X Files Lawsuit Against Center for Countering Digital Hate, Alleging Speech Suppression Tactics

2. “Arising from”

In addition, X Corp.’s claims arise from protected conduct.

To determine whether a claim or claims arise from protected activity, courts are to look to “the conduct that constitutes the specific act of wrongdoing challenged by the plaintiff.” Jordan-Benel v. Universal City Studios, Inc., 859 F.3d 1184, 1190 (9th Cir. 2017). “A defendant in an ordinary private dispute cannot take advantage of the antiSLAPP statute simply because the complaint contains some references to speech or petitioning activity by the defendant.” Sansoe v. Ford Motor Co., 668 Fed. Appx. 718, 719 (9th Cir. 2016) (quoting People ex rel. Fire Ins. Exch. v. Anapol, 211 Cal. App. 4th 809 (2012)). In addition, “the mere fact an action was filed after protected activity took place does not mean it arose from that activity.” City of Cotati v. Cashman, 29 Cal. 4th 69, 76– 77 (2002).

In Jordan-Benel, the plaintiff was a screenwriter who alleged that defendant production companies’ failure to compensate and credit him for a script constituted a breach of contract. Id. at 1187, 1189. The defendants brought an anti-SLAPP motion, arguing that the contract claim arose from their free-speech activity of producing a film. Id. at 1190. The Ninth Circuit agreed with the plaintiff, concluding that the specific wrongful act that gave rise to the claim was the failure to pay. Id. The court explained that even if the cause of action was triggered by protected activity—the release of the film—that does not mean that the action arose from it: “even if a defendant engages in free speech activity that is relevant to a claim, that does not necessarily mean such activity is the basis for the claim.” Id.; see also Martinez v. Metabolife Internat., Inc., 113 Cal. App. 4th 181, 187 (2003) (“[W]hen the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the anti-SLAPP statute.”).

X Corp. argues that just as the production of the film was not the specific act that gave rise to the claim in Jordan-Benel, CCDH’s publication of its articles and reports is not the specific act of wrongdoing at issue here. See Opp’n at 10–11 (“CCDH’s alleged ‘speech’ is not the wrong complained of—its wanton breach of contract and illegal access of data are.”). But even accepting that the conduct that forms the specific wrongdoing in the state law claims is CCDH’s illegal access of X Corp. data, that conduct (scraping the X platform and accessing the Brandwatch data using ECF’s login credentials) is newsgathering—and claims based on newsgathering arise from protected activity. See Iloh, 94 Cal. App. 5th at 956–57.

It is also just not true that the complaint is only about data collection. See Reply at 3 (arguing that X Corp.’s contention that its “claims arise from ‘illegal access of data,’ as opposed to speech,” is the “artifice” at “the foundation of [this] whole case.”) (quoting Opp’n at 10). It is impossible to read the complaint and not conclude that X Corp. is far more concerned about CCDH’s speech than it is its data collection methods. In its first breath, the complaint alleges that CCDH cherry-picks data in order to produce reports and articles as part of a “scare campaign” in which it falsely claims statistical support for the position that the X platform “is overwhelmed with harmful content” in order “to drive advertisers from the X platform.” See FAC ¶ 1. Of course, there can be no false claim without communication. Indeed, the complaint is littered with allegations emphasizing CCDH’s communicative use of the acquired data. See, e.g., id. ¶¶ 17–20 (reports/articles are based on “flawed ‘research’ methodologies,” 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); id. ¶ 43 (CCDH “used limited, selective, and incomplete data from that source . . . that CCDH then presented out of context in a false and misleading manner in purported ‘research’ reports and articles.”), id. ¶ 56 (“CCDH’s reports and articles . . . have attracted attention in the press, with media outlets repeating CCDH’s incorrect assertions that hate speech is increasing on X.”).

