throbber
Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 1 of 39
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`Rafey S. Balabanian (SBN 315962)
`rbalabanian@edelson.com
`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, California 94111
`Tel: 415.212.9300 / Fax: 415.373.9435
`
`Interim Lead Counsel
`
`[Additional Counsel listed on signature page]
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
`
`
`
`IN RE: APPLE INC. APP STORE
`SIMULATED CASINO-STYLE GAMES
`LITIGATION
`
`
`IN RE: GOOGLE PLAY STORE
`SIMULATED CASINO-STYLE GAMES
`LITIGATION
`
`
`
`
`
`
`
`Case No. 5:21-md-02985-EJD
`
`Judge: Hon. Edward J. Davila
`
`PLAINTIFFS’ CONSOLIDATED
`OPPOSITION TO
`MOTIONS TO DISMISS
`UNDER SECTION 230 OF THE
`COMMUNICATIONS DECENCY ACT
`
`Date: August 4, 2022
`Time: 9:00 a.m.
`Judge: Hon. Edward J. Davila
`Room: Courtroom 4 – 5th Floor
`
`Case No. 5:21-md-03001-EJD
`
`Judge: Hon. Edward J. Davila
`
`PLAINTIFFS’ CONSOLIDATED
`OPPOSITION TO
`MOTIONS TO DISMISS
`UNDER SECTION 230 OF THE
`COMMUNICATIONS DECENCY ACT
`
`Date: August 4, 2022
`Time: 9:00 a.m.
`Judge: Hon. Edward J. Davila
`Room: Courtroom 4 – 5th Floor
`
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`
`
`
`
`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
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`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 2 of 39
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`IN RE: FACEBOOK SIMULATED
`CASINO-STYLE GAMES LITIGATION
`
`
`
`
`
`Case No. 5:21-cv-02777-EJD
`
`Judge: Hon. Edward J. Davila
`
`PLAINTIFFS’ CONSOLIDATED
`OPPOSITION TO
`MOTIONS TO DISMISS
`UNDER SECTION 230 OF THE
`COMMUNICATIONS DECENCY ACT
`
`Date: August 4, 2022
`Time: 9:00 a.m.
`Judge: Hon. Edward J. Davila
`Room: Courtroom 4 – 5th Floor
`
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`
`
`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
`
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`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 3 of 39
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`
`
`TABLE OF CONTENTS
`
`I.
`INTRODUCTION ............................................................................................................. 1
`II. RELEVANT FACTUAL ALLEGATIONS .................................................................... 3
`A. Offering, Categorizing, and Promoting the Social Casino Apps ....................... 4
`B. Booking Illegal Transactions for a Fee: Selling Virtual Chips for Wagering
`in the Social Casinos .............................................................................................. 5
`
`C. Collecting and Analyzing Player Data, Marketing, and
`Targeting “Whales” ............................................................................................... 6
`
`III. ARGUMENT ..................................................................................................................... 7
`A. Summary of Argument ......................................................................................... 7
`B. Legal Framework .................................................................................................. 8
`C. Plaintiffs’ Claims Do Not Inherently Require the Court to Treat the
`Platforms as “Publishers or Speakers” of Third-Party Content. ..................... 9
`
`1. Booking Illegal Gambling Transactions Is Not “Publication.” .......... 10
`a. HomeAway and Other Relevant Cases Distinguish Between
`Immunity for Posting Content and Liability for Booking
`Illegal Transactions. ...................................................................... 10
`
`b. Plaintiffs Allege that The Platforms Illegally Transact Virtual
`Casino Chips. ................................................................................. 13
`
`c. None of the Platforms’ Arguments Suggest that Their Direct
`Participation in Illegal Transactions Should Be Immunized. ........ 16
`
`d. Avoiding Liability for Plaintiffs’ Claims Does Not Force the
`Platforms to Review, Edit, or Remove Third-Party Content. ........ 19
`
`e. Taylor v. Apple and Coffee v. Google Both Militate Against
`CDA Immunity Here. .................................................................... 22
`
`2. Directly Participating in Unfair Business Practices Is Not Publisher
`Conduct. ................................................................................................. 25
`
`3. That the Platforms’ Tools Are Available To Other Apps Does Not
`Immunize The Platforms’ Participation in Illegal Gambling
