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Shulman v. Facebook.Com

United States District Court, D. New Jersey

July 9, 2018

JACK A. SHULMAN, Plaintiff,
v.
FACEBOOK.COM, ET AL., Defendants.

         Not for Publication

          OPINION

          John Michael Vazquez, U.S.D.J.

         This case arises from Plaintiffs claims that Defendants are engaged in a vast conspiracy to stop Plaintiffs media company from using Facebook. Currently before the Court are Defendants'[1] motions to dismiss pro se Plaintiff Jack A. Shulman's Second Amended Complaint ("SAC"), D.E. 91, D.E. 92, and Defendant Facebook's motion to transfer, D.E. 93. The Court previously dismissed Plaintiffs Amended Complaint without prejudice. D.E. 79, 80. The Court has considered the parties' submissions[2] and has considered the motions without oral argument pursuant to Federal Rule of Civil Procedure 78 and Local Civil Rule 78.1. Defendants' motions to dismiss (D.E. 91, D.E. 92) are GRANTED and Defendant Facebook's motion to transfer (D.E. 93) is DENIED as moot.

         I. FACTUAL BACKGROUND [3]

         Plaintiff states he brings his claims as "Jack A. Shulman d/b/a Advances Magazine, and individually." SAC at ¶ 1.[4] Plaintiffs allegations are, in general, rambling and difficult to follow. The Court also notes that Plaintiffs claims have changed from the First Amended Complaint ("FAC"). The FAC alleged that Defendants violated the First, Fourth, Fifth, and Fourteenth Amendments, the Americans with Disabilities Act, New Jersey's Law Against Discrimination, and engaged in a RICO conspiracy by censoring his political speech on Facebook. See First Amended Complaint ("FAC"), D.E. 13.

         In a general sense, Plaintiffs SAC now alleges that the Defendants participated in a conspiracy scheme to prevent Plaintiffs business, Advances Magazine, from competing with the Media Defendants on Facebook. See Id. at ¶ 24. Plaintiff has been using Facebook since 2009, id. at ¶ 56, and "started investing in and engaging in intensified business use of Facebook.com in 2015 .. . seeking to enter into and compete in the electronic News Media and Publishing market, id. at ¶ 57. Plaintiff claims that Facebook (and apparently the Media Defendants) suspended Plaintiffs ability to post on Facebook based on false allegations that Plaintiff was "spamming and . . . breaching community standards." Id. at ¶ 26. Plaintiff claims that he was suspended from Facebook twenty-two times within the last year, "depriv[ing] the plaintiff of 222 out of 365 calendar days of business ... and caused him to lose over $ 150, 000 in investments in his business." Id. at ¶ 27. Plaintiff details his "top fifteen [] suspensions," including when he "post[ed] a copy of Pamela Gellar's defense of Israel from George Soros," "post[ed] a news item about Uranium One and Mrs. Clinton from the NY Times," "post[ed] a link to a White House Briefing," and when he "disagree[ed] with TV Minister Joel Osteen's claim that all activities by Muslims the world over were driven by their 'discovery' of God's Love, and must not be questioned . . . [and Plaintiff responding] that God's Love did not include the death of 69 million 'infidels' nor the comments of Islamic Religious leader Adbullah Juber." Id. at ¶ 27. Plaintiff claims that these "22 suspensions were baseless and entirely without merit and cost plaintiff his full investment in his business for over 4 years." Id. at ¶ 31.

         Plaintiff then turns to allegations related to Facebook's advertising system. In sum, Plaintiff "believes [Defendant Facebook has set up a business model that shakes down the small business person, using software that operates automatically and accompanied by corporate policies designed to hide it." Id. at ¶ 49. Plaintiff alleges "an anticompetitive scheme wherein [Plaintiffs] pay-ins for advertising were producing little or no impact and priced far, far higher per 'click thru' than defendants CNN, PBS and NPR, often overloading [Plaintiff] with inexplicable 'ad views' that had no effect whatsoever since [Defendant Facebook's users gave them no mind." Id. at ¶ 32. Plaintiff claims that Facebook's advertising system could only benefit entities that were '"National Brand[s]' whose name, logo and reputation might serve as 'click bait'-a way to draw the user's attention away from reading whatever [n]ews or comments they were engrossed in." Id. at ¶ 32. Plaintiff explains that Facebook's advertising system is '"price fixing' against the benefit of the small competitor and thus reduces competition, by its very nature, due to the lack of 'confirmed attraction' to the alleged 'impression' and 'viewing window' and likelihood of false positives." Id. at ¶ 37. Plaintiff contends that "Large Brand Name companies with recognized Logos have no equivalent problem." Id. In essence, Plaintiff claims that this "violates anticompetition laws by its one sided design to benefit only 'big brands.'" Id. at ¶ 39.

