East Coast Test Prep LLC v. Allnurses.com, Inc. ( 2020 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 18-3197
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East Coast Test Prep LLC, doing business as Achieve Test Prep; Mark Olynyk
lllllllllllllllllllllPlaintiffs - Appellants
v.
Allnurses.com, Inc.; David R. Smits, as Administrator of the Estate of Brian Short;
Lisa Dukes; Jennifer Moeller; Uhura Russ; ABC Companies 1-10; John Does, 1-10
lllllllllllllllllllllDefendants - Appellees
____________
Appeal from United States District Court
for the District of Minnesota
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Submitted: October 17, 2019
Filed: August 19, 2020
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Before COLLOTON, WOLLMAN, and KELLY, Circuit Judges.
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WOLLMAN, Circuit Judge.
East Coast Test Prep LLC (Test Prep), sells test-preparation services to
individuals seeking nursing degrees. Allnurses.com, Inc. (Allnurses), operates a
website for nurses and nursing students that allows registered users to open discussion
threads, post comments, and “like” other users’ comments. After certain unfavorable
comments were posted about Test Prep, the company and Mark Olynyk, its owner,
filed suit against several defendants, including Allnurses, its founder Brian Short, and
user Uhura Russ.1 As relevant here, Test Prep alleged claims sounding in defamation,
contract, and fraud, as well as other theories of liability asserting that Allnurses had
induced users to post negative comments. The district court2 granted Allnurses’s
motion for judgment on the pleadings and dismissed the suit against Russ for lack of
personal jurisdiction.
Test Prep argues that the district court erred in concluding that the
Communications Decency Act precluded its trade libel claim against Allnurses for
comments posted by third parties on Allnurses.com. Test Prep also challenges the
district court’s determination that the complaint’s factual allegations did not plausibly
state claims related to breach of contract and fraud, as well as the district court’s
alternative decision to grant summary judgment on the fraud-based claims. Test Prep
argues that Russ had waived any objection to personal jurisdiction and that the case
against her should thus have been transferred, not dismissed. We affirm.
I. Background
Allnurses describes its website as “the collective voice of the nursing
community, supporting the profession by providing a place where nurses can network,
share and learn from their peers.” To participate in the online discussion, users must
register with Allnurses. The registration page states, “Your participation implies full
acceptance with our Terms of Service.” The terms of service provide that Allnurses
“promote[s] the idea of lively debate,” but that users “are not allowed to post libelous
information.” The terms of service also warn that any illegal or inappropriate posts
1
Except where the distinction matters, we will refer to Test Prep and Olynyk
collectively as “Test Prep” and to Allnurses and Short collectively as “Allnurses.”
2
The Honorable John R. Tunheim, Chief Judge, United States District Court for
the District of Minnesota.
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“will be taken down immediately.” Allnurses reserves the right to delete or close
problematic threads, to edit or remove posts, and to disable the account of any user for
failing to comply with the terms or for “any reason deemed appropriate by the
administration for the safety and good of the community.”
An Allnurses.com user opened a thread entitled “Achieve Test Prep.... anyone?”
on the Excelsior College online nursing forum in February 2013. Excelsior College
offers nursing degree programs and allows its students to earn credit by examination.
Like Test Prep, Excelsior College offers test-preparation programs to help students
prepare for exams.
Several users posted comments on the “Achieve Test Prep.... anyone?” thread,
which Lisa Dukes moderated.3 The comments discussed the advantages and
disadvantages of using Test Prep’s services in conjunction with Excelsior College’s
registered nursing program. Two sets of comments remain at issue in this case: that
Test Prep’s services were redundant or obsolete and that Test Prep was under federal
investigation.