`Operations. ............................................................................................. 27
`
`D. In the Alternative, the Court Should Grant Leave to Amend. ........................ 30
`
`IV. CONCLUSION ................................................................................................................ 30
`
`
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`i
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`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
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`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 4 of 39
`
`
`
`TABLE OF AUTHORITIES
`
`United States Circuit Court of Appeals Cases
`
`Barnes v. Yahoo!, Inc.,
`570 F.3d 1096 (9th Cir. 2009) .................................................................................... passim
`
`
`Doe v. Internet Brands, Inc.,
`824 F.3d 846 (9th Cir. 2016) ................................................................................. 13, 17, 26
`
`
`Dyroff v. Ultimate Software Grp., Inc.,
`934 F.3d 1093 (9th Cir. 2019) ....................................................................................... 8, 11
`
`
`Ebner v. Fresh, Inc.,
`838 F.3d 958 (9th Cir. 2016) ............................................................................................. 30
`
`Fair Hous. Council of San Fernando Valley v. Roommates.Com, LLC,
`
`521 F.3d 1157 (9th Cir. 2008) ........................................................................... 3, 16, 27, 29
`
`Fyk v. Facebook, Inc.,
`808 F. App’x 597 (9th Cir. 2020) ...................................................................................... 18
`
`
`Gonzalez v. Google LLC,
`2 F.4th 871 (9th Cir. 2021) ................................................................................ 3, 20, 24, 29
`
`
`HomeAway.com v. Santa Monica,
`918 F.3d 676 (9th Cir. 2018) ...................................................................................... passim
`
`
`Lemmon v. Snap, Inc.,
`995 F.3d 1085 (9th Cir. 2021) .................................................................................... passim
`
`
`United States District Court Cases
`
`Airbnb, Inc. v. City of Boston,
`386 F. Supp. 3d 113 (D. Mass. 2019) .......................................................................... 12, 21
`
`
`Airbnb, Inc. v. City & Cty. of San Francisco,
`217 F. Supp. 3d 1066 (N.D. Cal. 2016) ................................................................... 2, 11, 21
`
`Benson v. DoubleDown Interactive LLC,
`
`No. 18-cv-525 (W.D. Wash. Nov. 24, 2021) .................................................................... 30
`
`Coffee v. Google, LLC,
`No. 20-cv-03901-BLF, 2022 WL 94986 (N.D. Cal. Jan. 10, 2022) ................ 14, 22, 24, 25
`
`
`
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`ii
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`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
`
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`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 5 of 39
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`
`
`Goddard v. Google, Inc.,
`No. 08-cv-2738-JF-PVT, 2008 WL 5245490 (N.D. Cal. Dec. 17, 2008) ................... 18, 27
`
`
`Evans v. Hewlett-Packard Co.,
`No. 13-cv-02477 WHA, 2013 WL 4426359 (N.D. Cal. Aug. 15, 2013) .......................... 18
`
`
`Fed. Agency of News LLC v. Facebook, Inc.,
`432 F. Supp. 3d 1107 (N.D. Cal. 2020) ............................................................................. 17
`
`
`Jurin v. Google Inc.,
`695 F. Supp. 2d 1117 (E.D. Cal. 2010) ............................................................................. 18
`
`
`La Park La Brea A LLC v. Airbnb, Inc.,
`285 F. Supp. 3d 1097 (C.D. Cal. 2017) ............................................................................. 18
`
`
`Mai v. Supercell Oy,
`No. 5:20-cv-05573-EJD, 2021 WL 4267487 (N.D. Cal. Sept. 20, 2021) ......................... 14
`
`
`Nunes v. Twitter, Inc.,
`194 F. Supp. 3d 959 (N.D. Cal. 2016) ......................................................................... 26, 29
`
`
`Opperman v. Path,
`87 F. Supp. 3d 1018 (N.D. Cal. 2014) ........................................................................... 8, 27
`
`
`State Farm Fire & Cas. Co. v. Amazon.com, Inc.,
`390 F. Supp. 3d 964 (W.D. Wis. 2019) ............................................................................. 13
`
`
`Taylor v. Apple, Inc.,
`No. 20-cv-3906-RS (N.D. Cal. Mar. 19, 2021) ..................................................... 14, 22, 23
`
`Turo Inc. v. City of Los Angeles,
