Case 3:20-cv-05222-JD Document 17 Filed 08/10/20 Page 1 of 20

1 JOHN C. ULIN (SBN 165524)

Email: julin@troygould.com
2 AMY NASHON STALLING (SBN 316353)
Email: astalling@troygould.com
3 TROYGOULD PC
1801 Century Park East, 16th Floor
4 Los Angeles, CA 90067-2367
Telephone: (310) 553-4441
5 Facsimile: (310) 201-4746

6 Attorneys for Plaintiff

MAFFICK LLC
7
8 UNITED STATES DISTRICT COURT

9 NORTHERN DISTRICT OF CALIFORNIA

10
11 MAFFICK LLC, a Delaware limited liability Case No. 3:20-cv-05222-JD
company,
12 REPLY BY PLAINTIFF MAFFICK, LLC IN
Plaintiff, SUPPORT OF EX PARTE APPLICATION FOR
13 TEMPORARY RESTRAINING ORDER AND
v. ORDER TO SHOW CAUSE RE
14 PRELIMINARY INJNUCITON
FACEBOOK, INC., a Delaware corporation,
15 and DOES 1-10, inclusive, Assigned to: Hon. James Donato

16 Defendants.

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1 TABLE OF CONTENTS
2 I. INTRODUCTION ............................................................................................................... 1

3 II. ARGUMENT ....................................................................................................................... 2

4 A. Maffick’s Requested TRO Would Not Be A Prior Restraint .................................. 2

5 B. Maffick Is Suffering Imminent And Irreparable Harm To Its Reputation And

6 Business Interests..................................................................................................... 4

7 C. Facebook’s Labeling Maffick As “Russia State-Controlled Media” Is Not A

8 Statement Of Opinion .............................................................................................. 7

9 D. The Actual Malice Standard Poses No Barrier To The Requested TRO ................ 9

10 E. Facebook’s Notice Is Unquestionably Defamatory ............................................... 10

11 F. Facebook’s Notice Is Actionable Under The Lanham Act And The UCL............ 11

12 G. Maffick’s Economic Interference Claim Supports The Requested TRO .............. 13

13 H. The Balance Of Hardships Weighs Heavily In Maffick’s Favor .......................... 14

14 I. The Public Interest Is Served By Judicial Checks On Facebook’s Recklessness.. 14

15 III. CONCLUSION.................................................................................................................. 15

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1 TABLE OF AUTHORITIES
2 Cases

3 Alabama State Conference of NAACP v. Alabama,

4 2020 WL 583803 (M.D. Ala. Feb. 5, 2020) ........................................................................ 8

5 Alexander v. U.S.,

6 509 U.S. 544 (1993)............................................................................................................. 4

AMF, Inc. v. Sleekcracft Boats,
7
599 F.2d 341 (9th Cir. 1979) ............................................................................................... 8
8
Balboa Island Vill. Inn, Inc. v. Lemen,
9
40 Cal. 4th 1141 (2007) ....................................................................................................... 2
10
Bolger v. Youngs Drug Prods. Corp.,
11
463 U.S. 60 (1983)............................................................................................................. 12
12
Bostos v. L.A. Cty. Bar Ass’n,
13
151 Cal. App. 3d 1083 (1984) ............................................................................................. 8
14
Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n,
15
447 U.S. 557 (1980)........................................................................................................... 11
16
Cincinnati v. Discovery Network, Inc.,
17
507 U.S. 410 (1993)........................................................................................................... 11
18 Davis v. Avvo,

19 345 F. Supp. 3d 534 (S.D.N.Y. 2018) ................................................................................. 8

20 Della Penna v. Toyota Motor Sales, U.S.A., Inc.,

21 11 Cal.4th 376 (1995) ........................................................................................................ 14

22 Disney Enter., Inc. v. VidAngel, Inc.,

23 224 F.Supp.3d 957 (C.D. Cal. 2016) ................................................................................... 5

24 Forsythe v. MPAA,

25 2016 WL 6650059 (N.D. Cal. Nov. 10, 2016) .................................................................... 8

26 Gen. Conf. of Seventh-Day Adventists v. Seventh-Day Adventist Congregational Church,

27
887 F.2d 228 (9th Cir. 1989) ............................................................................................... 8
Gertz v. Robert Welch, Inc.,
28
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1 418 U.S. 323 (1974)....................................................................................................... 9, 14