In August 2014, a user posted that Test Prep provided a valuable service,
explaining that the classes were well structured and taught by experienced registered
nurses. User JustBeachyNurse responded that Test Prep’s services would be rendered
redundant when Excelsior College began requiring students to take its test-preparation
classes. User monkeyhq reiterated the sentiment, opining that third-party test-
preparation services “for Excelsior Exams will be obsolete by July 1, 2015” and that
3
Dukes is a longtime member of the Allnurses.com community and serves as
a senior moderator. As of March 13, 2015, Dukes had written thirty-two articles for
publication on the website and had posted 12,822 comments. For purposes of this
appeal, Allnurses has conceded that Dukes acted as its agent when she moderated the
“Achieve Test Prep.... anyone?” thread.
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paying for such services would be “a total waste of your investment.” Dukes “liked”
monkeyhq’s post.
A Test Prep employee then posted that Test Prep would discontinue its test-
preparation services for nursing, but would continue to offer services for general
education courses. Other posts similarly indicated that Test Prep would no longer
enroll students in its nursing test-preparation classes. The Test Prep employee later
emailed the help desk, stating that she worked for Test Prep and asking if she could
participate in the discussion, notwithstanding the terms of service’s prohibition on
promoting or advertising. An Allnurses moderator responded that the employee’s
participation was acceptable.
On September 12, 2014, Olynyk posted in the “Achieve Test Prep.... anyone?”
thread under the username learning-is-good, sparking additional debate. Under the
username LadyFree28, Russ posted that Test Prep was “being investigated by the
federal government and is under a current lawsuit.” Russ noted that “there are too
many forums that have stated th[at] Achieve [Test Prep] ‘deceived’ them with their
practices.” Under the username duskyjewel, Jennifer Moeller also posted that Test
Prep was under federal investigation. The thread was closed to new comments on
September 16, 2014, because, according to an email from an administrator to Olynyk,
it contained misleading information and several members had complained. In
December 2014, another Test Prep employee registered as a user on Allnurses.com
and posted a comment in a different thread. Her comment was removed, as were the
identical comments she posted in the days that followed. Her account was later
disabled.
Test Prep filed suit in New Jersey state court. Allnurses removed the case to
federal district court and moved to dismiss for lack of personal jurisdiction. The case
thereafter was transferred to the District of Minnesota and discovery commenced.
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Acting pro se, Russ repeatedly moved to dismiss the complaint. She also filed a
counterclaim.
Test Prep moved to compel Allnurses to identify certain users, including
JustBeachyNurse and monkeyhq, and to disclose certain IP addresses. The magistrate
judge denied the motion, in part because the posts by JustBeachyNurse and monkeyhq
were not defamatory. The district court affirmed the magistrate judge’s order,
agreeing that JustBeachyNurse’s and monkeyhq’s statements were not false assertions
of fact, but rather expressed the opinion that a change in Excelsior College’s policy
would render Test Prep’s services redundant or obsolete.
Test Prep eventually filed a third amended complaint, which Allnurses
answered before moving for judgment on the pleadings. The district court determined
that Test Prep had failed to allege facts sufficient to hold Allnurses accountable for the
posts by JustBeachyNurse, monkeyhq, Russ, and Moeller. It thus dismissed the trade
libel claim against Allnurses. It also dismissed the claims sounding in contract and
fraud, determining that Test Prep had failed to allege facts sufficient to state plausible
claims for relief. The district court alternatively granted summary judgment to
Allnurses on the fraud claims. The remaining claims relevant on appeal were
dismissed as nonactionable.
After representing herself for more than a year and filing multiple documents,
Russ obtained pro bono legal representation in Minnesota. Her attorney moved to
dismiss the case for lack of personal jurisdiction. The district court granted the motion
and denied Test Prep’s conditional cross-motion to transfer the case to the Eastern
District of Pennsylvania, where Russ resides.
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II. Judgment on the Pleadings in Favor of Allnurses
We review de novo a district court’s grant of judgment on the pleadings under
the same standard that governs a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6). Noble Sys. Corp. v. Alorica Cent., LLC, 543 F.3d 978, 981 (8th
Cir. 2008). We therefore consider whether Test Prep has pleaded “enough facts to
state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). “Where a complaint pleads facts that are ‘merely consistent
with’ a defendant’s liability, it ‘stops short of the line between possibility and
plausibility of “entitlement to relief.”’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Twombly, 550 U.S. at 557).
