Facebook wins against alleged advertising fraudster

Defendant set up more than 70 bogus Facebook accounts and impersonated online advertising companies (including by sending Facebook falsified bank records) to obtain an advertising credit line from Facebook. He ran more than $340,000 worth of ads for which he never paid. Facebook sued, among other things, for breach of contract, fraud, and violation of the Computer Fraud and Abuse Act (CFAA). Despite the court giving defendant several opportunities to be heard, defendant failed to answer the claims and the court entered a default.

The court found that Facebook had successfully pled a CFAA claim. After Facebook implemented technological measures to block defendant’s access, and after it sent him two cease-and-desist letters, defendant continued to intentionally access Facebook’s “computers and servers to obtain account credentials, Facebook credit lines, Facebook ads, and other information.” The court entered an injunction against defendant accessing or using any Facebook website or service in the future, and set the matter over for Facebook to prove up its $340,000 in damages. It also notified the U.S. Attorney’s Office.

Facebook, Inc. v. Grunin, 2015 WL 124781 (N.D. Cal. January 8, 2015)

Lawsuit against Yelp over how it marketed its review filters can move forward

Plaintiff restaurant owner sued Yelp under California unfair competition law, claiming that certain statements Yelp made about the filters it uses to ascertain the unreliability or bias of user reviews were misleading and untrue. For example, plaintiff alleged that Yelp advertised that its filtering process “takes the reviews that are the most trustworthy and from the most established sources and displays them on the business page.” But, according to plaintiff, the filter did not give consumers the most trusted reviews, excluded legitimate reviews, and included reviews that were demonstrably false and biased.

Yelp filed an Anti-SLAPP motion to strike plaintiff’s complaint under California Code of Civil Procedure section 425.16, arguing that the complaint sought to interfere with Yelp’s free speech rights, and targeted speech that appeared in a public forum and was a matter of public interest. The trial court granted the motion, and plaintiff sought review with the Court of Appeal of California. On appeal, the court reversed.

It held that a motion to strike under the mechanism of California’s Anti-SLAPP statute was unavailable under section 425.17 (c), which prohibits Anti-SLAPP motions against “any cause of action brought against a person primarily engaged in the business of selling or leasing goods or services,” where certain other conditions are met, including the statement being made for purposes of promoting the speaker’s goods or services.

The appellate court disagreed with the lower court which found that Yelp’s statements about its filters were mere “puffery”. Instead, the court held that these actions disqualified the Anti-SLAPP motion under the very language of the statute pertaining to commercial speech.

Demetriades v. Yelp, Inc., 2014 WL 3661491 (Cal. Ct. App. July 24, 2014)

Evan Brown is an attorney in Chicago advising clients on matters dealing with technology, the internet and new media.

Court rules against woman accused of fraudulent misrepresentation for creating fake internet boyfriend

Bonhomme v. St. James, — N.E.2d —, (Ill.App. 2 Dist March 10, 2011.)

Perhaps the most famous legal case about someone creating a false persona online and using that to dupe someone is the sad case of Megan Meier, which resulted in the (unsuccessful) prosecution of Lori Drew. The facts of that case were hard to believe — a woman created the identity of a teenage boy from scratch by setting up a bogus MySpace profile, then engaged in sustained communications with young Megan, leading her to believe the two of them had a real relationship. After the “boy” broke that relationship off, Megan committed suicide.

Here’s a case that has not seen quite as much tragedy, but the extent and the nature of the alleged deception is just as incredible, if not more so, than that undertaken by Lori Drew.

The appellate court of Illinois has held that a woman who was allegedly the victim of an elaborate ruse, perpetrated in large part over the internet, can move forward with her fraudulent misrepresentation claim against the woman who created the fake persona of a “man” who became her “boyfriend”. The story should satisfy your daily requirement of schadenfreude.

Plaintiff first got to know defendant Janna St. James back in 2005 in an online forum for fans of the HBO show Deadwood. A couple months after they first began talking online, defendant set up another username on the Deadwood site, posing as a man named “Jesse”. Plaintiff and this “Jesse” (which was actually defendant) struck up an online romance which apparently got pretty intense.

To add detail to the ploy, defendant invented no less than 20 fictitious identities — all of whom were purportedly in “Jesse’s” social or family circle — which she used to communicate with plaintiff.

The interactions which took place, both online and through other media and forms of communication (e.g., phone calls using a voice disguiser) were extensive. “Jesse” and plaintiff planned to meet up in person once, but “Jesse” cancelled. Plaintiff sent $10,000 worth of gifts to “Jesse” and to the other avatars of defendant. It even went so far as “Jesse” and plaintiff planning to move to live with one another in Colorado. But before that could happen, defendant pulled the plug on “Jesse” — he “died” of liver cancer.

Some time after that, defendant (as herself) flew from Illinois to California to visit plaintiff. During this trip, some of plaintiff’s real friends discovered the complex facade. Plaintiff sued.

The trial court dismissed plaintiff’s fraudulent misrepresentation claim. Plaintiff sought appellate review. On appeal, the court reversed, sending the case for fraudulent misrepresentation back to the trial court.

The court said some interesting things about whether the facts that plaintiff alleged supported her claim for fraudulent misrepresentation. A plaintiff suing for fraudulent misrepresentation under Illinois law must show: (1) a false statement of material fact; (2) knowledge or belief of the falsity by the party making it; (3) intention to induce the plaintiff to act; (4) action by the plaintiff in justifiable reliance on the truth of the statement; and (5) damage to the plaintiff resulting from that reliance.

