Section 230 and the Presumption Against Extraterritoriality
June 27, 2022
The Ninth Circuit opinion in Gonzalez v. Google (2021) raises important questions about how the presumption against extraterritoriality applies to immunity defenses invoked by social media companies under 47 U.S.C. § 230.Section 230 shields internet companies from civil liability for user-generated content hosted on their platforms. Gonzalezholds, effectively, that there is no conceivable application of Section 230 that could be “extraterritorial” under the presumption.
That conclusion is in tension with controlling Supreme Court precedent. Every Supreme Court decision since Morrison v. National Australia Bank involving the presumption against extraterritoriality recognizes that—for any given federal statute—some applications are domestic and other applications are extraterritorial, depending on the facts of the case. The logic of Gonzalez, though, is that the facts are irrelevant for any case where Section 230 is implicated because every possible application of Section 230 is “domestic.”
This post first discusses the Gonzalez decision as it relates to the presumption against extraterritoriality and explains why Gonzalez is inconsistent with Supreme Court precedent. The Court’s doctrine, as articulated in Morrisonand RJR Nabisco Inc. v. European Community, involves a two-step framework. In step one, courts analyze the relevant statute for a clear indication of extraterritoriality. Absent such clear intent, the court proceeds to step two, which requires courts to ascertain the “focus” of the relevant statute. After presenting a critique of the Ninth Circuit’s analysis in Gonzalez, we consider two alternative views about how the focus test should apply to Section 230. We conclude by suggesting that the focus test does a poor job of promoting the central goal that the presumption against extraterritoriality is ostensibly intended to accomplish.
The Gonzalez Decision
The Gonzalez plaintiffs were family members of the victim of a fatal terrorist attack conducted by ISIS in Paris, France. They brought claims under the Anti-Terrorism Act (ATA), alleging that Google and other internet companies provided material aid to ISIS by helping the organization recruit new members or otherwise advancing its mission. Plaintiffs argued that the companies did more than simply host content—the algorithm-based programs helped target specific audiences and the companies shared advertisement revenue with ISIS. The district court held that Google and other defendants were not publishers or speakers for the ISIS content posted on their platforms and were thus entitled to Section 230 immunity.
Plaintiffs raised the presumption against extraterritoriality on appeal. Because the terrorist attack occurred in France, and the victim died in France, they argued that the district court’s application of Section 230 was impermissibly extraterritorial. The Ninth Circuit disagreed. Applying the two-step framework articulated by the Supreme Court in Morrison and RJR Nabisco, the court correctly concluded in step one that Congress had not given a “clear, affirmative indication” that Section 230 applies extraterritorially. Then, proceeding to step two, the court addressed “the statute’s focus.” The Ninth Circuit cited WesternGeco LLC v. ION Geophysical Corp. for the proposition that “a statute’s focus is the object of its solicitude” and concluded that Section 230 focuses on “limiting liability.” Because limitation of liability occurs in a U.S. courtroom, the “focus” of Section 230 is on the courtroom where a judge makes the decision to grant immunity. Thus, under the Ninth Circuit’s rationale, the presumption against extraterritoriality could never bar application of Section 230 in any case filed in a U.S. court because the statute’s focus in every such case is entirely domestic.
The Supreme Court has issued three decisions over the past twelve years applying the presumption against extraterritoriality (not including cases involving the Alien Tort Statute, which raise separate and distinct issues). Morrison v. National Australia Bank Ltd. applied the presumption to the Securities Exchange Act. RJR Nabisco, Inc. v. European Community applied the presumption to the Racketeer Influenced and Corrupt Organizations Act (RICO). WesternGeco LLC v. ION Geophysical Corp. applied it to the Patent Act. In all three cases, the Court’s rationale was consistent with the principle that some applications of the pertinent statute are domestic, other applications are extraterritorial, and the distinction hinges on the facts of each case. In no case did the Court state or imply that application of the “focus” test might yield the result that, for a particular statute, there is no conceivable set of facts involving extraterritorial application of the statute. Thus, the Ninth Circuit’s rationale in Gonzalez is in tension with the Supreme Court’s rationale in Morrison, RJR Nabisco, and WesternGeco.
