Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 1 of 12
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SHARED.COM,
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`Plaintiff,
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`v.
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`META PLATFORMS, INC.,
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`Defendant.
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`Case No. 22-cv-02366-RS
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`
`ORDER GRANTING IN PART AND
`DENYING IN PART DEFENDANT’S
`MOTION TO DISMISS FIRST
`AMENDED COMPLAINT
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`I. INTRODUCTION
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`Plaintiff Shared.com (“Shared”) is an online content creator that was, for many years,
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`deeply engaged in the Facebook advertising ecosystem. This suit arose following a series of
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`alleged incidents that effectively barred Shared from using, advertising on, and monetizing from
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`the social media platform. The operative First Amended Complaint (“FAC”) avers breach of
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`contract, misrepresentation, and several other acts of misconduct by Defendant Meta Platforms,
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`Inc. (“Meta”). Meta now moves to dismiss the FAC for failure to state a claim.
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`The motion is granted in part and denied in part. Some of Plaintiff’s claims are barred by
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`section 230(c)(1) of the Communications Decency Act. The remaining claims, however, have
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`been adequately pleaded.
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`II. BACKGROUND1
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`1 As this Court must “accept all factual allegations in the complaint as true” when evaluating a
`Rule 12(b)(6) motion to dismiss, Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005), all facts
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`Northern District of California
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`United States District Court
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`

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`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 2 of 12
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`Shared is a partnership based out of Ontario, Canada that “creates and publishes original,
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`timely, and entertaining [online] content.” Dkt. 21 ¶ 9. In addition to its own website, Plaintiff also
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`operated a series of Facebook pages from 2006 to 2020. During this period, Shared avers that its
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`pages amassed approximately 25 million Facebook followers, helped in part by its substantial
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`engagement with Facebook’s “advertising ecosystem.” This engagement occurred in two ways.
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`First, Shared directly purchased “self-serve ads,” which helped drive traffic to Shared.com and
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`Shared’s Facebook pages. Second, Shared participated in a monetization program called “Instant
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`Articles,” in which articles from Shared.com would be embedded into and operate within the
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`Facebook news feed; Facebook would then embed ads from other businesses into those articles
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`and give Shared a portion of the ad revenue. Shared “invested heavily in content creation” and
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`retained personnel and software specifically to help it maximize its impact on the social media
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`platform. Id. ¶ 19.
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`Friction between Shared and Facebook began in 2018. Shared states that it lost access to
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`Instant Articles on at least three occasions between April and November of that year. Importantly,
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`Shared received no advance notice that it would lose access. This was contrary to Shared’s averred
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`understanding of the Facebook Audience Network Terms (“the FAN Terms”), which provide that
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`“[Facebook] may change, withdraw, or discontinue [access to Instant Articles] in its sole
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`discretion and [Facebook] will use good faith efforts to provide Publisher with notice of the
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`same.” Id. ¶ 22; accord Dkt. 21-5. Shared asserts that “notice,” as provided in the FAN Terms,
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`obliges Facebook to provide advance notice of a forthcoming loss of access, rather than after-the-
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`fact notice.
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`During this same timeframe, Facebook also failed to make a timely payment from Instant
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`Articles ad revenue. Another clause in the FAN Terms (“the FAN payment term”) provides that
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`Facebook would forward money earned through Instant Articles “approximately 21 days
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`following the end of the calendar month in which the transaction occurred.” Dkt. 21 ¶ 26; accord
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`in this section are taken from the FAC, unless otherwise noted.
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`2
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
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`Northern District of California
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`United States District Court
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`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 3 of 12
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`Dkt. 21-5. Facebook delayed paying Shared its portion of April 2018 ad revenue until September
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`2018, roughly four months beyond the timeframe noted in the FAN payment term. This delay led
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`to a critical shortage in Shared’s operating capital, ultimately resulting in its decision to lay off
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`eighteen employees.