A. Trade Libel Claim
Test Prep alleged in its trade libel claim that Allnurses had published false
allegations about Test Prep’s products, services, property, or business. “A plaintiff
alleging trade libel must prove publication of a matter derogatory to the plaintiff’s
property or business, of a kind designed to prevent others from dealing with him or
otherwise to interfere with plaintiff’s relations with others.” Patel v. Soriano, 848
A.2d 803, 834 (N.J. Super. Ct. App. Div. 2004); see Wilson v. Dubois, 29 N.W. 68,
68 (Minn. 1886) (“False and malicious statements, disparaging an article of property,
when followed, as a natural, reasonable, and proximate result, by special damage to
the owner, are actionable.”). The published statements must be false. See Patel, 848
A.2d at 835; Wilson, 29 N.W. at 68. Test Prep has not appealed the district court’s
determination that the “redundant” and “obsolete” posts by JustBeachyNurse and
monkeyhq were statements of opinion and not false statements. Thus, with respect
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to the trade libel claim, we consider only the posts by Russ and Moeller that Test Prep
was under investigation and had been sued by the federal government.4
Test Prep argues that the district court erred in entering judgment on the trade
libel claim on the basis of Section 230 of the Communications Decency Act, which
“immunizes providers of interactive computer services against liability arising from
content created by third parties.” Fair Hous. Council v. Roommates.com, LLC, 521
F.3d 1157, 1162 (9th Cir. 2008) (en banc) (footnote omitted); see 47 U.S.C.
§ 230(e)(3) (“No cause of action may be brought and no liability may be imposed
under any State or local law that is inconsistent with this section.”). The Act provides
that “[n]o provider or user of an interactive computer service shall be treated as the
publisher or speaker of any information provided by another information content
provider.” 47 U.S.C. § 230(c)(1). Allnurses is a provider of an interactive computer
service, Allnurses.com. Test Prep seeks to treat Allnurses as the publisher or speaker
of Russ’s and Moeller’s posts. The question presented is whether Test Prep has
pleaded facts sufficient to attribute those posts to Allnurses. See Jones v. Dirty World
Entm’t Recordings LLC, 755 F.3d 398, 408 (6th Cir. 2014) (“[I]f a website operator
is in part responsible for the creation or development of content, then it is an
information content provider as to that content—and is not immune from claims
predicated on it.”).
We conclude that Test Prep has failed to plausibly allege that Allnurses was the
“information content provider” of the posts by Russ and Moeller. The Act defines
“information content provider” as “any person or entity that is responsible, in whole
or in part, for the creation or development of information provided through the
Internet or any other interactive computer service.” 47 U.S.C. § 230(f)(3). The
complaint alleged only that Russ and Moeller were longtime users of Allnurses.com,
4
Test Prep also has not challenged the district court’s conclusion that—even if
Dukes’s “like” of monkeyhq’s post were viewed as a republishing, the “like” could
not be defamatory because monkeyhq’s post was not a defamatory statement.
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who frequently posted comments, and that Moeller stopped posting on the website
after Test Prep sent a demand letter to Allnurses. The complaint also referred to the
solicitation clause in the terms of service, which states that Allnurses may solicit and
pay users for articles or other content. Based on these facts, Test Prep claimed that
Russ and Moeller were paid to post and were “volunteers, employees, servants,
contractors or agents of Allnurses.” We conclude that the sum total of the complaint’s
factual allegations pleaded no more than a “sheer possibility” that Allnurses was
wholly or partly responsible for creating or developing Russ’s and Moeller’s posts.