The Securities Exchange Act, RICO, and the Patent Act impose liability on defendants for securities fraud, racketeering, and patent infringement, respectively. Under the Ninth Circuit’s rationale in Gonzalez, Section 230 never applies extraterritorially because the statute “focuses” on limiting liability and the imposition of liability (or the grant of immunity) necessarily occurs in a domestic courtroom. By analogy, one could argue that RICO, the Securities Act, and the Patent Act never apply extraterritorially because they all “focus” on imposing liability and the imposition of liability always occurs in a domestic courtroom. Of course, that is not what the Supreme Court said in Morrison, RJR Nabisco, or WesternGeco. Instead, the Court said in all three cases that the relevant statutes “focus” on the conduct or effects giving rise to liability.
Section 404 of the Restatement (Fourth) of Foreign Relations Law says that the presumption does not apply to jurisdictional statutes. We would add that the presumption also should not apply to purely procedural rules, such as a rule governing jury selection. However, Section 230 is neither jurisdictional nor purely procedural; it creates a substantive defense to liability. If presented with the issue, the Supreme Court could decide that the presumption against extraterritoriality simply does not apply to statutes that, like Section 230, confer immunity on particular defendants. In WesternGeco, for example, petitioner argued that “the presumption against extraterritoriality should never apply to statutes,” such as Section 284 of the Patent Act, “that merely provide a general damages remedy for conduct that Congress has declared unlawful.” The Court ducked that issue, in part because it feared that such a broad, general ruling could have unanticipated consequences for other statutes.
For similar reasons, we think the Court would be reluctant to hold that the presumption against extraterritoriality never applies to statutes, like Section 230, that confer immunity on particular defendants. (For one example of an unanticipated negative consequence, see the discussion below of Doe v. Meta.) Thus, assuming that the presumption against extraterritoriality does apply to Section 230, the question of how it applies presents a puzzle that was not properly resolved in Gonzalez. The next two sections consider two possible approaches to that puzzle.
First Approach: Section 230 Focuses on the Injury
In RJR Nabisco, the Court divided its analysis of the presumption against extraterritoriality into two parts: “First, do RICO’s substantive prohibitions, contained in § 1962, apply to conduct that occurs in foreign countries? Second, does RICO’s private right of action, contained in § 1964(c), apply to injuries that are suffered in foreign countries?” Section 230 is analogous to Section 1964(c). Like that RICO provision, Section 230 addresses the availability of remedies in U.S. courts; it does not create a rule regulating primary conduct. In RJR Nabisco, the Court held that Section 1964(c) does not “create a private right of action for injuries suffered outside of the United States.” Implicit in this holding is the assumption that Section 1964(c) focuses on the injury that gives rise to a private right of action. The Court did not explain why Section 1964(c) focuses on the injury. Regardless, because Section 1964(c) and Section 230 are both concerned with the availability of remedies in U.S. courts for injuries resulting from tortious conduct, and because RJR Nabisco held that Section 1964(c) focuses on the injury, one could plausibly argue that Section 230 also focuses on the injury. We are not claiming that this is the right way to apply the focus test to Section 230, only that it is a plausible way to do so. If Section 230 does focus on the injury, then it grants immunity to internet companies for domestic injuries, but it does not grant immunity to internet companies for foreign injuries.
Under this “injury test,” the Ninth Circuit in Gonzalez arguably reached the correct result for the wrong reason. Although the ISIS bombing that killed Nohemi Gonzalez occurred in France, her surviving family members who filed a wrongful death claim were in the United States at all relevant times. Since the actual, living plaintiffs suffered injuries in the United States, the application of Section 230 to bar their claims would not be impermissibly extraterritorial under the injury test.
