Court filing
Transcript of Zoom Video Conference Proceedings — Brooks v. Thomson Reuters Corporation (Dkt. 50, N.D. Cal. No. 3:21-cv-01418)
Filed June 24, 2021 in Brooks v. Thomson Reuters Corporation; one of 127 filings from this case.
Record facts
| Court | U.S. District Court for the Northern District of California |
|---|---|
| Filed | 2021-06-24 |
U.S. District Court for the Northern District of California · No. 3:21-cv-01418-EMC · Doc. 50 · 2021-06-24 · Docket on CourtListener
Full text
Debra L. Pas, CSR, RPR, RMR, CRR
Official Reporter - U.S. District Court - San Francisco
(415)
Pages 1 - 43
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
BEFORE THE HONORABLE EDWARD M. CHEN
CAT BROOKS, et al,
)
)
)
Plaintiff, )
)
vs. ) No. C 21-1418 EMC
)
THOMSON REUTERS CORPORATION,
)
) San Francisco, California
Defendant. ) Thursday
) June 24, 2021
___________________________________) 1:30 p.m.
TRANSCRIPT OF ZOOM VIDEO CONFERENCE PROCEEDINGS
APPEARANCES:
For Plaintiffs: GIBBS LAW GROUP LLP
505 14th Street
Suite 1110
Oakland, California 94612
BY: ANDRE M. MURA, ESQ.
GUPTA WESSLER PLLC
100 Pine Street
Suite 1250
San Francisco, California 94111
BY: NEIL K. SAWHNEY, ESQ.
For Defendant: PERKINS COIE LLP
1201 Third Avenue
Suite 4800
Seattle, Washington 98101
BY: SUSAN D. FAHRINGER, ESQ.
Reported By: Debra L. Pas, CSR
Reported By: Debra L. Pas, CSR
Reported By: Debra L. Pas, CSR
Reported By: Debra L. Pas, CSR 11916
11916
11916
11916, , , , CRR, RMR, RPR
CRR, RMR, RPR
CRR, RMR, RPR
CRR, RMR, RPR
Official Reporter - US District Court
Computerized Transcription By Eclipse
Case 3:21-cv-01418-EMC Document 50 Filed 07/16/21 Page 1 of 44
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Debra L. Pas, CSR, RPR, RMR, CRR
Official Reporter - U.S. District Court - San Francisco
(415)
Thursday - June 24, 2021
1:39 p.m.
P R O C E E D I N G S
---000---
THE CLERK: Calling Civil Action 21-1418, Brooks, et
al versus Thomson Reuters Corporation.
Counsel, please state your appearances for the record
beginning with counsel for plaintiffs.
MR. MURA: Good afternoon. Andrew Mura for the
plaintiffs.
THE COURT: All right. Thank you, Mr. Mura.
MR. SAWHNEY: Neil Sawhney for the plaintiffs as
well.
THE COURT: All right. Good afternoon, Mr. Sawhney.
MS. FAHRINGER: And Susan Fahringer for Thomson
Reuters.
THE COURT: All right. Good afternoon,
Ms. Fahringer.
Interesting case. My first question goes to the privacy,
the right of publicity claim or right of privacy claim. And
I'm sort of curious. You know, my understanding from many
years ago in tort law is that this is the branch where somebody
uses somebody else's likeness to either promote some product or
service, an endorsement, or uses their fame in some way to
capitalize on -- you know, putting their face on a magazine
cover or something. In some way that is appropriating or
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Debra L. Pas, CSR, RPR, RMR, CRR
Official Reporter - U.S. District Court - San Francisco
(415)
exploiting that person's likeness. And this doesn't seem to be
that mode. It seemed to me much more in the mode of just a
straight privacy invasion, intrusion of privacy.
I'm sort of curious why this sort cause of action as
opposed to a more traditional up front privacy, straight
privacy violation.
MS. FAHRINGER: I assume that's a question for the
plaintiffs. But we have the same question.
THE COURT: Yes. Yes, it is.
MR. MURA: I'm happy to take that, Your Honor.
Well, one, we think this is tailor made for this because
California courts have rejected the view that this tort
requires that it be used for purposes of publicity.
And so the Eastwood case, which we've cited, has said that
California law has not imposed any requirement that the
unauthorized use or publication of a person's name or picture
be suggestive of an endorsement or association with the injured
person.
And, in fact, the statute --
THE COURT: But it was still -- that case played on
Clint Eastwood's fame. If it was Joe Shmoe, it wouldn't have
been much of a claim. Who cares about that.
But, I mean, if you use somebody -- you know, it may not
be promoting a project. It seems to me there's two branches of
this appropriation claim.
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Debra L. Pas, CSR, RPR, RMR, CRR
Official Reporter - U.S. District Court - San Francisco
(415)
One is -- is the implied endorsement, you know. The other
is the Clint Eastwood kind of using personality and fame. And
I don't see that here.
MR. MURA: Well, if you look at Comedy III
Productions, which mentions that Eastwood was before the
statute itself was amended so that it includes the language in
products or advertisements.
So now the statutes for a cause of action itself, which is
the basis for our UCL claim, is not limited to advertisements
explicitly. And there are many cases holding that the common
law cause of action as well is not limited to endorsements.
And there are cases as well cited in Eastwood. Eastwood
cites the Williams case, where the Court found exploitation
where a professor lecturer's notes were sold without his
permission.
And then I can offer you another case, because this was
raised in defendant's reply, but the KNB Enterprises against
Matthews case, which is 78 Cal.App. 4th 362, Page 373,
concerned the unauthorized distribution of models' photos.
This was a case involving photographs that were not used in a
manner to create a false impression of an endorsement. It was
the sale of non-famous people's sexually explicit photos.
So it wasn't using the photos to make the brand better as
an endorsement, but it was taking photos that you don't want to
be sold and selling him them, which is very similar to what's
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Debra L. Pas, CSR, RPR, RMR, CRR
Official Reporter - U.S. District Court - San Francisco
(415)
happening here.
So if you look more broadly at the right of publicity,
it's dealing with two things. It protects both the proprietary
interests and privacy interests.
