[00:00:01] Speaker 01:
Thank you.

[00:00:01] Speaker 01:
We are now hearing argument in three cross peels, which have been consolidated for the purposes of oral argument.

[00:00:08] Speaker 01:
Wilkinson versus Facebook, Custodaro versus Apple, and Andrews versus Google.

[00:00:14] Speaker 01:
And I understand that the appellants, Facebook and Google, are taking 10 minutes each, and that Apple is reserving their 10 minutes for rebuttals.

[00:00:23] Speaker 01:
OK, and plaintiffs will have 30 minutes.

[00:00:26] Speaker 01:
And with that, Mr. Boutros may proceed.

[00:00:28] Speaker 00:
Thank you, Your Honor.

[00:00:29] Speaker 00:
Yes, we're going to divide up the time.

[00:00:30] Speaker 00:
I'm going to go for 10 minutes for Metta, then Mr. Rowley for 10 minutes for Google, and then Mr. Perry is going to be rebuttal for all of us.

[00:00:39] Speaker 00:
Thank you.

[00:00:41] Speaker 00:
Section 30 in this court's rich body of decisions applying it bar plaintiff's claims in this case.

[00:00:47] Speaker 00:
This case is about Metta's publication of third-party content from start to finish, which is precisely why Section 230 bars the claims.

[00:00:56] Speaker 04:
Counsel, as much as I think you all want a decision in these matters, I'm just wondering if it's premature and it needs to be remanded for a final order.

[00:01:06] Speaker 00:
Your Honor, we think this is a classic case for interlocutory review.

[00:01:10] Speaker 00:
Judge Davila wrote a very thorough opinion, but found, suvesponte, that an interlocutory appeal was warranted because there was reasonable grounds for disagreement among the decisions.

[00:01:22] Speaker 00:
The Section 230 here would be disposed of the entire case, and we think it bars these claims.

[00:01:27] Speaker 00:
And one of the principles— He didn't apply his analysis, though, to any specific claim.

[00:01:33] Speaker 00:
Well, he applied it to the entire, you know, that's one of the issues we have here, Your Honor, but the core issue before the court, and there's only no dispute here, is whether the second Barnes factor has been satisfied for Section 230's application.

[00:01:47] Speaker 00:
That's the core legal issue.

[00:01:48] Speaker 06:
But, you know, our caseline indicates that you really need to look at the claims as well, so you can understand what the underlying thesis of the plaintiff's complaint, or various claims are.

[00:01:59] Speaker 00:
Correct.

[00:02:00] Speaker 06:
As you evaluate the Barnes factors.

[00:02:03] Speaker 00:
Correct your honor, but here it's absolutely undisputed that if we look at the complaint, I just pulled a couple pages.

[00:02:09] Speaker 06:
Let me ask you this.

[00:02:12] Speaker 06:
Hypothetically speaking, if we were to agree with you as to the second theory and the theories one and three, in your view that means the whole case, all the cases, all the claims, everything is gone.

[00:02:27] Speaker 00:
Well, we do think, so here, Judge Dabla looked at the two different theories.

[00:02:35] Speaker 00:
But if you look at the complaint, the theory is that these companies can be held liable for hosting, promoting, and collecting money for these third-party content.

[00:02:47] Speaker 00:
And I want to make clear that the chips themselves are third-party content.

[00:02:50] Speaker 00:
So the entire case, no matter how you slice it, no matter how you dice it, it's all about the fundamental activities that this court in its decisions has made clear cannot be the subject of a claim because of Section 230.

[00:03:04] Speaker 00:
So it's a pure legal issue.

[00:03:06] Speaker 00:
There's no dispute about Barnes 1.

[00:03:08] Speaker 00:
There's no dispute about Barnes 2.

[00:03:11] Speaker 06:
What do you think Judge Davila meant by his order that said,

[00:03:23] Speaker 06:
and not dismissed.

[00:03:24] Speaker 06:
I forget exactly how he said it, but he said, struck me as maybe some claims are dismissed in part, and some claims are not dismissed.

[00:03:32] Speaker 06:
I mean, it's confusing.

[00:03:33] Speaker 00:
The way I interpret it, Your Honor, is that he found that two of the theories, hosting and advertising and other

[00:03:41] Speaker 00:
the related activities that the platforms engage in were barred by Section 230.

[00:03:47] Speaker 00:
That applies to all the claims.

[00:03:49] Speaker 00:
And then the second prong where he said that he didn't dismiss was this question of the in-app payment processing.

[00:03:59] Speaker 00:
And that is exactly what this court in Dirof said is inappropriate, focusing in on function and saying that that one function is not protected by Section 230.

[00:04:12] Speaker 00:
And there in Dirof, it was illegal drug transactions.

[00:04:15] Speaker 00:
And the plaintiff had pointed to recommendations and notifications that put drug users together.

[00:04:21] Speaker 00:
And this court held, no, Section 230 does not allow this picking through the functions.

[00:04:25] Speaker 00:
It's the 10,000 duck bites that the court talked about in Roommates.

[00:04:28] Speaker 00:
So just stepping back, every one of these claims under every state law is focused on the hosting, promotion, and collecting of a fee.

[00:04:38] Speaker 01:
But don't we need an analysis of what the state law claims?

[00:04:41] Speaker 01:
actually require proof of what the basis of the duty is.

[00:04:44] Speaker 01:
I mean, how do we know which claims fall into which theory, which claim

[00:04:52] Speaker 01:
But it requires, every single one in the cases requires an analysis of the elements of the state law claim.

[00:04:59] Speaker 00:
No, Your Honor, for purposes of this appeal, we are assuming that plaintiffs are correct, that the developer conduct would be illegal under every state law.

[00:05:09] Speaker 00:
We don't think that's correct, but we're assuming it.

[00:05:12] Speaker 00:
And the question is, if it is illegal, can these companies be sued, consistent with section 230,

[00:05:19] Speaker 01:
You're painting in a very high brush.

[00:05:21] Speaker 01:
I think you're saying that the gambling would be illegal, but we're talking about the claims that plaintiffs have brought against you, the many specific causes of action based on specific state law

[00:05:36] Speaker 00:
Correct, Your Honor.

[00:05:37] Speaker 00:
Every single claim, including the RICO claim and every single claim under every state law, it's all focusing on the same conduct.

[00:05:44] Speaker 00:
The hosting of the casino games and the in-app purchasing process for purchasing the virtual chips, which are more content, so it's the dissemination of content.

[00:05:54] Speaker 00:
and they're being treated as publishers.

[00:05:55] Speaker 00:
Likewise, the chips unlock more content, so what they're attacking, they have different labels, they have different state laws, but every claim is premised on the same content.

[00:06:05] Speaker 00:
If you look at pages 30 and 31 of their brief, and then pages 39 and 41, they give away the entire case.

[00:06:12] Speaker 00:
In pages 30 and 31, they say,

[00:06:14] Speaker 00:
Chart in-app purchases can be fine under certain circumstances for a subscription, for a newsletter, but here they're focusing on the fact that there's virtual chips for casino gambling, a certain type of content.

[00:06:28] Speaker 00:
That's exactly what this Court has said over and over again is protected by Section 2.

[00:06:32] Speaker 06:
Let me ask you another question, Mr. Boutrous.

[00:06:34] Speaker 06:
Suppose, hypothetically speaking only, suppose we agree with what Judge Davila did.

[00:06:42] Speaker 06:
the case.

[00:06:42] Speaker 06:
Does that mean the case goes forward on all claims, or would you come back and try and knock out individual claims?

[00:06:48] Speaker 00:
It would go forward, Your Honor, on all claims, but the two theories that the court below found were not viable under Section 230 because they challenged

[00:06:58] Speaker 00:
They treated the companies as publishers would be out of the case.

[00:07:02] Speaker 00:
So they would be the plaintiffs would be limited to arguing that the in-app purchasing component with respect to every state law and and Rico That's the basis of their claim and your honor that this court has over and over again in dire off in roommates and

[00:07:18] Speaker 00:
in Perfect 10, which involved online payment processing, has said Section 230 protects the platforms for allowing publication and disseminating information, even where there's a fee that they charge and they receive.

[00:07:35] Speaker 00:
That's the claim.

[00:07:36] Speaker 00:
That's the whole claim here that they're left with.

[00:07:39] Speaker 00:
And the judge was entitled under the federal rules to rule out certain theories.

[00:07:43] Speaker 00:
This Court did the same thing, has done that same thing in Kimsey and

[00:07:47] Speaker 00:
Barnes and other cases.

[00:07:49] Speaker 00:
So the judge said, look, this activity.

[00:07:51] Speaker 04:
You know, when you say the district judge had that right, well, in the Rule 16 process, a judge can look at something and try to narrow a case, but it doesn't end up in an appealable order at that point.