2 Ibanez v. Fla. Dept. of Bus. & Prof. Reg.,

3 512 U.S. 136 (1994)........................................................................................................... 11

4 Kasky v. Nike, Inc.,

5 27 Cal. 4th 939 (2002) ................................................................................................. 11, 12

6 Larez v. City of L.A.,

946 F.2d 630 (9th Cir. 1991) ............................................................................................... 2
7
Levine v. United States Dist. Ct.
8
764 F.2d 590 (9th Cir. 1985) ............................................................................................... 4
9
Li v. Home Depot,
10
2013 WL 12160065 (C.D. Cal. Jan. 7, 2013) ...................................................................... 6
11
Lilith Games (Shanghai) Co. v. UCool, Inc.,
12
2015 WL 5591612 (N.D. Cal. Sept. 23, 2015) .................................................................... 7
13
Milkovich v. Lorain Journal Co.,
14
497 U.S. 1 (1990)............................................................................................................. 7, 8
15
Near v. Minnesota ex rel. Olson
16
283 U.S. 697 (1931)............................................................................................................. 4
17
New York Times Co. v. United States,
18 403 U.S. 713 (1971)..................................................................................................... 3, 4, 9
19 Okun v. Super. Ct.,

20 29 Cal.3d 442 (1981) ........................................................................................................... 7

21 One Indus. LLC v. Jim O’Neal Distrib., Inc.,

22 578 F.3d 1154 (9th Cir. 2009) ............................................................................................. 8

23 Polk Cty. v. Dodson,

24 454 U.S. 312 (1981)........................................................................................................... 14

25 Rent-A-Center, Inc. v. Canyon Television & Appliance Rental, Inc.,

26 944 F.2d 597 (9th Cir. 1991) ............................................................................................... 5

27
Rubin v. Coors Brewing Co.,
514 U.S. 476 (1995)........................................................................................................... 11
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1 Saad v. Am. Diabetes Ass’n,

2 2015 WL 751295 (D. Mass. Feb. 23, 2015) ........................................................................ 3

3 San Antonio Cmty. Hosp. v. S. Cal. Dist. Council of Carpenters,

4 137 F.3d 1090 (9th Cir. 1998) ............................................................................................. 4

5 Southern Christian Leadership Conf. v. Sessions,

6 56 F.3d 1281 (11th Cir. 1995) ............................................................................................. 8

Stackla, Inc. v. Facebook, Inc.,
7
2019 WL 738288 (N.D. Cal. Sept. 27, 2019) ...................................................................... 5
8
Steep Hill Labs, Inx. v. Moore,
9
2018 WL 1242182 (N.D. Cal. Mar. 8, 2018) ...................................................................... 3
10
Steiner v. Super. Ct.,
11
220 Cal. App. 4th 1479 (2013) ............................................................................................ 3
12
Thornburg v. Gingles,
13
478 U.S. 30 (1986)............................................................................................................... 8
14
U.S. Healthcare, Inc. v. Blue Cross of Greater Philadelphia,
15
898 F.2d 914 (3d Cir. 1990) .............................................................................................. 10
16
Virginia. State Bd. of Pharm. v. Va. Consumer Council,
17
425 U.S. 748 (1976)........................................................................................................... 12
18 ZL Techs, Inx. v. Gartner, Inc.

19 709 F. Supp. 2d 789 (N.D. Cal. 2010) ................................................................................. 8

20

21 Statutes

22 15 U.S.C. § 1116(a) ......................................................................................................................... 4

23
Cal. Bus & Prof. Code § 17203 ....................................................................................................... 4
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1 I. INTRODUCTION
2 The most striking aspect of Facebook’s “factual” presentation in response to Maffick’s

3 TRO application is what is missing. Challenged in federal court over the veracity of its public
4 statement that Maffick is “Russia state-controlled media” (the “Notice”), Facebook provided no
5 indication of what evidence it relied up on in making that determination in June 2020. Literally
6 nothing.
7 What Facebook has provided is half a dozen hearsay articles, identified over the past week

