Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

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Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

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Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

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In <a href="https://storage.courtlistener.com/recap/gov.uscourts.cand.431021/gov.uscourts.cand.431021.41.0.pdf" target="_blank">Ryan v. X Corp.</a>, a Northern District of California court held that <a href="https://www.law.cornell.edu/uscode/text/47/230" target="_blank">Section 230 of the Communications Decency Act</a> immunized X (formerly Twitter) against claims arising from suspension of a user’s account, notwithstanding that X allegedly used an AI system to select the account for suspension. The case also illustrates the unsettled state of the law (at least in the Ninth Circuit) regarding whether contract-based claims based on a platform’s alleged failure to comply with its own terms of service regarding content moderation are excluded from the Section 230 safe harbor.Plaintiff Jeremy Ryan, a “successful NFT artist” who used X to “further develop his cryptocurrency and NFT community,” sued X for suspending his accounts without explanation. Ryan alleged that X used an AI system to select his account for suspension. Ryan’s claims included breach of contract, promissory estoppel, unjust enrichment, intentional interference with contractual relationships with third parties, interference with prospective economic advantage, promissory fraud, conversion, and unfair business practices.The opinion in this case came in two parts. The court first <a href="https://storage.courtlistener.com/recap/gov.uscourts.cand.431021/gov.uscourts.cand.431021.29.0.pdf" target="_blank">dismissed several of Ryan’s claims</a> in September 2024, holding that the breach of contract, intentional interference, conversion, and unfair business practices claims were barred by Section 230. The court then dismissed the remaining claims in a subsequent opinion in December 2024 as barred by X’s terms of service.In its September opinion, the court applied the three factors from <a href="https://law.justia.com/cases/federal/appellate-courts/ca9/05-36189/05-36189-2011-02-25.html" target="_blank">Barnes v. Yahoo!</a> to determine whether the statute immunized X from liability: (1) whether X is a provider or user of an “interactive computer service,” (2) whether Ryan’s claim seeks to treat the defendant as a “publisher or speaker,” and (3) whether the content at issue was provided by “another information content provider.” The court quickly determined that the first and third factors were satisfied: X is an interactive computer service, and Ryan provided the content at issue. The key question was whether X’s suspension of Ryan’s accounts constituted a “publishing decision.”The court ruled that X’s account suspension decisions were indeed “traditional publishing functions” protected under Section 230. Relying on Ninth Circuit precedent, the court held that “any activity that can be boiled down to deciding whether to exclude material that third parties seek to post online is perforce immune under section 230.” The fact that X may have used AI to assist in its moderation decisions did not change this outcome.Other than the AI angle, this would appear to be a fairly standard application of Section 230, but the court also had to address Ryan’s breach of contract claim based on X’s alleged failure to comply with its own terms of service and other statements made on X’s website. The court’s job was made more difficult by recent Ninth Circuit cases <a href="https://cdn.ca9.uscourts.gov/datastore/opinions/2024/06/04/22-15910.pdf" target="_blank">Calise v. Meta Platforms, Inc.</a> and <a href="https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/22/23-55134.pdf" target="_blank">Estate of Carson Bride v. YOLO Technologies, Inc.</a>, both of which found exceptions to Section 230 based on the defendant platforms’ alleged failure to comply with their own content moderation policies.Commentators have criticized <a href="https://blog.ericgoldman.org/archives/2024/06/ninth-circuit-does-more-damage-to-section-230-calise-v-meta.htm" target="_blank">Calise</a> and <a href="https://blog.ericgoldman.org/archives/2024/08/when-it-comes-to-section-230-the-ninth-circuit-is-a-chaos-agent-estate-of-bride-v-yolo.htm" target="_blank">YOLO</a> for significantly expanding the limited Section 230 exception for promissory estoppel claims in <a href="https://law.justia.com/cases/federal/appellate-courts/ca9/05-36189/05-36189-2011-02-25.html">Barnes v. Yahoo!</a> in a manner that is inconsistent with dozens of prior cases and with the words of the statute itself. Barnes created a limited exception to Section 230 for contract-based claims where the defendant platform operator made a specific promise to the plaintiff to remove content and then failed to do so. Calise and YOLO expanded the exception to include “promises” contained in generally applicable platform terms and policies.The Ryan court held that these cases did not preclude application of Section 230 and reached back to Barnes to support its conclusion that Ryan’s contract claim was barred, holding that “despite Ryan’s protestations to the contrary, his suspension was undertaken by X in its capacity as a publisher of information, it meets the other Barnes criteria, and is protected.” In discussing Calise, the court noted that Ryan was trying to “impose liability upon X arising from its actions as a publisher, not its failure to fulfill some promise separate from that role,” and that the argument that his contract claim arose from a separate promise that X made to users on its website “comes up short because . . . statements made in a social media site’s terms and community standards do not amount to a legally enforceable promise.” We leave it to the reader to decide whether Ryan actually distinguishes Calise or simply refuses to apply it.The court went on to dispose of Ryan’s claims for intentional interference with plaintiff’s contractual relationships, conversion, and unfair business practices, also on Section 230 grounds. In each instance, Ryan’s claim arose from X’s decision to suspend Ryan’s accounts, which the court held was a publishing decision and therefore immunized under Section 230. In discussing Ryan’s conversion claim, which was based on the allegation that an “automated bot” made certain misrepresentations to Ryan regarding restoration of his account, the court noted that suspending an account is a publishing decision, regardless of whether AI is used.Ryan did not fare any better in the December opinion, where the court dismissed his remaining claims as barred by X’s terms of service. X’s terms of service stated that X may stop providing services to users, limit use of services, remove user content, and suspend or terminate users without liability. Ryan argued that California courts do not enforce limitation of liability provisions under <a href="https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1668.&lawCode=CIV#:~:text=All%20contracts%20which%20have%20for,(Enacted%201872.)" target="_blank">California Civil Code Section 1668</a> if they protect against fraud or gross negligence. Only Ryan’s claim for promissory fraud alleged fraud or gross negligence, however, and that claim requires a promise. Because X did not make any promise not to suspend Ryan’s accounts even if he complied with the terms of service, California Civil Code Section 1668 did not prohibit enforcement of the limitation of liability in X’s terms of service. Accordingly, the court dismissed Ryan’s claims for promissory fraud, promissory estoppel, unjust enrichment, and unfair business practices claim.The court also noted that, even if not barred by X’s terms of service, Ryan’s unjust enrichment claim would be barred under Section 230. Ryan argued that X was not entitled to Section 230 immunity because the decision to suspend his account was made by X’s AI system, and that this somehow made X an information content provider rather than merely an interactive computer service provider. Ryan also argued that X’s AI system (as distinct from X) was not entitled to Section 230 immunity. Ryan’s arguments are difficult to understand based on the opinion, and it appears that the court struggled with them as well. In any event, the court was not convinced, stating “no authority suggests that X’s use of a generative AI model to do content regulation deprives it of Section 230 immunity” and “[n]othing in the plain language of the statute suggests that X would be denied section 230 protection because it uses an AI system for content moderation.”

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

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Lindsay is an associate in the Technology Transactions Group of Morrison Foerster.

Lindsay B. Harris

Lindsay Harris

Northern District Applies Section 230 to AI-Assisted Content Moderation