`No. 2:18-cv-06055-CAS-GJSX, 2020 WL 3422262 (C.D. Cal. June 19, 2020) .............. 12
`
`
`State Court Cases
`
`Gentry v. eBay, Inc.,
`99 Cal. App. 4th 816 (2002) .............................................................................................. 18
`
`
`Massachusetts Port Auth. v. Turo Inc.,
`166 N.E.3d 972 (2021) ...................................................................................................... 13
`
`
`Miscellaneous Authority
`
`47 U.S.C. § 230 ........................................................................................................................... 8, 9
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`iii
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`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
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`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 6 of 39
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`
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`L.R. 7-4(a)(3) Statement of Issue To Be Decided
`
`Under recent Ninth Circuit precedent, online platforms enjoy CDA Section 230 immunity
`from liability for “publication activities (i.e., “reviewing, editing, and deciding whether to
`publish or to withdraw from publication third-party content”), but do not enjoy CDA immunity
`from liability for “booking” illegal transactions for a fee—even when those transactions flow
`from the protected third-party content. In this litigation, Plaintiffs allege that the online platform
`Defendants have booked, for a 30% fee, billions of dollars of illegal online casino chip sales
`transactions directly to class members. Does the CDA immunize the online platform Defendants
`from Plaintiffs’ claims seeking to recover the value of those illegal online casino chip sales?
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`iv
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`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
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`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 7 of 39
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`PLAINTIFFS’ CONSOLIDATED OPPOSITION MEMORANDUM
`
`Plaintiffs in the above-captioned actions submit this consolidated opposition to the
`various Motions to Dismiss Under Section 230 of the Communications Decency Act (“CDA”)
`filed by Defendants Apple, Inc. (“Apple”), Meta Platforms, Inc. (“Facebook”), and Google LLC
`together with Google Payment Corp. (“Google”) (all together, the “Platforms”).1
`I.
`INTRODUCTION
`
`In this litigation, Plaintiffs claim that the Platforms, separate and apart from publishing
`social casino apps, have illegally booked tens of billions of dollars of social casino chip sales
`directly to class members. Plaintiffs allege that the Platforms act essentially as bookies for online
`casinos: the Platforms illegally sell to class members casino chips that are substantially certain to
`be wagered on slot machines, illegally process those payments, illegally obtain the full value of
`the casino chip sales, illegally earn 30% of the gross sales (at a gobsmacking profit margin) for
`their contribution to the enterprise, and at some later date illegally remit the 70% remainder to
`the social casino developers—i.e., their co-conspirators in the illegal gambling enterprise.
`The Platforms claim that the CDA shields them from liability for their illegal conduct.
`But three years ago, the Ninth Circuit squarely decided the exact issue presented here. Under
`HomeAway v. City of Santa Monica, online platforms (i) enjoy CDA immunity from liability for
`“publication” activities (i.e., “reviewing, editing, and deciding whether to publish or to withdraw
`from publication third-party content”), but (ii) do not enjoy CDA immunity from liability for
`“booking” illegal transactions for a fee—even when those transactions flow from the protected
`
`
`See Apple’s Mot. to Dismiss, Dkt. 92, In re: Apple Inc. App Store Simulated Casino-Style
`1
`Games Litig., No. 5:21-md-02985 (N.D. Cal. Apr. 8, 2022) (“Apple Motion”); Facebook’s Mot.
`to Dismiss, Dkt. 99, In re: Facebook Simulated Casino-Style Games Litig., No. 5:21-cv-02777
`(N.D. Cal. Apr. 8, 2022) (“Facebook Motion”); Google’s Mot. to Dismiss, Dkt. 69, In re:
`Google Play Store Simulated Casino-Style Games Litig., No. 5:21-md-03001 (N.D. Cal. Apr. 8,
`2022) (“Google Motion”).
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`1
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`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
`
`

