In an important decision concerning whether global social media companies may be haled into Texas courts to answer for alleged statutory violations, the 14th Court of Appeals has affirmed a trial court order denying Facebook’s special appearance. Facebook, Inc. v. Jane Doe (No. 14-19-00854-CV) arose from a lawsuit brought by a victim of sex-trafficking against Facebook for a violation of § 98.002(a), CPRC. The statute imposes civil liability for damages on a defendant “who engages in the trafficking of persons or who intentionally or knowingly benefits from participating in a venture that traffics another person.” The plaintiff filed suit against Facebook in 2019, alleging that the social media company facilitated her “entrapment” into sex trafficking at the age of 15 by enabling her abuser to “groom” her despite “red flags” in his messages and Facebook’s knowledge that traffickers used its platform for this purpose. She further alleged that Facebook has profited from its knowing facilitation of sex traffickers in various ways, while doing nothing to raise awareness and warn users, particularly children between the ages of 13 and 17, of the dangers of entrapment and grooming on Facebook.
Plaintiff’s original lawsuit included causes of action for negligence, gross negligence, negligent undertaking, and products liability, in addition to the statutory claim. Facebook filed a special appearance and a Rule 91a motion to dismiss these claims, which the trial court denied. Facebook sought mandamus in the 14th Court of Appeals, which likewise denied relief. On appeal, SCOTX ordered the trial court to dismiss these claims pursuant to § 230 of the Federal Communications Act, which extends broad immunity to social media companies. See In re Facebook, 625 S.W.3d 80 (Tex. 2021). The Court, however, did not order the dismissal of the statutory sex trafficking claim because it “is predicated on allegations of Facebook’s affirmative acts encouraging trafficking on its platform.” With respect to the statutory claim, Facebook once again filed a special appearance and moved for dismissal based on lack of general or specific jurisdiction. The trial court denied the motion, sending the case back up to the court of appeals.
Citing a long list of facts alleged by the plaintiff to establish Facebook’s purposeful availment of the benefits and privileges of doing business in Texas, the court of appeals had no difficulty in determining that Facebook’s Texas contacts met the first prong of the jurisdictional due process test. These facts include: (1) Facebook’s substantial business in Texas; (2) the presence of Facebook offices and employees in Texas; (3) the company’s extensive marketing in Texas; (4) the company’s substantial profits from Texas users’ data; and (5) Facebook’s purposeful direction of tailored advertisements to millions of Texas users. To its credit, Facebook did not attempt to argue that it did not purposefully avail itself of the privilege of conducting business in Texas and invoking the benefits and protections of Texas law.
Facebook, however, contested the second prong of the test, which bars specific jurisdiction if the plaintiff’s suit does not “arise out of or relate to” the defendant’s contact with the forum state. As the court of appeals pointed out, the nexus requirement does not require a causal connection between the conduct and the suit, and the court must determine nexus on a case-by-case basis. Facebook argued that none of the relevant policies or decisions complained of in this case occurred in Texas or were directed at Texas users specifically. The court of appeals disagreed, focusing on the plaintiff’s use of the platform in Texas and the company’s operation of its platform in the state [citing, among other cases, Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021) and Luciano v. SprayFoamProducts.com, LLC, 625 S.W.3d 1 (Tex. 2021), holding that “[I]t is sufficient that SprayFoam intended to serve a Texas market for the insulation that the Lucianos allege injured them in the lawsuit”).
Finally, Facebook did not try to argue that exercising jurisdiction over the company would offend traditional notions of fair play and substantial justice or create an undue burden, which given the extend of the company’s business activities in Texas would have been a ludicrous claim. The court found further that Texas had a substantial interest in protecting its citizens from sex trafficking, and that other defendants and witnesses are all located in Texas. The court affirmed the trial court’s denial of Facebook’s special appearance.
Whether Facebook will appeal again to SCOTX or return to the trial court to try another way out of the lawsuit remains to be seen. What is particularly interesting to us is that asserting federal immunity didn’t work in this case because the plaintiff alleged affirmative conduct that may have violated a state statute, and that, so far at least, the courts below are unwilling to treat a social media company any differently than, say, an automobile manufacturer for purposes of establishing minimum contacts with the state. Actively market and sell your product here, and you will be held accountable here, absent federal immunity or preemption. TCJL members are happy to live with that, and so should a global social media behemoth.