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`Meanwhile, all was not well with Shared’s self-serve ad buys. Shared notes that, “[o]ver
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`the course of its relationship with Facebook, Shared had numerous ads arbitrarily and incorrectly
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`rejected without explanation.” Dkt. 21 ¶ 47. Facebook’s Advertising Policies, which governed the
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`self-serve ad program, had provided that if an ad was rejected, Facebook would send the publisher
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`“an email with details that explain why. Using the information in [the] disapproval email, you can
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`edit your ad and create a compliant one.” Id. ¶ 45; accord Dkt. 21-4, at 2. Shared expected to
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`receive specific explanations when its ads were rejected, but each time it instead received a
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`“circular” explanation simply stating that the ad had been rejected for failing to comply with the
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`Advertising Policies. Dkt. 21 ¶ 102.
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`All of these tensions were brought to a head in October 2020 when Facebook “unpublished
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`the Shared Facebook pages, suspended Shared’s ability to advertise,” and disabled Shared’s ad
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`accounts as well as the personal Facebook profiles of several Shared employees. Id. ¶ 42. While
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`the Facebook Terms of Service stated that accounts could be suspended only after “clearly,
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`seriously or repeatedly” breaching Facebook’s policies, id. ¶ 49, Shared states that, to its
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`knowledge, it had not violated any such policies. These actions “effectively gave Shared a death
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`sentence within the Facebook system,” resulting in its business and its multimillion-dollar
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`valuation “cratering.” Id. ¶¶ 43, 51.
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`Shared sued Meta, Facebook’s parent company, in July 2022. The FAC raises six claims
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`for relief, some of which have multiple factual bases. First, Shared avers that Meta committed
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`conversion (Claim 1), breach of contract (Claim 3), and breach of the implied covenant of good
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`faith and fair dealing (Claim 4) in suspending access to Shared’s Facebook pages, contrary to the
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`Facebook Terms of Service. Second, Shared avers that Meta committed breach of contract (Claim
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`3), breach of the implied covenant of good faith and fair dealing (Claim 4), and intentional
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`3
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
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`Northern District of California
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`United States District Court
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`

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`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 4 of 12
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`misrepresentation (Claim 5) or negligent misrepresentation (Claim 6) for failing to provide
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`advance notice of suspension from Instant Articles, contrary to the FAN Terms. Third, Shared
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`avers that Meta committed breach of contract (Claim 3), intentional misrepresentation (Claim 5) or
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`negligent misrepresentation (Claim 6), and violated California’s Unfair Competition Law (“UCL”)
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`(Claim 2), see Cal. Bus. & Prof. Cod § 17200, for failing to provide sufficient details regarding ad
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`rejections in violation of the Advertising Policies. Fourth, Shared avers that Meta committed
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`breach of contract (Claim 3) for failing to deliver the April 2018 payment on time in violation of
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`the FAN payment term. Meta now moves to dismiss the FAC in its entirety.
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`III. LEGAL STANDARD
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`Federal Rule of Civil Procedure 12(b)(6) governs motions to dismiss for failure to state a
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`claim. A complaint must include “a short and plain statement of the claim showing that the pleader
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`is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While “detailed factual allegations” are not required, a
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`complaint must have sufficient factual allegations to “state a claim to relief that is plausible on its
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`face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S.
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`544, 570 (2007)). When evaluating such a motion, courts generally “accept all factual allegations
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`in the complaint as true and construe the pleadings in the light most favorable to the nonmoving
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`party.” Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). However, “[t]hreadbare recitals of
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`the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal,
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`556 U.S. at 678.