`

`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 8 of 39
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`third-party content.2 This commonsense distinction, reiterated by courts nationwide in the years
`since HomeAway, forecloses the Platforms’ Motions. That is so because Plaintiffs’ claims do not
`turn on the Platforms’ publication of—or failure to withdraw from publication—social casino
`apps. They turn, instead, on the Platforms’ “bookings,” for a fee, of billions of dollars of illegal
`online casino chip sales directly to class members.
`
` Because the challenged conduct here—i.e., the Platforms’ bookings, for a fee, of illegal
`online casino chip sales—is indistinguishable from the vacation rental platforms’ bookings of
`unlicensed properties in HomeAway, that case controls and disposes of the Platforms’ Motions.
`Apple and Google fail, for whatever reason, to even cite HomeAway. Facebook’s attempts to
`distinguish it—first by falsely claiming that Plaintiffs do not allege “any illegal payment[s] or
`other financial transaction[s]” (they do), and then by offering the non-sequitur that Plaintiffs’
`claims do not target any “real-world” activity (they do, and that’s not relevant anyway)—fare no
`better.3 Those failures aren’t surprising: distinguishing HomeAway, it turns out, is impossible.
`
`The result that HomeAway compels here is consistent with both the original intent and
`modern interpretation of the CDA. As the Ninth Circuit recently explained in another case, “[t]he
`original goal of § 230 was modest,” seeking to “allow interactive computer services to perform
`some editing on user-generated content without thereby becoming liable for all defamatory or
`
`
`HomeAway.com v. City of Santa Monica, 918 F.3d 676, 684-85 (9th Cir. 2018) (holding
`2
`that platforms “face no liability for the content” others post on their websites, but do face
`liability for illegally “booking” unlicensed home rental transactions); see also Airbnb, Inc. v. City
`& Cty. of San Francisco, 217 F. Supp. 3d 1066, 1072-73 (N.D. Cal. 2016) (denying, in opinion
`cited by Ninth Circuit in HomeAway, platforms immunity where challenged ordinance “create[d]
`no obligation on [the platforms’] part to monitor, edit, withdraw or block” third party content,
`but instead held platforms “liable only for their own conduct, namely for providing, and
`collecting a fee for, Booking Services in connection with an unregistered unit.”).
`3
`Facebook Motion at 12.
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`2
`
`
`
`
`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
`
`

`

`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 9 of 39
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`otherwise unlawful messages that they didn’t edit or delete.”4 The CDA certainly was “not meant
`to create a lawless no-man’s-land on the Internet.”5 That explains why the Ninth Circuit has
`“consistently eschewed an expansive reading of the statute that would render unlawful conduct
`magically . . . lawful when [conducted] online.”6 And that’s just the case here: the Platforms’
`illegal and extremely lucrative participation in a multi-billion-dollar gambling enterprise has not
`“magically” become lawful simply because it is conducted online.7
`
`As discussed elsewhere in this brief, the Platforms’ Motions fail for other reasons, too,
`including that Plaintiffs’ consumer protection claims do not treat the Platforms as publishers or
`speakers and that the Platforms’ arguments about “neutral tools” misunderstand the relevant
`analysis under Barnes v. Yahoo!, Inc., 570 F.3d 1096 (9th Cir. 2009). Consequently, Plaintiffs’
`respectfully request that the Court deny the Platforms’ Motions or, alternatively, grant Plaintiffs
`leave to amend their complaints.
`II.
`RELEVANT FACTUAL ALLEGATIONS
`
`Social casino apps generate over $6 billion in annual revenue, and Platforms like Apple,
`Google, and Facebook tax and permanently retain 30% of that revenue (over $2 billion) each
`year. Compl. ¶¶ 7-8, Dkt. 73, In re: Apple Inc. App Store Simulated Casino-Style Games Litig.,
`No. 5:21-md-2985 (“Apple Compl.”); Compl. ¶¶ 8-9, Dkt. 80, In re: Facebook Simulated
`Casino-Style Games Litig., No. 5:21-cv-2777 (“Facebook Compl.”); Compl. ¶¶ 7-8, Dkt. 52, In
`re: Google Play Store Simulated Casino-Style Games Litig., No. 5:21-md-3001 (“Google
`Compl.”); see also Facebook Compl. ¶ 8 (“[O]f the top twelve grossing apps available on
`
`
`Gonzalez v. Google LLC, 2 F.4th 871, 887 (9th Cir. 2021) (internal quotation marks
`4
`omitted).
`5
`Fair Hous. Council of San Fernando Valley v. Roommates.Com, LLC, 521 F.3d 1157,
`1164 & n.15 (9th Cir. 2008).
`6
`HomeAway, 918 F.3d at 683 (internal quotation marks omitted).
`7
`Id.
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`3
`
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`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
`
`

