Elon Musk's X Lawsuit Against Anti-Hate Group, CCDH, Alleging Speech Suppression Tactics

X Corp. v. Center for Countering Digital Hate, INC. Court Filing, retrieved on March 25, 2024 is part of . You can jump to any part in this filing . This part is 1 of 19. HackerNoon’s Legal PDF Series here Sometimes it is unclear what is driving a litigation, and only by reading between the lines of a complaint can one attempt to surmise a plaintiff’s true purpose. Other times, a complaint is so unabashedly and vociferously about one thing that there can be no mistaking that purpose. This case represents the latter circumstance. This case is about punishing the Defendants for their speech. Plaintiff X Corp., the social media company formerly known as Twitter, has brought suit against Defendants Center for Countering Digital Hate, Inc. (“CCDH U.S.”), Center for Countering Digital Hate Ltd. (“CCDH U.K.”) (together, “CCDH”), Stichting European Climate Foundation (“ECF”), and Does (collectively, “Defendants”), alleging that CCDH undertook “a series of unlawful acts,” one of which involved ECF’s help, “designed to improperly gain access to protected X Corp. data.” FAC (dkt. 10) ¶ 1. X Corp. alleges that CCDH then “cherry-pick[ed]” users’ posts from that data in order to “falsely claim” in reports and articles that “it had statistical support showing” that the X Corp. platform “is overwhelmed with harmful content.” Id. X Corp. insists that CCDH did so in order to push “a contrived narrative to call for companies to stop advertising on X,” and that CCDH succeeded, causing X Corp. “at least tens of millions of dollars” in “lost . . . advertising revenues and other costs.” Id. ¶¶ 2, 5. CCDH moves to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and moves to strike pursuant to California’s anti-SLAPP statute, California Civil Procedure Code § 425.16. MTD&S (dkt. 47).[1] As explained below, the Court GRANTS the motion. I. BACKGROUND A. Factual Allegations[2] 1. The Parties X Corp. is a corporation organized under the laws of the State of Nevada, with a principal place of business in San Francisco, California. FAC ¶ 7. X Corp. provides a real-time social media platform (“the X platform”) to its users, who can share ideas through public posts. Id. Elon Musk took over Twitter in late October of 2022. See Rob Wile, “A timeline of Elon Musk’s takeover of Twitter,” NBC News (Nov. 17, 2022), nbcnews.com/business/business-news/twitter-elon-musk-timeline-what-happened-so-farrcna57532 (hereinafter Wile Timeline). Twitter changed its name to “X” in July of 2023. See Irina Ivanova, “Twitter is now X. Here’s what that means,” CBS News (July 31, 2023), https://www.cbsnews.com/news/twitter-rebrand-x-name-change-elon-musk-what-itmeans/ (adding, “‘Twitter was acquired by X Corp both to ensure freedom of speech and as an accelerant for X, the everything app,’ the company’s owner, billionaire Elon Musk, recently said.”). CCDH U.S. is a non-profit corporation organized under the laws of Washington, D.C., with its principal place of business there as well. Id. ¶ 8. It created an account on the X (then Twitter) platform in 2019. Id. CCDH U.K. is a non-profit organization formed under English law and headquartered in London, England. Id. ¶ 9. CCDH U.S. and CCDH U.K. are affiliated corporate entities. Id. CCDH prepares and publishes reports and articles about organizations and individuals who post on social media platforms “on widely debated topics, included COVID-19 vaccinations, reproductive healthcare, and climate change.” Id. ¶ 17. It then makes those reports “publicly available and free.” Id. X Corp alleges that CCDH’s reports use “flawed methodologies to advance incorrect, misleading narratives,” cherry-picking data and labeling as “hate speech” content that does not conform to its views. Id. ¶ 18. X Corp. maintains that “CCDH’s reports and articles, coupled with its demands to entirely remove certain users from platforms, are transparent efforts to censor viewpoints that CCDH disagrees with, and