So on the one hand, it allows persons to capture the
economic value of their identity. And we know from cases like
Motschenberger -- Motschenberger, excuse me, that this applies
to the appropriation of identity of a relatively unknown
person. It may result in an economic injury even as to that
person. And it may create economic value in what was
previously valueless. And so that's one aspect of it.
And the other aspect --
THE COURT: Well, let me ask you though. The idea is
you're creating value, exploiting somebody -- something about
their likeness, their personality, whether it's sexually
explicit photos, or -- even if they are not famous, or somebody
who is famous.
Here what's being exploited is just facts about the
person. Not the person. There's nothing about that person, it
seems to me, but it's the details and facts about the person.
It's not their -- it's not their likeness. It's not their
photo. It's not -- something about their -- I mean, it seems
different.
Do you have a case where this -- where this cause of
action has found to lie, where it's about information gathering
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Official Reporter - U.S. District Court - San Francisco
(415)
and creating dossiers?
MR. MURA: Well, I would -- it is about photos, Your
Honor. We have alleged that photos of millions of people are
included in the dossiers. We have also alleged names. And
names of photographs have traditionally been included both for
the common law purposes and under the statute explicitly as
indicia of identity.
I would point the Court to the Vanna White case. That was
a case involving likeness of a robot, where the robot was found
not to meet the statutory definition of likeness. But what the
Court said there is the common law is incredibly broad and
appropriation of any indicia by which the person is
identifiable is covered by the common law.
And you do have classic sort of information that is
typically covered by this type of cause of action: Names,
photos of millions of people, detailed information. And all of
this is being put together to create an identity profile.
Identity is the product.
And these dossiers exist solely from and because of
Thomson Reuters. And this includes proceed proprietary
information. Thomson Reuters talks about this in its marketing
materials. It's not just public information out there --
THE COURT: I understand that. I understand that.
We get into that when we get in the balancing test and the
First Amendment.
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Debra L. Pas, CSR, RPR, RMR, CRR
Official Reporter - U.S. District Court - San Francisco
(415)
Well, but you have no case on point where it's just a
matter of gathering personal information, as opposed to using
somebody's likeness for either promotion purposes or to -- to
enhance a product.
MR. MURA: No, I believe we do. I believe Eastwood
does say that the right of publicity is not merely a type of
law forbidding false advertising or false endorsement.
THE COURT: Would that be your best case?
MR. MURA: I believe the statement in Eastwood and
the cases cited there in Williams.
And KNB Enterprises against Matthews case, it's another
case in which the photos were not being used as an endorsement.
The photos were being used contrary to the consent of women,
very much like here. The photos and the names and that sort of
information is being used without consent to provide these
identity profiles.
And so those cases show -- I mean, I certainly agree, Your
Honor, that some of the heartland cases are cases which involve
endorsements and celebrities. But it's been long established
that this law is broader than that and does not simply cover
celebrities and it does not simply cover endorsements.
THE COURT: So let me ask you my first question. Why
not bring a straight privacy, whether it's intrusion or
collection of information case? Is there something I'm missing
here?
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Official Reporter - U.S. District Court - San Francisco
(415)
MR. MURA: We may be open to amending to include such
a claim, Your Honor. But we thought that the claim fit nicely
within this. Because identity, again, under the common law is
any indicia by which the plaintiff is identifiable. And names
and photos are clearly part of the CLEAR products. And that
information is being collected without consent. And it's being
used to define and make clear, to use sort of the title of the
product itself, the identity of these individuals and to
provide sort of third parties who pay for this information
secretly to understand who these plaintiffs are.
THE COURT: So would a phone book constitute a
violation of the right to publicity?
MR. MURA: No, Your Honor. First of all, a phone
book includes -- to the extent that it includes public
information and advertising, there is a Ninth Circuit case
about that. And the Court found that a phone book -- you know,
first of all, it's not a right of publicity case. That was
just a First Amendment case considering --
THE COURT: I'm not talking about any case. I'm just
asking under your theory, where you're collecting people's
information. You're using it, you know, in a way. Any kind of
directory, whether it's a phone book or any kind of directory
of -- someone puts it together, a directory of your classmates
from your law school. Is that a violation of the right to
privacy?
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Official Reporter - U.S. District Court - San Francisco
(415)
MR. MURA: You would have to analyze it based on the
nature of the information and the nature of the exchange. And
here the information is -- a lot of it is private information.
It's proprietary information that Thomson Reuters collects.
It's simply not but public information.
Although there is case law that we cited where there is a
private interest in public information. We cited numerous
Supreme Court cases which discuss privacy interests and
information like addresses.
And there is a vast difference between information that is
out there and in the disaggregate and the collection of that
information into a summary form of a profile, and that's what
we're dealing with here, which is very different from names and
addresses next to, for example, advertisements that are already
public. I mean, the --
THE COURT: Why would the public -- why does the
public versus private nature of the information, especially in
view of the aggregate, you know, idea -- I mean, your face is
public information; right? Somebody could take a picture --
you're out in public and they take a picture. I'm not sure why
that informs the question of the right to publicity.
MR. MURA: Well, the difference is also the sale and
the consent, Your Honor. There is not consent here to the
collection of this wholesale information which comes from, you
know, private sources, the scraping of chat rooms, non-public
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Official Reporter - U.S. District Court - San Francisco
(415)
information about abortion records, information that's
collected from data brokers, and then the sale that information
without consent.
I mean, very much the right of publicity is about -- it's
about consent. The ability both to capture the economic value
of your identity, but also to control the use of your identity.
And your identity being the indicia by which you're
identifiable.
And here it's in spades. The type of information, the
360-degree view of persons that's being sold by Thomson Reuters
through the CLEAR product.
THE COURT: All right. Ms. Fahringer, how do you
respond to Eastwood, Williams and KNB Enterprises.
MS. FAHRINGER: I like those cases very much, Your
Honor. And the Court's recollection of tort law is the same as
it is today.
The right of publicity doesn't allow you to stop someone
else from disclosing factual information about you. Other
torts might. Other circumstances than these, if they bring
that sort of a tort, it will -- it's doomed for other reasons.
