LEONARD P. STARK, District Judge.
Pending before the Court is Defendant Hotwire, Inc.'s motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). (See D.I. 105) For the reasons that follow, the motion will be denied.
On May 23, 2013, Plaintiff Enrico Moretti filed a putative class action complaint in California state court. (D.I. 1-1 Ex. A) The matter was removed to the U.S. District Court for the Northern District of California and later transferred to this District. (D.I. 1, D.I. 54, D.I. 55) The relevant pleadings before the Court are Plaintiffs Second Amended Class Action Complaint ("Complaint"), filed on April 10, 2015 (D.I. 83), and Hotwire's answer to the same, filed May 4, 2015 (D.I. 86).
Plaintiff sues under California's false advertising, consumer protection, and unfair and deceptive trade practices laws, and alleges common law fraud. Plaintiff accuses Defendants of carrying out a "currency exchange rate scam." (D.I. 83 at 1-2 ¶ 2) According to Plaintiff, prices for car rentals in Mexico were advertised in U.S. dollars but later converted into Mexican Pesos at an artificially inflated rate. (Id.) Plaintiff claims he and other consumers paid more than the advertised price for their rentals as a result. (Id.) Defendants also allegedly failed to inform consumers that the purchase of liability insurance was mandatory, disclosing terms and conditions stating the contrary. (See, e.g., id. at 2 ¶ 3) Plaintiff claims that The Hertz Corporation and Dollar Thrifty Automotive Group, Inc. (together, the "Hertz Defendants") supplied this misleading information about car rental prices and terms to Hotwire, and Hotwire incorporated the content into listings on its website. (See, e.g., id. at 9 ¶ 28) Plaintiff alleges that Hotwire continued to do so despite consumer complaints and Hotwire's knowledge of the information's fraudulent content. (See, e.g., id. at 11 ¶ 31) Plaintiff characterizes Hotwire as a willing and ratifying participant in this arrangement, and alleges that Hotwire "directly profit[s]" from the scheme. (Id. at 15 ¶ 38(d))
On May 13, 2016, Hotwire filed a motion for judgment on the pleadings. (D.I. 105) Hotwire contends that it is immune from suit under 47 U.S.C. § 230 ("Section 230"), which protects websites and other interactive computer service providers under certain circumstances. The motion was fully briefed (see D.I. 106, D.I. 111, D.I. 112), and the Court heard oral argument on September 2, 2016 (see D.I. 118 ("Tr.")).
Under Federal Rule of Civil Procedure 12(c), a party may move for judgment on the pleadings "[a]fter [the] pleadings are closed — but early enough not to delay trial." When evaluating a motion for judgment on the pleadings, the Court must accept all factual allegations in a complaint as true and view them in the light most favorable to the non-moving party. See Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008).
A Rule 12(c) motion will not be granted "unless the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law." Id. (internal quotation marks omitted). "The purpose of judgment on the pleadings is to dispose of claims where the material facts are undisputed and judgment can be entered on the competing pleadings and exhibits thereto, and documents incorporated by reference." Venetec Intl, Inc. v. Nexus Med., LLC, 541 F.Supp.2d 612, 617 (D. Del. 2008). Thus, a court may grant a motion for judgment on the pleadings (like a motion to dismiss) only if, after "accepting all well-pleaded allegations in the complaint as true, and viewing them in the light most favorable to plaintiff, plaintiff is not entitled to relief." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997). Judgment on the pleadings is appropriate "only if no relief could be afforded under any set of facts that could be proved." Turbe v. Gov't of Virgin Islands, 938 F.2d 427, 428 (3d Cir. 1991).
Hotwire contends that Section 230 requires judgment on the pleadings in its favor. Second 230 provides that "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." 47 U.S.C. § 230(c)(1). Federal courts have interpreted the statute as providing broad immunity from claims that would hold websites liable for dissemination of information originating from a third party. See, e.g., Nemet Chevrolet, Ltd. v. Consumera airs.com, Inc., 591 F.3d 250, 254-55 (4th Cir. 2009).