It is instructive, though, to compare Gonzalez to Doe v. Meta, a claim against Meta Platforms (Facebook’s parent company) filed recently in California state court. Plaintiff in Doe is a Rohingya Muslim refugee residing in the United States. She filed a class action on behalf of “all Rohingya who left Burma (Myanmar) on or after June 1, 2012, and arrived in the United States under refugee status, or who sought asylum protection, and now reside in the United States.” Facebook’s complicity in the genocide against the Rohingya people in Myanmar is well documented. As Alexander Preve argued in a recent post on this blog, the Ninth Circuit decision in Gonzalez gives Facebook a complete defense under Section 230 to the Rohingya genocide claim. However, if the Ninth Circuit overturns Gonzalez and concludes that Section 230 focuses on the injury—as the Supreme Court held with respect to RICO Section 1964(c)—Facebook would not have a viable defense because the Doe plaintiffs suffered their injuries in Myanmar, not in the United States.
The Supreme Court said in RJR Nabisco that the main goal of the presumption against extraterritoriality is “to avoid the international discord that can result when U.S. law is applied to conduct in foreign countries.” As a party to the Genocide Convention, the United States has a duty “to prevent and to punish” both genocide and complicity in genocide. A refusal to grant immunity to Meta in Doe v. Meta would help implement the U.S. obligation to prevent genocide by providing Meta and other internet companies a financial incentive to ensure that their platforms are not used to incite genocide. Conversely, a decision to grant immunity would create international discord, contrary to the main goal of Supreme Court doctrine, precisely because it would constitute a failure to implement that treaty obligation to the fullest extent possible. Therefore, Doe v. Meta could potentially present a valuable opportunity for the Ninth Circuit to reconsider its misguided decision in Gonzalez v. Google and to apply the focus test to Section 230 so as to avoid international discord, consistent with the central objective of Supreme Court doctrine.
Second Approach: The Focus is on Content Moderation
Since its enactment in 1996, Section 230 has been frequently invoked to shield internet companies from liability for third party content hosted on their platforms. Section 230 enables the modern internet by leaving editorial control and content moderation decisions to the discretion of internet companies. Thus, one could argue that Section 230’s “focus” is to enable internet companies to perform content moderation functions without fear of civil liability.
Under this approach, the application of the presumption against extraterritoriality to Section 230 would turn on a factual inquiry about where the content moderation occurred. Content moderation involves both human moderators and algorithmic content moderation. A company can decide to perform these functions either domestically or overseas (or both). If a company’s human and machine moderators performed their work domestically, the immunity would apply. If the content moderation occurred in offices outside the United States, application of the immunity would be impermissibly extraterritorial under Morrison and RJR Nabisco. For algorithmic content moderation, the location of the relevant activity presumably hinges on the location of the servers.
Under this version of the focus test, it is unclear whether Section 230 immunity would be available to the Gonzalez defendants. The Gonzalez court would have needed to determine whether the relevant content moderation activity occurred domestically or overseas. By contrast, a decision to grant Section 230 immunity would likely be impermissibly extraterritorial in Doe v. Meta, where the relevant human content monitoring was apparently performedthrough secretive operations in Kuala Lumpur, Malaysia, and Dublin, Ireland.
As noted previously, the Supreme Court said in RJR Nabisco that the main goal of the presumption against extraterritoriality is “to avoid the international discord that can result when U.S. law is applied to conduct in foreign countries.” The Ninth Circuit’s analysis in Gonzalez, as applied to the facts in Doe v. Meta, is clearly inconsistent with that goal, for the reasons noted above. If Section 230 focuses on the injury (the first approach), then application of the presumption to Doe v. Meta would be consistent with the main goal of the doctrine. However, apart from the analogy to RICO Section 1964(c), the conclusion that Section 230 focuses on the injury seems somewhat arbitrary. In contrast, the conclusion that Section 230 focuses on content moderation activity (the second approach) seems to be largely consistent with the two-step doctrinal framework articulated in Morrison and RJR Nabisco. However, if the focus of Section 230 is content moderation, then the doctrine calls for a fact-intensive inquiry that has very little to do with the potential for international discord, because the location of content moderation activity is likely to be irrelevant to the foreign relations issue. Thus, overall, the type of analysis required by the focus test is not well-suited to promoting the main objective that the presumption against extraterritoriality is ostensibly intended to accomplish.