Armslist Loses Two Section 230 Rulings, But Still Defeats Both Lawsuits

December 12, 2021 · by · in Content Regulation, Derivative Liability

Armslist has become a critical player for Section 230 jurisprudence in Wisconsin. It’s not going well for Armslist or Section 230. Due to the Seventh Circuit’s troubled Section 230 jurisprudence, two federal district judges in Wisconsin ruled that Armslist didn’t qualify for Section 230–even though the Wisconsin Supreme Court ruled otherwise. Yet, Armslist still won both cases on the prima facie elements. Given these results, these cases once again remind Section 230 critics that Section 230 is a procedural fast lane to the inevitable outcomes.

Webber v. Armslist LLC, 2021 WL 5206580 (E.D. Wis. Nov. 9, 2021)

This case involves an estranged husband’s murder of his wife. The husband bought the murder weapon on Armslist. The wife’s estate sued Armslist, alleging “that, but for Armslist’s failure to enact adequate safeguards, and but for Armslist’s conscious decision to design Armslist.com in an irresponsible, unreasonable, and unlawful manner, Sara Schmidt’s estranged husband would not have been able to purchase the firearm that he used to kill her.”

Section 230

In Daniel v. Armslist, the Wisconsin Supreme Court held that Armslist qualified for Section 230. The judge could have easily cited that case and moved on. Instead, this judge replies: “the Wisconsin Supreme Court’s interpretation of federal law is not binding on this Court.” Cue judicial activism.

The court acknowledges that “other circuits have granted blanket protection under § 230” but it thinks the Seventh Circuit “appears to have been less willing to do so,” citing the outdated Doe v. GTE case, the Chicago v. StubHub case, and Justice Thomas’ unhinged blog post in the Malwarebytes case. This leads to obviously wrong statements like:

In this case, the Court does not have claims for defamation, obscenity, copyright infringement, or some other related theory of liability before it, but instead claims sounding in negligence and public nuisance based on Defendants’ affirmative conduct. It thus appears that § 230 is not even relevant to this case.

OK, so Judge Easterbrook created multiple Section 230 jurisprudential problems, including this one. In Chicago v. Stubhub, he said Section 230(c)(1) “limits who may be called the publisher of information that appears online. That might matter to liability for defamation, obscenity, or copyright infringement.” No. Not even close. Section 230 is irrelevant to copyright infringement per 230(e)(2) and irrelevant to federal obscenity prosecutions per 230(e)(1) (obscenity is expressly referenced as one of the exclusions). So that passage reveals Judge Easterbrook’s ignorance about Section 230. Yet, judges are still duplicating the error a decade later.

The judge in this case exacerbated the error by saying that negligence doesn’t raise publisher issues. However, Section 230 jurisprudence is filled with defense wins in negligence cases, starting with the Zeran case in 1997 and including the Daniel case involving Armslist. The judge doesn’t engage with any of that precedent.

The court continues:

even if § 230 applies to this type of case, Plaintiff’s claims do not seek to treat Defendants as the “publisher or speaker” of the post in question. Here, Plaintiff seeks to hold Defendants liable for their “role in developing or co-developing [their] own content.” Specifically, Plaintiff faults Defendants for failing to prohibit criminals from accessing or buying firearms through Armslist.com; actively encouraging, assisting, and facilitating illegal firearms transactions through their various design decisions; failing to require greater details from users, such as providing credit-card verified evidence of users’ identities; failing to require that sellers certify under oath that they are legal purchasers; and failing to provide regularly updated information regarding applicable firearms laws to its users, among many other things….

This type of claim, then, does not seek to treat Defendants as the “publisher or speaker” of the post that led to Schmidt’s killer obtaining a firearm; rather, it seeks to hold Defendants liable for their own misconduct in negligently and recklessly creating a service that facilitates the illegal sale of firearms.

These “bad design” arguments to work around 230 have been rejected repeatedly. The court obviously wanted to undercut Section 230. A classic tell of judicial activism.

Negligence

The anti-precedent ruling on Section 230 feels even more unnecessary given that the court still rules against the plaintiff on the merits. The court could have not discussed 230 at all and still reached the same conclusion, rather than going out of its way to opine (incorrectly) on Section 230.

On the merits, the plaintiff must overcome the Vesely v. Armslist ruling (a 7th Circuit ruling). The court also sidesteps it, saying “Vesely is not controlling here, since this case arises under Wisconsin negligence law which differs from the law of Illinois.”

The court says that the plaintiff adequately alleged a duty because the:

complaint alleges that Defendants (1) knew criminal gun buyers and sellers frequently exploit a legal loophole allowing “occasional” gun sales by private sellers that skirt state and federal regulations; (2) knew in 2018 that Armslist.com was facilitating illegal and reckless sales by unlicensed sellers and purchases by prohibited possessors; and (3) specifically created and designed their website to capitalize on this illegal gun market opportunity after other  companies offering similar services abandoned it

Nevertheless, the court dismisses for lack of causation:

It is clear from the complaint that Schmidt was shot and killed by her estranged husband, not Defendants, with a handgun he purchased from another party, again not Defendants. Based on the facts alleged, there is no reason to believe that even if Schmidt’s estranged husband had not purchased a gun from a person who posted an advertisement on the Armslist website, Schmidt would still be alive. Armslist is hardly the only source of guns in this country, and one does not even need a gun to take another person’s life. Schmidt was killed by a person so determined to take her life, so consumed by hatred, that he was even willing to take his own. The likelihood that such a person would have found another source from which to obtain a firearm or another way to take Schmidt’s life is more plausible than Plaintiff’s claim that she would still be alive.