reveal CCDH’s goal of leaving on the platforms only viewpoints that CCDH supports.” Id. ¶ 20. Indeed, X Corp. alleges that CCDH is an “activist organization[] masquerading as [a] research agenc[y].” Id. ¶ 1. ECF is a non-profit foundation formed under Dutch law and headquartered in The Hague, Netherlands. Id. ¶ 10. Doe defendants are “presently unknown supporters and funders [of CCDH] who have, among other things, directed, instructed, acted as agents of or in concert with, conspired with, and/or who have participated in meaningful ways in CCDH’s and ECF’s unlawful conduct.” Id. ¶ 6. X Corp. alleges that “a United States Senator” referred to CCDH as a “[f]oreign dark money group,” and further alleges that X Corp. will further amend the complaint once it ascertains the Doe defendants’ true names. Id. 2. The Dispute Between the Parties X Corp. alleges that CCDH has created “faulty narratives regarding X Corp. and the X service, with the express goal of seeking to harm X Corp.’s business by driving advertisers away from the platform.” Id. ¶ 25. It continues: “To enable and facilitate those efforts, CCDH has engaged in a series of unlawful acts to secure data regarding X that CCDH could then mischaracterize in its reports and articles alongside calls for companies not to advertise on X.” Id. The dispute between the parties involves two separate means by which CCDH acquired X Corp. data, and three publications in which CCDH made use of that data. a. CCDH “Scraping” Data from X Corp. Itself The first means by which CCDH took X Corp. data involves “scraping” data from X Corp. directly. As a user of the X platform, CCDH necessarily agreed to X Corp.’s Terms of Service (“ToS”) when it created a new account in 2019. Id. ¶¶ 8, 53. The ToS provided that “‘scraping the Services without the prior consent of Twitter is expressly prohibited.’” Id. ¶ 53.[3] The ToS did not define “scraping.” See ToS. However, scraping generally means “extracting data from a website and copying it into a structured format, allowing for data manipulation or analysis.” See hiQ Labs, Inc. v. LinkedIn Corp., 31 F.4th 1180, 1186 n.[4] (9th Cir. 2022) (hereinafter “hiQ 2022 Circuit opinion”); see also hiQ Labs, Inc. v. LinkedIn Corp., 639 F. Supp. 3d 944, 954 (N.D. Cal. 2022) (hereinafter “hiQ 2022 district opinion) (defining “scraping” as “a process of extracting information from a website using automated means”). In its February 9, 2023 report, discussed below, CCDH states: “‘[t]o gather tweets from each of the ten reinstated accounts, [CCDH’s] researchers used the social media webscraping tool SNScrape, which utilizes Twitter’s search function to enable data collection.’” FAC ¶ 77. X Corp. alleges that CCDH scraped the X platform “on numerous occasions, including before preparing its February 9, 2023 report,” and that X Corp. never gave CCDH permission to do so. Id. b. CCDH Accessing Data from Brandwatch The second means by which CCDH took X Corp. data involves a company called Brandwatch. Brandwatch, “a trusted partner of X,” and notably not a defendant in this case, “provides SaaS products4 that enable its customers to conduct brand monitoring on social media, customer research on opinions and trends, campaign planning and campaign effectiveness measurement, competitive analysis and risk management, influencer identification and market research, and audience segmentation and analysis.” FAC ¶ 28. Brandwatch had contracts with X Corp. and with ECF, both of which are relevant here. Id. ¶¶ 29, 35. i. Relevant Brandwatch Agreements X Corp. entered into a contract with Brandwatch on May 1, 2020, called the “Master License Agreement” (“the MLA”). Id. ¶ 29. Pursuant to the MLA, Brandwatch could access certain data regarding X Corp., referred to as “‘Licensed Materials,’” which included posts on the X platform, in order “to enable Brandwatch’s customers to use its SaaS products to analyze posts and X/Twitter users.” Id. X Corp. would stream its Licensed Materials from its servers, “including in