8 or so by its outside counsel. The articles, which all were written between a year and a half and
9 three years ago, mostly discuss a Russia Today subsidiary’s investment in Maffick Media GmbH,
10 an inactive German company that no longer has any relationship with Maffick or its social media
11 pages (all of which was discussed in Maffick’s opening brief), and events surrounding Facebook’s
12 decision to take down, and promptly reinstate, Maffick’s social media pages 18 months ago. None
13 of the articles provides a factual basis for their false suggestion that Maffick’s social media
14 channels were editorially controlled by the Russian government. Moreover, they describe an
15 obsolete arrangement that no longer constitutes Maffick’s corporate structure, let alone its current
16 editorial practices. See Second Naouai Declaration at ¶¶ 13-14 (filed concurrently herewith).
17 Facebook admits its awareness (including because Maffick told them and documented it

18 repeatedly) that, since July 2019, Maffick has been owned and operated by a Delaware LLC, whose
19 sole member is a U.S. citizen who lives and works in Los Angeles. Id. at ¶¶ 12-13. But there is no
20 evidence that Facebook made any effort to determine who controls Maffick’s social media channels
21 editorially, as of mid-2020. Instead, Facebook’s “evidence” suggests the decision was made
22 entirely based on old hearsay that is both wrong and obsolete.
23 Two other points are notable about Facebook’s “evidence.” First, while Facebook contends

24 that there is nothing inherently defamatory about its state-controlled media designation, it describes
25 its motivation in labeling Maffick as “Russia state-controlled media” by quoting a Senate
26 Committee Report, which indicated that “[i]n 2016 Russian operatives used social media to
27 conduct an information warfare campaign designed to spread disinformation and societal
28 division….” Far from being the innocuous statement that Facebook describes, the Notice thus
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1 reflects an intent to label Maffick as a “Russian operative” conducting “information warfare” to

2 “spread disinformation and societal division.” All that is both false and defamatory.
3 Second, Facebook suggests repeatedly that this dispute should be resolved using its internal

4 appeals process. Facebook complains that Maffick has not presented sufficient evidence to satisfy
5 its concerns through Maffick’s pending appeal. Maffick offered to use Facebook process to resolve
6 this dispute, if Facebook would provide minimal procedural safeguards. Facebook refused to
7 identify a point person with whom Maffick could discuss the sufficiency of its submissions or to
8 establish a timetable for decision. Instead, Facebook insisted on a black box appeal where Maffick
9 submits information without knowing who the decision maker is, having an opportunity to
10 supplement its submissions or to know what Facebook needs, having any protection for the sort of
11 confidential information about finances and business operations that Facebook claims to want, or
12 having any sense of the timing for a decision about a Notice that is damaging Maffick’s reputation
13 and business interests every day. Facebook apparently believes it can say what it wants about
14 Maffick, without ever providing any evidentiary basis for its allegations, and that Maffick can only
15 attempt to protect its interests by submitting to an internal appeal process by which the fox guards
16 the henhouse and sets all the rules. The obvious unfairness of that arrangement is a key motivation
17 for this lawsuit and Maffick’s TRO application
18 II. ARGUMENT
19 A. Maffick’s Requested TRO Would Not Be A Prior Restraint

20 Facebook acknowledges, as it must, that this Court can enjoin its repeating statements that

21 have been judicially determined to be defamatory. See Balboa Island Vill. Inn, Inc. v. Lemen, 40
22 Cal. 4th 1141, 1157 (2007). Once Maffick establishes that the Notice is false and defamatory, the
23 Court can and should order Facebook to take it down. Facebook argues that the prior restraint
24 doctrine prevents the Court from issuing such an order before trial on the merits. That is not so.
25 Maffick cited several cases in which courts entered or upheld preliminary injunctions requiring
26 defendants to take down or not repeat defamatory statements.
27 Facebook attempts to distinguish Maffick’s cases on the ground that each of them involved

28 an injunction that followed an evidentiary determination that the challenged statement was false
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1 and defamatory. But that is exactly what Maffick seeks on this ex parte application. Maffick
2 submitted admissible evidence demonstrating that it is a U.S. company, owned and operated by
3 U.S. citizens, and not under the control of any Russian governmental entity or official,
4 operationally or editorially. See Decl. of Anissa Naouai at Doc. 3-2, ¶ ¶ 2-3, 12 (“First Naouai
5 Decl.”). Maffick’s evidence also demonstrates that Facebook’s assertions with respect to Maffick’s
6 ownership structure are based on obsolete information about Maffick GmbH, a German entity that
7 is inactive and has no involvement with Maffick’s current operations or ownership interest in
8 Maffick. Id. at ¶ 15. In response, Facebook came forward with hearsay articles that predate the
9 incorporation of Maffick LLC and therefore do not address Maffick’s current operations, and none
10 of which address the key issue of editorial control at Maffick. 1 Based on this record, the Court can
11 make the evidentiary determination needed to support an order requiring Facebook to take down
12 the Notice, i.e., to stop repeating the statement found to be defamatory. To the extent the Court
13 concludes that the requested injunction requires decision on a more robust record or after an
14 evidentiary hearing, Maffick requests that the Court open discovery immediately and set the matter
15 for an early hearing, so that it can obtain the finding necessary to support the injunction without
16 continuing to suffer irreparable reputational harm and destruction of business opportunities and
17 relationships any longer than absolutely necessary.
18 It also bears emphasis that the requested TRO is not a classic “prior restraint,” inasmuch as