The court adds that, even if the plaintiff established the four prima facie elements of negligence, the plaintiff would STILL lose the case:

the Court concludes that Wisconsin’s public policy bars this suit. Because the injury Plaintiff suffered is too remote from and out of proportion to Defendants’ conduct and allowing recovery in this case would place an unreasonable a burden on Defendants. Although intentional criminal acts “are not a superseding cause per se,” “acts that are either criminal or intentionally tortious . . . are more likely to be adjudged superseding causes than merely negligent acts.”…the conscious, premeditated decisions and actions of Schmidt’s killer served as a superseding cause of Plaintiff’s injury… lawfully providing a forum for individuals to engage others interested in buying and selling firearms is simply too far removed from and out of proportion to the criminal act committed by Schmidt’s killer….Imposing civil liability on Defendants for Schmidt’s murder…would likely destroy their business. Indeed, the latter might be Plaintiff’s goal.

If this public policy conclusion stands, it’s an incredibly important conclusion. Section 230 critics might celebrate the judge’s refusal to apply 230 to this case, but what they should focus on is the judge’s rejection of the lawsuit on public policy grounds. In other words, imposing liability on Armslist goes too far, so any Section 230 reform won’t result in any greater financial recompense for the plaintiff or greater efforts to protect victims–it will just scramble Section 230. In that sense, this case is like the “material support for terrorists” cases against social media services, which have failed on a wide variety of grounds beyond Section 230. Anyone who points to those cases as a reason to reform Section 230 is disregarding what the courts are actually saying.

Bauer v. Armslist, LLC, 2021 WL 5416017 (E.D. Wis. Nov. 19, 2021)

This is from a different judge than the Webber ruling, but from the same district. So it follows the same basic script, including rejecting both Section 230 and the plaintiff’s prima facie case.

The facts are tragic and a little confusing. The allegations: Caldwell operated a virtual store on Armslist (he has since been convicted of dealing firearms without a license). Jones purchased a gun from Caldwell and then resold it in Chicago. After some unspecified number of trades, the gun ends up in Legghette’s hands, even though he was barred from gun ownership due to prior convictions. Legghette used the gun to kill a police officer, Bauer. Leggehette has been sentenced to life in prison.

Section 230

The court says that the Seventh Circuit “has expressly held that §230 does not create immunity,” invoking the old Doe v. GTE ruling. Ugh. That ruling has aged terribly because it’s so obviously wrong and ahistorical. The court uses a lengthy and unnecessary historical tour of the Seventh Circuit Section 230 jurisprudence to concludes that Section 230(c)(1) is just a definitional section (as Doe v. GTE did). There’s so much wrong with the Section 230 discussion, including:

  • Section 230 is “a fact-based inquiry.” Section 230’s best payoff comes from allowing courts to rule on the law, not on the facts.
  • Like Webber, the court says the Wisconsin Supreme Court ruling in Daniel v. Armslist is irrelevant to the federal courts in Wisconsin.
  • “The plaintiffs in this case have not raised claims of defamation or obscenity or copyright infringement—the types of claims that would require the court to determine whether Armslist is a “publisher” or “speaker” of content.” See my discussion above about this mangled invocation of the Stubhub precedent. If a court is going to be persnickety about other courts reading the statute wrong, the court probably ought not to make errors like this. 💯
  • The court says 230(c)(2) doesn’t apply because that only matters when a defendant restricts access to content. OK, but if 230(c)(1) is a definitional section, and 230(c)(2) only applies to removal decisions, then the court seems to be saying that 230 never covers leave-up decisions. This is obviously wrong in every way; indeed, the Seventh Circuit couldn’t have ruled for Craigslist if this court’s legal “analysis” is correct. The Seventh Circuit needs to fix this.

The court says Section 230 doesn’t apply because the plaintiffs alleged that “Armslist should have structured the website differently—should have included safeguards and screening/monitoring provisions, should have been aware of the activity of individuals like Caldwell, should have implemented measures that would prevent illegal firearms dealers from using the website to sell guns without a license.” As discussed with the Webber case, these “badly structured website” arguments are failing everywhere else around the country, creating obvious circuit conflicts. Maybe the Wisconsin judges are hoping to position one of these cases for the U.S. Supreme Court?

Negligence

The court says the plaintiffs satisfied three of the elements:

  • Duty. “Wisconsin’s law on duty—that the duty of care is established when it is foreseeable to the defendant that its acts or omissions could cause harm to someone else—the second amended complaint states facts sufficient to establish that Armslist had a general duty to exercise ordinary care.”  The court adds that if it applied Illinois law, then per the Vesely case, Armslist lacked a special relationship to the plaintiffs.
  • Breach. “The second amended complaint alleges facts sufficient to assert breaches of that duty—the failure to implement screening mechanisms to identify or remove or report individuals who are selling or buying large numbers of firearms through the website, the failure to track patterns of users of the website, the defaulting to a “private seller” tag ads created by users who have not created accounts.”
  • Damage. Bauer’s death.

However, the claim fails for lack of proximate causation:

Would a reasonable person conclude that the way Armslist structured the Armslist.com website, and its alleged failures to monitor how that website was being used, had such an effect in producing Commander Bauer’s death that that reasonable person would regard the website as a cause of Commander Bauer’s death? The answer must be no.

Citing Webber, the court says there also could be a public policy bar to the negligence claim.

The court concludes:

The murder of Commander Paul Bauer on February 13, 2018 was horrific and inexcusable. The court cannot imagine the pain Erin Bauer has endured at the loss. She is not alone in her anger and frustration that people who should not have guns—who are prohibited from having guns—appear able to obtain them with little effort and use them to wreak unspeakable damage. But that understandable anger and frustration does not translate into a claim for tortious conduct by the website on which the ad for the gun that made its way to Shomari Legghette appeared.

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