See Iqbal, 556 U.S. at 678 (“The plausibility standard is not akin to a ‘probability
requirement,’ but it asks for more than a sheer possibility that a defendant has acted
unlawfully.” (quoting Twombly, 550 U.S. at 556)). Test Prep thus has failed to
plausibly allege that Allnurses was the “information content provider” with respect
to those posts. Compare Huon v. Denton, 841 F.3d 733, 742 (7th Cir. 2016)
(reversing the grant of the defendant’s motion to dismiss because “[r]ather than
asserting one or two standalone factual allegations concerning [the defendant’s]
control over comments, [the] complaint devotes over four pages to detailing [the
defendant’s] alleged activities”), with Kimzey v. Yelp! Inc., 836 F.3d 1263, 1269 (9th
Cir. 2016) (affirming the grant of the defendant’s motion to dismiss because the
plaintiffs had failed “to state the facts plausibly suggesting” that the interactive
computer service Yelp “fabricated content under a third party’s identity”).
B. Contract and Promissory Estoppel Claims
The complaint alleged that the terms of service constituted a contract between
Allnurses and its members, which include Olynyk as a registered user of
Allnurses.com, and that Test Prep was “an entity intended to benefit” from the
contract. According to the complaint, Allnurses breached the contract when it failed
to remove certain posts about Test Prep and when it prohibited Olynyk and others
from engaging in “lively debate” and from “disagree[ing] with anyone on any type of
subject.” The district court determined that the complaint did not allege facts in
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support of the contention that Test Prep was an intended beneficiary of the terms of
service, nor did it “properly allege[] that a contract was formed through the [terms of
service].” D. Ct. Order of Jan. 29, 2018, at 32. The district court also concluded that
Test Prep had failed to state a plausible claim for breach of the implied covenant of
good faith and fair dealing.
Test Prep has not challenged the district court’s determination that the company
was not an intended beneficiary of Allnurses’s terms of service, and the complaint
does not allege that the company itself was a party to the contract. In the absence of
any contractual relationship between Test Prep and Allnurses, there is no basis for the
complaint’s allegation that Allnurses had “certain obligations to [Test Prep] under the
[terms of service] of the [w]ebsite Allnurses.com, including without limitation, to take
down defamatory or ‘potentially libelous’ or ‘libelous’ information [and] defamatory
posts.” Test Prep’s separate claim for breach of the implied covenant of good faith
and fair dealing likewise fails, because the covenant “does not extend to actions
beyond the scope of the underlying contract.” In re Hennepin Cty. 1986 Recycling
Bond Litig., 540 N.W.2d 494, 503 (Minn. 1995)).5 We are thus left with the question
whether the complaint alleged facts sufficient to state a claim that Allnurses breached
a contract with Olynyk, who is both a registered user of Allnurses.com and a plaintiff
in this action.6
5
The district court applied Minnesota law in determining the contract-related
claims, and we will do so as well. Neither party has argued that the district court
should have applied New Jersey law.
6
Other Test Prep employees were registered users and thus may have entered
into a contract with Allnurses when they agreed to the terms of service, but those
individuals are not plaintiffs in this case. Accordingly—although the terms of service
allow Allnurses to remove posts and disable accounts—we need not decide whether
Allnurses breached the terms when it removed the repeated comments and disabled
the account of a Test Prep employee in December 2014.
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Olynyk argues that Allnurses breached the terms of service when it did not
“immediately tak[e] down libelous information” and when it closed the discussion
thread, thereby preventing him from correcting the false and derogatory statements
about Test Prep. The terms state, in relevant part:
You are not allowed to post libelous information about a person, school,
instructor, health care facility, or entity. Any post which is violative of
any law or is invasive of a person’s privacy will be taken down
immediately.
We promote the idea of lively debate. This means you are free to
disagree with anyone on any type of subject matter as long as your
criticism is constructive and polite.