Section 230 reflects Congress's goal of "promot[ing] the continued development of the Internet." 47 U.S.C. § 230(b)(1). Congress was concerned that "imposing tort liability on companies that serve as intermediaries for other parties' potentially injurious messages" might deter online activity that is beneficial on the whole. Zeran v. America Online, Inc., 129 F.3d 327, 330-31 (4th Cir. 1997). "[A]n `interactive computer service' qualifies for immunity so long as it does not also function as an `information content provider' for the portion of the statement or publication at issue." Carafano v. Metrosplash.com, Inc., 339 F.3d 1119, 1123 (9th Cir. 2003).
Courts have extracted a three-part test from Section 230(c)(1). See, e.g., Universal Commc'n Sys., Inc. v. Lycos, Inc., 478 F.3d 413, 418 (1st Cir. 2007). A party seeking the statute's protections must show that: (i) it is an interactive computer service provider; (ii) the particular information at issue at was provided by another information content provider ("ICP"); and (iii) the claim seeks to treat the defendant as a publisher or speaker of that third party content. See id. The immunity "depends on the pedigree of the content at issue." Jones v. Dirty World Entm't Recordings LLC, 755 F.3d 398, 409 (6th Cir. 2014). Service providers can qualify for Section 230 immunity as long as they do not "contribute[] materially to the alleged illegality" of the content. Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, 521 F.3d 1157, 1168 (9th Cir. 2008).
Hotwire contends — and Plaintiff does not appear to contest — that Hotwire is an interactive computer service provider and satisfies the first element of the test. (See D.I. 106 at 10; D.I. 111 at 11) The parties disagree as to whether the Complaint's allegations lay a sufficient foundation for treating Hotwire as a materially contributing ICP and whether Plaintiff is attempting to treat Hotwire as a publisher of third party content.
Hotwire argues that judgment on the pleadings is proper because "Moretti does not (and cannot) allege that Hotwire authored the alleged misinformation at issue." (D.I. 106 at 11; see also D.I. 112 at 8 ("Moretti does not (and cannot)
A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Rule 8 does not require plaintiffs to "anticipate or overcome affirmative defenses" in a complaint. Schmidt v. Skolas, 770 F.3d 241, 248 (3d Cir. 2014). For that reason, "a complaint does not fail to state a claim simply because it omits facts" that would defeat, for example, a statute of limitations defense. Id. Defending parties are responsible for asserting affirmative defenses and ultimately bear the burdens of production and persuasion with respect to such defenses. See Moore v. Kulicke & Soffa Indus., Inc., 318 F.3d 561, 566 (3d Cir. 2003). It follows that "[l]itigants need not try to plead around" potential defenses. Schmidt, 770 F.3d at 248 (internal quotation marks omitted).
This principle does not categorically preclude courts from considering the application of an affirmative defense at the pleading stage. Courts routinely do so when the "basis for the defense is evident on the face of the complaint." Brody v. Hankin, 145 F. App'x 768, 771 (3d Cir. 2005); see also Jones v. Bock, 549 U.S. 199, 215 (2007) ("Whether a particular ground for opposing a claim may be the basis for dismissal for failure to state a claim depends on whether the allegations in the complaint suffice to establish that ground, not on the nature of the ground in the abstract."); Ruiz-Sanchez v. Goodyear Tire & Rubber Co., 717 F.3d 249, 252 (1st Cir. 2013) ("Dismissal on the basis of an affirmative defense requires that (i) the facts establishing the defense are definitively ascertainable from the complaint and the other allowable sources of information, and (ii) those facts suffice to establish the affirmative defense with certitude." (internal quotation marks omitted)).
As the Third Circuit.has observed, "[t]he facts necessary to establish an affirmative defense must generally come from matters outside of the complaint." Worldcom, Inc. v. Graphnet, Inc., 343 F.3d 651, 657 (3d Cir. 2003). Whether facts supporting a defense are established in a complaint depends in part on the particular defense's elements and whether there is any overlap with the building blocks of the plaintiff's claims.
