Facebook Litigation Revived

The District of Columbia Court of Appeals reversed and remanded a matter involving litigation against Facebook where the company had been awarded summary judgement in the Superior Court

The District of Columbia’s Consumer Protection Procedures Act (CPPA) protects consumers against false, deceptive, or unfair business practices. For much of the CPPA’s history, claims under the statute had to be based on intentional conduct. Those intentional CPPA claims often involved intentional misrepresentations akin to common-law fraud.  Nearly two decades ago, we held that certain CPPA claims could be based on unintentional misrepresentations. But we left one question open: must CPPA claims based on unintentional misrepresentations be proved by clear and convincing evidence (like common-law fraud and CPPA claims based on intentional misrepresentations) or by a preponderance of the evidence? Today we hold that CPPA claims based on unintentional misrepresentations need only be proved by a preponderance of the evidence.

The CPPA claims in this case stem from the widely publicized Cambridge Analytica data leak. In 2018, the Guardian newspaper exposed that the consulting firm Cambridge Analytica had improperly purchased data that had been gleaned from tens of millions of individuals with accounts on Facebook, Inc. After the news broke, Facebook’s stock value plummeted, Facebook account holders deactivated or deleted their Facebook accounts, and governmental bodies around the globe launched investigations into Facebook’s conduct. The District of Columbia launched one such investigation and brought an action against Facebook for violating the CPPA.

In the District’s telling, Facebook violated the CPPA by unintentionally misleading consumers about which of their data was accessible to third-party applications through a Facebook user’s friends and about Facebook’s enforcement capabilities for auditing third-party applications. The District also alleged that Facebook made a material omission by failing to disclose to users that their data had been obtained in violation of Facebook’s policies. Facebook moved for summary judgment on the District’s claims. The trial court granted summary judgment for Facebook after observing that the District had to prove its CPPA claims by clear and convincing evidence. In light of our conclusion that CPPA claims based on unintentional conduct may be proved by a preponderance of the evidence, we reverse and remand for the trial court to consider whether summary judgment is appropriate under the correct burden of proof.

Also at issue in this case is the trial court’s exclusion of the District’s sole expert witness, Dr. Florian Schaub. The trial court held a hearing at which it expressed criticism of Dr. Schaub’s analytical methods and analysis. The court subsequently granted Facebook’s motion to exclude the testimony in its entirety, referring perfunctorily to the reasons stated at the hearing and in Facebook’s motion. The trial court’s written order makes meaningful appellate review challenging, and, while the court’s statements at the hearing provide some insight into its views on aspects of Dr. Schaub’s approach, we are unable on this record to discern the specific concerns the court had under Motorola Inc. v. Murray, 147 A.3d 751 (D.C. 2016) (en banc), as to some of Dr. Schaub’s three methods of analysis. Accordingly, we reverse the trial court’s order excluding the testimony in its entirety and remand for further analysis and explanation.

The court’s opinion was authored by Associate Judge Shanker and joined by Associate Judges McLeese and Deahl. (Mike Frisch)