X Corp. is correct that it has not brought a claim for defamation. See Opp’n at 10; FAC. It insists that that choice demonstrates that it is not really complaining about CCDH’s speech. Opp’n at 10. CCDH argues that X Corp.’s decision not to include a defamation claim is evidence that X Corp. “cannot allege that the CCDH Defendants said anything knowingly false, nor does it wish to invite discovery on the truth about the content on its platform.” MTD&S at 2; see also ACLU Br. at 1 (“X Corp. attempts to disguise a nonviable defamation claim as a breach of contract claim to retaliate against a nonprofit that provided the public with information critical of X Corp.”). Whatever X Corp. could or could not allege, it plainly chose not to bring a defamation claim.[10] As the Court commented at the motion hearing, that choice was significant. Tr. of 2/29/24 Hearing at 62:6–10. It is apparent to the Court that X Corp. wishes to have it both ways—to be spared the burdens of pleading a defamation claim, while bemoaning the harm to its reputation, and seeking punishing damages[11] based on reputational harm.

For the purposes of the anti-SLAPP motion, what X Corp. calls its claims is not actually important. The California Supreme Court has held “that the anti-SLAPP statute should be broadly construed.” Martinez, 113 Cal. App. 4th at 187 (citing Equilon Enters. v. Consumer Cause, Inc., 29 Cal. 4th 53, 60 n.3 (2002)). Critically, “a plaintiff cannot avoid operation of the anti-SLAPP statute by attempting, through artifices of pleading, to characterize an action as a ‘garden variety breach of contract [or] fraud claim’ when in fact the liability claim is based on protected speech or conduct.” Id. at 188 (quoting Navellier, 29 Cal. 4th at 90–92); see also Baral v. Schnitt, 1 Cal. 5th 376, 393 (2016) (“courts may rule on plaintiffs’ specific claims of protected activity, rather than reward artful pleading”); Navellier, 29 Cal. 4th at 92 (“conduct alleged to constitute breach of contract may also come within constitutionally protected speech or petitioning. The anti-SLAPP statute’s definitional focus in not the form of the plaintiff’s cause of action[.]”)

Collondrez v. City of Rio Vista, 61 Cal. App. 5th 1039 (2021), is a recent example of a court disregarding the name of a claim to assess its content. In that case, a former police officer brought suit for breach of contract and intentional interference with prospective economic advantage because his former employer disclosed information from his personnel file without giving him notice as required by contract. Id. at 1044–46. The court held that the claims nonetheless arose from protected speech, explaining that “we disregard [a claim’s] label and instead examine its gravamen.” Id. at 1051, 1048 (cleaned up). It then concluded that “the harmful act at the heart of the complaint, the act that allegedly cost [the plaintiff] his [new job] and resulted in other economic and emotional harm, is the publication of his personnel information.” Id. at 1049. Here, even though X Corp. did not include a cause of action explicitly premised on CCDH’s speech, as in Collondrez, speech is a harmful act at the heart of the complaint.

X Corp. insists that that is not so, arguing that “CCDH’s actions caused harm independent of any alleged protected activities.” Opp’n at 11. It asserts that “[i]f CCDH carried out all the same illegal activities, but stopped just short of publishing the February 9, 2023 report, X Corp. would maintain the very same valid claims against it.” Opp’n at 11; see also id. at 11–12 (citing Kovalenko v. Kirkland & Ellis LLP, No. 22-cv-5990-HSG, 2023 WL 5444728, at *3 (N.D. Cal. Aug. 23, 2023) (“The question is whether the challenged allegations ‘supply a necessary element’ of a claim.”)). The Court disagrees— and not because it is impossible to imagine that X Corp. would have been motivated to bring suit had CCDH not spoken.

Each of the state law causes of action—breach of contract, intentional interference with contractual relations, and inducing breach of contract—require as an element a showing of damages. See Oasis W. Realty, LLC v. Goldman, 250 P.3d 1115, 1121 (Cal. 2011) (“the elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.”) (citing Reichert v. General Ins. Co., 68 Cal. 2d 822, 830 (1968)); United Nat’l Maint., Inc. v. San Diego Convention Ctr., Inc., 766 F.3d 1002, 1006 (9th Cir. 2014) (“the elements for the tort of intentional interference with contractual relations are ‘(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.’”) (quoting Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal.3d 1118 (1990)); Shamblin v. Berge, 166 Cal. App. 3d 118, 122–23 (1985) (inducement to breach a contract “requires that a plaintiff prove: ‘(1) he had a valid and existing contract [with a third party]; (2) . . . defendant had knowledge of the contract and intended to induce its breach; (3) the contract was in fact breached by the contracting party; (4) the breach was caused by . . . defendant’s unjustified or wrongful conduct; and (5) . . . damage[s] [were suffered as a result].’”) (quoting Dryden v. TriValley Growers, 65 Cal. App. 3d 990, 995 (1977)).