[00:08:02] Speaker 04:
That's the concern I have.

[00:08:03] Speaker 00:
This wouldn't be an appeal board, except that Judge Davila, who was very thorough, very careful, went through all this court's cases, said this was a thorny, complex issue.

[00:08:15] Speaker 00:
Plaintiffs argue that this court's decision in HomeAway gives them a victory.

[00:08:20] Speaker 00:
It doesn't.

[00:08:21] Speaker 00:
It was completely different.

[00:08:22] Speaker 00:
It was off platform.

[00:08:24] Speaker 00:
Well, kind of back to my point.

[00:08:25] Speaker 00:
Yes.

[00:08:26] Speaker 04:
What about a right to amend?

[00:08:29] Speaker 04:
multiple claims here, but the right to amend doesn't go away, or?

[00:08:33] Speaker 00:
You know, I think here it would be futile because the conduct of this complaint from start to finish, they walked right into a wall of section 230.

[00:08:42] Speaker 00:
It's all about the casino content, the casino games, and the virtual chips.

[00:08:47] Speaker 00:
It's like black letter law in this circuit, and this is the leading circuit on section 230, that those theories are barred as is the remaining theory on in-app

[00:08:57] Speaker 00:
purchasing payments and I will leave the rest of my time.

[00:09:00] Speaker 00:
I guess I do still have a little time left.

[00:09:02] Speaker 00:
I'll keep going.

[00:09:03] Speaker 06:
So on the second theory, why did Judge Davila get it wrong?

[00:09:09] Speaker 00:
But Judge Zavala relied on Homeway, which is a case that's easily distinguishable.

[00:09:15] Speaker 00:
There, the Santa Monica ordinance, in the words of this court, and the court reiterated this in Dirof, was the ordinance did not require monitoring or analysis of any of the third party content.

[00:09:28] Speaker 00:
It only covered the unlicensed booking transactions that could be in the, the platforms could check the registry of the Santa Monica

[00:09:38] Speaker 00:
to see whether properties were registered.

[00:09:43] Speaker 00:
And this court emphasized there was no requirement of monitoring the third party content, even looking at the third party content.

[00:09:50] Speaker 00:
And it wasn't a claim that the third party content was illegal.

[00:09:53] Speaker 00:
Flip side of this case, that's exactly their claim.

[00:09:56] Speaker 00:
They claim that the- Which claims?

[00:09:58] Speaker 00:
Every single claim, Your Honor.

[00:10:01] Speaker 01:
How are we supposed to know without a claim by claim analysis?

[00:10:04] Speaker 00:
Because, Your Honor, if you look at it, every claim is the same.

[00:10:08] Speaker 00:
I think Judge Gabala... I've looked at the complaint.

[00:10:10] Speaker 01:
They're not all the same.

[00:10:11] Speaker 00:
They're the same in terms of the core elements of the claims, which are hosting the casino games, allowing the purchase of the virtual chips, dissemination of more content.

[00:10:24] Speaker 01:
And that's how to look... They're facts, but those are not the legal obligations at issue.

[00:10:28] Speaker 01:
in every claim.

[00:10:29] Speaker 00:
Every claim that they claim, they're focusing on, would impose a duty of the platforms to monitor, to exclude certain third-party content, or not charge for it, and that's what Section 230 says.

[00:10:42] Speaker 01:
Where is that analysis and Judge DeMilla's opinion?

[00:10:44] Speaker 00:
Well, I think when he eliminated the two theories, that's what he was focusing on, that they were focused on the hosting, advertising, other activities.

[00:10:54] Speaker 00:
So I think he correctly got that point right, that the claims are fundamentally pinned on this hosting of the casino games and the purchasing of the content.

[00:11:05] Speaker 00:
That's all this court has to focus on.

[00:11:07] Speaker 00:
It wipes out the entire case.

[00:11:08] Speaker 01:
I think you maybe need to.

[00:11:09] Speaker 00:
Yes.

[00:11:10] Speaker 00:
I don't want to monopolize.

[00:11:20] Speaker 02:
May it please the court, Fred Rowley Jr.

[00:11:22] Speaker 02:
for Google.

[00:11:23] Speaker 02:
I'd like to pick up on a point that Mr. Boutros made, because I do think that the plaintiff's claims and all of the claims fundamentally do run up against a wall of precedent in this court and courts nationwide.

[00:11:38] Speaker 02:
Really, the plaintiff's claims end up resting on a distinction about how platforms charge for third-party content that's just irrelevant to Section 230.

[00:11:49] Speaker 02:
The plaintiffs don't dispute at this point.

[00:11:52] Speaker 02:
On appeal, they concede that offering and hosting the apps, that that's publication.

[00:11:57] Speaker 02:
Their answering brief says on page 31, if all the platforms did was put the casino apps up in their app stores, that would be publishing.

[00:12:08] Speaker 02:
And the plaintiffs had to make that concession because the law is clear that when a platform offers someone else's content and the apps are content here,

[00:12:19] Speaker 02:
It's engaged in publishing within the meaning of Section 230.

[00:12:23] Speaker 02:
But the law is equally clear in this court and in courts across the country that platforms don't lose Section 230 immunity by charging money for offering and publishing the apps.

[00:12:35] Speaker 06:
Well, they say that the casino, the virtual gambling, I guess you'd want to call it.

[00:12:41] Speaker 06:
They say, like, take California, for example, they just say it's illegal.

[00:12:45] Speaker 02:
Well, Your Honor, think about dry off, right?

[00:12:48] Speaker 02:
Dyroth.

[00:12:49] Speaker 02:
Dyroth involved alleged drug dealing that was taking place on the platform.

[00:12:55] Speaker 02:
What Section 230 is concerned about is content and whether what an internet service provider is doing

[00:13:02] Speaker 02:
is publishing someone else's content.

[00:13:05] Speaker 02:
And there's no question, but on the plaintiff's own allegations, that's what's happening here.

[00:13:09] Speaker 01:
But in HomeAway, the court said, you know, you can leave those postings up when the ordinance isn't regulating the content.

[00:13:17] Speaker 01:
You just can't process the transaction.

[00:13:20] Speaker 01:
Yes, Your Honor.

[00:13:21] Speaker 01:
So what if one of these many state law claims at issue is just saying there's no issue with the publication, they just can't process the in-app purchase?

[00:13:30] Speaker 02:
But Your Honor, these claims are all about content.

[00:13:34] Speaker 02:
They're only about content.

[00:13:35] Speaker 02:
Content isn't incidental.

[00:13:38] Speaker 02:
Content is the entire point.

[00:13:40] Speaker 02:
And that's true whether the court focuses on virtual chips, as the plaintiffs have tried to do on appeal, or whether the court actually looks at the complaint, because the complaint mounts a broader challenge to the apps themselves.

[00:13:54] Speaker 02:
It's content and third party content either way.

[00:13:57] Speaker 02:
So if you focus on the virtual chips,

[00:13:59] Speaker 02:
They themselves are content because they're visually depicted and they constitute information.

[00:14:06] Speaker 02:
But there's another point in which the virtual chips are content, and this is very important.

[00:14:11] Speaker 02:
They unlock the content that is the apps.

[00:14:15] Speaker 02:
On the plaintiff's own allegations, the virtual chips are how a user plays the apps.

[00:14:21] Speaker 02:
They specifically allege that they are essential to hosting an operation of the social casino games.

[00:14:27] Speaker 02:
I would point in the Google complaint

[00:14:29] Speaker 02:
to paragraphs 58 to 62.

[00:14:33] Speaker 02:
And what they allege is that these chips are essential to play the game.

[00:14:37] Speaker 02:
At paragraph 62, they say the purchase chips extend gameplay.

[00:14:43] Speaker 02:
So these chips are not just content in and of themselves, but they're content because they are bound up with the apps, which are also third-party content.

[00:14:52] Speaker 02:
So what does the plaintiff's claim, what do all the claims end up resting on?

[00:14:56] Speaker 02:
They rest on this distinction

[00:14:59] Speaker 02:
between how the social casino apps allegedly charge for access to the games and how other platforms might do it.

[00:15:09] Speaker 02:
The plaintiffs don't dispute, they actually concede that there are at least some ways for social casino apps to charge users to access the apps that would constitute publishing.

[00:15:23] Speaker 02:
They actually say that, and I'll quote here from page 31

[00:15:29] Speaker 02:
of their answering brief, they say that an app could, I'll try to find the quotation here, they say that the app, this is at page 31, offering a subscription or selling a newspaper is quintessentially publishing conduct.

[00:15:51] Speaker 02:
And so it wouldn't matter if a newspaper were charging for individual newspapers.