Defendant made a strange kind of circular argument as to the first element — falsity of a material fact. She asserted that plaintiff’s claim was based more on the fiction that defendant pursued rather than specific representations. And the concepts of “falsity” and “material fact,” defendant argued, should not apply in the context of fiction, which does not purport to represent actuality. So defendant essentially argued that so long as she knew the masquerade was fiction, there could be no misrepresentation. The court recognized how invalid this argument was. The logic would shift the element of reliance on the truth of the statement from the injured party to the utterer.

Though the appellate court ruled in favor of plaintiff, the judges disagreed on the question of whether plaintiff was justified in relying on the truth of what defendant (as “Jesse,” as the other created characters, and herself) had told plaintiff. One judge dissented, observing that “[t]he reality of the Internet age is that an online individual may not always be — and indeed frequently is not — who or what he or she purports to be.” The dissenting judge thought it simply was not justifiable for plaintiff to spend $10,000 on people she had not met, and to plan on moving in with a man sight-unseen. (In so many words, the judge seemed to be saying that plaintiff was too gullible to have the benefit of this legal claim.)

The majority opinion, on the other hand, found the question of justifiable reliance to be more properly determined by the finder of fact in the trial court. For the motion to dismiss stage, plaintiff had alleged sufficient facts as to justifiable reliance.

(Congratulations to my friend Daliah Saper for her good lawyering in this case on behalf of plaintiff.)

Facebook victorious in lawsuit brought by kicked-off user

Young v. Facebook, 2010 WL 4269304 (N.D. Cal. October 25, 2010)

Plaintiff took offense to a certain Facebook page critical of Barack Obama and spoke out on Facebook in opposition. In response, many other Facebook users allegedly poked fun at plaintiff, sometimes using offensive Photoshopped versions of her profile picture. She felt harassed.

But maybe that harassment went both ways. Plaintiff eventually got kicked off of Facebook because she allegedly harassed other users, doing things like sending friend requests to people she did not know.

When Facebook refused to reactivate plaintiff’s account (even after she drove from her home in Maryland to Facebook’s California offices twice), she sued.

Facebook moved to dismiss the lawsuit. The court granted the motion.

Constitutional claims

Plaintiff claimed that Facebook violated her First and Fourteenth Amendment rights. The court dismissed this claim because plaintiff failed to demonstrate that the complained-of conduct on Facebook’s part (kicking her off) “was fairly attributable to the government.” Plaintiff attempted to get around the problem of Facebook-as-private-actor by pointing to the various federal agencies that have Facebook pages. But the court was unmoved, finding that the termination of her account had nothing to do with these government-created pages.

Breach of contract

Plaintiff’s breach of contract claim was based on other users harassing her when she voiced her disapproval of the Facebook page critical of the president. She claimed that in failing to take action against this harassment, Facebook violated its own Statement of Rights and Responsibilities.

The court rejected this argument, finding that although the Statement of Rights and Responsibilities may place restrictions on users’ behavior, it does not create affirmative obligations on the part of Facebook. Moreover, Facebook expressly disclaims any responsibility in the Statement of Rights and Responsibilities for policing the safety of the network.

Good faith and fair dealing

Every contract (under California law and under the laws of most other states) has an implied duty of good faith and fair dealing, which means that there is an implied “covenant by each party not to do anything which will deprive the other parties . . . of the benefits of the contract.” Plaintiff claimed Facebook violated this implied duty in two ways: by failing to provide the safety services it advertised and violating the spirit of the terms of service by terminating her account.

Neither of these arguments worked. As for failing to provide the safety services, the court looked again to how Facebook disclaimed responsibility for such actions.

The court gave more intriguing treatment to plaintiff’s claim that Facebook violated the spirit of its terms of service. It looked to the contractual nature of the terms of service, and Facebook’s assertions that users’ accounts should not be terminated other than for reasons described in the Statement of Rights and Responsibilities. The court found that “it is at least conceivable that arbitrary or bad faith termination of user accounts, or even termination . . . with no explanation at all, could implicate the implied covenant of good faith and fair dealing.”

But plaintiff’s claim failed anyway, because of the way she had articulated her claim. She asserted that Facebook violated the implied duty by treating her coldly in the termination process, namely, by depriving her of human interaction. The court said that termination process was okay, given that the Statement of Rights and Responsibilities said that it would simply notify users by email in the event their accounts are terminated. There was no implied obligation to provide a more touchy-feely way to terminate.


Among other things, to be successful in a negligence claim, a plaintiff has to allege a duty on the part of the defendant. Plaintiff’s negligence claim failed in this case because she failed to establish that Facebook had any duty to “condemn all acts or statements that inspire, imply, incite, or directly threaten violence against anyone.” Finding that plaintiff provided no basis for such a broad duty, the court also looked to the policy behind Section 230 of the Communications Decency Act (47 U.S.C. 230) which immunizes website providers from content provided by third parties that may be lewd or harassing.


The court dismissed plaintiff’s fraud claim, essentially finding that plaintiff’s allegations that Facebook’s “terms of agreement [were] deceptive in the sense of misrepresentation and false representation of company standards,” simply were not specific enough to give Facebook notice of the claim alleged.

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