Assuming that Allnurses’s terms of service constituted an offer that he accepted
when he registered on Allnurses.com, Olynyk has failed to plead facts sufficient to
establish any breach by Allnurses. “A breach of contract is a failure, without legal
excuse, to perform any promise that forms the whole or part of the contract.” Lyon
Fin. Servs., Inc. v. Ill. Paper & Copier Co., 848 N.W.2d 539, 543 (Minn. 2014). “[A]
breach of contract claim requires only that the promise at issue be part of the parties’
bargain.” Id.; see Baehr v. Penn-O-Tex Oil Corp., 104 N.W.2d 661,664-65 (Minn.
1960) (“[A] contract is a legally enforceable promise,” which is an assurance “that a
thing will or will not be done.”). Allnurses did not promise in the first quoted
paragraph to identify and immediately remove any and all potentially false statements.
Instead, it clearly disallowed users from posting libelous information and informed
them that illegal or inappropriate posts would be removed. Allnurses’s statement that
it “promote[s] the idea of a lively debate” was not a promise to keep its discussion
threads open, particularly in light of the provision that “[p]roblematic posts/threads
may be deleted or closed.” Olynyk’s breach of contract claims thus fails as a matter
of law. Because he made no additional arguments for reversal of judgment on his
claim for breach of the implied covenant of good faith and fair dealing, we have no
reason to separately consider that claim.
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Finally, we conclude that the district court properly granted judgment in favor
of Allnurses on the promissory estoppel claim. The complaint alleged that Allnurses
made “promises in the [terms of service] and through communications with Mark
Olynyk.” For the same reasons that the relevant terms of service do not constitute a
contractual obligation, they likewise do not constitute a “clear and definite” promise
sufficient to support Test Prep’s promissory estoppel claim. See Martens v. Minn.
Mining & Mfg. Co., 616 N.W.2d 732, 746 (Minn. 2000) (holding that a statement was
not sufficiently “clear and definite” to constitute an enforceable promise). Moreover,
Allnurses made no promises in its explanatory messages to Olynyk stating why the
thread had been closed, which constituted “the only communication [Test Prep]
allege[d] between Olynyk and Allnurses.” D. Ct. Order of Jan. 29, 2018, at 33.
C. Fraud Claims and Other Theories of Liability
Test Prep claimed that Allnurses committed common law misrepresentation and
violated the New Jersey and Minnesota Consumer Fraud Acts. See N.J. Stat. § 56:8-
2; Minn. Stat. § 325F.69. The complaint alleged that Allnurses held itself out to be
a fair and impartial forum that “promote[d] the idea of lively debate,” but failed to
disclose its relationship with Excelsior College and other advertisers. Test Prep
claimed that Allnurses used the forum to advance the interests of those advertisers, as
shown by Dukes’s like of monkeyhq’s post and by Allnurses’s actions in closing the
thread, removing certain posts by a Test Prep employee, and disabling that employee’s
account. We agree with the district court that these bare factual allegations do not
state common law or statutory claims for fraud that are plausible on their face.
Test Prep contends that the district court erred in converting Allnurses’s motion
for judgment on the pleadings to a motion for summary judgment with respect to the
fraud claims. Having decided that the district court properly granted judgment on the
pleadings on those claims, we need not decide whether its alternative disposition of
the fraud claims was appropriate. Moreover, we agree with the district court that Test
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Prep’s remaining claims—for vicarious, contributory, inducement, or acting-in-
concert liability—must be dismissed because they are “not independently actionable.”
D. Ct. Order of Jan. 29, 2018.
III. Dismissal for Lack of Personal Jurisdiction over Russ
Test Prep pleaded claims of defamation, trade libel, and fraud against Russ.