What the right of publicity protects against is taking
identity, using its allure for your own gain.
We know what this means from the case law. It requires a
certain chronological sequence. You have to use the identity
and appropriate their likeness in order to secure some gain.
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Official Reporter - U.S. District Court - San Francisco
(415)
Use and appropriation have to happen first. And we know
what those mean. The cases all say so. Use and appropriation
as a product endorsement, that's a -- that's one of the
possibles, one of the possibilities. That's Fraley, Fairfield,
Perkins, Stewart. Or in an ad, or something very like an ad --
THE COURT: What about the non-endorsement cases, the
Williams and the KNB case?
MS. FAHRINGER: Those are typically cases that are
and like. For example, if they are selling model photos. That
was also sort of the Michaels versus Entertainment Group. That
actually was in an advertisement used to sell adult video
subscription.
I don't know about the KNB case. To be honest, I haven't
read it. It wasn't in the briefings. But I would guess that
what it is, if it's talking about models, is that the models'
identities are something that's alluring and that would be used
to close a sale or that would be used to do something that
benefits the person in a right of publicity claim.
There are all of the -- all of the cases cited by -- all
of the cases cited by the parties, with the exception of those
cases that dismiss this claim with prejudice on the pleadings,
all of them have to do with use and appropriation as a product
endorsement. Those are the cases I just recited. Or in
something like an ad. That's the Eastwood case. That's the
White case. Michaels, Brown, Downing, Callahan. Even Lucas
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Official Reporter - U.S. District Court - San Francisco
(415)
versus White Pages, the Illinois case about the Illinois
statute on which the plaintiffs rely so heavily, that, too, was
an ad-like setting.
The photo in these cases used the allure, the attraction
or the identity as bait to achieve some gain. And that's why
right of publicity cases are typically brought by celebrities.
Celebrities are the most alluring for that purpose. And that's
why --
THE COURT: They have to be. There are cases --
MS. FAHRINGER: No.
THE COURT: -- where you have, you know, a non-known
person to use as the --
MS. FAHRINGER: Absolutely, absolutely. For example,
the endorsement cases. And that's why another uses
endorsement. A trusted person, or a person in the position of
a potential buyer. That's the copy -- the Fairfield case,
where it's just an ordinary guy who happens to be in the
position of the buyer, a lawyer, who is used in an endorsement
setting. That's more likely to attract attention.
In some of those cases the claim failed anyway for other
reasons. Like Callahan, for example, it was barred under the
CBA. But that was -- it's necessary, but it's not sufficient.
But it's certainly necessary. And here the Complaint doesn't
allege that at all, as the Court has noted.
I want to speak just a minute in response to the Court's
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Official Reporter - U.S. District Court - San Francisco
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question about have we got a case. Has anyone got a case that
just deals with information, just merely information. And the
answer is yes. Yes, we have that case. And that case is
In Re Facebook Consumer Privacy User Profile Litigation.
And just like in the Aligo case for different reasons, the
Court held that that use -- just as the Court noted, that that
use was so, quote, categorically different from what's covered
by this tort, so far beyond the reach of this tort that that
Court dismissed the right of publicity claim with prejudice on
the pleadings.
Similarly in Aligo, which isn't -- and let me just run
through. We've got all of these cases that say what it could
be: Necessary, but not sufficient. Those are the cases I just
recited. The endorsement cases. The ad-like cases.
We also have a group of cases that tell us what it
definitely isn't. What it definitely isn't. Those cases tell
us what doesn't qualify as right of publicity claims.
Just displaying a name and likeness, just the mere
display, no, not covered. That's' Perfect 10.
How about displaying somebody's name and likeness next to
an ad? How about that? No, not covered. That's Cross versus
Facebook.
Okay. How about displaying a likeness within an ad where
the likeness is just one of many? No, that's not covered
either. That's incidental use. And the Aligo case held that
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Official Reporter - U.S. District Court - San Francisco
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that claim on the pleadings was dismissed with prejudice
because it was, quote, inconceivable that the incidental use
would matter.
And then, of course, we have selling information, the
In Re Facebook case, not covered. Categorically different from
what's covered by this tort.
This is not a right of publicity case at all. It doesn't
fit this claim. It doesn't fit this fact -- these facts. And,
moreover, every other claiming asserted by the plaintiffs
hinges on the right of publicity concepts. Their UCL claim,
their UCL unlawful claim barely does. Their unfair claim does
as well. And unjust enrichment claim is -- is an add on.
THE COURT: I'm going to address that.
Let me just ask plaintiffs. I take it you don't agree
with Judge Chhabria's decision in In Re Facebook.
MR. MURA: No, we don't, Your Honor.
And if you look at Eastwood, I mean, Eastwood directly
addresses this question about whether the claim is limited to
the sort of exploitation or advertisement or promotion, and it
says it is not.
And it also cautions that the common law right should not
be limited to sort of these historical examples.
So we don't disagree that sort of the more common cases
historically have been the sorts of cases that counsel was
talking about. But counsel is saying that this case is not
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Official Reporter - U.S. District Court - San Francisco
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like Cross and other cases like Perfect 10, but those cases did
not deal with the type of conduct and product that we're
talking about here.
And for appropriation, it's quite simple under both the
statute and the common law. You just have to show
appropriation to the company's advantage, commercial or
otherwise.
And here Thomson Reuters entire product is selling
people's identities, and they are taking the name and photos
and using it to their advantage. And that satisfies both the
common law and it satisfies the statutory claims.
So, of course, I mean, these data brokers and --
THE COURT: That would apply to any collection of
information about people; right? I don't see how could you
draw the limit. Whether it's a phone book, a directory of your
class, your law school class, anything. You say: Well,
there's consent. That's a defense, but, I mean, there is a
prima facie tort violation.
Any time you collect in any way, even if it's two names;
right? What if it's just one name? You give somebody else
somebody's name and you sell it. You say: Well, I'm really
interested in so-and-so. I want to know where they live,
et cetera, et cetera. And you say: Okay, I'll find out for
you. That's a right of publicity claim.
