New York-based Nemet Chevrolet filed a notice of appeal to the Fourth Circuit last week, challenging a district court's dismissal of its amended complaint against ConsumerAffairs.com based on section 230 of the Communications Decency Act (CDA 230). The appeal presents some interesting questions about whether a website loses CDA 230 immunity by encouraging negative consumer commentary and using drop-down boxes to enable users to categorize their submissions. To my knowledge, this is the first federal appeal raising these issues since the Ninth Circuit's controversial decision in Fair Housing Council v. Roommates.com, LLC, 521 F.3d 1157, 1175 (9th Cir. 2008).
The district court dismissed Nemet's original complaint back in June 2008. As Eric Goldman described it, this first dismissal was "a textbook application of 230--the complaint even specifie[d] that the posts were written by third party consumers." In July, the court granted Nemet permission to file an amended complaint, which added allegations designed to establish that ConsumerAffairs "developed" its user-submitted content by (1) encouraging users to submit complaints by touting its relationship with consumer class action lawyers and promising compensation in the event of a class action lawsuit; (2) advising website users about how to craft complaints that would be most attractive to consumer class action lawyers; (3) providing a "complaint" button for website users to post content without providing a button for positive comments; and (4) providing specific categories of alleged misconduct to guide website users' complaints. See Nemet's Opposition to Defendant's Motion to Dismiss, at 2.
In September, the district court dismissed the amended complaint in a summary order, holding that the new allegations were "insufficient to take this matter outside the protection of the Communications Decency Act." Nemet has appealed this order.
Hopefully the Fourth Circuit will take this opportunity to provide guidance on where CDA 230 stands after Roommates.com. But the appellate court may not need to reach the interesting CDA 230 issues, because Nemet has also alleged that it "believes" that ConsumerAffairs actually authored certain defamatory "consumer" complaints. See, e.g., Am. Cmplt. ¶¶ 64, 68, 72, 82, 86, 96. The outcome of the appeal, therefore, may turn on the mundane question of whether these conclusory allegations are sufficient to survive a motion to dismiss.
You can monitor the progress of the case and access the underlying court document through our database entry, Nemet v. ConsumerAffairs.com.