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`For actions sounding in fraud, the complaint “must state with particularity the
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`circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Such averments “must be
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`accompanied by ‘the who, what, when, where, and how’ of the misconduct charged,” such that
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`they are “specific enough to give defendants notice of the particular misconduct.” Kearns v. Ford
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`Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (first quoting Vess v. Ciba-Geigy Corp. USA, 317
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`F.3d 1097, 1106 (9th Cir. 2003); and then quoting Bly-Magee v. California, 236 F.3d 1014, 1019
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`(9th Cir. 2001)). Knowledge may be pleaded generally under Rule 9(b), but the complaint “must
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`set out sufficient factual matter from which a defendant’s knowledge of a fraud might reasonably
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`4
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
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`Northern District of California
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`United States District Court
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`

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`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 5 of 12
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`be inferred.” United States ex rel. Anita Silingo v. WellPoint, Inc., 904 F.3d 667, 679–80 (9th Cir.
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`2018).
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`IV. ANALYSIS
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`To survive Defendants’ motion to dismiss, each of Plaintiff’s claims must overcome three
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`hurdles: first, they must not be barred by section 230(c)(1) of the Communications Decency Act;
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`second, they must not be barred by the Limits on Liability within the Facebook Terms of Service;
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`and third, they must be sufficiently pled. After reviewing the FAC, not every claim can overcome
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`all three, so each hurdle is addressed in turn.
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`A. Section 230(c)(1) Immunity
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`Congress passed the Communications Decency Act in an effort to create and promote a
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`vibrant digital communications landscape. Among other things, section 230(c)(1) of the Act
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`generally exempts “information content providers” from liability for information provided by third
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`parties. See, e.g., Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1099–100 (9th Cir. 2009). The section
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`states that “[n]o provider or user of an interactive computer service shall be treated as the
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`publisher or speaker of any information provided by another information content provider.” 47
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`U.S.C. § 230(c)(1). While this immunity is broad, it is not absolute. As the Ninth Circuit clarified
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`in Barnes v. Yahoo!, Inc., the relevant inquiry is not how plaintiffs style their claims for relief, but
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`rather “whether the duty that the plaintiff alleges the defendant violated derives from the
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`defendant’s status or conduct as a ‘publisher or speaker.’” 570 F.3d at 1102. If the plaintiff alleges
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`that liability arises from the defendant’s “manifest intention to be legally obligated to do
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`something,” rather than from the defendant’s “status or conduct as a ‘publisher or speaker,’”
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`section 230(c)(1) does not apply. Id. at 1107; see In re Zoom Video Commc’ns. Inc. Privacy
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`Litigation, 525 F. Supp. 3d 1017, 1034 (N.D. Cal. 2021).
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`Defendant argues that all of Plaintiff’s claims are barred by section 230(c)(1). It asserts,
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`and Plaintiff does not contest, that Meta is a “provider . . . of an interactive computer service”
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`under the Act’s definition, and that the relevant information at issue was “provided by another
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`information content provider.” 47 U.S.C. § 230(c)(1); see Dkt. 24, at 22. Defendant further argues
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`5
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
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`Northern District of California
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`United States District Court
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`

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`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 6 of 12
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`that each of Plaintiff’s claims seek to treat Meta as a “publisher or speaker,” and that the suit must
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`therefore fail in its entirety.
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`Defendant is only partially correct. Plaintiff raises three claims involving Defendant’s
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`decision to suspend Plaintiff’s access to its Facebook accounts and thus “terminate [its] ability to
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`reach its followers”: one for conversion, one for breach of contract, and one for breach of the
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`implied covenant of good faith and fair dealing. See Dkt. 21, ¶¶ 54–63, 110–12, 119. Shared
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`claims that, contrary to the Facebook Terms of Service, Defendant suspended Shared’s access to
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`its Facebook pages without first determining whether it had “clearly, seriously or repeatedly
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`breached [Facebook’s] Terms or Policies.” At bottom, these claims seek to hold Defendant liable
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`for its decision to remove third-party content from Facebook. This is a quintessential editorial
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`decision of the type that is “perforce immune under section 230.” Barnes, 570 F.3d at 1102
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`(quoting Fair Housing Council of San Fernando Valley v. Roommates.com, 521 F.3d 1157, 1170–
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`71 (9th Cir. 2008) (en banc)). Ninth Circuit courts have reached this conclusion on numerous
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`occasions. See, e.g., King v. Facebook, Inc., 572 F. Supp. 3d 776, 795 (N.D. Cal. 2021); Atkinson
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`v. Facebook Inc., 20-cv-05546-RS (N.D. Cal. Dec. 7, 2020); Fed. Agency of News LLC v.