[00:15:56] Speaker 02:
It wouldn't matter if a newspaper were charging for

[00:15:59] Speaker 02:
subscriptions, what would matter is it's publishing because they're still publishing content.

[00:16:05] Speaker 02:
And the same is absolutely true of the social casino apps.

[00:16:09] Speaker 02:
How do we know?

[00:16:10] Speaker 02:
Because on page 31 of the brief, they acknowledge putting up an advertisement for a social casino website, even if there were a charge to do so, that's publication.

[00:16:21] Speaker 02:
And so they're saying, well, if you use an advertising model, that's publication.

[00:16:28] Speaker 02:
But because these social casino apps charge on a pay-to-play basis, they charge for in-app content.

[00:16:36] Speaker 02:
That's somehow not publication.

[00:16:39] Speaker 02:
That distinction is just irrelevant.

[00:16:40] Speaker 01:
I understand your argument is that literally every single claim raised in this complaint rests on these issues.

[00:16:48] Speaker 01:
But where is that analysis in the district court's order?

[00:16:52] Speaker 02:
Well, Your Honor, the district court exercised its broad discretion to sequence the issues

[00:16:58] Speaker 02:
that would be presented by the party's motion to dismiss.

[00:17:02] Speaker 02:
And as a lot of courts do, the district court had the 230 issues briefed first before the merits issues.

[00:17:12] Speaker 01:
So we have case law saying that we cannot issue an advisory opinion, and this procedure for interlocutory appeal isn't meant to essentially certify legal questions to this court.

[00:17:22] Speaker 01:
So why isn't this appeal barred by that?

[00:17:26] Speaker 02:
Your Honor, I think that the district court properly acknowledged and properly recognized that this is a controlling issue of law, and it is a Heartland 1292b situation, because if this court reverses on the second theory, the payment processing theory, if it reverses on that, the case is over.

[00:17:49] Speaker 02:
And so I think that this is exactly the kind of situation

[00:17:54] Speaker 02:
where a district court properly considers Section 1292B review.

[00:17:59] Speaker 02:
And I think it is significant that Judge Davila, Sue Esponte, undertook the 1292B analysis and certified the issues.

[00:18:10] Speaker 02:
Yes, Judge Pius?

[00:18:11] Speaker 06:
Mr. Allen, let me ask you this.

[00:18:13] Speaker 06:
When Judge Davila gets around to applying his theories, he goes through the cases and then he gets

[00:18:24] Speaker 06:
to application of the theories to the complaint.

[00:18:29] Speaker 06:
And he's talking about his second theory on page 33.

[00:18:36] Speaker 06:
And he says, he references Gonzalez in Home Away.

[00:18:41] Speaker 06:
And then he says, likewise here, plaintiffs seek to impose liability for the platform's processing of unlawful transactions for unlawful gambling.

[00:18:54] Speaker 06:
That was the reference to bookie type kind of activity.

[00:18:59] Speaker 06:
What's wrong with that?

[00:19:01] Speaker 02:
Your Honor, what's wrong with it is that the only transactions that are being challenged here are for content.

[00:19:09] Speaker 02:
The virtual chips are content.

[00:19:11] Speaker 02:
The apps themselves are content.

[00:19:14] Speaker 02:
We are not talking about off-platform, off-internet things, as in HomeAway, which involve transactions.

[00:19:21] Speaker 02:
When you talk about content, you're talking about within the apps.

[00:19:25] Speaker 02:
Yes, Your Honor, the apps.

[00:19:27] Speaker 02:
but also the virtual chips.

[00:19:29] Speaker 02:
All of it is content.

[00:19:30] Speaker 02:
Well, the chips only occur within the app, is that correct?

[00:19:33] Speaker 02:
Yes, Your Honor, but they're bound up with the app itself, which is content, because the plaintiffs allege that the chips are essential to play the app.

[00:19:42] Speaker 02:
But even if you take the chips on their own, if you just segregate them out, they're still content.

[00:19:48] Speaker 02:
They're information within the meaning of Section 230.

[00:19:53] Speaker 02:
They tell the player what the resources they have, the resources that are available to play the game.

[00:19:58] Speaker 02:
So any way you cut it, whether you start the analysis with the app or whether as the plaintiffs do an appeal, you focus on the virtual currency, you end up in the, or the virtual chips, you end up in the same place.

[00:20:10] Speaker 02:
And so I think that's where Judge Davila kind of lost the analysis or lost its way in that the court treated the payments as though they were almost for

[00:20:20] Speaker 02:
gambling in real life when they're only for content.

[00:20:23] Speaker 02:
The content isn't incidental.

[00:20:25] Speaker 02:
The content is the whole point.

[00:20:28] Speaker 02:
And that makes the case fundamentally different from both HomeAway and Gonzalez, which at the end of the day involve payments or transactions off platform and off the internet.

[00:20:40] Speaker 02:
But there's another point, and this is very important, and that is that HomeAway, in that case, the website could comply with the Santa Monica City ordinance

[00:20:50] Speaker 02:
without having to engage in monitoring and monitor the content.

[00:20:53] Speaker 02:
And here, the monitoring would be quite extensive.

[00:20:57] Speaker 02:
You would not only have to monitor whether the micro payments, and that's what these are.

[00:21:01] Speaker 02:
These are payments sometimes in dollars and cents.

[00:21:04] Speaker 02:
You'd have to monitor the micro payments not only for specific social casino apps, you'd have to find those social casino apps.

[00:21:12] Speaker 02:
But the plaintiffs allege that not all the games within the app are illegal.

[00:21:17] Speaker 02:
And so you'd have to, in addition,

[00:21:20] Speaker 02:
to segregating out or culling the social casino apps, you'd have to find the micropayments for specific games within the app.

[00:21:28] Speaker 02:
And we're talking about millions of players and millions of transactions.

[00:21:32] Speaker 02:
That's exactly the kind of editorial judgments parsing things that Congress was concerned about in section 230.

[00:21:40] Speaker 02:
So we submit that the district court got that part of his analysis wrong and that theory, the payment processing theory has to be

[00:21:50] Speaker 02:
the analysis of that has to be reversed.

[00:21:52] Speaker 03:
Good morning.

[00:22:06] Speaker 03:
May it please the court?

[00:22:08] Speaker 03:
In their briefs and argument today, Google and Meta and Apple in their briefs have made very clear they've got a policy preference for

[00:22:20] Speaker 03:
light regulation on what they do.

[00:22:23] Speaker 03:
And it's a fine view to have, but I'm really struggling to figure out what it has to do with this case or with Section 230.

[00:22:31] Speaker 03:
What we're doing here is interpreting a statute, 47 USC 230 C-1.

[00:22:36] Speaker 03:
And we heard a lot today about content over and over again, that the chips are content, that the apps are content.

[00:22:44] Speaker 03:
But this court has repeatedly explained that

[00:22:49] Speaker 03:
It's not enough, and this is an exact quote from HomeAway, it is not enough that third party content is involved.

[00:22:54] Speaker 03:
Internet brands rejected use of a but for test that would provide immunity under the CDA just because third party content's involved.

[00:23:04] Speaker 03:
That last part's not part of the quote.

[00:23:08] Speaker 03:
And so I'm really struggling here to figure out

[00:23:11] Speaker 03:
what the argument is beyond, well third party content is involved, therefore CDA 230 must be involved.

[00:23:17] Speaker 03:
That was the reasoning that this court rejected in the roommates.com mock opinion and hasn't adopted since.

[00:23:27] Speaker 03:
The question we're trying to answer here is whether we have pleaded ourselves out of court.

[00:23:33] Speaker 03:
by setting out a case that necessarily seeks to hold these defendants liable for publishing conduct, that is publishing of third-party content.

[00:23:46] Speaker 03:
And I haven't heard today any reason why we can transform what is fundamentally

[00:23:51] Speaker 03:
gambling activity that is brokering transactions for gambling into something that a publisher does.

[00:23:59] Speaker 03:
In Barnes, the court explained that we're not going to do intellectual gymnastics to figure out what is and what isn't publishing.

[00:24:07] Speaker 03:
We know what publishing is, and it's not running a casino.

[00:24:11] Speaker 04:
Council, would you then be conceding your opposing counsel's position that amendment would be futile?

[00:24:19] Speaker 04:
In other words, if you pleaded yourself out of court, is there a way you could plead a claim that would be viable?

[00:24:26] Speaker 04:
Assume we accept the position that 230 defeats your current claims.

[00:24:32] Speaker 04:
Would you be able to amend to plead a plausible claim?

[00:24:36] Speaker 03:
I understand the question.

[00:24:40] Speaker 03:
If you accept the premise that brokering a gambling transaction is publishing, which is what I think is in dispute and what we disagree with here, then the question would be, okay, well then can we plead enough to demonstrate that the content being published is not, in fact, third-party content, but is

[00:24:58] Speaker 03:
content that we can attribute to the defendants here.

