US District Judge Orelia E. Merchant has dismissed a case against eBay that accused the company of selling harmful products, citing Section 230 of the Communications Decency Act.

The DOJ filed its lawsuit in September 2023, accusing eBay of selling hundreds of thousands of products that harm the environment. The list of harmful items eBay was accused of selling included pesticides, as well as devices designed to circumvent vehicle emission controls. This allegedly put the company in violation of the Clean Air Act (CAA), the Toxic Substances Control Act (TSCA), and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

Catch our chat on the judge tossing out the DOJ case against eBay!

“Laws that prohibit selling products that can severely harm human health and the environment apply to e-commerce retailers like eBay just as they do to brick-and-mortar stores,” Assistant Attorney General Todd Kim, of the Justice Department’s Environment and Natural Resources Division (ENRD), said at the time. “We are committed to preventing the unlawful sale and distribution of emissions-defeating devices and dangerous chemicals that, if used improperly, can lead to dire consequences for individuals and communities.”

“eBay’s sale of emission control defeat devices, pesticides and other unsafe products poses unacceptable risks to our communities disproportionately impacted by environmental and health hazards,” added U.S. Attorney Breon Peace for the Eastern District of New York. “Together with our partners, this office will vigorously enforce federal law against those whose conduct endangers public health and the environment.”

eBay’s Defense

In its defense, eBay argued that it was protected by Section 230, which shields online platforms from liability for what users of its platforms do. The law is a cornerstone of the internet, at least in the US, and has played a major role in the success of online platforms. eBay asked for the DOJ’s case to be dismissed on the basis of Section 230.

eBay raises the following arguments in support of dismissal: 1) the Complaint does not plausibly allege that eBay violated the CAA; 2) the Complaint does not plausibly allege that eBay violated the FIFRA; 3) the Complaint does not plausibly allege that eBay violated the TSCA or the Methylene Chloride Rule; and 4) Section 230 of the Communications Decency Act (“Section 230”) independently bars the United States’ claims.

Key to the defense was the definition of the word “sell,” and whether eBay sold anything directly.

Plaintiff alleges that eBay “sold” Aftermarket Defeat Devices; eBay contends that it does not actually “sell” any item listed on its platform. eBay’s Memo, at 25. In its motion to dismiss, eBay asserts that the ordinary meaning of “sell” requires ownership or possession over an item. Id. at 7. That is, eBay must own or possess an item to “sell” the item under the CAA. Id. eBay contends that because the Complaint fails to allege that eBay owned, held in its possession, or transferred any item covered by the CAA in exchange for value, the Complaint fails to allege that “eBay sold any product that violates the CAA.” Id.

Both parties agree that the word “sell” should be understood to convey its ordinary meaning, and both rely on the plain meaning provided in Black’s Law Dictionary. Id. ; Pl. Opp. at 9. However, eBay argues that “selling an item means transferring title or possession of that item for a price.” eBay’s Memo at 7. Specifically, eBay asserts “Black’s Law Dictionary defines ‘sell’ as ‘[t]o transfer (property) by sale,’ and [] defines a ‘sale’ as ‘[t]he transfer of property or title for a price.’ Black’s Law Dictionary 1603, 1634 (11th ed. 2019). Black’s in turn relies on the Uniform Commercial Code, which similarly states that ‘[a] ‘sale’ consists in the passing of title from the seller to the buyer for a price.’ UCC § 2-106(1).” Id. According to eBay, eBay must own or possess an item to “sell” the item within the meaning of the CAA. It follows that since eBay neither owns nor possesses the items listed on eBay.com, it cannot sell them.

Judge Merchant’s Decision

Ultimately, Judge Merchant agreed with eBay, finding that the company is protected under Section 230 and did not, in fact, directly sell the goods in question.

This Court agrees with eBay. The provision of neutral, automatic email prompts and messages, and of payment processing software does not materially contribute to the illegal products’ “alleged unlawfulness”. Under Section 230, an “information content provider” is “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.” 47 U.S.C. § 230(f)(3). This means that “[a]n interactive computer service will be immune for content on its platform under Section 230 unless ‘it assisted in the development of what made the content unlawful,’ thus becoming an information content provider.” Ratermann v. Pierre Fabre USA, Inc., 651 F. Supp. 3d 657, 667 (S.D.N.Y. 2023) (citing LeadClick Media, 838 F.3d at 174). The administrative and technical support eBay provides to sellers does not “materially contribut[e] to [the content’s] alleged unlawfulness.” LeadClick Media, 838 F.3d at 176.

Finally, because the liability Plaintiff attempts to impose on eBay is “derived from its status as a publisher … imposing liability … does [] inherently require the court to treat” eBay as the “publisher or speaker of its affiliates’ [illegal content],” Section 230 immunity applies. Id. at 176- 77 (cleaned up). Therefore, although eBay’s motion to dismiss Plaintiff’s claim for injunctive relief fails under the TSCA, because Section 230 applies, eBay’s motion to dismiss Plaintiff’s claim for injunctive relief is granted.

The Implications of Judge Merchant’s Decision

Section 230 has been a hotly debated piece of legislation, with some lawmakers on both sides of the aisle wanting to revisit and revise it, if not eliminate its protections altogether.

On the other side of the debate are internet companies, as well as free speech advocates, who say the law is a critical free speech protection and vital to a healthy internet.

The Electronic Frontier Foundation outlines the benefits Section 230 provides:

Congress passed this bipartisan legislation because it recognized that promoting more user speech online outweighed potential harms. When harmful speech takes place, it’s the speaker that should be held responsible, not the service that hosts the speech.

Section 230’s protections are not absolute. It does not protect companies that violate federal criminal law. It does not protect companies that create illegal or harmful content. Nor does Section 230 protect companies from intellectual property claims.

The free and open internet as we know it couldn’t exist without Section 230. Important court rulings on Section 230 have held that users and services cannot be sued for forwarding email, hosting online reviews, or sharing photos or videos that others find objectionable. It also helps to quickly resolve lawsuits cases that have no legal basis.

Without Section 230’s protections, many online intermediaries would intensively filter and censor user speech, while others may simply not host user content at all. This legal and policy framework allows countless niche websites, as well as big platforms like Amazon and Yelp to host user reviews. It allows users to share photos and videos on big platforms like Facebook and on the smallest blogs. It allows users to share speech and opinions everywhere, from vast conversational forums like Twitter and Discord, to the comment sections of the smallest newspapers and blogs.

Judge Merchant’s dismissal of the DOJ’s lawsuit is a strong validation of Section 230’s importance and will help serve as precedent for other similar cases.