X (Formerly Twitter) Hits CCDH With Breach of Contract Allegations

B. Breach of Contract Claim

The complaint’s first cause of action is for breach of contract. FAC ¶¶ 73–79. To state a claim for breach of contract, a plaintiff must allege (1) the existence of a contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) resulting damages to the plaintiff. See Oasis W. Realty, 250 P.3d at 1121.

X Corp. alleges that X Corp. and CCDH U.S. are parties to the ToS, which explicitly prohibits “‘scraping the Services without the prior consent of Twitter.’” FAC ¶¶ 74, 75. X Corp. further alleges that it fully performed its obligations, but that CCDH U.S. violated the ToS by scraping the X platform, and that CCDH then “mischaracterized the data it obtained by unlawfully scraping in its reports and articles, in efforts to claim X is overwhelmed with harmful conduct, and support CCDH’s call to companies to stop advertising on X.” Id. ¶¶ 76–78. X Corp. notes that CCDH’s February 9, 2023 report admits that “‘[t]o gather tweets from each of the ten reinstated accounts, [CCDH’s] researchers used the social media web-scraping tool SNScrape, which utilizes Twitter’s search function to enable data collection.’” Id. ¶ 77. And X Corp. alleges that “[a]s a direct and proximate result of CCDH U.S.’s breaches of the ToS in scraping X, X Corp. has suffered monetary and other damages in the amount of at least tens of millions of dollars.” Id. ¶ 78. The “at least tens of millions of dollars” of damages derives from companies pausing paid advertising on the X platform in response to CCDH’s “allegations against X Corp. and X regarding hate speech and other types of content on X.” Id. ¶ 70.

CCDH argues that X Corp. fails to state a breach of contract claim, for three reasons: (1) X Corp. has failed to adequately allege a breach; (2) if the ToS’s anti-scraping provision applies, it violates public policy; and (3) X Corp. has failed to adequately allege recoverable damages. MTD&S at 9–18. The Court concludes that CCDH’s argument about damages is persuasive, and does not reach CCDH’s other arguments.

CCDH maintains that X Corp. fails to adequately allege damages resulting from CCDH’s alleged scraping of the X platform because: (a) under state contract law, X Corp.’s lost advertising revenue is not recoverable; (b) constitutional law bars X Corp. from using a non-defamation cause of action to recover reputational damages; and (c) allowing this cause of action, in which X Corp. seeks tens of millions of dollars, to stand would subject CCDH to “significant costs of enduring discovery and litigation . . . against a well-resourced adversary with every incentive to impose crushing burdens on the CCDH Defendants.” Id. at 15–18. That last argument is emotional rather than legal; while the Court is not blind to the David and Goliath dynamic here, the law does not bar big companies from suing small nonprofits, so long as the suit is otherwise up to snuff. This order therefore addresses only CCDH’s arguments based on state contract law and constitutional law.