[00:25:01] Speaker 03:
And that would be, Judge Davila found that we didn't plead enough in our complaint to get there.

[00:25:08] Speaker 03:
But that doesn't mean that we can't, and it doesn't mean that we shouldn't have another opportunity to do so.

[00:25:12] Speaker 03:
And then that's, in fact, the reason for our cross-appeal here.

[00:25:19] Speaker 03:
You know, we didn't see the need to appeal whether or not our complaint sufficiently set out that theory, because our understanding of what a district court is doing when it dismisses a theory on a motion to dismiss, which I think probably under rule eight, you're not really supposed to do.

[00:25:34] Speaker 03:
But we understand what that means.

[00:25:36] Speaker 03:
We understand that means I'm not going to let you take discovery on this.

[00:25:40] Speaker 03:
And that's fine.

[00:25:41] Speaker 03:
We understand district courts, he could have done it with a discovery order.

[00:25:44] Speaker 03:
And it's not really a problem unless

[00:25:47] Speaker 03:
As Your Honor pointed out previously, there's an interlocutory appeal.

[00:25:51] Speaker 03:
And then we end up with a law of the case problem, right?

[00:25:53] Speaker 03:
And we're back potentially in the district court trying to figure out, OK, what did the Ninth Circuit intend to allow to go forward and whatnot?

[00:26:01] Speaker 03:
And so I guess, Harvard.

[00:26:02] Speaker 03:
So let me ask you this.

[00:26:03] Speaker 06:
If he hadn't certified this case under 1292B and the case were to go forward, would any claims be out?

[00:26:16] Speaker 03:
I don't think so.

[00:26:17] Speaker 03:
No, I think the argument... Well, you didn't say... Well, you don't know.

[00:26:21] Speaker 03:
The argument the defendants made was not that any particular claim... The way that they decided to move to dismiss was not that any particular claim didn't meet the standard, but that we had fully set out the affirmative defense.

[00:26:35] Speaker 03:
And so at this point, no, the defendants didn't argue for the dismissal of any particular claim.

[00:26:41] Speaker 03:
So if we would agree with Judge Davila, all claims just go forward.

[00:26:46] Speaker 03:
Well, the way that Judge Davila had set up the case management, my expectation would be that there would be another round of briefing on the pleadings that would address the state-by-state questions.

[00:26:57] Speaker 03:
And so I don't know that they would all go forward.

[00:27:00] Speaker 06:
What would those motions to dismiss look like?

[00:27:04] Speaker 03:
Well, I suppose it would be up to the defendants if they wanted to file them.

[00:27:07] Speaker 06:
Well, you must have thought about it.

[00:27:09] Speaker 03:
Sure.

[00:27:09] Speaker 03:
What I would expect to see is that, you know, different, you know, obviously these cases are under different states laws, you know, some of which have more interpretation than others, some of which state supreme courts have ruled upon.

[00:27:20] Speaker 03:
And so I would certainly expect to see arguments specific to the statute saying, you know, what you have alleged does or does not meet a particular state statute.

[00:27:28] Speaker 03:
So for example.

[00:27:29] Speaker 03:
I think in Washington, the question is relatively clear.

[00:27:32] Speaker 03:
This court has held that the type of game, and in fact some of the exact games alleged here, are gambling.

[00:27:39] Speaker 03:
So I think that may be the end of that in terms of Washington, but there may be other states where the law is less developed, or whether it's less clear.

[00:27:49] Speaker 03:
And they may have arguments on that front.

[00:27:53] Speaker 06:
Do you think we should require Judge Davila to be more specific?

[00:27:57] Speaker 03:
I think that this problem is created by allowing an interlocutory appeal that is effectively just seeking to apply the settled law of this court to the facts of a particular case.

[00:28:14] Speaker 03:
If this were an ordinary appeal after a final judgment, we wouldn't have that problem, because the questions that your honor is asking would have been answered already.

[00:28:26] Speaker 03:
you know, 1292 B is really just, you know, it designed to get at these, you know,

[00:28:33] Speaker 03:
The Seventh Circuit called them pure questions of law, things that can be answered a little bit more in the abstract and that are new questions on which there can be disagreement.

[00:28:43] Speaker 03:
And Judge Tavolai, I think correctly, didn't really identify such room for disagreement on the pure questions of law here.

[00:28:49] Speaker 03:
This court has set out in recent years a pretty clear framework on Section 230 and on how we go about figuring out a three-part test that's

[00:29:03] Speaker 03:
grounded pretty closely in the language of 230C1.

[00:29:06] Speaker 03:
And the question here is really, is gambling publishing?

[00:29:11] Speaker 03:
And the answer is no.

[00:29:14] Speaker 03:
But even if somebody could come to a different conclusion, well, they've gone.

[00:29:19] Speaker 06:
Let me just have one last question on this line.

[00:29:25] Speaker 06:
Suppose we were to agree with the defendant's appellants.

[00:29:31] Speaker 06:
Does that end your case completely?

[00:29:33] Speaker 06:
That 230, that Judge Davila got it wrong on the second theory, and they're right, and 230 applies, does that, is your case gone?

[00:29:44] Speaker 03:
No, I don't think so, Your Honor.

[00:29:47] Speaker 03:
You know, this Court's... Then what's left?

[00:29:49] Speaker 03:
Well, this Court's precedent is...

[00:29:51] Speaker 03:
quite clear that ordinarily plaintiffs should be granted at least one opportunity to amend their complaint unless it would be futile to do so.

[00:29:59] Speaker 03:
And we haven't, this is on amended complaints, this was our first chance at it.

[00:30:04] Speaker 03:
And if the answer is, well, this is publishing, well, then yes, we should have the opportunity to add additional allegations

[00:30:11] Speaker 03:
to rise to the level of plausibility that this is in fact the defendant's content and not third party content that they can be held liable for because of their close relationship with these games.

[00:30:26] Speaker 03:
Now the district court found that we could go forward on the transaction theory without having to do that and there was no reason for us to appeal that particular determination here because we

[00:30:39] Speaker 03:
under Rule 8, we only need to have one viable legal theory.

[00:30:44] Speaker 03:
And the district court found that we had one.

[00:30:48] Speaker 03:
But if, as Your Honor says, the court disagrees, then we should at least get another chance to

[00:30:53] Speaker 03:
to make the allegations that are required under whatever new standard is set out.

[00:30:59] Speaker 03:
But I would say that it would be a pretty big departure from the way that this court has approached Section 230 in recent years.

[00:31:06] Speaker 03:
And I think the Homeaway case is directly on point here.

[00:31:11] Speaker 03:
The only distinction I heard was that, well, that has to do with real life bookings.

[00:31:19] Speaker 03:
But Homeaway, it didn't turn on that question.

[00:31:22] Speaker 04:
Did the panel in HomeAway also say that that procedure could function without the website?

[00:31:28] Speaker 04:
It didn't really require.

[00:31:31] Speaker 03:
The same is true here.

[00:31:33] Speaker 03:
The defendants here, they like to bundle together their hosting of the apps and the payment processing because it is a very lucrative thing to do.

[00:31:42] Speaker 04:
Thirty percent.

[00:31:43] Speaker 03:
Yeah, it's a lot of money.

[00:31:45] Speaker 03:
I will say microtransactions.

[00:31:48] Speaker 03:
Microtransactions have added up, we've got affidavits attached to our complaints here, hundreds of thousands of dollars.

[00:31:54] Speaker 03:
So micro or not, we're talking big money.

[00:31:59] Speaker 03:
But in terms of HomeAway, I think that the...

[00:32:11] Speaker 03:
the monitoring question and it's as much the same as it is here.

[00:32:17] Speaker 03:
So in Homeway, the defendants, sorry, the plaintiffs, the platform in that case said, well, our website won't work if we don't allow these bookings.

[00:32:27] Speaker 03:
We can't have a website full of unbookable listings.

[00:32:32] Speaker 03:
They don't have to change anything other than no longer entering into and continuing this financial relationship where they broker transactions for the app developers.

[00:32:43] Speaker 03:
Part of the activity of the publication doesn't have to change at all.

[00:32:46] Speaker 03:
They can continue to offer the apps in the app store.

[00:32:49] Speaker 03:
They can continue to put them up, host them, publish them.

[00:32:54] Speaker 03:
They can do all of that without processing, brokering, being involved at all in the transactions.

[00:33:01] Speaker 03:
other side of it is true too.

[00:33:03] Speaker 03:
So you could imagine a scenario where the apps are hosted somewhere else.

[00:33:09] Speaker 03:
They're not on the app store.

[00:33:10] Speaker 03:
They're hosted by the developers themselves, but that wouldn't stop a third party, one of these defendants even, from brokering the transactions if they wanted to enter into that financial relationship.

