Have Algorithms Opened Up Your Software to Product Liability?

On January 24, 2023, next of friends to a minor filed a product liability lawsuit against social media companies Meta Platforms, Inc. (Facebook and Instagram) and Snapchat in Connecticut Superior Court, alleging that these social media platforms caused the plaintiff to develop “mental health issues.” V.V. et al. v. Meta Platforms, Inc., et al., No. FBT-23-cv-5050779-S (Conn. Super. Ct. Jan. 24, 2023). The complaint alleges that these “communications apps” were defectively designed and marketed under Connecticut state law because they expose children to mental and physical harm by, among other things, “algorithms” and “features” such as “like,” “notifications,” “endless feed[s]” of content, and “quick add buttons,” that cause “addiction” and lead to depression and anxiety. Complaint ¶¶ 6–7, 42–43, 76–89, 129–31, 183, V.V. v. Meta, No. FBT-23-cv-5050779-S. Further, it alleges that the age restriction setup and “public profile settings” are defective because the platforms are designed to “evade parental oversight.” Id. ¶¶ 17, 24.

This case is one of dozens of recently filed lawsuits in which plaintiffs assert claims against social media companies for allegedly causing or contributing (or both) to the development of mental health conditions. On October 6, 2022, the Judicial Panel on Multidistrict Litigation transferred a multidistrict litigation (MDL) of 28 federal actions that had been filed by that time and were pending in 17 districts against several social media platforms, including Meta, Snapchat, Twitter, TikTok, and YouTube, to the Northern District of California before Judge Yvonne Gonzalez Rogers. See In re Social Media Adolescent Addiction/Personal Injury Prod. Liab. Litig., MDL No. 3047  (N.D. Cal. 2022). V.V. v. Meta was conditionally transferred to the Social Media MDL; however, the plaintiff successfully challenged the conditional order based, in part, on arguments that the case had to be remanded to state court.

In In re Social Media, the master complaint alleges that social media algorithms cause compulsive use and addiction, leading to dramatic increases in rates of anxiety, depression, self-harm, eating disorders, and suicide among children. The plaintiffs assert causes of action for product liability, negligence, violation of unfair trade practices and consumer protection laws, fraudulent/negligent concealment and misrepresentation, and the per se violation of federal statutes prohibiting the sexual exploitation of minors.

On April 17, 2023, the defendants filed a motion to dismiss for lack of standing under Federal Rule of Civil Procedure 12(b)(1) and failure to state a claim under Rule 12(b)(6), arguing, among other things, that the communication services at issue are not products, there is no cognizable duty of care, and even if a duty exists, there is no causal connection between the features comprising the services and the plaintiffs’ injuries. The defendants also argued that section 230 of the Communications Decency Act, 47 U.S.C. § 230 et seq., and the First Amendment bar the plaintiffs’ claims, but they agreed to wait to brief the issue until the Supreme Court ruled in Gonzalez v. Google, LLC, No. 21-1333. (A per curiam opinion was issued in Gonzalez v. Google on May 18, 2023, and on June 27, 2023, the defendants in In re Social Media filed a supplemental motion to dismiss, arguing that the plaintiffs’ claims were barred pursuant to section 230 and the First Amendment of the U.S. Constitution).

On June 1, 2023, the plaintiffs filed their opposition, arguing that they have asserted product liability claims because their allegations concern “the design features of Defendants’ apps,” which they argue are products, not the content that is located on the platforms, which they concede are not products. Plaintiffs’ Opposition to Defendants’ Joint Motion to Dismiss, In re Social Media, No. 4:22-md-03047-YGR (N.D. Cal. filed June 1, 2023), ECF no. 302.

The Definition of “Product” and Application to Social Media Cases

To date, plaintiffs who have asserted product liability actions based on intangible goods and services, such as social media software, have been appropriately unsuccessful because their claims do not concern a “product.” Under the Restatement (Third) of Torts: Product Liability § 19 (1998), a product is defined as “tangible personal property distributed for commercial use or consumption.” The Restatement (Second) of Torts § 402A comment d (1965) provided examples of products, which included “an automobile, a tire, a grinding wheel, a water heater, a gas stove, a power tool, a riveting machine, a chair, and an insecticide.” Section 402A also describes “products” as “chattels” or “articles.” Restatement § 402A cmts. a, d–e. A “chattel” is a “physical object.” “Chattel,” Black’s Law Dictionary  251 (rev. 8th ed. 2004) (“Movable or transferable property; personal property; esp[ecially], a physical object capable of manual delivery”). Sixteen states have also passed product liability acts that align with these definitions. Consequently, courts have historically declined to extend liability in product liability actions based on ideas and expressions, even when they were in some tangible form like a book, movie, or other form of media. James v. Meow Media, Inc., 300 F.3d 683, 701–2 (6th Cir. 2002) (“video games, movie[s], and internet sites” are not “‘products’”); Winter v. G.P. Putnam’s Sons, 938 F.2d 1033, 1034–36 (9th Cir. 1991) (information in an encyclopedia not a product); Wilson v. Midway Games, Inc., 198 F. Supp. 2d 167, 172–74 (D. Conn. 2002) (interactive media game is not a product); Cardozo v. True, 342 So. 2d 1053 1056 (Fla. Dist. Ct. App. 1977) (thoughts and ideas conveyed in a book are not a product).