Proceeding pro se, Russ moved to dismiss, stating that there was “NO BASIS [for her]
being attached to the complaint; LadyFree28 is not an interested business or party
affiliated with AllNurses.com.” She also moved for a protective order and filed a
counterclaim. The purported counterclaim did not state a legally cognizable claim for
relief, but did state that Russ was a Pennsylvania resident, who had completed her
registered nursing studies at “a local university” and had held a nursing license in
Pennsylvania for eleven years. The filing also stated that she could not retain a lawyer
or find pro bono representation due to the “location of lawsuit and geographical
location.” Russ filed two additional pro se motions to dismiss, which reiterated the
factual allegations from her counterclaim. Russ’s third motion sought dismissal on
due process grounds, stating that Russ “does not live in Minnesota or New Jersey, nor
does business in either of the aforementioned states and has lived in Pennsylvania for
almost 30 years.” After Russ was finally able to secure pro bono legal representation,
her attorney moved for dismissal, arguing that the court did not have personal
jurisdiction over Russ and that venue in Minnesota was inappropriate.
The district court granted the motion, concluding that it lacked personal
jurisdiction over Russ and that she had not waived that defense. The court explained:
The core argument contained in each of Russ’s pro se pleadings may
fairly be summed up as follows: “Why am I being haled into court in
Minnesota? I have nothing to do with this dispute!” Although this
argument undoubtedly presents a merits challenge, Russ has raised
factual issues that implicate jurisdictional and venue challenges as well.
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D. Ct. Order of Aug. 9, 2018, at 8-9. The court denied Test Prep’s cross-motion for
transfer to the Eastern District of Pennsylvania.
Reviewing de novo, we conclude that the district court did not err in granting
Russ’s motion to dismiss for lack of personal jurisdiction. See Johnson v. Arden, 614
F.3d 785, 793 (8th Cir. 2010) (standard of review). We likewise conclude that Russ
did not waive the defense with her inartful pro se pleadings. Russ’s pro se
counterclaim did not state any legal basis for relief but rather explained that Russ—a
longtime Pennsylvania resident—was unable to defend herself in Minnesota. Russ’s
repeated pro se motions to dismiss were understandable in light of the sprawling
nature of the case and Test Prep’s multiple amendments of the complaint. We thus
agree with the district court’s characterization of Russ’s pleadings as constituting a
challenge to the location of the lawsuit. Cf. Alger v. Hayes, 452 F.2d 841, 844-45
(8th Cir. 1972) (holding that the defendant waived his defense of lack of personal
jurisdiction because his conduct did “not reflect a continuing objection to the power
of the court to act over the defendant’s person”).
Test Prep contends that the district court erred in denying its motion to transfer
the case against Russ to the Eastern District of Pennsylvania. It argues that the court
failed to consider whether the claims against Russ would be time barred if Test Prep
were required to file suit anew in Pennsylvania. Test Prep also argues that the court
erroneously concluded that Test Prep did not address whether transfer would be in the
interests of justice.
The record belies these arguments. In its motion to transfer and memorandum
in support of the motion, Test Prep did not explain that the statute of limitations had
run in Pennsylvania; nor did it set forth any substantive arguments regarding whether
the interests of justice required transfer instead of dismissal. Test Prep merely stated
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that “the Eighth Circuit requires courts to consider whether the case should be
transferred rather than dismissed” and cited cases to support that assertion. In light
of the scant argument Test Prep presented in its motion papers, we conclude that the
district court did not abuse its discretion in denying the motion to transfer.7 See
Everett v. St. Ansgar Hosp., 974 F.2d 77, 79 (8th Cir. 1992) (standard of review).
Conclusion
Having concluded that the district court did not err in granting Allnurses’s
motion for judgment on the pleadings, we need not decide whether the district court
erred in denying Test Prep’s motion to compel Allnurses to identify certain users and
to divulge certain IP addresses.
The judgment is affirmed.
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7
Test Prep raised additional arguments in response to Allnurses’s amicus brief
in support of Russ’s motion to dismiss. Even if the district court granted leave to file
these extraneous briefs, it was not required to address the arguments that they raised.
We decline to consider whether the district court erred when it considered the
merits of Test Prep’s case against Russ in denying the motion to transfer. We
conclude that the district court acted within its discretion to deny the motion to
transfer, regardless of whether Test Prep could prevail on its claims against Russ.
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