Fourth Circuit Affirms Section 230 Immunity on Motion to Dismiss
Posted in Internet

With 2009 drawing to a close, a panel of the Fourth Circuit affirmed a decision by the Eastern District of Virginia holding that the website was an “interactive computer service” entitled to immunity under Section 230 of the Communications Decency Act with respect to 20 website postings concerning a class-action lawsuit against an auto dealer. The Fourth Circuit’s opinion in Nemet Chevrolet, Ltd. v., Inc. is linked here.

The Fourth Circuit panel’s majority opinion is largely procedural, but it offers an important lesson about how the court views Section 230 immunity. A plaintiff in the Fourth Circuit seeking to avoid a website defendant’s Section 230 immunity by characterizing the defendant as an “information content provider” at the motion to dismiss stage of litigation must provide more than conclusory statements and speculation to state a claim. 

Nemet did not dispute in its amended complaint that was an “interactive computer service” generally entitled to immunity under Section 230. Instead, Nemet alleged that the defendant was an “information content provider” subject to liability under Section 230 with respect to 20 complaints posted on the website.  The Fourth Circuit panel disagreed. The nut of the majority opinion is encapsulated in this quote:

[The Federal Rules of Civil Procedure] require[] “more than conclusions” to “unlock the doors of discovery for a plaintiff.” Viewed in the correct “factual context,” Nemet’s stark allegations are nothing more than a “formulaic recitation” of one of the elements of its claims. A plaintiff must offer more than “[t]hreadbare recitals of the elements of a cause of action” and “conclusory statements,” however, to show its entitlement to relief.

Section 230 defines an “information content provider” as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.” Based on the governing precedent, the Fourth Circuit panel reviewed the Nemet case to determine “whether the facts pled by Nemet, as to the application of CDA immunity, make its claim that is an information content provider [subject to liability under Section 230] merely possible or whether Nemet has nudged the claim ‘across the line from conceivable to plausible.’”

In support of its claim for defamation and tortious interference with business expectancy, Nemet argued that was an “information content provider,” because of (1) the structure and design of the website or (2)’s participation in preparing the 20 complained of consumer complaints. Nemet argued that the defendant’s actions to solicit the consumer complaints, steer the complaints into specific categories, contact customers to obtain more information about their complaints, help draft or revise their complaints, and promise recovery by joining a class-action lawsuit rendered responsible, in whole or in part, for the creation or development of the posts. In other words, these actions moved into the “information content provider” category.


At first blush, it would seem that Nemet had a plausible argument. But, reviewing Nemet’s amended complaint, the majority found the plaintiff did not allege sufficient facts to demonstrate the defendant’s status as an “information content provider.” The majority wrote, “[e]ven accepting as true all of the facts Nemet has pled as to’s liability for the structure and design of its website, the amended complaint ‘does not show, or even intimate,’ that contributed to the allegedly fraudulent nature of the comments at issue.”


The majority distinguished this case from the FHC v. case, in which the Ninth Circuit held liable as the developer of unlawful website content because required users to disclose their sex, family status, and sexual orientation, as well as those of the users’ desired roommates, using a list of pre-determined responses. According to the Fourth Circuit, “the Ninth Circuit did not hold that a website operator becomes an information content provider because the information posted on its website may be developed in a way unrelated to its initial posting, such as its potential to further a class-action lawsuit. merely adopted a definition of 'development,' for purposes of § 230(f)(3), that includes 'materially contributing' to a given piece of information’s alleged unlawfulness.”


The Fourth Circuit also rejected Nemet’s argument that became an “information content provider” by asking questions about consumer complaints against Nemet or by helping consumers draft or revise their complaints. With respect to drafting or revising complaints, the majority noted that the Fourth Circuit’s standards required Nemet to allege action “more than a website operator performs as part of its traditional editorial function” to render it an “information content provider.”


Finally, the panel majority rejected Nemet’s claim that fabricated eight of the 20 website posts. If the defendant made up these complaints, then, presumably, the court would have to find the creator of—and, therefore, “information content provider” of—the fabricated content. Nemet’s primary evidence of the fabrication was the fact that its own internal dealership records did not match the dates, car models, and first names associated with these eight complaints. The majority found this allegation to be “pure speculation and a conclusory allegation of an element of the [Section 230] immunity claim. . . .” (Chief District Judge Jones dissented from the majority on this issue, writing that the majority held Nemet to too high a pleading standard for these eight complaints.)


Thus, Nemet stands for the proposition that to make it past the initial pleadings stage, a plaintiff must allege facts and offer more than mere conclusory statements and speculative inferences about how a defendant qualifies as the developer or creator of website content. 

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