’s criminal complaint against Backpage CEO Carl Ferrer.
In October 2016 Backpage CEO Carl Ferrer was arrested on felony charges of pimping a minor, pimping, and conspiracy to commit pimping. The court dismissed the complaint on the basis of immunity for third-party content under Section 230 of the Communications Decency Act (“CDA”). The State responded by filing a new complaint against Ferrer that added money laundering charges to the pimping allegations. The State amended its complaint to clarify that the money laundering charges are based on bank fraud, wire fraud and prostitution.
Court Applies CDA 230 to Dismiss Most of the Complaint
Superior Court Judge Lawrence G. Brown dismissed most of the amended complaint. The Court rejected the State’s arguments that Backpage’s editorial involvement in editing the escort ads and knowledge of the nature of the ads rendered it outside the scope of CDA 230 immunity.
First, “it is well established that notice of the unlawful nature of the information provided is not enough to make it the service provider’s own speech.” (Universal Commun. Sys. v. Lycos, Inc. (1st Cir. 2007) 478 F.3d 413, 420, citing Barrett v. Rosenthal (2006) 40 Cal. 4th 33). Thus, even if Backpage knew of the unlawfulness of the content of the ads, knowledge is insufficient to render Defendants liable. This is true regardless of whether Backpage even exercised its editorial discretion and deleted or blocked certain terms from ads. (See Doe II v. MySpace Inc, (2009) 175 Cal.App.4th 561, 571 [immunity under section 230 applies even when self-regulation is unsuccessful or unattempted]; Doe v. Backpage.com, LLC (1st Dist. 2016) 817 F.3d 12, 21 [rejecting claim that website operators should be liable for failing to provide sufficient protections to users from harmful content created by others].)
Here, the People acknowledge that advertisements are placed by third parties and Backpage’s edits “would not change the users’ intent.” Nor is there an allegation that Defendant(s) set up the website to require offensive content to be supplied, as in Roommates, Bollaert or Dirty World. As such, there is no material contribution to the offensive content in the advertisements, and the allegations reference traditional publisher functions.
The Court also would not let the State bootstrap advertisement charges into a money laundering claim.
Backpage’s decision to charge money to allow a third party to post content, as well as any decisions regarding posting rules, search engines and information on how a user can increase ad visibility, are all traditional publishing decisions and are generally immunized under the CDA. In short, the victimization resulted from the third party’s placement of the ad, not because Backpage profited from the ad placement. (See Doe, supra, 817 F.3d at 20 [noting that the plaintiffs were harmed when they were trafficked through the advertisements whose content was created by a third party]; Cohen v. Facebook, Inc. (E.D.N.Y. May 18, 2017) 2017 U.S.Dist.LEXIS 76701, at *28-31 [Facebook immune from liability for allowing Hamas to use its platform to post offensive content that incited or encouraged terrorist attacks in Israel because although Facebook’s role in publishing that content was an essential causal element of the claims, allowing liability to be imposed on that basis would inherently require the court to treat the defendant as the publisher or speaker of content provided by Hamas, and was impermissible under the CDA].)
The Court, however, left intact money laundering/bank fraud/wire fraud charges based on Ferrer’s alleged intentional omission of the Backpage name in their credit card merchant accounts, thereby deceiving banks to do business with them.
The opinion is below.