Maybe, it seems to me, that could be something else, but
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Official Reporter - U.S. District Court - San Francisco
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you're saying that's a right of publicity claim.
MR. MURA: Yeah. I mean, the question, Your Honor,
there would be whether you're appropriating the use of
someone's identity.
And there is this some concept of incidental use; right?
I mean, if you're just taking information and using it in a way
that is so fleeting and insignificant that it has no commercial
value, then that's not covered.
But clearly Thomson Reuters is not using information in
that incidental way, such as in the example that the Court just
gave. It's using the information precisely of so many
Californians and featuring it prominently. And it's directly
related to its commercial purpose, which is selling the
identity profiles of these individuals.
So we think that's quite distinct, especially given the
quantum, the private sale and the nature of the transaction.
That all sets it apart from sort of the ordinary examples of
someone using someone's name.
And, also, to the extent that there is a concern that this
would tread on free speech. The claim itself includes
exceptions that deal with newsworthiness, transformative nature
for art. None of those exceptions are met here, and that goes
a long way to showing that the claim itself is quite cabined if
it's applied by it's terms and consistently with its
exceptions.
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Official Reporter - U.S. District Court - San Francisco
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THE COURT: All right. Let me ask. Your opponent
says that the unfairness -- the fairness claim under the UCL is
hinged upon establishing this right of publicity tort claim.
I take it you don't agree with that; that there is, for
instance, a balancing test, the South Bay test. It doesn't
matter. It's not a requirement that a tort be committed in
order for something to be unfair, as opposed to unlawful.
I take it, that's your view, Mr. Mura?
MR. MURA: Yes. It's a cost benefit analysis that,
one, we don't think is properly suited for the pleadings, but
essentially the question would be whether there's a substantial
harm from the sale of the personal information.
Here there are two harms, economic harm and invasion of
privacy. And the information isn't all already public, as
Thomson Reuters keeps suggesting. It's non-public and
proprietary information.
And even as to the public information, the Courts have
distinguished between disaggregated information and information
that's compiled into a single dossier. That vastly exceeds the
nature of the harm.
And when you compare that to the countervailing interests
that Thomson Reuters mentions, those interests simply dissolve.
I mean, they are just outweighed, but this is a factual
question that's typically --
THE COURT: Yeah. No, I understand that. I'm just
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trying to make sure that it is your position that this is a
cause of action that is divorced and not tethered to the rise
or fall of a publicity tort claim. You can still have a UCL
claim even without a tort claim.
MR. MURA: Yes. You can still have a UCL claim even
without a tort claim.
THE COURT: And you also under the tethering test,
the Cel-Tech case, the unfairness, although it has to be
tethered to some legislative declared policy, you don't
necessarily have to find a violation of a specific statute.
You can glean policy from statutes that's enough to state a
public policy.
MR. MURA: That's exactly right, Your Honor, yes.
THE COURT: All right. So let me ask Ms. Fahringer,
what's wrong with that? I mean, the UCL test is much broader.
I understand the unlawful prong is key to a violation of
some law, but the unfairness test is much more amorphous. Then
there's different prongs of that. Two of those prongs, which
seem to apply in a non-competitor situation, general balancing
test and the tether test, would suggest that those are claims
that could survive with or without establishing a right of
publicity tort claim.
MS. FAHRINGER: Yeah. And I might have been using
too much shorthand when I said that about the unfair claim.
Here are the issues. Here are the problems with their UCL
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unfairness claim, and there are two categories of them.
Let's start with the unfair conduct that they are
targeting. That's in Paragraph 92 of the Complaint. And in
Paragraph 92 they describe that conduct as "selling
Californians' personal information and data without consent."
That's the nature of the conduct they're targeting here.
So that leads to our CCPA, unfairness, legislatively
declared policy issue when -- this Paragraph 92 is sort of
another way of saying that the plaintiffs want the right to
opt in to the sale of their personal information. And the
California legislature and the CCPA said there is no such
right.
That's -- it governs the sale of personal information. It
adopts an opt-out framework. The framework Thomson Reuters
uses. That's in the Complaint, Paragraph 46, 47, 57, where the
legislature has permitted the conduct that's serving as the
predicate for the unfair claim. Courts can't override that.
That's one issue.
But regardless of the CCPA, the claim also fails under the
tests. But that's the CCPA problem, that the unfair --
THE COURT: And isn't part of the response to that
that there is a factual dispute whether the CCPA has been
actually complied with here, given the allegations about the,
quote, tiny link, quote/unquote, at the bottom of the page, "no
notice to consumer that exists." The difficulty in actually
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opting out. There seems to me at least a factual question can
be resolved at this stage about whether or not the CCPA escape
hatch really works here.
MS. FAHRINGER: Yeah. And with respect, there is no
dispute that the CCPA adopts an opt-out framework. And the
nature of their claim is that it's an opt-in. They want
opt-in, and the CCPA said: No, no. Opt out is our model.
THE COURT: Does that -- is that almost kind of a
preemption argument; that the -- to the extent that there would
have been a generalized unfairness claim in this area, that the
CCPA sort of, I don't know, roughly speaking, preempts this
notion. You can't have an opt-in. You can only have an
opt-out. Is that your argument?
MS. FAHRINGER: Not precisely. The issue is that --
the CCPA is an unusual statute. It goes to great, great
lengths to say you can't -- there is no -- the private right of
action is limited to security breaches.
You can't litigate whether somebody complied with the
CCPA. It's not permitted. CCPA private right of action is
limited to security breaches.
So what we've got here is a statute that says, hey,
opt-out is the framework, and here is all the details about how
that works. And by way, Courts, stay out of it. That's not --
you know, that's for -- that's not for -- not courts. Private
litigants, stay out of it. That's for the Attorney General.
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That's the issue with the CCPA. It's just -- it's an
unusual statute. And the nature of its unusualness is the
reason that you can't really dive into the details of
compliance with the many provisions of that statute.
But I want to set that aside for the moment because it --
because it doesn't -- it's not required to show that the
unfairness claim isn't viable. And the reason for that -- and
this is where the issue, the problem is tied to the flaws in
your right of publicity claim.