In recent years, plaintiffs have revamped their arguments, contending that courts are “moving toward liability of technological systems,” Rodgers v. Laura & John Arnold Found., No. 17-5556, 2019 WL 2429574, slip op. at 2 (D.N.J. June 11, 2019), and that advances in technology have merged ideas and expression with the software, websites, and applications that facilitate their transmission in a manner that is subject to product liability law. Further, “numerous commentators have discussed the issue” of software platforms as technical products “and urged that software should be treated as a product.” Reporters’ Notes to Restatement (Third) of Torts: Product Liability § 19 (1998). But thus far, most courts have rejected arguments that platforms are products. See, e.g., Quinteros v. Innogames, No. C19-1402RSM, 2022 WL 898560 (W.D. Wash. Mar. 28, 2022) (claimed psychologically addictive online game is not a product); Doe v. Uber Tech. Inc., No. 19ST-cv-11874, 2020 WL 13801354, at *6–7 (Cal. Super. Ct. Nov. 30, 2020) (Uber application is not a product), aff’d on other grounds, 294 Cal. Rptr. 3d 664 (Cal. Ct. App. 2022); Transcript of Motion to Dismiss Hearing at 57, Doe v. Facebook, Inc., No. 2019-16262 (151st Dist. Ct., Harris Cty., Tex. Oct. 4, 2019), docket entry 85-2 (Instagram is not a product); Rodgers, 2019 WL 2429574, slip op. at 2 (public service announcement is not a product); but see Brookes v. Lyft Inc., 2022 WL 19799628 (Fla. Cir. Ct. Sept. 20, 2020) (holding Lyft app is a product); Maynard v. Snapchat, Inc., 870 S.E.2d 739 (Ga. 2022) (permitting negligent design defect claim to proceed without directly addressing whether the application was a product).

In In re Social Media, the plaintiffs are taking a new approach, arguing that their product liability claims are separate and distinct from the content on the websites and apps. The plaintiffs claim that the algorithms “dictate the content” viewed on the platforms and generate an “endless feed to keep users scrolling in an induced ‘flow state[,]’” in conjunction with claims about how the addictiveness of social media platforms “exploit[s] children.” See Corrected Plaintiffs’ Master Complaint ¶¶ 3, 60, 76, 79, 82, 103, 142, 238, 247, 250, 262–97, 306–10, 324, 327–28, 346–57, 392–437, 438–42, 461–62, 467–69, 493, 509, 523, 560, 569, 577–82, 584, 589–637, In re Social Media, No. 4:22-md-03047-YGR  (N.D. Cal. filed Feb. 17, 2023), ECF No. 138. The plaintiffs also argue that, without the algorithms, “Plaintiffs would not have been injured even if the same content remained on the apps.” Id. ¶ 238, In re Social Media, No. 4:22-md-03047-YGR (citing Corrected Plaintiffs’ Master Complaint ¶ 238). The plaintiffs are thus focused on the design features of the defendants’ applications and cite cases in which courts treat technical items like a navigational chart (Saloomey v. Jeppesen & Co., 707 F.2d 671, 677 (2d Cir. 1983)), drug distribution software (Hardin v. PDX, Inc., 173 Cal. Rptr. 3d 397, 406–7 (Cal. Ct. App. 2014)), and defective warnings, as products. The plaintiffs in In re Social Media also point out that the Ninth Circuit stated in Winter that “[c]omputer software that fails to yield the result for which it was designed may[,]” like other highly technical tools such as aeronautical charts, be considered a “‘product[] for the purpose of products liability law.” Plaintiffs’ Opposition to Defendants’ Joint Motion to Dismiss at 26–27, In re Social Media, No. 4:22-md-03047-YGR (citing Winter, 938 F.2d at 1034–36).