         Plaintiff alleges that the Defendants "behave as a RICO Enterprise" because "Plaintiff believes [Defendant Facebook and those who've joined it through a PAY TO PLAY agreement and buy ins such as defendants, CNN, PBS and NPR, reap mutual rewards by doing harm to smaller competitors." Id. at ¶ 50. Plaintiff adds that this "RICO Enterprise"

engages in 'baiting', 'false reporting of illegal conduct', 'violation of the public trust', and other wrongdoing so as to draw off cash on hand from the smaller competitor, plaintiff, who through a deceptive 'lure the rubes' draws smaller competitors into deceptive and fraudulent business practices produce [sic] little or no results but benefit the larger defendants CNN, PBS and NPR, and repeatedly, anti-competitively suspending the plaintiffs business on Facebook.com and even acted to disrupt momentum, and to prevent [Plaintiff] from drawing a large following, by canceling his News posted to large affinity groups on Facebook.com, who would otherwise be very interested in reading [Plaintiffs] NEWS, causing him to lose roughly 222 days of the past 365 days to suspension, unable to promote, unable to advertise, unable to post News, build followers and ultimately, losing all formerly developed business momentum and his investment in it of substantial money, time and effort.

Id. at ¶ 50. More specifically, Plaintiff claims that Facebook "promised Plaintiff vast public exposure, low rates for advertising and engages in [sic] mutual protection with them of their media concentration in the market, helping him to increase [Plaintiffs] competitive position in the electronic News Media and Publishing market." Id. at ¶ 60. Instead, Plaintiff claims that his business "was treated deceptively and was injured by [Facebook's] anti-competitive schemes that benefit the larger businesses including CNN, PBS and NPR, at the expense of smaller competitor [sic] like the plaintiff." Id. at ¶ 61. For example, Plaintiff states that he learned that "Defendants CNN, PBS and NPR are given rates as low as $0.16 per advertisement clicked through by a user, and are given 100% distribution of their news to the viewers on [Facebook] through the Newsfeed(s)," while this option was not offered to Plaintiff. Id. at ¶ 62.

         In sum, Plaintiff claims that Defendant Facebook engaged in much of this conduct "as part of a horizontal integration of its own media activities with competitor [Defendants CNN, PBS and NPR, in support of their patronage, without regard for the consequences upon [P]laintiff, in fact intended to victimize [P]laintiff and other businesses like [P]laintiff[']s, for their own self enrichment." Id. at ¶ 155. Plaintiff continues that

the [Defendants knew that [Facebook] could provide a means to continuously expand their monopolistic control over the market for electronic New publishing, and, [Defendant Facebook who[] in combination with [Defendants CNN, PBS and NPR, lures the unwary (plaintiff, others) in, steals their money delivering nothing to smaller competitors but a steadily declining ability to compete, ads that are worthless, abuses and suppresses them, violates their privacy and premises, humiliates their vulnerabilities and keeps expanding to gain control of more and more of the Internet, while suppressing smaller competition, to the favor of its pay-to-play partners in the Enterprise, [Defendants CNN, PBS and NPR.

Id. at ¶169.

         II. PROCEDURAL HISTORY

         On February 2, 2017, Plaintiff filed his initial Complaint. D.E. 1. On March 13, 2017, Plaintiff filed the FAC. D.E. 13. On November 6, 2017, the Court dismissed the FAC without prejudice. D.E. 79, 80. The Court also denied Plaintiffs motion for partial summary judgment and motion for Rule 11 sanctions. D.E. 79, 80.