19 the Notice has already been published and Facebook has had the opportunity to make its statement.
2
20 See New York Times Co. v. United States, 403 U.S. 713, 714 (1971) (injunction against

21
22 1
Maffick objects to the news articles attached as exhibits to the Declaration of Jonathan
23 Blavin as inadmissible hearsay offered for the proof of the matter asserted therein (except where
they contain statements made by Maffick or its officers), and asks that they be excluded pursuant to
24 Larez v. City of L.A., 946 F.2d 630, 640-44 (9th Cir. 1991).
2
The cases Facebook cites for the proposition that a TRO requiring a defendant to take
25 defamatory statements down from a website all present vastly distinguishable facts and are
inapposite. See Steep Hill Labs, Inx. v. Moore, 2018 WL 1242182, at *14 (N.D. Cal. Mar. 8, 2018)
26 (Plaintiff sought injunction requiring defendant to take down entire website and broad requirement
to publish no defamatory statements), aff’d, 744 Fed. App’x 443 (9th Cir. 2018); Steiner v. Super.
27 Ct., 220 Cal. App. 4th 1479, 1493 (2013) (Defendant sought injunction requiring opposing counsel
to take down statements on firm website that had nothing to do with Defendant); Saad v. Am.
28 Diabetes Ass’n, 2015 WL 751295, at *1-*2 (D. Mass. Feb. 23, 2015) (Plaintiff sought injunction
(Continued...)
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1 publication of the Pentagon Papers was a prior restraint); Near v. Minnesota ex rel. Olson, 283 U.S.
2 697, 706 (1931) (injunction against publication of future news articles was prior restraint). Here,
3 Maffick seeks an order requiring Facebook to take down a published Notice once it is found to be
4 false and defamatory. The order would come after an evidentiary finding that reached through a
5 process in this Court that provides procedural safeguards that have been absent in prior restraint
6 cases. See Alexander v. U.S., 509 U.S. 544, 552-53 (1993). The requested injunction is narrowly
7 tailored, requiring only that Facebook take down the Notice once it is determined false and
8 defamatory, and no other relief would prevent Maffick’s reputational harm and irreparable loss of
9 business relationships and opportunities. Under these circumstances, the case law supports entry of
10 the narrow TRO that Maffick requests, which simply requires Facebook to stop repeating
11 defamatory statements. See Levine v. United States Dist. Ct., 764 F.2d 590, 595 (9th Cir. 1985).
12 Moreover, because Facebook’s Notice is part of a campaign intended to promote its social media
13 platform as one that identifies foreign state-controlled media, in order to attract users and
14 advertisers, it is commercial speech, which is entitled to lesser protection under the First
15 Amendment. See San Antonio Cmty. Hosp. v. S. Cal. Dist. Council of Carpenters, 137 F.3d 1090,
16 1092 (9th Cir. 1998) (recognizing that commercial speech may constitutionally be subjected to
17 prior restraint). Indeed, because such speech is subject to regulation under the Lanham Act and
18 California’s UCL, injunctive relief, including TRO and preliminary injunction, is authorized by
19 statute. See 15 U.S.C. § 1116(a); Cal. Bus & Prof. Code § 17203.
20 B. Maffick Is Suffering Imminent And Irreparable Harm To Its Reputation And