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`Facebook, Inc., 395 F. Supp. 3d 1295, 1306–07 (N.D. Cal. 2019). To the extent Facebook’s Terms
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`of Service outline a set of criteria for suspending accounts (i.e., when accounts have “clearly,
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`seriously, or repeatedly” breached Facebook’s policies), this simply restates Meta’s ability to
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`exercise editorial discretion. Such a restatement does not, thereby, waive Defendant’s section
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`230(c)(1) immunity. See King, 572 F. Supp. 3d at 795. Allowing Plaintiff to reframe the harm as
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`one of lost data, rather than suspended access, would simply authorize a convenient shortcut
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`through section 230’s robust liability limitations by way of clever pleading. Surely this cannot be
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`what Congress would have intended. As such, these claims must be dismissed.
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`The remaining claims, however, do not seek to treat Defendant as a publisher or speaker.
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`They arise instead out of promises that Plaintiff argues Defendant made to its advertising partners.
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`With respect to the FAN Terms, Plaintiff’s claims are rooted in Defendant’s averred violation of
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`its promise to provide “notice.” Plaintiff similarly seeks to hold Defendant liable for its averred
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`6
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
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`Northern District of California
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`United States District Court
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`

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`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 7 of 12
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`violation of its promise to provide “details that explain why” Plaintiff’s ads were rejected. In both
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`cases, Plaintiff does not question Defendant’s right or ability to limit access to the Facebook ad
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`platform or to remove the ads; rather, Plaintiff objects to what it argues were deficiencies in the
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`procedure described in Facebook’s contracts. Cf. id. (“That Facebook has the editorial discretion
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`to post or remove content has little do to with the implied promise to explain why content was
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`removed.”). Additionally, Plaintiff’s breach of contract claim involving the FAN payment term
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`clearly has nothing to do with Facebook’s editorial capabilities, but rather involves its obligations
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`to pay ad partners in a timely fashion. These claims, therefore, are not subject to section 230(c)(1)
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`immunity.
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`B. Facebook’s Limits on Liability
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`Defendant next argues that many of Plaintiff’s claims for damages are barred under the
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`Limits on Liability (“the limitations provision”) included in Facebook’s Terms of Service. In
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`relevant part, the Terms state the following:
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`[Facebook’s] liability shall be limited to the fullest extent permitted
`by applicable law, and under no circumstance will we be liable to you
`for any lost profits, revenues, information, or data, or consequential,
`special, indirect, exemplary, punitive, or incidental damages arising
`out of or related to these Terms or the Facebook Products, even if we
`have been advised of the possibility of such damages.
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`Dkt. 21, Ex. 11 § 3. Courts have generally enforced such limitations provisions, so long as they
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`are not unconscionable.2 See, e.g., Food Safety Net Servs. v. Eco Safe Sys. USA, Inc., 147 Cal.
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`Rptr. 3d 634, 641–42 (Ct. App. 2012). However, as Plaintiff correctly observes, California law
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`renders limitations provisions unenforceable against claims for fraud or willful injury. See Cal.
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`Civ. Code § 1668. The limitations provision therefore cannot stand in the way of Claims 2, 5, and
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`6, as they all aver some form of fraud by Defendant.
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`2 Plaintiff summarily avers in the FAC that the limitations provision is unconscionable. Dkt. 21
`¶ 113. Plaintiff further states in its Opposition that it “reserves to argue unconscionability as the
`case progresses.” Dkt. 25, at 21 n.6. Since Plaintiff has thus far not meaningfully argued that the
`limitations provision is, in fact, unconscionable, this Order assumes the provision is enforceable.