X Corp.’s many allegations about CCDH’s speech do more than add color to a complaint about data collection—they are not “incidental to a cause of action based essentially on nonprotected activity.” See Martinez, 113 Cal. App. 4th at 187. Instead, the allegations about CCDH’s misleading publications provide the only support for X Corp.’s contention that it has been harmed. See FAC ¶ 78 (breach of contract claim: alleging that CCDH “mischaracterized the data . . . in efforts to claim X is overwhelmed with harmful conduct, and support CCDH’s call to companies to stop advertising on X. . . . As a direct and proximate result of CCDH’s breaches of the ToS in scraping X, X has suffered monetary and other damages in the amount of at least tens of millions of dollars”); ¶¶ 92– 93 (intentional interference claim: alleging that Defendants “intended for CCDH to mischaracterize the data regarding X in the various reports and articles . . . to support Defendants’ demands for companies to stop advertising on X” and that “[a]s a direct and proximate result of Defendants intentionally interfering with the Brandwatch Agreements . . . X Corp. has suffered monetary and other damages of at least tens of millions of dollars”); ¶¶ 98–99 (inducing breach of contract claim: alleging that “X Corp. was harmed and suffered damages as a result of Defendants’ conduct when companies paused or refrained from advertising on X, in direct response to CCDH’s reports and articles” and that “[a]s a direct and proximate result of Defendants inducing Brandwatch to breach the Brandwatch Agreements . . . X Corp. has suffered monetary and other damages in the amount of at least tens of millions of dollars.”).

The “at least tens of millions of dollars” that X Corp. seeks as damages in each of those claims is entirely based on the allegation that companies paused 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.” See id. ¶ 70. As CCDH says, “X Corp. alleges no damages that it could possibly trace to the CCDH Defendants if they had never spoken at all.” Reply at 3. Indeed, X Corp. even conceded at the motion hearing that it had not alleged damages that would have been incurred if CCDH “had scraped and discarded the information,” or scraped “and never issued a report, or scraped and never told anybody about it.” See Tr. of 2/29/24 Hearing at 7:22–8:3. The element of damages in each state law claim therefore arises entirely from CCDH’s speech. See Bonni v. St. Joseph Health Sys., 491 P.3d 1058, 1069–70 (Cal. 2021) (“a claim is subject to an anti-SLAPP motion to strike if its elements arise from protected activity.”).

Accordingly, the state law claims arise from CCDH’s actions—its newsgathering and writing of reports/articles—in furtherance of CCDH’s free speech rights.

[10] At the motion hearing, X Corp. asserted that it was “not trying to avoid defamation” and claimed to have “pleaded falsity” in paragraph 50 of the complaint. Tr. of 2/29/24 Hearing at 59:20–23. In fact, paragraph 50 did not allege falsity, or actual malice, though it used the word “incorrect.” See FAC ¶ 50 (“incorrect implications . . . that hate speech viewed on X is on the rise” and “incorrect assertions that X Corp. ‘doesn’t care about hate speech’”). When the Court asked X Corp. why it had not brought a defamation claim, it responded rather weakly that “to us, this is a contract and intentional tort case,” and “we simply did not bring it.” Tr. of 2/29/24 Hearing at 60:1–12; see also id. at 60:21–22 (“That’s not necessarily to say we would want to amend to bring a defamation claim.”).

[11] If there is any question about the “punishing” part, X Corp. filed a similar suit, not before this Court, in November of 2023 against Media Matters, another non-profit media watchdog, for “reporting on ads from major brands appearing next to neo-Nazi content.” PPP Br. at 10. Prior to doing so, Musk threatened a “thermonuclear lawsuit” against Media Matters. Id. (quoting Elon Musk (@elonmusk), X (Nov. 18, 2023, 2:01 AM), https://twitter.com/elonmusk/status/1725771191644758037 [https://perma.cc/K8SZM33S]). Musk’s post also claimed, remarkably, that the lawsuit was furthering X Corp.’s efforts “to protect[] free speech.” See Elon Musk (@elonmusk), X (Nov. 18, 2023, 2:01 AM), https://twitter.com/elonmusk/status/1725771191644758037 [https://perma.cc/K8SZM33S].