Facebook, Inc. v. MaxBounty, Inc.
2011 WL 1120046
N.D. Cal.2011Background
- Facebook, Inc. is a large social network with real-identity requirements for users.
- Facebook prohibits false, deceptive, spammy, or misleading advertisements and requires transparency about offers.
- MaxBounty operates an advertising network using a CPA model and serves as an intermediary between publishers and advertisers.
- Facebook alleges MaxBounty and its affiliates created fake Facebook pages to redirect users to third-party sites.
- The alleged scheme involves pages that prompt users to become fans, invite friends, and complete registrations, leading to further offers and payments to MaxBounty.
- MaxBounty moves to dismiss multiple claims under Rule 12(b)(6), arguing CAN-SPAM, CFAA, and state-law fraud theories fail or lack proper pleading.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAN-SPAM applicability to social-network pages | Facebook contends the communications fall within CAN-SPAM as electronic messages | MaxBounty argues the messages are not email and thus outside CAN-SPAM | CAN-SPAM claim sufficiently pled and within scope |
| CFAA pleading standards | Facebook argues Rule 8(a) suffices; some circuits adopt 8(a) pleading | MaxBounty urges Rule 9(b) heightened pleading for fraud elements | Rule 9(b) does not govern CFAA claims; CFAA pleading survives on notice pleading |
| Common-law fraud pleading | Facebook alleges misrepresentation, knowledge, intent, reliance, damages | Facebook lacks particularized facts on knowledge, identity of wrongdoers, and specifics of fraud | Common-law fraud and related aiding/abetting/conspiracy claims inadequately pled; defects may be cured by amendment |
| Aiding and abetting and conspiracy sufficiency | Facebook asserts MaxBounty knowingly aided fraudulent pages | Allegations are conclusory and lack substantial factual support | Aiding/abetting and conspiracy claims dismissed or not adequately pled; leave to amend |
Key Cases Cited
- MySpace v. Wallace, 498 F.Supp.2d 1293 (N.D. Cal. 2007) (CAN-SPAM breadth supports expansive interpretation)
- eBay Inc. v. Digital Point Solutions, Inc., 608 F.Supp.2d 1156 (N.D. Cal. 2009) (CFAA defrauding element does not require common-law fraud pleadings)
- SKF USA, Inc. v. Bjerkness, 636 F.Supp.2d 696 (N.D. Ill. 2009) (Rule 9(b) not applied to CFAA claims)
- Motorola, Inc. v. Lemko Corp., 609 F.Supp.2d 760 (N.D. Ill. 2009) (Rule 9(b) applicability to 1030(a)(4) discussed)
- In re 3Com Securities Litigation, 761 F.Supp.1411 (N.D. Cal. 1990) (conspiracy/knowledge pleading standards referenced)