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`7
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
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`Northern District of California
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`United States District Court
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`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 8 of 12
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`For the remaining claims, the limitations provision presents a possible obstacle, because it
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`limits Plaintiff’s potential relief. Plaintiff argues it would be more appropriate to defer resolving
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`this question until a later stage in the litigation, given that the distinction between general (or
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`direct) damages and consequential (or indirect) damages is “relative not absolute.” While the
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`distinction between these two forms of damages might not be quite as nebulous as Plaintiff
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`suggests, the point is well taken. Given that each of the claims plausibly avers that Shared was
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`harmed as a result of Defendant’s conduct, the discovery process would aid in determining more
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`concretely whether each claim avers direct or indirect damages. The limitations provision will
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`therefore not mandate dismissal of any of Plaintiff’s claims, though Defendant can always reassert
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`the limitations provision in, for example, a motion for summary judgment.
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`C. Sufficient Pleadings
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`Finally, every claim must make a minimum showing of plausibility in order to survive a
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`motion to dismiss, and Rule 9(b) further requires claims sounding in fraud to be pleaded with
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`particularity. The surviving portions of Claims 3 and 4 are discussed first; Claim 2 is discussed
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`second; and Claims 5 and 6 are discussed third.
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`1. Breach of Contract & Implied Covenant Claims: FAN Terms
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`Plaintiff claims that Defendant breached the FAN Terms by failing to provide Shared with
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`advance notice that its access to Instant Articles would be suspended. Plaintiff further argues that,
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`to the extent the FAN Terms did not necessarily require Defendant to provide advance notice,
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`Facebook’s failure to do so would still constitute a breach of the implied covenant of good faith
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`and fair dealing. Defendant, in response, contests Plaintiff’s interpretation of the FAN Terms and
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`argues that no breach occurred because (a) it was not required to offer “advance” notice at all and
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`(b) it did, in fact, offer after-the-fact notice.
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`The main dispute, then, turns largely on the interpretation of the FAN Terms themselves.
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`Contrary to Defendant’s contention, the FAN Terms are not self-evidently clear: “notice” is
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`susceptible to both interpretations (i.e., “advance” notice and “after-the-fact” notice). See, e.g.,
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`Notice, MERRIAM-WEBSTER, https://www.merriam-webster.com/dictionary/notice (defining
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`8
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
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`Northern District of California
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`United States District Court
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`

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`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 9 of 12
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`“notice” as both “the announcement of a party’s intention to quit an agreement or relation at a
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`specified time” and “the condition of being warned or notified . . .”). Accepting Plaintiff’s
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`contentions as true, as the law requires, Plaintiff has adequately pleaded these criteria. Plaintiff has
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`also adequately pleaded proximate causation between the averred breach and the damages that
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`ensued — namely by precluding Shared’s ability to pivot to other forms of content creation. The
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`motion is therefore denied as to these portions of Claims 3 and 4.
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`2. Breach of Contract: Advertising Policies
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`Plaintiff similarly avers, in Claim 3, that Defendant breached the terms of the Advertising
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`Policies by not providing sufficient “details that explain[ed] why” Plaintiff’s ads were rejected
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`from Facebook. As with the averred breach of the FAN Terms, Defendant moves to dismiss
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`primarily on the grounds that the clear terms of the Advertising Policies did not require
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`explanations “sufficient for Shared to bring its ads into compliance” and that Defendant did, in
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`fact, provide details — the details being that the ads were suspended for violating the Advertising
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`Policies. This dispute, once more, turns largely on contract interpretation, and again, Plaintiff’s
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`interpretation is plausible. Plaintiff has also adequately pleaded proximate causation between the
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`averred breach and damages — namely, that Plaintiff wasted money on ads it would otherwise not
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`have purchased. The motion is therefore denied as to this portion of Claim 3.