While it remains to be seen whether courts will accept this novel theory of a product, for now, under the Restatement and Uniform Commercial Code, “software” remains a “general intangible,” not a “good”; and the majority rule in case law is that software “is neither ‘tangible personal property’ nor remotely ‘analogous to’ it” to qualify as a product. See Rodgers v. Christie, 795 F. App’x 878, 880 (3d Cir. 2020).

Alternative Theories of Recovery Asserted by Plaintiffs to Avoid Dismissal of Software-Related Claims

As demonstrated by the plaintiffs in In re Social Media and V.V. v. Meta Platforms, plaintiff attorneys have attempted to skirt the requirement of a physical product by asserting pseudo-product liability claims pursuant to unfair competition laws and traditional state law claims, such as negligence and negligent/fraudulent misrepresentation.

This type of alternative pleading is not new and often fails on First Amendment grounds, especially in the online space, where courts find that section 230 of the Communications Decency Act precludes liability under publisher immunity or preempts state law claims or both.

But plaintiffs have had some success with alternative theories. For instance, courts have permitted pseudo-product liability claims to proceed against the identified communications platform based on the design of the media and failure to warn of the alleged design defect, finding that section 230 immunity did not apply to these claims. See, e.g., A.M. v. Omegle.com, LLC, 614 F. Supp. 3d 814, 820 (D. Or. 2022) (immunity did not apply to product liability claims concerning warnings and design of chat room). An informative recent example is a decision by the Ninth Circuit in Lemmon v. Snap, Inc., 995 F.3d 1085, 1092 (9th Cir. 2021), in which the court declined to apply publisher immunity under section 230 to a negligent design claim against Snap because the plaintiffs’ claims were based on Snap’s “distinct capacity as a products designer” and not a publisher of third-party content. On remand, the district court denied Snap’s motion to dismiss, permitting the claim to continue after finding that the plaintiffs had adequately alleged duty and causation. Lemmon v. Snap, Inc., No. 19-cv-4504, 2022 WL 1407936, slip op. at 6–7 (C.D. Cal. Mar. 31, 2022). Importantly, the district court undertook a negligence analysis, not a products liability analysis. Plaintiffs have cited Lemmon to argue that product liability claims should survive dismissal, with mixed success. Compare Jacobs v. Meta Platforms, Inc., 2023 WL 2655586, at *3 (Cal. Super. Ct. Mar. 10, 2023) (holding Facebook is not a product; it is a service), and Jackson v. Airbnb, Inc., No. 22-cv-3084, 2022 WL 16752071, at *10 (C.D. Cal. Nov. 4, 2022) (Airbnb is a marketplace and not a product), with Omegle.com, LLC, 614 F. Supp. 3d at 820.

The Rise of Litigation Seeking Damages to Compensate for Amorphous Injuries

The In re Social Media cases are also unlike the traditional product liability lawsuit because the alleged injuries are, at least in part, subjective mental health conditions, as opposed to objective physical injuries. In these cases, the plaintiffs claim that the social media companies caused them to develop addiction (defined as problematic use, as opposed to clinical addiction, which involves physical dependence), sleep deprivation, anxiety, depression, self-harm, suicidal ideation, exploitation, abuse, and attempted suicide.

Unlike a physical injury alleged in the classic product liability case to have been caused by a product (such as cancer, a lost limb, or opioid dependence), nonphysical harms may not be subject to an objective standard by which to judge whether the plaintiff suffers from the claimed disease, the extent of the injury, or whether the product was responsible for its development. As a result, the field of potential plaintiffs could be expanded to almost any product user because a physical injury is not a condition precedent to filing suit.

Traditional product liability lawsuits, such as the recently settled JUUL MDL, also involved subjective injuries, including claims that product use led to the development of nicotine addictions and mood disorders. See In re JUUL LABS, Inc., Mktg., Sales Practices & Prod. Liab. Litig., MDL No. 2913 (2019). Indeed, in In re Social Media, the plaintiffs primarily rely on the decision in In re JUUL Labs, Inc., Marketing, Sales Practices, and Product Liability Litigation, 497 F. Supp. 3d 552, 655 (N.D. Cal. 2020), to support their negligence-based addiction claims.

Conclusion

Though courts have thus far proved reluctant to extend product liability to software, the door has not been closed, and some commentators are urging an updated definition of a product to reflect modern technology. The plaintiffs’ bar will undoubtedly continue its attempts to extend the protections of products liability law to intangible goods and services, such as software and code, given the increasingly intangible nature of products. The ongoing growth of artificial intelligence will give further incentive for such lawsuits and provide plaintiffs alternative theories to extend product liability to programs. Entities that are at risk for such lawsuits, such as developers, should remain vigilant in protecting against potential litigation.