The -- the -- even if the CCPA didn't permit an opt-out
framework, plaintiffs still couldn't show it's an unfair
practice because they fail the tethering test. The
legislatively declared policy they resort to is the statutory
right of publicity. And that's -- even if it -- even if they
can't state a perfect claim under that, there's no -- the right
of publicity is not a legislatively declared policy that's at
issue here.
The other -- sometimes in their argument you get the sense
that this really should be an invasion of privacy claim, but in
this Complaint -- and I've underlined that in this briefing
they argue that the problem is not the disclosure of their
information. It's -- it's sale. That's at their opposition at
Page 18, where they say:
"Thomson Reuters could comply with the law simply
by either not charging for Californians' identities or
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getting consent to do so."
This case, the one before us today, does not focus on --
it's not a privacy harm if Thomson Reuters could disclose the
exact same information for free.
So the harm to these plaintiffs is entirely economic. And
that can't outweigh the many -- the utility of the defendant's
conduct against Thomson Reuters's conduct here.
CLEAR is used. And this is in the complaint, it's
incorporated by reference. It's used to prevent money
laundering, to verify and know your vendor, to facilitate
commercial lending, healthcare and insurance fraud prevention,
protecting victims of human trafficking and sexual
exploitation, finding absent parents.
The Complaint at Paragraph 11 cites the website's CLEAR
investigation pages that recite this.
That utility is not outweighed by the harm that this
Complaint alleges. The balance doesn't favor plaintiffs. They
can't show it's unfair under that balance.
Moreover, they can't show -- due to the CCPA, they can't
show that an opt-out method is unfair. So their unfair
framework fails for both of those two reasons.
THE COURT: Well, let me ask Mr. Mura this question
then. So if the harm -- the objection is to the -- not the
aggregation in obtaining of the information, but the selling of
the information, then it strikes me as -- you know, what's the
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incremental difference between -- taking all this information
and putting it all out on the web and taking all this
information and selling it and making it only available for
price, from the -- from the consumer's perspective, it seems
like just giving it away would even be worse. It would be even
a greater dissemination.
So I'm not sure I understand. If the gist -- the gravamen
of the Compliant is the selling of the personal information,
which is stated Paragraph 92, for instance, what's the harm
here that's being objected to?
MR. MURA: It's both an economic and a privacy harm,
Your Honor. And the point we were just trying to make -- I
think counsel is taking a statement that we're making in the
Section 230 section, but our Complaint overall, it's honed;
that the point is that these 360-degree dossiers about people
exist is because Thomson Reuters is collecting an amalgam of
private and public data and selling it, which distinguishes the
Facebook case. Because the Facebook case is not about the sale
of data. It was about data that was leaked through Cambridge
Analytica, which further distinguishes that case.
But here we're talking about an interest in controlling
private information and, also, an economic harm.
And the question of whether that substantial harm from the
sale of personal information outweighs whatever substantial
interest that defendants think the product has, including in
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collecting and scraping chat records, abortion records, and
providing that --
THE COURT: If that information were given out, it
appears you don't have any objection. You're not asking in
your prayer for relief any injunction against collection, any
injunction against any dissemination. It's selling without
consent or paying for it.
MR. MURA: Well, we don't have a request because
that's not what Thomson Reuters is doing. Thomson Reuters is
not collecting the information and providing it out for free.
I think that was just a flourish in that sentence.
But if you look at what Thomson Reuters is doing, we're
attacking the sale of it and that -- because that's what's
causing the privacy and the economic harm. And it fits
precisely what Thomson Reuters is doing here.
And it also fits the right of publicity claim, because
that concerns the appropriation for a commercial advantage,
which is what Thomson Reuters is doing. Not what Facebook was
doing with the information that it had that was leaked through
Cambridge Analytica. That wasn't a sale of information. So I
think that distinguishes that. But that balancing test should
not be done at the pleading stage.
And I would disagree with counsel that we have not
criticized the opt-out function of their platform. Our
Complaint does discuss the opt-out platform. It says that the
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plaintiffs could not comply, could not provide the opt-out. It
explains why the opt-out doesn't comply with the CCPA.
But that's all a factual basis to reject Thomson Reuters'
defense based on the CCPA.
There's an even better argument, which is if you look at
what the CCPA says, it says:
"The provisions of the law that afford the
greatest protection for the right of privacy" --
(Court reporter clarification.)
MR. MURA: Yes. I'll speak a little more slowly. I
apologize for that.
It says in Section 1798.175:
"The provisions of the law that afford the
greatest protection for the right of privacy for
consumers shall control."
And it also says that:
"The CCPA shall not be construed to relieve any
party from any duties or obligations imposed under
other law."
So it's quite clear that the CCPA is intended to
supplement not supplant existing laws relating to consumer's
personal information.
And beyond that, the mere fact that it has an opt-out
versus not opt-in, we know from De La Torre against CashCall,
Cel-Tech and many California Supreme Court cases that not
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making conduct unlawful doesn't make it lawful for all
purposes.
So there is nothing in the law itself that suggests that
it bars consideration of whether conduct is unfair, especially
if the UCL, which it might here, afford greater protection for
consumers.
THE COURT: Let's talk about the First Amendment, the
constitutional sort of defense.
I guess I want to hear from you, Ms. Fahringer. Where --
what the -- how this is a matter of public interest, public
concern here.
There is -- it seems to me this is a matter of private
concern, not public concern, not unlike the credit reports in
Dun and Bradstreet. And given that this is a -- you know, this
is not being widely publicized, you have to pay for it, paying
for data, paying for information, and it's not -- you know,
it's not being disseminated widely, as you would in a news
broadcast or something else.
So what's the First Amendment interest here that's so
compelling?
MS. FAHRINGER: Yeah. So here is the -- let me start
just from the step one. The right of publicity is a
content-based restriction. Restriction applies unless an
exception covers the conduct.
And the issue that we're really wrestling with, I think,
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is commercial speech. Commercial speech has to propose a
commercial transaction. And here there is no commercial
speech-y sort of allegations.