         On November 29, 2017, Plaintiff filed the SAC. D.E. 82. On January 11, 2018, Facebook filed a motion to dismiss. D.E. 91. On the same day, the Media Defendants filed a motion to dismiss. D.E. 92. Plaintiff filed opposition to both motions, D.E. 106, to which Facebook and the Media Defendants replied, D.E. 108, 109. Defendant Facebook also filed a motion to transfer this case to the United States District Court for the Northern District of California, D.E. 93, to which Plaintiff filed opposition, D.E. 107, and to which Facebook replied, D.E. 110.

         III. STANDARD OF REVIEW

         Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a defendant to move to dismiss a count for "failure to state a claim upon which relief can be granted[.]" To withstand a motion to dismiss under Rule 12(b)(6), a plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Ail. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A complaint is plausible on its face when there is enough factual content "that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although the plausibility standard "does not impose a probability requirement, it does require a pleading to show more than a sheer possibility that a defendant has acted unlawfully." Connelly v. Lane Const. Corp., 809 F.3d 780, 786 (3d Cir. 2016) (internal quotation marks and citations omitted). As a result, a plaintiff must "allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of [his] claims." Id. at 789.

         In evaluating the sufficiency of a complaint, a district court must accept all factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). A court, however, is "not compelled to accept unwarranted inferences, unsupported conclusions or legal conclusions disguised as factual allegations." Baraka v. McGreevey, 481 F.3d 187, 211 (3d Cir. 2007). If, after viewing the allegations in the complaint most favorable to the plaintiff, it appears that no relief could be granted under any set of facts consistent with the allegations, a court may dismiss the complaint for failure to state a claim. DeFazio v. Leading Edge Recovery Sols., 2010 WL 5146765, at *1 (D.N.J. Dec. 13, 2010).

         Because Plaintiff is proceedingpro se, the Court construes the pleadings liberally and holds him to a less stringent standard than those filed by attorneys. Haines v. Kerner, 404 U.S. 519, 520 (1972). However, the "Court need not . . . credit a pro se plaintiffs 'bald assertions' or 'legal conclusions.'" D'Agostino v. CECOMRDEC, 2010 WL 3719623, at *1 (D.N.J. Sept. 10, 2010).

         IV. ANALYSIS

         Plaintiffs SAC brings five counts.[5] Count One alleges violations of the "Clayton Act," SAC at ¶¶ 174-189; Count Two alleges violations of the "CAN-SPAM Act (coordinated with CDA violations)" and include what Plaintiff calls "Count Two(B): CDA/CAN-SPAM violations in the context of psychological gaslighting," id. at ¶¶ 213-227; Count Three alleges a RICO conspiracy, id. at ¶¶ 228-248; Count Four alleges violations of various New Jersey laws, id. at ¶¶ 249-252; and Count Five alleges a "privacy violation and use of keylogger/mouse logging 'spyware' software by Defendant Facebook," id. at ¶¶ 253-270.[6]

         A. Count One (Antitrust Claims)

         Plaintiff stylizes Count One as an action for "Clayton Act Violations," but Plaintiff appears to bring claims under the Sherman Act, 15 U.S.C. §§ 1 et seq., the Clayton Act, 15 U.S.C. §§ 12 etseq., the Robinson-Patman Act, 15 U.S.C. §§ 13 etseq., the Lanham Act, 15 U.S.C. §§ 1051 et seq., and the New Jersey Antitrust Act, N.J.S.A. 56:9, et seq. As a general matter, Count One alleges that Defendant Facebook's apparent "pay per view" advertisement pricing model burdens smaller media competitors to the benefit of larger companies like Defendants CNN, PBS, and NPR. See SAC at ¶¶ 178-189. Plaintiff claims that this advertising model amounts to an "anticompetitive scheme" and "price fixing." Id. at ¶ 179. Plaintiff asserts that the anticompetitive scheme also includes Facebook's suspensions of Plaintiff s account, as well as harassment Plaintiff experienced on Facebook. Id. at ¶ 182.

         i. Sherman Act

         Count One mentions the Sherman Act in passing. Id. at ΒΆ 179. Presumably, Plaintiff alleges a Sherman Act violation as to his allegations concerning Defendants' "price fixing" and "anticompetitive" conduct. Defendants argue Plaintiffs Sherman Act claims (to the extent that he brings any) should be dismissed, in part, because ...


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