[00:33:24] Speaker 06:
Let me ask you, along the same vein, but just a little bit more concrete and specific.

[00:33:31] Speaker 06:
Sure.

[00:33:31] Speaker 06:
If you turn for a moment, I just got the Google complaint on my iPad.

[00:33:35] Speaker 06:
I just brought it up on my iPad, the Google complaint.

[00:33:38] Speaker 06:
If you go to count one of the complaint, you want to see the count one of the complaint, Google?

[00:33:43] Speaker 06:
I've got the Apple one, but they're close.

[00:33:46] Speaker 06:
They're almost identical.

[00:33:51] Speaker 06:
So tell me,

[00:33:55] Speaker 06:
Take what Judge Davila did and apply it specifically to Count 1, which is the unfair competition claim under California law.

[00:34:10] Speaker 06:
What would you have to prove under Judge Davila's in order to prevail?

[00:34:16] Speaker 03:
Sure.

[00:34:18] Speaker 03:
So Count 1 is the unfair and unlawful business practices.

[00:34:23] Speaker 03:
It says that these slot machines are unlawful, that they are illegal slot machines under California law.

[00:34:33] Speaker 03:
That's the first hurdle.

[00:34:35] Speaker ?:
Right.

[00:34:36] Speaker 03:
You'd have to prove that.

[00:34:37] Speaker ?:
Right.

[00:34:38] Speaker 06:
OK.

[00:34:39] Speaker 03:
Next.

[00:34:40] Speaker 03:
and that, you know, we also have, or you have proved that it's a lottery, there's a couple of ways that we can get it, but effectively, that it is unlawful conduct, which is one of the ways that you can state a UCL claim.

[00:34:59] Speaker 03:
And so, you know, the question is, well, are they by,

[00:35:05] Speaker 03:
being part of by brokering the transactions for this illegal slot machine which is either an illegal lottery or an illegal slot machine are they engaging in.

[00:35:15] Speaker 03:
Unlawful conduct.

[00:35:18] Speaker 03:
And if they are and the other.

[00:35:20] Speaker 03:
requirements of the UCL on that, then we're entitled to the injunctive relief provided by the UCL.

[00:35:25] Speaker 06:
And they're not involved in any publishing, quote unquote, as we've used the term?

[00:35:30] Speaker 03:
I don't think that is a necessary requirement to demonstrate entitlement to relief under that section.

[00:35:36] Speaker 03:
Well, that would be their defense.

[00:35:37] Speaker 03:
They might say, well, no, you have to prove that.

[00:35:39] Speaker 03:
And we would say, no, we don't.

[00:35:42] Speaker 03:
The fact that I just stated to you, brokering the illegal gambling transactions and tweeting the other requirements,

[00:35:48] Speaker 03:
without getting into suffering an injury in fact, lost money or property as a result of the conduct and brokering the transactions, those would be enough.

[00:36:00] Speaker 01:
What conduct specifically could they no longer engage in if this claim count was sustained?

[00:36:09] Speaker 03:
They've got to stop brokering gambling transactions.

[00:36:12] Speaker 03:
They have to stop being part of the

[00:36:17] Speaker 03:
the financial transaction that is for illegal gambling.

[00:36:22] Speaker 01:
They just couldn't process the payment.

[00:36:26] Speaker 03:
Right.

[00:36:26] Speaker 03:
They can't take the payment.

[00:36:31] Speaker 03:
they're acting as a middleman, as a broker, right?

[00:36:34] Speaker 03:
They get a request for a financial transaction, they process the credit card payment, they tell the app developer, this payment has been processed for this amount of money and this amount of chips has been purchased, right?

[00:36:46] Speaker 03:
That kind of brokering activity, which is kind of part of one larger gambling transaction.

[00:36:53] Speaker 03:
The chips are, we allege that they're substantially all used for gambling and that they're gone in days.

[00:37:00] Speaker 01:
Assuming hypothetically we agreed, how do we know that's true for every single count alleged in this complaint?

[00:37:07] Speaker 03:
I don't think

[00:37:10] Speaker 03:
I guess I have two answers to that.

[00:37:12] Speaker 03:
One is that in the way that the defendants move to dismiss here, I don't think the court has to get there because the question is only as a general matter by alleging this.

[00:37:23] Speaker 03:
Have we established their affirmative defense?

[00:37:26] Speaker 03:
If the answer to that is no, then the motions to dismiss should be denied.

[00:37:31] Speaker 03:
I think perhaps what you're referring to is the question you were asking earlier, avoiding an advisory opinion and, you know, don't we have to get a real answer to go through all of these counts?

[00:37:43] Speaker 03:
You know, and I think we raised this concern at the petition stage.

[00:37:50] Speaker 03:
And I guess what I would say to that is if district courts are going to continue to

[00:38:00] Speaker 03:
try to look at cases like this and knock out section 230 first, then it may be useful to say, well, no, that's, you know, it doesn't work that way, the affirmative defense hasn't been established.

[00:38:14] Speaker 03:
you know by by way of this you know by by just sort of referring to third party content and saying well these depend on third party content therefore you know therefore you lose you know but I I otherwise if the question is

[00:38:30] Speaker 03:
Well, should we send it back for further development or hold off or try to do the analysis ourselves?

[00:38:37] Speaker 03:
I think the answer to all of those questions is, well, no, that doesn't really make a lot of sense on this interlocutory appeal.

[00:38:43] Speaker 03:
I think then the answer would be, well, then this isn't a great case for an interlocutory appeal because it doesn't allow the court to do the analysis that's needed.

[00:38:52] Speaker 03:
And perhaps even the analysis that's needed isn't pure legal question, but

[00:38:57] Speaker 03:
flying the settled law of this circuit to the particular facts of cases.

[00:39:02] Speaker 04:
Well, go ahead.

[00:39:03] Speaker 04:
If we dismiss these appeals and don't address the merits, what do you envision will happen next in the district court?

[00:39:10] Speaker 04:
You've got two MDLs and one class action, correct?

[00:39:15] Speaker 03:
I mean, they're all class actions, but yes.

[00:39:18] Speaker 03:
I would imagine that

[00:39:21] Speaker 03:
we would see attempts to dismiss the case on, you know, count by count.

[00:39:30] Speaker 03:
Would you move for a leave to amend?

[00:39:33] Speaker 03:
If the appeal were simply dismissed.

[00:39:36] Speaker 03:
Correct.

[00:39:37] Speaker 03:
I don't think we'd need to if the district court, you know, if the district court asked us to.

[00:39:42] Speaker 04:
Well, in the alternative, would, might you say we think we're right on this, but alternatively, if we're not?

[00:39:47] Speaker 03:
Of course.

[00:39:48] Speaker 03:
Of course.

[00:39:48] Speaker 03:
If we, if, if we got a motion to dismiss and it's that, you know, it was on state-specific claims, yes, certainly our motion, our response to the motion to dismiss would be we think we state a claim, but if we don't, of course, then we'd ask to amend.

[00:40:02] Speaker 06:
So at the motion to dismiss stage, we take all the well-pleaded allegations as true and ask whether or not on these facts is it reasonably plausible that you could prevail.

[00:40:19] Speaker 06:
There's a claim there.

[00:40:21] Speaker 06:
And Mr. Bustro said, OK, yes, yes, yes.

[00:40:23] Speaker 06:
We assume that all the allegations are true.

[00:40:27] Speaker 06:
You assume there's gambling or whatever.

[00:40:30] Speaker 06:
130, 230 bars all those claims.

[00:40:38] Speaker 06:
Why shouldn't we answer that question?

[00:40:47] Speaker 03:
I think that the court certainly

[00:40:51] Speaker 03:
I think the court, as it could, it is possible to answer the question.

[00:40:57] Speaker 03:
Whether it is wise to do so on an interlocutory basis, initially we said that that wasn't a good idea.

[00:41:04] Speaker 03:
Now there's been a year and a half worth of delay, so it might not be so bad to have an answer on the question.

[00:41:14] Speaker 03:
you know, whether the court can answer that question depends on whether there's jurisdiction under Section 1292B, right?

[00:41:20] Speaker 03:
That is, whether that particular question, Your Honor, is just asked, whether it is actually a legal question that is open to, you know, that there's substantial disagreement on or reasonable, you know, minds could disagree on.

[00:41:36] Speaker 03:
And I think

[00:41:37] Speaker 03:
the district court didn't really identify any basis for that kind of disagreement.

[00:41:43] Speaker 03:
The district court said, well, on the facts of this, maybe a judge could have gone the other way.

[00:41:49] Speaker 03:
But the court doesn't say, well, there's an unresolved legal question.

[00:41:53] Speaker 03:
I think that the legal question is pretty well answered, which is, well, is what we're accusing them of doing publishing, or is it not publishing?