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`Defendant Facebook, nine are social casinos.”). The Platforms would have the Court believe they
`are merely passive publishers of these cash-cow apps. See Apple Motion at 5 (“Apple’s role is
`limited to innovating and providing a marketplace on which developers can offer these apps for
`download.”); Facebook Motion at 3 (“Facebook is merely a platform for developers to make
`these games available to others.”); Google Motion at 10 (“Google simply publishes apps to
`Google Play in accordance with its publicly-available content policies.”). But Plaintiffs’ Master
`Complaints describe an “illegal internet gambling enterprise” between the Platforms and the
`developers of social casino applications, in which the Platforms play multiple, distinct, active
`roles. Apple Compl. at 1; Facebook Compl. at 2; Google Compl. at 1.
`
`For purposes of this limited opposition, Plaintiffs need not repeat here their allegations of
`how social casinos work, how they cause real harm to consumers, and how they violate dozens
`of states’ gambling and consumer protection laws. What is relevant for these Motions is how the
`Platforms participate in the illegal gambling scheme, illegal gambling transactions, and unfair
`business practices. Plaintiffs allege that the Platforms’ involvement in the illegal gambling
`enterprise extends far beyond passively hosting the social casino apps and in fact involves acting
`as the social casinos’ bookmaker (i.e., handling the sale of virtual chips, collecting money from
`players, skimming 30% of the sales, and then remitting the remainder to the developer),
`promoting the apps, collecting and analyzing valuable user data, and helping the developers
`target high-spenders. See, e.g., Apple Compl. ¶¶ 5-6; Facebook Compl. ¶¶ 5-6; Google Compl.
`¶¶ 5-6 (Developers’ “business [model] of targeting, retaining, and collecting losses from
`addicted gamblers is inextricably entwined with the Platforms.”).
`A. Offering, Categorizing, and Promoting the Social Casino Apps
`It is not in dispute that, each year, the Platforms sell to consumers billions of dollars of
`
`online casino chips to be used in social casino slot machines. Beyond booking those transactions,
`the Platforms also review, categorize, and apply special rules to social casino apps. Apple Compl.
`¶¶ 82-84; Facebook Compl. ¶¶ 76-77; Google Compl. ¶¶ 78-80 (explaining app review process
`and that social casinos are categorized as “Casino” games, distinct from “Arcade” and “Card”
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`4
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`
`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
`
`