In the context of the right of publicity, when right of
publicity cases talk about this, it means typically using
someone's identity in an ad-like setting, implying endorsement.
We don't have that here for the reasons we just discussed. If
you did, where you have that sort of activity, you use a
balancing test.
And the -- the right to be protected from unauthorized
publicity against the public interest and the dissemination of
news and information. And a clear platform is a platform
that's used. It's a website. It's a public forum. And it's a
platform that's used for the dissemination of information.
The right of publicity test that Courts apply, it's the --
the question is does the -- does the speech merely exploit the
individual portrayed by -- for example, if it's nothing more
than an ad or an endorsement, immunity isn't granted. That's
New Kids on the Block.
Here it doesn't even begin to exploit the individual
portrayed. It's why there is this disconnect between these
facts and the right of publicity case. The framework, the
First Amendment framework applied in light of publicity cases
starts from the premise that there is some sort of commercial
use. That's just absent here. Here there is nothing like
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that. They don't allege that.
So scrutiny should apply. If there were --
THE COURT: I guess I'm missing something here. This
is strictly commercial. I mean, people are buying this
information for -- like you say, to verify mortgages or, you
know, verify -- or do whatever they are going to do. It's a
for purchase, for sale information.
It's not being published widely, you know, in some
publication free of charge.
MS. FAHRINGER: But it doesn't matter. First
Amendment doesn't care whether it's for -- newspapers aren't
free. Books aren't free. The First Amendment doesn't care
whether --
THE COURT: The nature of the dissemination informs,
it seems to me, the quality of the First Amendment interest.
First of all, this is all in the context -- this speech is
being used for commercial purposes.
What they are trying to enjoin is the sale of information
in a commercial context, not the publication in a news
broadcast. So this sounds to me like classic, you know,
commercial speech.
MS. FAHRINGER: But the right of publicity framework
the Courts use -- let me back up a step.
What these plaintiffs are arguing about is their
information. And what we're saying, that the First Amendment
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bars their right of publicity claim.
THE COURT: Yeah, but what the First Amendment
applies to is restriction on your client's speech. Forget
about what the plaintiff's interest is.
I'm looking at what is it that's being restricted. Is it
political speech? Somebody can't get on a soap box and espouse
Marxist views in San Diego? Or is it about somebody saying: I
want to sell you this kind of optometry services.
You know, and here is, I want to sell this information.
Just like a credit report. I want to sell a more extensive
credit report. It's a dossier, according to the plaintiffs.
That's for sale. That is a proposed commercial transaction
that would be impinged upon by any injunction of this Court.
That's where the First Amendment comes in. That's the
state action. So it is a commercial transaction, it seems to
me.
MS. FAHRINGER: Well, either way. Say it is. The
right to be -- in a right of publicity case -- in a right of
publicity case the balancing test that is then triggered. Say,
it is a commercial transaction. Then you go to this balancing
test. That's in New Kids on the Block. And what you balance
is the right to be protected from unauthorized publicity on the
one hand, against the public interest and the dissemination of
news and information on the other.
So let's start with the plaintiff's right to be protected
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from unauthorized publicity. Does this merely exploit the
individual portrayed? That's the New Kids on the Block test.
Is it nothing more than an ad or an endorsement, for
example? Then immunity would be granted. That's New Kids on
the Block. And that's one where First Amendment was found
to -- I'm sorry. So I've got -- I got ahead of myself there.
If it merely exploits the individual portrayed, if it's
nothing more than an ad, immunity won't be granted.
And here there is -- there is nothing like that even at
the threshold. There is no ad-like activity. There is no
ad-like endorsement. They are not used to propose a commercial
transaction.
THE COURT: So, in other words, there's not much of a
privacy interest here. There's not much of a -- on the other
side of the equation, this is only a right of publicity case.
What's being deprived is the money that you paid for it, not
some exposure of something, you know, that's intensely personal
or private or somehow injurious.
And which is why I raise the question: Why isn't this
just a straight privacy case? Because then it's -- then you
weigh how deeply intrusive it is to have all your information
harvested, gathered, some of it allegedly non-public
information, and then put out there for sale, everything about
your -- you know, all those kind of details; where you've been,
license plate detections, or whatever it is. All this stuff
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that tells you, you know, everything. Then I sort of
understand that.
But I hear what you're saying, is that since they've only
asserted a very limited privacy interest, the right of
publicity, which is in many ways an economic deprivation kind
of thing, because you should have paid me -- if you're going to
say, I'm going to endorse this thing, or if you're going to use
my face on the cover of your product or whatever it is, I
should get my royalty out that and then we'll be okay.
So let me put the ball back in your court. So the fact
that you framed this only as a publicity -- right of publicity
and not as a privacy intrusion case, does that inform the First
Amendment calculus here?
MR. MURA: It does, Your Honor, because the only --
the only U.S. Supreme Court case, Zacchini, to address the
First Amendment in the right of publicity context found that
the commercial use of identity without consent is ordinarily
unprotected by the First Amendment.
And then you have Comedy III Productions, which is a
California Supreme Court case, which found the same. And they
did so. They did not supply strict scrutiny. They applied a
balancing test, even though the right of publicity was a
content-based restriction.
All the arguments that Thomson Reuters is make, which are
sort of the framework that you might think of through Time Hill
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or New York Times versus Sullivan, that's the same category
error that the Ohio Supreme Court had made in the Zacchini
case.
And if you read the Zacchini case, the Supreme Court says,
no, those types of privacy cases are -- that's not the right
line of cases, because this does involve proprietary interests,
this tort.
And so what applies here is a balancing test, even though
it's a content-based restriction. And those are -- those are
two cases that are both on all points.
It's Thomson Reuters, who in its opening brief, applied
the balancing test. They did not bring up strict scrutiny
until their reply, so it should be waived.
But if you look at any of the cases that have applied any
sort of traditional tiered scrutiny, Court after Court have
held that private sales of data aren't subject to strict
scrutiny. It's not journalism. It's not a matter of public
concern.
All the analog cases -- and those are not right of
publicity cases, but all the analog cases, they applied
intermediate scrutiny. So at most you would apply intermediate
scrutiny.