[00:42:06] Speaker 03:
You know, this Horton Homeway, you know, a transaction to reserve vacation rentals is not publishing.

[00:42:13] Speaker 03:
Even if it's bundled up together with publishing, there was some discussion about monitoring.

[00:42:19] Speaker 03:
But in that case, the platforms made the same argument that the defendants made here.

[00:42:24] Speaker 03:
They said, well, we're going to have to monitor everything on this website in order to make it work.

[00:42:29] Speaker 03:
And the court said, well, no.

[00:42:31] Speaker 03:
You might choose to in order to keep processing the transactions the way you'd like to do it.

[00:42:38] Speaker 03:
But you don't have to.

[00:42:40] Speaker 03:
That's a business decision.

[00:42:41] Speaker 03:
And the court doesn't concern itself with whether someone might choose to engage in monitoring as a business decision.

[00:42:48] Speaker 03:
you know, as a result of potential liability for something that's not publishing.

[00:42:53] Speaker 03:
And at the end of the day, again, you know, like booking a rental house, gambling is not publishing.

[00:42:58] Speaker 03:
It is not what publishers do.

[00:43:01] Speaker 03:
Lemon, a similar argument, right?

[00:43:03] Speaker 03:
You know, in Lemon, the question was this, you know, a product feature that had been created that displayed a speedometer on someone's screen.

[00:43:12] Speaker 03:
Well, that's content.

[00:43:13] Speaker 03:
It didn't exist outside the app, right?

[00:43:15] Speaker 03:
It's content, content, content.

[00:43:18] Speaker 03:
But it didn't matter because the cause of action, what was ultimately the grounds for liability, was product design.

[00:43:26] Speaker 03:
And so it didn't matter that the product was an app and what was being used was an app.

[00:43:32] Speaker 03:
It's ultimately not a publishing cause of action.

[00:43:36] Speaker 03:
And then in Dairouf,

[00:43:39] Speaker 03:
You know, the question was not the way that it was framed previously.

[00:43:46] Speaker 03:
In that case, it was the functionality in question was recommending particular content, that is, curating content, deciding which, you know, the thing that they were being held liable for was whether or not particular content was being shown.

[00:44:05] Speaker 03:
And that is publishing, not

[00:44:09] Speaker 03:
you know, a transaction for gambling.

[00:44:14] Speaker 06:
So you have a cross appeal.

[00:44:16] Speaker 06:
Yes.

[00:44:18] Speaker 06:
Did you want to challenge, did you want to address any of Judge Davila's rulings on the two other theories that he rejected?

[00:44:27] Speaker 03:
The only reason that we brought the cross appeal was not to put us in the position where we're asking the court to affirm

[00:44:35] Speaker 03:
the district court's opinion on the other two theories and then wind up with law of the case that causes problems later on.

[00:44:43] Speaker 03:
And so I think, as I was saying earlier, what we think is that really you shouldn't be dismissing legal theories on a Rule 12 motion, right?

[00:44:54] Speaker 03:
If one legal theory states a claim under rule eight, well, then the correct

[00:45:03] Speaker 03:
outcome of the rule 12 motion is denied.

[00:45:06] Speaker 03:
And again, it's usually not an issue.

[00:45:10] Speaker 03:
We understand that, you know, a district court wants to signal to us which theories we should go forward on and which theories we shouldn't normally really

[00:45:18] Speaker 03:
Normally, it would be a formality, and the only problem is created by the interlocutory appeal, right?

[00:45:24] Speaker 03:
My concern was, well, we come up, it gets affirmed, we go back, we learn more facts.

[00:45:31] Speaker 03:
Maybe in discovery, maybe not in discovery.

[00:45:33] Speaker 03:
There's lots of other ways we can learn things, right?

[00:45:35] Speaker 03:
And we learn a new set of facts, and that opens up one of those other theories in a way that wasn't open before, and what we hear is, well, no, the Ninth Circuit already said that theory's out.

[00:45:47] Speaker 03:
And it just seemed strange to us to have that debate potentially in the future in the district court when we could simply just ask the panel here to make a decision on that question and then it's answered either way and we know what to do.

[00:46:05] Speaker 03:
uh... and that's that is the only reason.

[00:46:09] Speaker 01:
I understand your concern would be if you discovered more facts, you could develop some of your claims, you seek leave to amend and it's essentially denied because there's some kind of ruling that that theory is out of the case.

[00:46:21] Speaker 03:
And it's affirmed in the district court, perhaps of the opinion that you know it has been taken out of his hands and yes that's that's kind of the

[00:46:32] Speaker 03:
That's the core concern.

[00:46:33] Speaker 03:
I will say in order to come to the conclusion that the defendants set forth in their jurisdictional brief was that it's totally OK to dismiss theories and to affirm that.

[00:46:43] Speaker 03:
That would create a circuit split with the Seventh Circuit, a pretty clear one, I think, and a pretty unnecessary one.

[00:46:50] Speaker 03:
There's just no reason to go there.

[00:46:58] Speaker 04:
Well, Council, that has somewhat triggered a question in my mind to set this out for you.

[00:47:04] Speaker 04:
I can imagine that the clients in this setting are concerned about getting an answer at the least cost as quickly as possible, and they have a Ninth Circuit panel that they think is poised to make the decision, and they're confident in their positions, all right?

[00:47:20] Speaker 04:
But no one's really talking about the broader issue of why we're even concerned about the scope of interlocutory appeal here.

[00:47:28] Speaker 04:
It's a matter of allocation of power, or allocation of authority, as between the district court and the court of appeals.

[00:47:35] Speaker 04:
It's a statute that's intended to avoid unnecessary burdens on the court of appeals.

[00:47:42] Speaker 04:
So would you address that?

[00:47:43] Speaker 04:
I mean, I think the arguments have all been

[00:47:47] Speaker 04:
parochial in the sense that it's all about my client.

[00:47:49] Speaker 04:
I suppose it should be.

[00:47:50] Speaker 04:
Their clients are paying the fees.

[00:47:52] Speaker 04:
But what's your position on what we would be doing to the jurisprudence if we do make a ruling in this setting on the merits?

[00:48:00] Speaker 03:
I think it creates serious problems, both in terms of the burden on the Court of Appeals and in terms of the delay on district court proceedings.

[00:48:13] Speaker 03:
Those are the two major factors as to why interlocutory appeals are disfavored.

[00:48:20] Speaker 03:
The general rule of the federal judiciary hasn't changed.

[00:48:24] Speaker 03:
We don't like interlocutory appeals.

[00:48:27] Speaker 03:
We don't like piecemeal appeals.

[00:48:28] Speaker 03:
They're generally bad.

[00:48:30] Speaker 03:
narrow circumstances we recognize, maybe they can be helpful.

[00:48:33] Speaker 03:
And our position from the beginning has been, well, this isn't really one of those cases.

[00:48:38] Speaker 03:
First, because of the delay.

[00:48:40] Speaker 03:
The second time we were asked the question, the delay had already happened.

[00:48:44] Speaker 03:
And I do think delay is generally not just bad for my clients, but bad for the administration of justice.

[00:48:51] Speaker 03:
We want to keep the courts moving.

[00:48:53] Speaker 03:
And then in terms of allocation of resources, yeah, I think that is a serious concern, right?

[00:49:00] Speaker 03:
The court might come to a conclusion on the merits and then we amend our complaint or the facts change or anything like that and then, you know, what did we spend 18 months doing and was this a good use of appellate resources?

[00:49:14] Speaker 03:
It really would be hard to say that it is.

[00:49:18] Speaker 03:
And so I think, again, maybe it's a sunk cost fallacy, but I would certainly hope not to have wasted the briefing and the time that we've spent here.

[00:49:27] Speaker 03:
And so one way to resolve that, as we suggested in our jurisdictional brief, is the court could determine that there's no jurisdiction here, while at the same time saying, using the opportunity to set out, OK, here is why this wasn't a good

[00:49:45] Speaker 03:
use of a 1292B process and in that could also help us.

[00:49:54] Speaker 03:
whether 1292B is appropriate does in part depend on whether the question is disputed.

[00:50:00] Speaker 03:
And so, of course, the benefit for my clients is perhaps we could get a little bit of an answer on that point.

[00:50:05] Speaker 04:
It's dicta, but it's Supreme Court dicta.

[00:50:09] Speaker 03:
Right, exactly.

[00:50:09] Speaker 03:
Well, I'm not sure that it would be dicta, actually, Your Honor, because one of the jurisdictional factors is, do we have a question on which there is a substantial disputed question of law?

[00:50:22] Speaker 03:
you're allowed to look into the merits to the extent that it's necessary to determine jurisdiction.