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`3. California UCL Claim
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`Plaintiff avers, in Claim 2, that Defendant violated the UCL, which prohibits “unlawful,
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`unfair or fraudulent business practices.” Cal. Bus. & Prof. Code § 17200. Specifically, Plaintiff
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`contends that Defendant’s failure to provide “details that explain why” ads were rejected violated
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`both the “fraudulent” and “unfair” prongs of the UCL. “Because the statute is written in the
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`disjunctive, . . . [e]ach prong of the UCL is a separate and distinct theory of liability.” Lozano v.
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`AT&T Wireless Servs., Inc., 504 F.3d 718, 731 (9th Cir. 2007).
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`a. “Fraudulent” Prong
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`In order to prevail on a UCL claim under the “fraudulent” prong, Plaintiff must satisfy the
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`“reasonable consumer” standard: it must show that “members of the public are likely to be
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`9
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 10 of 12
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`deceived.” I.B. ex rel. Fife v. Facebook, Inc., 905 F. Supp. 2d 989, 1011 (N.D. Cal. 2012). Since
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`this claim sounds in fraud, Rule 9(b) requires that the claim be stated with particularity. Here,
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`Plaintiff has met its burden. Shared argues that the Advertising Policies themselves contained a
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`fraudulent statement — i.e., that ad partners would be provided with sufficient details to bring
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`their rejected ads into conformity with Facebook’s policies. It is plausible that a reasonable
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`consumer would concur with Shared’s interpretation of the Policies, notwithstanding Defendant’s
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`contrary interpretation. Indeed, Plaintiff supports this interpretation by offering examples of
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`numerous other ad partners that faced similar frustration in using Facebook’s self-serve ads. See
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`Dkt. 21, ¶¶ 75–86. It is similarly plausible, at the very least, that Defendant knew or should have
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`known that it could not comply with this expectation due to its averred reliance on artificial
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`intelligence. While Plaintiff does not state who specifically at Shared read the Policies, or on what
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`particular dates they read them, the FAC states that Plaintiff did read the Advertising Policies
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`“[p]rior to deciding to advertise and/or continue advertising on Facebook.” In combination, this
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`suffices to satisfy Rule 9(b)’s heightened pleading standards. Plaintiff has therefore stated a claim
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`under the “fraudulent” prong of the UCL, and the motion is denied in this respect.
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`b. “Unfair” Prong
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`At present, California courts have “adopt[ed] three different tests for determining
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`unfairness in the consumer context.” Nationwide Biweekly Admin., Inc. v. Super. Ct. of Alameda
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`Cnty., 462 P.3d 461, 472 (Cal. 2020). Under the “balancing test,” the court must examine the
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`impact of an alleged unfair practice on its victim, “balanced against the reasons, justifications and
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`motives of the alleged wrongdoer.” Id. at 472 n.10; see also In re Anthem, Inc. Data Breach
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`Litigation, 162 F. Supp. 3d 953, 990 (N.D. Cal. 2016) (balancing test involves considering
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`whether plaintiff “alleg[ed] immoral, unethical, oppressive, unscrupulous, or substantially
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`injurious conduct by Defendant[]”). Some courts apply a different, three-part balancing test, under
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`which “(1) [t]he consumer injury must be substantial; (2) the injury must not be outweighed by
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`any countervailing benefits to consumers or competition; and (3) it must be an injury that
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`consumers themselves could not reasonably have avoided.” Nationwide, 462 P.3d at 472 n.10.
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`10
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 11 of 12
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`Finally, the “tethering test” requires the plaintiff to show that “the public policy which is a
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`predicate to a consumer unfair competition action under the ‘unfair’ prong of the UCL [is]
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`tethered to specific constitutional, statutory, or regulatory provisions.” In re Adobe Sys., Inc.
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`Privacy Litigation, 66 F. Supp. 3d 1197, 1226 (N.D. Cal. 2014).