But I do think given Zacchini and Comedy III Productions,
which is both U.S. Supreme Court and California Supreme Court,
applying a balancing test, that that's the appropriate test
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that should apply.
THE COURT: Well, let me ask. As I understand it,
the First Amendment is being asserted against both common law
and statutory claims of publicity. Is it being asserted
against the UCL claim as well?
(Brief pause.)
THE COURT: Maybe I need to clarify that. I want to
make sure I understand what the context here is.
MS. FAHRINGER: Yeah. And I'm -- I'm pausing on the
question because the UCL claim is wrapped up so tightly in the
right of publicity claim --
THE COURT: Well, it may or may not. I know that's
your view. I don't know if that's necessarily correct.
I'm going to assume for a moment that the UCL claim has
its own legs, particularly under the balancing test, which is a
little bit more amorphous and broad.
Is there a First Amendment assertion there as well, or is
it just a CCPA defense, or what's --
MS. FAHRINGER: Well, two things. So we're talking,
I think, about -- there is certainly a UCL First Amendment
assertion with respect to the unlawful UCL prong obviously
because that relies on the right of publicity.
THE COURT: Right.
MS. FAHRINGER: The unfairness prong. And you will
we have the CCPA issue, the unfairness balancing, tethering
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tests that are failed without resort to the First Amendment.
And then on top of that, I do think that the First
Amendment -- and it's for the same reasons that it should bar
the same -- even if you apply intermediate scrutiny, it fails
here due to the nature of the plaintiff's interests. It's sort
of these -- these flaws that run through the way the claims are
treated in this complaint. They, in fact -- the -- the claim
itself on the merits, they color the use -- the unfairness
prong, and it also is the reason it would fail even under
intermediate scrutiny under the First Amendment.
Does that answer the question?
THE COURT: I believe that bottom line is you're
saying that there is a First Amendment. Even as against the
balancing test of the UCL, you would assert a First Amendment.
To which, I assume, you would respond, Mr. Mura, that in
addition to the -- the cases that would say that the First
Amendment doesn't bar tort action for right of publicity, the
broader balancing test, which takes into account just the
straight privacy invasion here, not just the publicity aspect,
serves as an additional counter balance to the First Amendment
interest.
MR. MURA: Yes, Your Honor.
I did not understand Thomson Reuters to be raising an
argument against any -- any First Amendment claim against
anything other than the rights of publicity. That's not how I
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Official Reporter - U.S. District Court - San Francisco
(415)
read their brief.
So this is -- and I did not -- and they did not argue
strict scrutiny until their reply. So I think the tiered
security argument should be considered waived, but, again, I
think if -- I've made my argument.
If the Court does consider it then, at best, it would be
intermediate security because this is the private sale of data,
which isn't subject to strict security.
And just if I could say something about the harm. I mean,
the reason the harm is happening here is not just money. I
mean, it's because -- the only reason this information is out
there as a dossier is because Thomson Reuters is selling it is
as such and can sell it as such. And if they couldn't make any
money selling it, it wouldn't be out there and the privacy
harms that we have been discussing wouldn't be happening.
So it's not our position that the harm is just money. The
harm is also loss of control over the info and the ability to
control identity, which are at the hart of the right of
publicity claims.
THE COURT: All right. Let me -- last point. Let me
get your response to the CDA issue, Mr. Mura. Tell me why that
the immunization of CDA doesn't apply here.
MR. MURA: Well, first and fundamentally, I think the
Court can resolve it because Thomson Reuters has created a
profile of Californians. They select the data. They create
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Official Reporter - U.S. District Court - San Francisco
(415)
the product, a 360-degree view dossier that doesn't exist
anywhere.
And their marketing materials say explicitly that Thomson
Reuters has proprietary records. And the definition of
"proprietary" is essentially that Thomson Reuters has created
and developed it.
And so that puts it outside of the ordinary sort of
publisher realm, and it puts it outside -- it puts our claim
outside of the type of claim that is targeting conduct that
doesn't materially contribute to the illegality. I mean, this
clearly is targeting the creation and the development of these
dossiers.
And it's Thomson Reuters own actions in collecting and
merging both proprietary and non-proprietary data that means
it's making a material contribution to the creation of this
development. So it cannot have Section 230 immunity.
And Ninth Circuit law, Roommates and many other cases are
crystal clear that that immunity only applies to the extent
that interactive computer service provider doesn't also provide
some of the challenged information conduct.
And so here the creation and development of the dossiers
puts it well outside the bounds of what Congress considered to
be acceptable for Section 230 immunity.
We would also disagree with the argument that our claims
seek to treat Thomson Reuters as a publisher or speaker. That
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Official Reporter - U.S. District Court - San Francisco
(415)
first argument was really about the information being provided
by another information content provider.
But this other argument, which is sort similar is that,
you know, when you get to that consideration about publisher or
speaker, you ask whether the cause of action inherently
requires the Court to treat the defendant as a publisher or
speaker and you look to whether the duty that plaintiff alleges
the defendant violated derives from that status.
And so you have a nice quotation in Roommates which says:
Look, if someone -- if a third party tenders information for
posting online and all the editor's job is to do is to sort of
make minor edits or decide whether to post it or not, that's
going to be immunized. But if the editor publishes the
material and makes the affirmative decision to publish, that
person is contributing materially to the allegedly unlawful
dissemination. And so that person is a developer, it's not a
publisher, and is not entitled to CDA immunity.
So here it's just the nature of the product that
distinguishes Thomson Reuters from Google and from other
platforms. I mean, Thomson Reuters is making the affirmative
decision to publish. It's going out and procuring the
material. It's -- some of this information, again, is
proprietary and so, therefore, it's not entitled to CDA
immunity.
THE COURT: All right. So the model doesn't fit
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Official Reporter - U.S. District Court - San Francisco
(415)
because they are not just sitting there as sort of a neutral
forum for third-party posts exercising minimal editorial
comment, but instead really publishing their own and deciding
to publish their own content.
MR. MURA: That's right, Your Honor.
THE COURT: All right. Your response, Ms. Fahringer.