[00:50:27] Speaker 03:
And so that would be one way to do that.

[00:50:31] Speaker 03:
It certainly is a way that presumes that I win on a whole lot of issues.

[00:50:37] Speaker 03:
So perhaps I'm careful in suggesting that.

[00:50:41] Speaker 06:
I was just going to say this, this judge Davila made the decision to certify Suvaspati on his own.

[00:50:48] Speaker 06:
Nobody suggests there was nothing in the briefing in the district court that suggested, you know, you might, whatever you do, you might certify.

[00:50:56] Speaker 03:
It was suesponte and it followed some discussion that was at least questioned perhaps the extent to which Section 230 has been applied and echoed some of the concerns that have come up in some other courts about how

[00:51:22] Speaker 03:
how far out of the original intent of the statute and the language of the statute, Section 230 has gotten.

[00:51:32] Speaker 03:
Perhaps there is pure question of law on that particular issue that has come up, even as high up as the Supreme Court.

[00:51:43] Speaker 03:
I don't think resolving that set of questions is necessary to resolving this case, so perhaps this isn't the best time to resolve that.

[00:52:15] Speaker 05:
May it please the court.

[00:52:16] Speaker 05:
Mark Perry for Apple, and on behalf of all the defendants.

[00:52:20] Speaker 05:
The court has asked a number of questions about the interlocutory appeal, and if I could start with that.

[00:52:26] Speaker 05:
This is a statutory immunity.

[00:52:29] Speaker 05:
It prevents the lawsuit from proceeding if it applies.

[00:52:33] Speaker 05:
And immunities are typically taken first in litigation.

[00:52:35] Speaker 05:
And in fact, in the district court, the plaintiffs agreed to have the 230 immunity case decided first and in isolation.

[00:52:43] Speaker 05:
This court has approved that methodology before.

[00:52:45] Speaker 05:
The roommates.com case, for example, assumed that the conduct pleaded violated the federal housing laws and proceeded to decide the immunity question on that assumption, even though on remand it turned out that there was no violation at all on the actual allegations of the complaint.

[00:53:00] Speaker 05:
That's how this case proceeded as well.

[00:53:02] Speaker 05:
Judge Davila did certify it to Espante, I think, recognizing that the district courts could use guidance in this area.

[00:53:09] Speaker 05:
There are two cases, Coffee and Taylor, one Google, one Apple, that appear to conflict on the question whether processing of in-app currency payments is covered by 230.

[00:53:19] Speaker 05:
This court has never directly ruled on that, although the court has applied immunity

[00:53:24] Speaker 05:
in at least three cases to payment processing regimes, including, importantly, the second half of roommates.com, which included the premium pay for content which the court held was immune.

[00:53:36] Speaker 05:
So Judge Davila recognized the conflict among the circuits, in fact, to the district courts.

[00:53:39] Speaker 05:
In fact, there's a case in the Western District of Washington applying the cater case that is being held pending this court's decision in this case, I am told.

[00:53:46] Speaker 05:
And so it is important to the guidance of the district courts.

[00:53:49] Speaker 05:
We also had Gonzalez.

[00:53:51] Speaker 05:
This case came up.

[00:53:52] Speaker 05:
The Supreme Court took Gonzalez.

[00:53:53] Speaker 05:
We all thought we were gonna get some guidance, and the guidance we got was the Ninth Circuit gets to figure it out.

[00:53:58] Speaker 05:
So we're back here, and here we are.

[00:54:03] Speaker 05:
Judge Sung, you and others asked about the sort of claim-by-claim analysis as opposed to the holistic analysis.

[00:54:10] Speaker 05:
Again, this is a product of how it was briefed in the district court.

[00:54:13] Speaker 05:
The plaintiffs never presented a claim-by-claim analysis.

[00:54:16] Speaker 05:
They presented the holistic analysis by theory, and there was a reason for that.

[00:54:21] Speaker 05:
The complaint is a host.

[00:54:23] Speaker 01:
Your motion to dismiss.

[00:54:24] Speaker 05:
It was our motion to dismiss.

[00:54:25] Speaker 05:
In responding to our motion to dismiss, if you look at theirs, which in the Apple ER starts at ER 45, does not contain what one often sees as the claim by claim section.

[00:54:34] Speaker 05:
It just refers to them in gross.

[00:54:36] Speaker 05:
And there's a reason for that.

[00:54:38] Speaker 05:
This complaint is a hosting complaint.

[00:54:40] Speaker 05:
The word hosting or its cognates appears more than three dozen times in the complaint.

[00:54:46] Speaker 05:
But the plaintiffs, in response to the motion to dismiss, abandoned their hosting claims.

[00:54:51] Speaker 05:
and they only had what they called then a bookie claim, bookie doesn't appear in the complaint, and what they call here a brokering claim, brokering doesn't appear in the complaint.

[00:54:59] Speaker 05:
So they shifted their claims and they didn't defend them on the way they were drafted in the complaint, but they didn't seek to amend either.

[00:55:06] Speaker 05:
Judge Piaz, you asked about the UCL claim in particular, count one.

[00:55:10] Speaker 05:
Injury, of course, is an element of UCL claim.

[00:55:13] Speaker 05:
Injury, in fact, is an element of all of these state law claims.

[00:55:15] Speaker 05:
And the plaintiffs in this complaint chose to have a standalone section on injury.

[00:55:20] Speaker 05:
It's paragraphs 103 to 108 in the Apple complaint.

[00:55:23] Speaker 05:
And it's got, the other two have the same thing.

[00:55:27] Speaker 05:
That section proves, establishes, the section 230 precludes all of these claims.

[00:55:35] Speaker 05:
Paragraph 104 in the Apple complaint says, these players have been injured

[00:55:40] Speaker 05:
by Apple's hosting, promoting, and facilitating of the apps.

[00:55:46] Speaker 05:
And 106 says, as long, and I'm quoting, by the way, as long as Apple continues to offer and promote the apps and continues to facilitate the sale of the chips, the harms will persist.

[00:55:59] Speaker 05:
Those are their injury allegations for all claims.

[00:56:01] Speaker 05:
Article 3 in statutory standing require injury.

[00:56:05] Speaker 05:
Hosting, promoting, and facilitating continue to offer and promote and facilitate the sale of chips.

[00:56:11] Speaker 05:
That is their case.

[00:56:14] Speaker 05:
We now know that hosting and promoting are immune.

[00:56:17] Speaker 05:
They've conceded it.

[00:56:19] Speaker 05:
Facilitating also is.

[00:56:21] Speaker 05:
And this is the bridge, if you will, Judge Zung, to the merits, unless the court would like to hear more on interlocutory appeal, because the whole case comes down to whether facilitating the sale of these virtual chips is also publishing content.

[00:56:34] Speaker 05:
Publishing is a business.

[00:56:36] Speaker 05:
Publishers sell books, newsletters, podcasts, games, and everything else for money.

[00:56:41] Speaker 05:
That's what publishing is.

[00:56:43] Speaker 05:
This is a monetization strategy.

[00:56:46] Speaker 05:
And when Judge Sung, you asked my friend, what would the platforms have to do if the plaintiffs won?

[00:56:54] Speaker 05:
The response, and I wrote this down verbatim, stop processing gambling transactions.

[00:57:00] Speaker 05:
That was his answer.

[00:57:03] Speaker 05:
That shows 230 immunity for two independent but related reasons.

[00:57:08] Speaker 05:
First, the transaction is in content.

[00:57:12] Speaker 05:
These virtual chips are third party content.

[00:57:15] Speaker 05:
They are not created by the platforms.

[00:57:17] Speaker 05:
They are created by the developers.

[00:57:19] Speaker 05:
Processing a transaction in information created by another information content provider, to use this direct language of section 230, is protected against state law regulation.

[00:57:31] Speaker 05:
That is all a virtual chip transaction is.

[00:57:36] Speaker 05:
Second.

[00:57:37] Speaker 06:
Even if, can I just stop you right here?

[00:57:39] Speaker 06:
Of course.

[00:57:40] Speaker 06:
Even if the underlying transaction is illegal?

[00:57:44] Speaker 05:
Well, that's the second answer.

[00:57:45] Speaker 05:
Thank you, Judge Paez.

[00:57:46] Speaker 05:
He put gambling into that sentence, right?

[00:57:49] Speaker 05:
Unlawful gambling transactions.

[00:57:51] Speaker 05:
In the context of an app on the internet, how do we know?

[00:57:55] Speaker 05:
How does anyone know?

[00:57:56] Speaker 05:
The court, the defendants, the plaintiffs for that matter know

[00:58:00] Speaker 05:
that a transaction is quote unquote unlawful.

[00:58:05] Speaker 05:
And it is only, only by examining the content of the app.