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`Here, Plaintiff argues that Defendant’s conduct is unfair because, by failing to provide
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`satisfactory explanations for ad rejections, Defendant “provide[d] advertising services at a lower
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`cost, and . . . made those advertising services appear to be more valuable than they were.” Dkt. 21
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`¶ 74. Plaintiff suggests this was due to Defendant’s “over-reliance on artificial intelligence” in ad
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`regulation, which allowed Facebook to “maximize its profits” rather than provide adequate
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`explanations. Id. ¶¶ 71, 74. Plaintiff also argues Defendant’s conduct was “contrary to legislatively
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`declared public policies that seek to protect consumers from misleading statements.” Id. ¶ 72.
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`Plaintiff has made an adequate showing that Defendant’s conduct was “unfair” under the
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`tethering test. While this claim essentially overlaps with Plaintiff’s claim under the “fraudulent”
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`prong, Defendant is incorrect in arguing that this would require dismissal: “unfair” prong claims
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`that overlap with claims under another UCL prong need only be dismissed “if the claims under the
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`other . . . prongs of the UCL do not survive.” Hadley v. Kellogg Sales Co., 243 F. Supp. 3d 1074,
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`1104–05 (N.D. Cal. 2017) (emphasis added); see also Punian v. Gillette Co., 2016 WL 1029607,
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`at *17 (N.D. Cal. Mar. 15, 2016). As noted above, Plaintiff has stated a valid claim under the
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`“fraudulent” prong, so its claim under the “unfair” prong may proceed since it has articulated a
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`specific state policy that Defendant has allegedly violated.3 The motion to dismiss the UCL claim
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`under the “unfair” prong is therefore denied.
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`4. Misrepresentation Claims
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`Finally, Plaintiff avers, in Claims 5 and 6, that Defendant misrepresented to Plaintiff that it
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`would receive both “advance notice” that it would lose access to Instant Articles, and that it would
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`3 Plaintiff’s “unfair” prong claim therefore rises and falls with its “fraudulent” prong claim. This
`Order expresses no opinion as to whether Plaintiff has adequately pleaded a claim under the
`“unfair” prong for reasons other than Defendant’s allegedly misleading conduct.
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`11
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:22-cv-02366-RS Document 31 Filed 09/21/22 Page 12 of 12
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`
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`receive sufficient “details that explain why” its ads were rejected. The latter argument overlaps
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`almost entirely with Claim 2, and these two claims must therefore rise or fall together. Given that
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`Plaintiff satisfactorily stated a claim under the “fraudulent” prong of the UCL, it has also stated a
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`plausible claim for misrepresentation with respect to the Advertising Policies.
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`As to the FAN Terms and the lack of adequate notice, the reasoning above applies here as
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`well. Although Plaintiff does not state who at Shared actually read the FAN Terms, the FAC
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`nevertheless states that Shared “reasonably relied on [the FAN Terms] in connection with its
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`decision” to invest in and utilize Instant Articles. Dkt. 21 ¶ 131. The FAC therefore avers
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`Defendant’s wrongful conduct with sufficient particularity to satisfy Rule 9(b), and Defendant’s
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`motion is therefore denied with respect to Claims 5 and 6.4
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`V. CONCLUSION
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`Based on the foregoing analysis, the motion to dismiss is granted in part and otherwise
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`denied. Claim 1 is dismissed without leave to amend; Claim 3 is dismissed with respect to the
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`Terms of Service, without leave to amend; and Claim 4 is dismissed with respect to the Terms of
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`Service, without leave to amend. The motion is denied in all other respects.
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`
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`IT IS SO ORDERED.
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`
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`Dated: September 21, 2022
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`______________________________________
`
`RICHARD SEEBORG
`Chief United States District Judge
`
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`4 Plaintiff pleads Claim 5 and 6 in the alternative, as it must, because it is impossible to be liable
`for intentional and negligent misrepresentation simultaneously for the same conduct. The
`distinction turns on Defendant’s knowledge, but since knowledge may be alleged generally under
`Rule 9(b), Plaintiff has met this requirement.
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`12
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`ORDER ON MOTION TO DISMISS
`CASE NO. 22-cv-02366-RS
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`Northern District of California
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`United States District Court
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