`

`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 11 of 39
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`game categories). Apple in fact rates the social casino app category— “apps that feature
`Frequent/Intense Simulated Gambling”—as “17+” in order “to help make the App Store safe for
`kids.” Apple Compl. ¶ 85. Facebook executives focus closely on this category; Facebook’s
`Director of Global Platform Partnerships once stated: “It’s the number one category on
`Facebook. It’s a category that, you know, never stops growing … It’s very good for gaming
`companies because they can decide to target on Facebook, or on mobile, you know, specific
`users, or just the whales.” Facebook Compl. ¶ 85. And Google, for its part, bars “ads which
`promote gambling, real-money games, contests, and tournaments” from being displayed in social
`casino apps. Google Compl. ¶ 83.
`
`The Platforms also provide “marketing guidance, tools, promotional offers, and more” to
`the developers of social casinos to help drive users’ “discovery of apps and in-app purchases.”
`Apple Compl. ¶ 87; Google Compl. ¶ 85; see also Facebook Compl. ¶¶ 78, 171. Apple selects
`apps to “feature” within its App Store, which “increases app installs.” Apple Compl. ¶ 88.
`Google “offers App Campaigns to promote apps on Google Search, YouTube, Google Play, and
`more.” Google Compl. ¶ 85. And Facebook uses tools like “targeted ads” and “in-game rewards”
`to encourage new users to play social casinos. Facebook Compl. ¶ 80.
`
`
`B. Booking Illegal Transactions for a Fee: Selling Virtual Chips for Wagering in the
`Social Casinos
`The Platforms also “operate[] as the payment processor for all in-app purchases of virtual
`
`chips in the Illegal Slots.” Apple Compl. ¶ 63; Facebook Compl. ¶ 60; Google Compl. ¶ 61.
`Though the Platforms do not determine the odds of winning any slot machine spins within the
`apps, they otherwise act much like bookmakers in gambling parlance: accepting players’ real
`money, provisioning casino chips to be wagered on illegal slot machine games, earning 30% of
`the gross sales for their contribution to the enterprise, and sometime later remitting the purchase
`amount (net of their fee) to the gambling game developers. When players run out of chips, they
`cannot continue playing the same slot machine game unless they purchase more chips. Apple
`Compl. ¶¶ 61-63; Facebook Compl. ¶¶ 58-60; Google Compl. ¶¶ 59-61.
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`5
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`
`
`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
`
`

`

`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 12 of 39
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`Virtual chips can only be used inside each social casino app, and “[s]ubstantially all
`
`virtual chips are used on slot machine spins.” Apple Compl. ¶ 65; Facebook Compl. ¶ 62; Google
`Compl. ¶ 63. And the challenged apps in this litigation derive substantially all of their revenue
`from slot machine games. Apple Compl. ¶ 56; Facebook Compl. ¶ 53; Google Compl. ¶ 54. In
`other words, when a user buys virtual chips from the Platforms within a social casino app, it is
`substantially certain that those chips will be used to wager on a slot machine spin.
`C. Collecting and Analyzing Player Data, Marketing, and Targeting “Whales”
`Finally, the Platforms are closely involved in social casinos’ business strategies. For
`
`example, the Platforms and developers work together to “monitor the game activity and use the
`collected data to increase user spending.” Apple Compl. ¶ 91; Facebook Compl. ¶ 81; Google
`Compl. ¶ 88. Because the Platforms handle all payment processing for social casinos, the
`developers often can access user data only from the Platforms. Apple Compl. ¶ 91; Facebook
`Compl. ¶ 81; Google Compl. ¶ 88. The Platforms and developers also “work together to target
`and exploit high-spending users, or ‘whales.’” Apple Compl. ¶ 92; Facebook Compl. ¶ 82;
`Google Compl. ¶ 89. For example, Apple “aids in the design and direction of targeted
`advertising, both on and within its App Store and other related Apple platforms, all aimed at
`driving new customers to [social casinos] and retaining current gamblers.” Apple Compl. ¶ 94.
`Facebook provides “App Ads [which] allow Illegal Slot companies to target high spending users
`and activate non-spending users,” “sends targeted ads offering in-game rewards to users who
`invite their Facebook friends to also play the [social casinos],” and provides online
`“tournaments” which “driv[e] increased chip sales.” Facebook Compl. ¶¶ 80, 84. And Google
`“aids in the design and direction of targeted advertising, both on Google.com, its larger Display
`Network, and within other apps and platforms, all aimed at driving new customers to the [social
`casinos] and retaining current gamblers.” Google Compl. ¶ 91.
`
`
`
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`6
`
`
`
`
`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
`
`