California,” to “servers used by Brandwatch [] located in the United States, which Brandwatch’s applications accessed to enable [its] users with login credentials to analyze the data.” Id. In the MLA, Brandwatch agreed that it would “‘not attempt to (and will not allow others to): . . . copy, sell, lease, sublicense, distribute, redistribute, syndicate, create derivative works or assign or otherwise transfer or provide access to, in whole or in part, the Licensed Material to any third party.’” Id. ¶ 31. Brandwatch further agreed to keep “Twitter Content” secure. Id. ECF was a subscriber to Brandwatch’s applications, and therefore also had a series of contracts with Brandwatch. Id. ¶ 35. X Corp. alleges that Brandwatch’s terms of service, to which ECF must have agreed, must be similar to the ones publicly available at https://www.brandwatch.com/legal/terms-and-conditions/. Id. Brandwatch provided ECF with login credentials, which enabled ECF to log into Brandwatch’s applications to access the Licensed Materials. Id. ¶ 36. X alleges that ECF’s agreement with Brandwatch prevented ECF from selling, reselling, licensing, sublicensing, or otherwise making the Brandwatch service “available to anybody other than its Users” and from distributing “Supplier Data to any non-User for any reason other than Customer’s (or User’s) business purpose.” Id. ¶ 37. ECF further agreed “that it would ensure that its user ID and password to use the Brandwatch applications were kept confidential” and that it would “‘not share Customer Data with any other customer or third parties.’” Id.[5] ii. CCDH Access to Brandwatch Using ECF Login CCDH has never been a customer of Brandwatch. Id. ¶ 39. X Corp. alleges that ECF knew that CCDH was not authorized to access the Licensed Materials or Brandwatch, and knew that CCDH wanted to access the Licensed Materials “to prepare its purported ‘research’ reports and call for censorship and attacks on X Corp.” Id. ¶ 38. X Corp. alleges that “on several occasions since at least early 2021,” ECF agreed to share its Brandwatch login credentials with CCDH “to enable CCDH’s illegal access to the X Corp. data.” Id. CCDH U.K. allegedly instructed CCDH U.S. to secure ECF’s login credentials and helped CCDH U.S. determine how to use Brandwatch applications to search X Corp. data and “how to mischaracterize that data in the CCDH reports.” Id. CCDH then allegedly “accessed the Licensed Materials improperly and without authorization.” Id. ¶ 41. X Corp. further alleges that CCDH knew as of March 2021 that X Corp. and Brandwatch are parties to agreements that “prohibit Brandwatch from allowing third parties to, among other things, access, distribute, create derivative works from, or otherwise transfer the Licensed Materials.” Id. ¶ 42.[6] X Corp. also alleges that “CCDH knew that . . . ECF’s agreement with Brandwatch prohibited ECF from, among other things, sharing its login credentials [or] any of the Licensed Materials with CCDH.” Id. Despite that alleged knowledge, X Corp. alleges, CCDH “induced and conspired with ECF to provide CCDH U.S. with its login credentials in violation of [X Corp.’s agreements with Brandwatch] and in violation of ECF’s agreement with Brandwatch.” Id. ¶ 43. “CCDH then impermissibly and without authorization accessed the Licensed Materials on several occasions.” Id. c. CCDH’s Use of the Data Notwithstanding X Corp.’s claim at the motion hearing that “data security . . . is what this case is about,” see Tr. of 2/29/24 Hearing (dkt. 74) at 12:11, the complaint does not stop at allegations of CCDH’s allegedly unauthorized access of X Corp. data. It goes on to allege that CCDH “used limited, selective, and incomplete data . . . that CCDH then presented out of context in a false and misleading manner in purported ‘research’ reports and articles.” FAC ¶ 43 (emphasis added). The complaint includes extensive allegations about these publications, which X Corp. contends are based on “flawed ‘research’ methodologies,” and which “present an extremely distorted