MS. FAHRINGER: Deciding whether to publish content
is obviously publisher activity. The question is: Whose
content is it? What information is at issue?
The Complaint answers this. The information at issue is,
quote, the names, photographs, personal identifying information
and other personal data that's included in the database.
That's Paragraph 70 of the Complaint.
The plaintiffs have made clear they are not challenging
the risk inform reports. So what we're talking about is the
names, photographs, personally identifying information,
et cetera.
By the way, Roommates makes clear that, quote:
"Providing neutral tools to carry out what may be
unlawful or illicit searches" -- and there is not even
that allegation here -- "doesn't amount to development
for purposes of CDA immunity."
Where do the names, photographs, personal identifying
information other personal data come from?
Paragraph 2. It comes from social -- this is the
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Official Reporter - U.S. District Court - San Francisco
(415)
Complaint, Paragraph 2. It comes from social networks, blogs,
chat rooms, third-party data brokers, law enforcement accesses.
Paragraph 14. It comes from public records, government
sources, internet searches, third-party data brokers.
Paragraph 16. Credit agencies, DMV records.
These are not Thomson Reuters. These are third parties.
It's covered -- clearly cover their other information --
another information content provider, that criteria is met.
Thomson Reuters --
THE COURT: Let me ask you about that. I mean, if
you are choosing for your own publication quoting from other
works, citing other works, does that make that content created
by a third party? It may be information gleaned from third
party put into your own content.
MS. FAHRINGER: So if the Court is asking about sort
of where on the spectrum, at what point does the use become so
transformative to turn it into your own content. Where does
that --
THE COURT: I don't know if it has to be
transformative, but you've adopted it as your own content at
some point.
I mean, you may be gathering stuff from here and there and
then consolidating it in a way. That's different from people
just posting without you necessarily using it or endorsing it
is as your own. Because it's being sold as your own package,
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Official Reporter - U.S. District Court - San Francisco
(415)
right, as Reuters package?
MS. FAHRINGER: Well, it's being -- this is like the
Ancestry.com case. This is -- this is a -- and it -- which is,
by the way, dismissed with prejudice because the CDA barred the
claims.
This -- maybe the delivery of the content provided by
others is done through the -- through the CLEAR product,
through Thomson Reuters, but that's not to say that an online
service provider -- that the content is provided. That's not
what it means to have an information content provider.
Information content provider, that's the entity
responsible for the creation or development of information
provided through the internet or any other interactive computer
service. And the information that's at issue in this case is
the content of what is said about the plaintiffs, and that
comes from others.
THE COURT: Well, what if somebody just does an
interview, does a field investigation? Gathers information,
writes a report and then puts it. Is that content created by
another provider because they got the information from somebody
out on the field who was interviewed?
MS. FAHRINGER: Again, that is not this case. That
is --
THE COURT: Well, but it's -- your argument seems to
suggest that. You looked at where the original source was?
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Official Reporter - U.S. District Court - San Francisco
(415)
I'm not sure I understand that.
I mean, the CDA was all about people posting stuff, you
know, on various websites, interactive websites. It was their
own post, et cetera, et cetera. It was not somebody gleaning
and pulling together posts and annotating them or doing
something with it and making it their own.
MS. FAHRINGER: But the third-party content needn't
come from users. That's the Liberi case, the Nasser case.
The -- the -- I think the issue -- I'm not -- I think -- I
get the sense that I'm not answering the question. That's
probably because it seems so clear to me, Your Honor. This --
what we've got is a -- and it's because I'm queuing off of the
Complaint.
So plaintiffs claims treat Thomson Reuters as the
publisher of -- or speaker. We know that. It's not a breach
of contract case or design defect case. It's about the content
of the information Thomson Reuters supplies. That's
publishing.
And so the question then becomes: Where does the
information -- and Thomson Reuters is acknowledged to be a
provider or user of an interactive computer service, it's
publishing or speaking content provided by another.
THE COURT: What's your response to that, Mr. Mura?
MR. MURA: The division is exactly what Your Honor
was suggesting. This is not a case where third parties are
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Official Reporter - U.S. District Court - San Francisco
(415)
posting or providing information to put forth on a platform.
It's Thomson Reuters that's making the decision about what to
post, what information to go out and to collect and to put in
its dossier.
And Roommates talks about the distinction between, you
know, a passive transmitter of information provided by others
and someone who does more than that. And someone who does more
than that becomes a developer, at least in part, of that
information. And Section 230 doesn't provide immunity for that
type of action.
And so here Thomson Reuters, the illegality completely
stems from what Thomson Reuters is doing, which is going out,
collecting all this information, creating this product that
would not exist. It doesn't exist anywhere else. It's not
just simply coming in some neutral fashion from some third
party. It's Thomson Reuters that's making the affirmative
decision to go and create this product, to put it together. It
decides what's in it. It uses proprietary information. So
clearly it's just not passively publishing some information
that some third party wants to be provided on screen.
And the question is never whether the information comes
from a third party. That is not the test. I mean, the test
laid out in Roommates is all about the focus on whether the
party claiming immunity as an interactive computer service
provider is actually simply just passively transmitting
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Official Reporter - U.S. District Court - San Francisco
(415)
information provided by others or whether it's sort of actively
taking a role in a way that's related to the illegality, the
alleged illegality of the conduct. And that's exactly what you
have here.
And it's a closed universe. These are not neutral tools
for displaying information that other parties, you know,
provide online.
THE COURT: All right. This argument has been
helpful. I'll take it under submission.
Thank you, counsel. Your presentation has been very
helpful. Appreciate it.
MS. FAHRINGER: Thank you, Your Honor.
MR. MURA: Thank you, Your Honor.
(Proceedings adjourned.)
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Debra L. Pas, CSR, RPR, RMR, CRR
Official Reporter - U.S. District Court - San Francisco
(415)
CERTIFICATE OF OFFICIAL REPORTER
I certify that the foregoing is a correct transcript from
the record of proceedings in the above-entitled matter.
__________________________________
Debra L. Pas, CSR 11916, CRR, RMR, RPR
Thursday, July 15, 2021
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