`

`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 13 of 39
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`
`III. ARGUMENT
`A. Summary of Argument
`The Platforms move to dismiss all of Plaintiffs’ Master Complaints on grounds that all
`
`forty causes of action in the Complaints seek to punish the Platforms merely for passively
`publishing social casino apps created by third parties, and that such liability is precluded by
`Section 230 of the CDA. But while Section 230 immunizes platforms from liability for
`publishing third-party content, it does not “declare[] a general immunity from liability deriving
`from third-party content.” Barnes, 570 F.3d at 1100 (emphasis added). In particular, recent and
`directly on-point Ninth Circuit authority—authority that Apple and Google fail to even mention
`in their Motions—squarely holds that platforms hosting third-party content are not immune for
`their own conduct when they book and collect a fee for unlawful transactions (even if the
`transactions flow from protected third-party content). HomeAway, 918 F.3d at 684. HomeAway
`applies cleanly to the allegations here, since Plaintiffs allege that the Platforms booked and
`earned a 30% fee for every illegal gambling transaction Plaintiffs challenge. Specifically, the
`Platforms received and processed payment for (and taxed a 30% cut of) all purchases of virtual
`chips within the social casino apps. Those purchases total tens of billions of dollars and are
`themselves illegal transactions, since in every instance the purchased chips were substantially
`certain to be wagered on illegal slot machines.
`
`The Platforms’ Motions rest on a fundamental misunderstanding of Plaintiffs’ claims.
`Plaintiffs’ claims do not seek to hold the Platforms liable for publishing or hosting social casino
`apps. Instead, Plaintiffs seek to hold the Platforms liable for their own conduct both in booking
`and taking a cut of illegal gambling transactions and in directly participating in unfair business
`practices. These claims do not seek to regulate publisher activity, since avoiding liability would
`not force the Platforms to review, monitor, or edit any third-party content. Declining to extend
`CDA immunity here thus is consistent not only with HomeAway and other relevant precedent,
`but also with two recent decisions in this District regarding CDA immunity and claims of
`unlawful gambling. See infra Section III.C.1.e. (discussing Taylor v. Apple and Coffee v.
`
`PLS.’ CONSOL. OPP’N TO CDA 230 MOTIONS TO DISMISS
`Case Nos. 21-md-02985-EJD; 21-md-03001-EJD;
`21-cv-02777-EJD
`
`7
`
`
`
`
`EDELSON PC
`150 California Street, 18th Floor
`San Francisco, CA 94111
`Tel: 415.212.9300 • Fax: 415.373.9435
`
`

`

`Case 5:21-cv-02777-EJD Document 104 Filed 04/29/22 Page 14 of 39
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`Google). In addition, though the Platforms insist that the challenged conduct is simply the
`provision of “neutral tools” offered to all apps, the Platforms can “face the prospect of liability,
`even for their ‘neutral tools,’” since their potential liability is based on their own conduct and not
`solely on the content of third parties. Lemmon v. Snap, Inc., 995 F.3d 1085, 1094 (9th Cir. 2021).
`Because Plaintiffs’ claims fall outside the scope of CDA immunity, the Court should deny the
`Platforms’ Motions to Dismiss.
`B. Legal Framework
`At the pleadings stage, the Court must “accept all factual allegations in the complaint as
`
`true and construe the pleadings in the light most favorable to the nonmoving party.” Dyroff v.
`Ultimate Software Grp., Inc., 934 F.3d 1093, 1096 (9th Cir. 2019). A complaint that “states a
`plausible claim for relief” falling outside the scope of CDA immunity “may survive a motion to
`dismiss.” Id.
`
`Section 230 of the CDA “protects from liability (1) a provider or user of an interactive
`computer service (2) whom a plaintiff seeks to treat, under a state law cause of action, as a
`publisher or speaker (3) of information provided by another information content provider.”
`Barnes, 570 F.3d at 1100-01; see also 47 U.S.C. § 230.8 A defendant can fall outside the scope
`of CDA immunity, therefore, if the plaintiff’s claim either (a) challenges conduct other than
`publisher or speaker conduct, or (b) challenges the defendant’s publication of information where
`the defendant itself is one of the “information content providers.” See Opperman v. Path, 87 F.
`Supp. 3d 1018, 1043 (N.D. Cal. 2014).
`
`
`47 U.S.C. § 230(c)(1) provides: “No provider or user of an interactive computer service
`8
`shall be treated as the publisher or speaker of any information provided by another information
`content provider.”
`47 U.S.C.

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