[00:58:11] Speaker 05:
Let's take the Double Down Casino, which is their poster child for this illegal slot, right?

[00:58:16] Speaker 05:
They say that 182 games within that app are slot machine games, that 21 of them are card games, and that, I don't remember, one or two of them are bingo games.

[00:58:26] Speaker 05:
There is no allegation that the card games or the bingo games are unlawful.

[00:58:30] Speaker 05:
So if a user, a consumer were to download that app, which is content, and the downloading and the hosting are concededly protected, and then purchases a chip, which is content, which has nothing to do, by the way, with what goes on inside the game, so that's just a pure content transaction, that was my first answer, my friends say that it becomes unlawful if that player chooses

[00:58:54] Speaker 05:
to use that chip to put a spin on one of the slot games as opposed to a marker on a bingo game or a bet on a card game.

[00:59:03] Speaker 05:
Now, how do the platforms know what that user does with the chip?

[00:59:09] Speaker 05:
We don't right now.

[00:59:10] Speaker 05:
The only way we possibly could would be to monitor every in-app action by every user of every app on the platforms.

[00:59:22] Speaker 05:
For Apple, worldwide, that's well over a billion users and well over two million apps.

[00:59:27] Speaker 05:
It's an unimaginable number.

[00:59:29] Speaker 05:
Google and Meta, it's an equivalent number, right?

[00:59:32] Speaker 05:
Between the three platforms, it is a significant majority of the world population.

[00:59:36] Speaker 05:
But this theory would require the platforms to go in and monitor every time somebody has a chip in their coin bank, wallet, piggy bank, whatever the app calls it, how they use it.

[00:59:47] Speaker 05:
Is it lawful or unlawful?

[00:59:48] Speaker 05:
And by the way, it gets worse.

[00:59:50] Speaker 05:
Because it may be, under the allegations, unlawful in Washington state, but lawful in Florida.

[00:59:57] Speaker 05:
So the platforms would have to not only monitor each use of a virtual chip, but where that user was located, which IP address it's running through.

[01:00:06] Speaker 05:
And it would go on and on from there.

[01:00:07] Speaker 05:
This is why monitoring here is not an optional aspect.

[01:00:13] Speaker 05:
And to come back to the stop processing transactions, my friends conceded in their brief.

[01:00:21] Speaker 05:
that charging for a subscription is quintessential publishing activity.

[01:00:26] Speaker 05:
A chip is just a subscription.

[01:00:28] Speaker 05:
A chip is a per spin subscription rather than a per week or per month subscription.

[01:00:32] Speaker 05:
And it has a direct analogy in real world publishing.

[01:00:35] Speaker 05:
You can subscribe to a paper for a year or for a month, or you can go down to the corner still, some corners, and plug a quarter into the machine and get one paper.

[01:00:44] Speaker 05:
And a token gets you one spin or 10 tokens or whatever, how they've developed it.

[01:00:49] Speaker 05:
It is just a monetization structure that has content dependent, but it doesn't take it outside the realm of immunity because publishing activity includes all of these things.

[01:01:01] Speaker 05:
A related point on that, your honor, is that changing the content of the game

[01:01:07] Speaker 05:
The developer has set it up to work this way with these virtual chips.

[01:01:11] Speaker 05:
Stopping that transaction changes the content of the game.

[01:01:15] Speaker 05:
That is an editorial function.

[01:01:17] Speaker 05:
That is a publishing function under every one of this court's cases.

[01:01:20] Speaker 05:
And the remedy that my friends stood to this lectern and told this court that they want would require that.

[01:01:28] Speaker 05:
We talked a lot about HomeAway.

[01:01:29] Speaker 05:
I think my friends have already discussed it.

[01:01:31] Speaker 05:
The difference between the real world and content is immense.

[01:01:34] Speaker 05:
It's actually in the statute.

[01:01:36] Speaker 05:
Information provided by another information content provider.

[01:01:40] Speaker 05:
The chips meet that definition.

[01:01:42] Speaker 05:
The properties in Santa Monica do not.

[01:01:45] Speaker 05:
It is as simple as that.

[01:01:46] Speaker 05:
They are not information.

[01:01:48] Speaker 05:
They are properties.

[01:01:49] Speaker 05:
This is information through and through.

[01:01:53] Speaker 05:
And finally, I see my time is running out.

[01:01:56] Speaker 05:
My friend stood up and said, we're talking here about policy preferences.

[01:02:00] Speaker 05:
Your Honor, Congress makes the policy.

[01:02:03] Speaker 05:
Section 230 includes several very specific exemptions, including for child sexual abuse material, including for payment processing for child sexual abuse material.

[01:02:14] Speaker 05:
That was the Doe versus Backpage case that the Congress effectively overruled by adopting that exemption.

[01:02:20] Speaker 05:
There is no gambling exemption.

[01:02:22] Speaker 05:
from friends on the other side are asking this court to do Congress's job and set up a new exemption to Section 230, because applying Section 230 as written requires dismissal of this complaint in its entirety.

[01:02:35] Speaker 05:
By the way, without amendment, there is no way this could be amended to get past 230, because it is content on top of content on top of content.

[01:02:46] Speaker 05:
Judge Pius.

[01:02:46] Speaker 06:
Yeah, let me ask you.

[01:02:50] Speaker 06:
So the certification order, when I first looked at it, I found it troubling because we're dealing with theories and not claims.

[01:03:00] Speaker 06:
And as counsel was saying a moment ago, we're not fans of interlocutory appeals.

[01:03:11] Speaker 06:
I mean, it's disruptive to what goes on in the district court.

[01:03:19] Speaker 06:
Would it be out of question to simply ask Judge Davila whether he intended, as a result of his order, that all claims would be allowed to go forward?

[01:03:40] Speaker 05:
Your Honor, with respect, I think Judge Davila answered that question for us on page 36 of the Motion of Dismiss Order, which is at ER 38 of the Apple record, quote,

[01:03:49] Speaker 05:
If the Ninth Circuit reverses this court as do plaintiff's second theory of liability, which is payment processing, which is all that's left, the case is resolved in its entirety.

[01:04:00] Speaker 05:
Right, so he understands that if this court recognizes that payment processing is content, is covered, then the case is resolved in its entirety.

[01:04:09] Speaker 05:
So he answered it that way.

[01:04:11] Speaker 05:
I would add a different, or a related answer, George Paias, and this was really fleshed out in the Google brief, which is if we look at the actual complaint, and again, I'm pointing to paragraph 104 as a paradigm example, it says, hosting, promoting, and facilitating.

[01:04:27] Speaker 05:
It's a three-legged stool.

[01:04:29] Speaker 05:
We now know that two of the legs are precluded.

[01:04:32] Speaker 05:
We now know they didn't amend their complaint.

[01:04:35] Speaker 05:
We now know that if the court were to simply stand on those allegations, that means the whole thing is bad.

[01:04:41] Speaker 05:
It doesn't mean some part of it is good.

[01:04:46] Speaker 05:
was trying to triangulate it, including because of this court's then prevalent ruling in Gonzalez.

[01:04:52] Speaker 05:
But the real answer is if a plaintiff pleads a clearly precluded complaint, then it is precluded.

[01:04:59] Speaker 05:
The claims are precluded because this was a hosting complaint through and through.

[01:05:02] Speaker 05:
And one of the artificialities before the court is that by focusing only on payment processing,

[01:05:10] Speaker 05:
It ignores that payment processing is actually one aspect of the much broader publishing relationship that the platforms have with the developers.

[01:05:19] Speaker 05:
Because it includes hosting.

[01:05:21] Speaker 05:
It includes updating.

[01:05:22] Speaker 05:
It includes reviewing.

[01:05:23] Speaker 05:
It includes promoting.

[01:05:24] Speaker 05:
It includes marketing.

[01:05:25] Speaker 05:
It includes access.

[01:05:26] Speaker 05:
It includes de-publishing if they break the rules.

[01:05:29] Speaker 05:
It includes various monetization structures.

[01:05:31] Speaker 05:
And all of those things ought to be considered together.

[01:05:33] Speaker 05:
And if you consider them together, it's publishing.

[01:05:35] Speaker 05:
It's through and through.

[01:05:37] Speaker 05:
There is nothing other than third party content involved here.

[01:05:39] Speaker 05:
So that I worry there's an artificiality there that Judge Davila's approach wrote.

[01:05:44] Speaker 05:
But the answer then would be to recognize the whole thing is precluded.

[01:05:47] Speaker 05:
Rather, we would submit than to send it back.

[01:05:56] Speaker 05:
Thank you, Your Honor.

[01:05:57] Speaker 01:
Council.

[01:06:01] Speaker 01:
Thank everyone for their helpful arguments today.

[01:06:03] Speaker 01:
This matter is submitted for decision and with that today's sitting is adjourned.