On Monday, a 67-page opinion written by Judge Michael M. Anello ruled in favor of individuals suing three companies that operate “people search” websites that sell access to databases containing reports exclusive details about people in exchange for a subscription. Regarding the defenses of defendants PeopleConnect Inc., Intelius LLC and The Control Group Media Company LLC (collectively, PeopleConnect), the court declared that there was no basis to compel arbitration or to dismiss the class action in the rejection phase.
The lawsuit dates back to February, when a plaintiff from Alabama and California sued PeopleConnect for misappropriating their identity without consent for commercial purposes, an illegal act under state right-to-publicity laws. PeopleConnect opposed the complaint and sought to compel arbitration or dismiss the claims with an arsenal of defenses under Section 230 of the Communications Decency Act (CDA), constitutional provisions and other arguments .
The court’s 14-page discussion of arbitration concluded that the defendants could not compel the Alabama plaintiff’s claims to the court-ordered forum. Judge Anello undertook a choice of law analysis and reviewed Supreme Court and Ninth Circuit case law, including a recent decision in an action brought against a similar company associated with one of the defendants also representing the same Defence lawyer.
“Defendants have not borne their burden of showing that plaintiff Camacho’s attorney had the authority to bind plaintiff Camacho to agreements or that plaintiff Camacho subsequently ratified it,” the opinion summarizes.
PeopleConnect’s defense under Section 230 of the CDA failed because the liability protection does not extend to “content created or developed by an interactive computer service”. than their websites themselves.
Second, the First Amendment and California’s analogous provision failed to protect defendants from prosecution because the impugned speech was commercial, Judge Anello found. The case centered on “teasers”, free searches that visitors to the website could perform to entice them to purchase subscriptions, which the court said were “unquestionably advertisements…” intended solely to induce a commercial transaction, not the meaningful communication of knowledge. ‘”
Along the same lines, Judge Anello found that both state statutes complied with the First Amendment, noting that the imposition of “”liability for violating the traditional right of publicity does not necessarily offend the first amendment “”.
Finally, the court joined the three cases pending before it and, in doing so, applied this notice to all three. Plaintiffs are represented by Bursor & Fisher PA and Edelson PC. PeopleConnect is represented by Jenner & Block LLP.