On Monday, a 67-page opinion authored by Judge Michael M. Anello found in favor of the individuals suing three companies that operate “people search” websites that sell access to databases containing proprietary detailed reports about people in exchange for a subscription fee. Over defendants PeopleConnect Inc., Intelius LLC, and The Control Group Media Company LLC’s (collectively, PeopleConnect) defenses, the court said that there was neither a basis for compelling arbitration nor tossing the class action at the dismissal phase.
The suit dates to February, when an Alabama and a California plaintiff sued PeopleConnect for misappropriation of their identities without consent for a commercial benefit, an illegal act under the states’ right-to-publicity laws. PeopleConnect opposed the complaint and sought to compel arbitration or dismiss the claims with an arsenal of defenses under Section 230 of the Communications Decency Act (CDA), constitutional provisions, and other arguments.
The court’s 14-page discussion of arbitration concluded that the defendants could not compel the Alabama plaintiff’s claims to the parajudicial forum. Judge Anello undertook a choice of law analysis and reviewed Supreme Court and Ninth Circuit case law, including a recent decision in an action brought against a similar company associated with one of defendants also represented the same defense counsel.
“Defendants have not carried their burden of demonstrating that Plaintiff Camacho’s counsel had authority to bind Plaintiff Camacho to agreements or that Plaintiff Camacho subsequently ratified it,” the opinion summarized.
PeopleConnect’s Section 230 CDA defense failed because the liability shield does not extend to “‘content created or developed by an interactive computer service.’” Specifically, the court explained that the contested conduct was the defendants’ gathering information about the plaintiffs and others, rather than their websites themselves.
Next, the First Amendment and California’s analogue provision did not shield the defendants from suit because the challenged speech was commercial, Judge Anello found. The case centered on “teasers,” free searches website visitors could conduct as a means of enticing them to purchase subscriptions, which the court said were “unquestionably advertisements … ‘aimed only at inducing a commercial transaction, not about the meaningful communication of knowledge.’”
Relatedly, Judge Anello concluded that both state statutes comport with the First Amendment, noting that imposing “‘liability for violating the traditional publicity right does not necessarily offend the First Amendment.’”
Lastly, the court consolidated the three cases pending before it, and in so doing, applied the instant opinion to all three. The plaintiffs are represented by Bursor & Fisher P.A. and Edelson PC. PeopleConnect is represented by Jenner & Block LLP.