picture of what is actually being discussed and debated” on the X platform, in order to “silence” speech with which CCDH disagrees. See id. ¶¶ 17–20. Specifically, X Corp. highlights three publications. i. March 24, 2021 Report The first publication, from March 24, 2021, is a report called “The Disinformation Dozen,” which focused on twelve high-profile individuals who opposed COVID vaccinations. Id. ¶ 21. It is publicly available on CCDH’s website. Id. (citing https://counterhate.com/research/the-disinformation-dozen/). And it asserts that “[j]ust twelve anti-vaxxers are responsible for almost two-thirds of anti-vaccine content circulating on social media platforms.” Id. X Corp. alleges that an unnamed social media platform criticized the report as “creating a ‘faulty narrative’ without ‘any evidence.’” Id. ¶ 22. CCDH states in the March 24, 2021 report that it “collected this sample using Brandwatch, an enterprise social listening tool, to extract anti-vaccine tweets posted between 1 February and 16 March 2021 based on text analysis.” Id. ¶ 45. ii. November 10, 2022 Article[7] The second publication, from November 10, 2022, is an article called “Fact check: Musk’s claim about a fall in hate speech doesn’t stand [up] to scrutiny.” Id. ¶ 46. It is publicly available on CCDH’s website. Id. (citing https://counterhate.com/blog/factcheck-musks-claim-about-a-fall-in-hate-speech-doesnt-stand-up-to-scrutiny/). And it purports to contradict Elon Musk’s claim that hate speech on the X platform had declined, stating that based on its “analysis of data from the social media analytics tool Brandwatch,” “the week in question saw an uptick in the amount of hateful language being tweeted.” See CCDH, “Fact check” (Nov. 22, 2022) https://counterhate.com/blog/factcheck-musks-claim-about-a-fall-in-hate-speech-doesnt-stand-up-to-scrutiny/). The article specifies that “[d]ata was collected using Brandwatch, which includes original tweets, retweets and quote retweets.” Id. iii. February 9, 2023 Report The third publication, from February 9, 2023, is a report called “Toxic Twitter,” which concludes that Twitter was generating millions of dollars in advertising revenue from previously banned accounts. See FAC ¶ 49 (citing https://counterhate.com/research/toxic-twitter/); Kaplan Decl. Ex. B (dkt. 48-2) (“Toxic Twitter” report). The report is publicly available on CCDH’s website. Id. It states that Musk “has reinstated tens of thousands of accounts, including neo-Nazis, white supremacists, misogynists and spreaders of dangerous conspiracy theories,” and that “just ten reinstated accounts renowned for publishing hateful content and dangerous conspiracies will generate up to $19 million a year in advertising revenue for Twitter.” Toxic Twitter at 3. X Corp. alleges that the report “expressly calls for companies to stop advertising on X based on its incorrect implications . . . that hate speech viewed on X is on the rise.” FAC ¶ 50. The Toxic Twitter report involves both types of data collection at issue in the complaint. X Corp. alleges that “to obtain data that it needed for and mischaracterized in its February 9, 2023 report, CCDH again improperly accessed data that X Corp. provided to Brandwatch,” citing “several data points for which non-public Brandwatch sources are quoted.” FAC ¶ 51; but see Toxic Twitter at 17 (citing Brandwatch, 22 February 2022, https://www.brandwatch.com/blog/how-much-do-social-media-ads-cost-on-facebookinstagram-twitter-and-linkedin/).