Applying these pleading principles here, Hotwire has failed to demonstrate — based on the facts alleged in the operative complaint, taken as true — that it is entitled to Section 230 immunity. As noted, the immunity applies only if Hotwire does not "function as an [ICP] for the portion of the statement or publication at issue," Carafano, 339 F.3d at 1123, which in turn requires that Hotwire not have "contribute[d] materially" to the offending nature of the content, Roommates.com, 521 F.3d at 1168. Plaintiff's complaint is silent on these points. Taking the well-pleaded factual allegations as true, there is no basis in the Complaint from which the Court could conclude that Hotwire did
In some Section 230 cases, there is no genuine dispute between the parties about the nature of the service provider's conduct with respect to the offending content. See, e.g., Green v. America Online, 318 F.3d 465, 470-71 (3d Cir. 2003) ("There is no dispute that . . . the relevant content originated not from AOL but from another [ICP] . . . . There is no real dispute that Green's fundamental tort claim is that AOL was negligent in promulgating harmful content and in failing to address certain harmful content on its network." (internal quotation marks omitted)). Thus, on several occasions, the Third Circuit has affirmed early dismissals based on Section 230. immunity. See Obado v. Magedson, 612 F. App'x 90, 93 (3d Cir. 2015) (summary affirmance; district court's dismissal was based on finding that manipulation of search engine to "maximize search results relating to the alleged defamatory content does not affect [defendants'] immunity from suit"); DiMeo v. Max, 248 F. App'x 280, 282 (3d Cir. 2007) ("Although DiMeo argues on appeal that Max is in fact an information content provider because he solicited and encouraged members of his message board community to engage in defamatory conduct or was otherwise partially responsible for the conduct, the complaint is devoid of any such allegations.").
Similarly, this Court has applied. Section 230 in granting a Rule 12(b)(6) motion on at least one occasion. See Kabbaj v. Google, Inc., 2014 WL 1369864 (D. Del. Apr. 7, 2014). There, the Court noted that "[t]he amended complaint [did] not allege that any Defendant created or authored the defamatory statements." Id. at *3. Instead, "the amended complaint allege[d] that Defendants hosted content, administered services, and provided a platform for others' content." Id. The Third Circuit summarily affirmed. See Kabbaj v. Google, Inc., 592 F. App'x 74 (3d Cir. 2015).
Here, however, Plaintiff's allegations are such that there is, based solely on the face of the Complaint, a factual dispute as to the nature and degree of Hotwire's involvement in the allegedly misleading statement. Under the circumstances here, the Court cannot treat the Complaint's silence as to whether Hotwire materially contributed to the false statement as an affirmative allegation that Hotwire did
Several decisions of other district courts support the Court's conclusion. See, e.g., Swift v. Zynga Game Network, Inc., 2010 WL 4569889 (N.D. Cal. Nov. 3, 2010); Suk Jae Chang v. Wozo LLC, 2012 WL 1067643 (D. Mass. Mar. 28, 2012); CYBERsitter, LLC v. Google Inc., 905 F.Supp.2d 1080 (C.D. Cal. 2012). In Perfect 10, Inc. v. Google, Inc., 2008 WL 4217837 (C.D. Cal. July 16, 2008) the court ruled that judgment was improper at the 12(b)(6) stage despite its doubts over the plaintiffs case:
Id. at *8 (quoting Roommates.com, 521 F.3d at 1168).
The Court recognizes the friction between its holding and Congress's stated goals in enacting Section 230. The Court is sensitive to the expense of litigation and the public policy arguments in favor of requiring plaintiffs to plead around immunities from suit like Section.230.
Hotwire has not "clearly established that no material issue of fact remains to be resolved." Rosenau, 539 F.3d at 223 (internal quotation marks omitted). Judgment on the pleadings is, therefore, inappropriate and the Court will deny Hotwire's motion.
The Court's decision to deny Hotwire judgment on the pleadings is reinforced by Plaintiff's counsel's representations at oral argument regarding the nature and character of Hotwire's advertisements: (See, e.g., Tr. at 33) Plaintiff is of the belief that, if needed, he could plead sufficient facts to show that Hotwire is not entitled to the protection of Section 230 immunity. While the Court has held that Plaintiff is not required to so plead, in the particular circumstances of this case it will likely prove helpful to the parties (and ultimately to the Court) for Plaintiff to amend his complaint to include any specifics which are in his possession that help to show why Plaintiff believes Hotwire is not immune under Section 230. Accordingly, the Court will order Plaintiff to amend his complaint.
For the reasons stated above, Hotwire's motion for judgment on the pleadings will be denied.