[8] X Corp. further alleges that CCDH admits in the February 9, 2023 report that it “‘used the social media web-scraping tool SNScrape, which utilizes Twitter’s search function to enable data collection.’” FAC ¶ 54. d. Harm to X Corp. X Corp. alleges that CCDH “widely disseminates its articles and ‘research’ reports for free,” id. ¶ 65, and that CCDH’s publications “have attracted attention in the press, with media outlets repeating CCDH’s incorrect assertions that hate speech is increasing on X,” id. ¶ 56. X Corp. alleges that CCDH’s publications have “caused significant financial harm to X Corp., including via lost advertising revenues.” Id. ¶ 66. Specifically, at least eight “companies who advertised on X on an ongoing basis immediately paused spending” after viewing CCDH’s publications, and at least five companies “planning on running future campaigns” paused those plans after viewing CCDH’s publications. Id. ¶¶ 67–68. Other companies have allegedly identified the CCDH publications as a barrier “to reactivating their paid advertising campaigns on X.” Id. ¶ 69. X Corp. “estimates that it has lost at least tens of millions of dollars in lost revenues” as of the date of the amended complaint, “with those amounts subject to increasing as time goes on.” Id. ¶ 70. It accuses CCDH of being the but-for and proximate cause of its lost revenues, because “CCDH’s conduct to obtain that data (which it then distorted) was necessary for CCDH to make its allegations against X Corp . . . regarding hate speech and other types of content on X.” Id. X Corp. also alleges additional losses of over $5,000 caused by internal investigations to look into CCDH’s unauthorized data access, as well as attorneys’ fees. Id. ¶ 71. Continue Reading . Here [1] A second motion, filed by ECF, see ECF Mot. (dkt. 49), is addressed in a separate order. [2] For the purposes of this motion, this order accepts as true the allegations from the complaint, and construes them in the light most favorable to X Corp. See W. Reserve Oil & Gas Co. v. New, 765 F.2d 1428, 1430 (9th Cir. 1985). [3] This provision specified that users “may not . . . access or search or attempt to access or search the Services by any means (automated or otherwise) other than through our currently available, published interfaces that are provided by Twitter (and only pursuant to the applicable terms and conditions), unless you have been specifically allowed to do so in a separate agreement with Twitter (NOTE: crawling the Services is permissible if done in accordance with the provisions of the robots.txt file, however, scraping the Services without the prior consent of Twitter is expressly prohibited).” Kaplan Decl. Ex. A (dkt. 48-1) (“ToS”) at 6–7. [4] SaaS means “software as a service.” See What is SaaS Business Intelligence?, WiseGeek, http://wisegeek.net/what-is-saas-business-intelligence.htm (last visited 2/3/2024). [5] CCDH has submitted Brandwatch Service Terms dated October 15, 2022, see Kaplan Decl. Ex. C (dkt. 48-3), Brandwatch Service Terms dated August 8 or 9, 2021, see Kaplan Decl. Ex. D (dkt. 48-4), Brandwatch Service Terms dated April 15, 2019, see Kaplan Decl. Ex. E (dkt. 48-5), and Brandwatch Service Terms dated April 21, 2023, see Kaplan Decl. Ex. F (dkt. 48-6), all of which, it asserts, are incorporated by reference in the Complaint, see Kaplan Decl. ¶¶ 4–7. X Corp. does not seem to dispute that the complaint incorporates these documents. [6] See also id. ¶ 91 (“Defendants knew, based on their experience in CCDH purporting to analyze data associated with social media platforms . . . that for Brandwatch to have access to X Corp. data for its SaaS products to analyze, X Corp. must have contracts with Brandwatch, and that Brandwatch would be prohibited under the terms of the Brandwatch Agreements from providing access to unauthorized parties, or allowing any unauthorized parties to access that data.”). [7] The complaint also discusses a November 2, 2021 report called “The Toxic Ten,” about ten climate-change-denying posters, which it contends is flawed, see id. ¶¶ 23–24; however, the complaint does not discuss that report as one involving improperly accessed data, see id. ¶¶ 39–55 (only discussing the March 24, 2021 report, November 10, 2022 article, and February 9, 2023 reports for this point). [8] This is the only citation to Brandwatch that the Court observes in the February 9, 2023 report. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on March 25, 2024, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. storage.courtlistener