21 Business Interests

22 Confronted with evidence that its false Notice is causing Maffick serious harm to its

23 reputation and business relationships and opportunities, Facebook makes a series of inconsistent
24 and strained arguments in an effort to deny that Maffick is suffering imminent and irreparable
25
26
(...Continued)
27 that would require to take down a “statement of concern” that fell far short of the false factual
28 statement at issue here).
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1 harm. For example, Facebook argues that, because Maffick is suffering monetary damages, its
2 damages are too compensable to constitute injunctive relief. Yet, in the very next paragraph,
3 Facebook argues Maffick’s damages are too speculative to support relief. Facebook’s further
4 arguments include speculation that the pandemic (and not the Notice) is to blame for the sudden,
5 precipitous drop in Maffick’s monetization and viewership, which thrived from March through
6 June, but fell in the weeks after the Notice was published, and the suggestion that the hundreds of
7 negative comments on Maffick’s pages are insufficient evidence of reputational damage.
8 It is well-established that harm to one’s reputation, goodwill, business relationships and

9 negotiating positions all constitute irreparable harm. See Disney Enter., Inc. v. VidAngel, Inc., 224
10 F.Supp.3d 957, 976 (C.D. Cal. 2016); accord Rent-A-Center, Inc. v. Canyon Television &
11 Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir. 1991). Maffick has suffered harm in each of
12 these areas. Maffick’s flagship channel, “In the Now” had 247,706,036 views in May. See Second
13 Naouai Decl. at ¶ 20. Facebook published the Notice on June 5. In July, In the Now had
14 66,494,294 views. Id. In the Now’s reach in May was 237,449,490 and in July, it was 70,449,087.
15 Id. Its monthly monetization similarly dropped by approximately 85% since the Notice was
16 published. Id. Maffick’s ability to generate views and reach and to monetize its social media
17 pages is directly related to its reputation and goodwill as a reliable social media source, which are
18 being irreparably harmed by Facebook’s defamatory Notice. Id.
19 The cases Facebook cites to support its arguments on irreparable harm involve

20 particularized, fact-specific patterns that are distinguishable from this case. For example, Stackla,
21 Inc. v. Facebook, Inc., 2019 WL 738288 (N.D. Cal. Sept. 27, 2019) did not involve any claim of
22 damage to the plaintiff’s reputation or goodwill and plaintiff failed to provide documentary
23 evidence of contractual damage. Here, Maffick has presented substantial evidence of immediate
24 harm proximately caused by Facebook’s false Notice and the likelihood that such harm will
25 worsen. Moreover, while the law does not require, as Facebook contends, that a company be “on
26 the brink of ceasing to exist” in order to obtain relief from the Court, Maffick’s situation is truly
27 precarious because Maffick’s entire business model is dependent on Facebook’s platform. Without
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1 Facebook, Maffick is an actor without a stage. The defamatory Notice thus threatens Maffick’s
2 entire business model.
3 Facebook suggests there is no link between its Notice and Maffick’s decrease in

4 monetization and web traffic, but, Maffick has presented evidence of its growth over time – until
5 Facebook posted the Notice. See Second Naouai Decl. at Ex. 1. Nor can Facebook credibly argue
6 that Maffick lost viewers and revenues as a result of a global pandemic which has left millions
7 unemployed with unprecedented free time to engage with social media. Indeed, viewer activity and
8 monetization thrived for the first three months of the quarantine period and only fell after Facebook
9 published the Notice in June. Id. Facebook similarly should not be heard to argue that the
10 hundreds of negative comments posted on Maffick’s pages are not evidence of reputational
11 damage, and to compare them with the two cherry-picked product reviews at issue in Li v. Home
12 Depot, 2013 WL 12160065 (C.D. Cal. Jan. 7, 2013) (unpublished). Maffick’s commenters are not
13 only “demonstrating a likelihood that they will cease using its services,” they are attacking Maffick
14 in the strongest of terms and encouraging others to do the same. Examples of such comments
15 include:
16 This In the Now organization are communist racist baiters are trying to
divide us, don’t be a dumb sheep and let them.
17
[Expletive] you! Russian controlled media site! Trying to start
18 [expletive]!! WTF!
19
Russia state controlled propaganda machine. You people are despicable.
20
Stop you communists! We are a democracy and you will not divide us.
21
Here is in the Now . . . Russian propaganda masters! Doing the same crap
22
again today that they always do! Try to make America look like the worst
23 country in the world….

24 First Naouai Decl. at Ex. 4. Far from being anecdotal, these comments are supported by Maffick’s
25 statistical evidence, which shows a 60% drop in user “likes” of posted content on Maffick’s
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1 flagship channel, “In the Now,” in July 2020, and a 50% drop in user recommendations of In the
2 Now content over the same period. 3 See Second Naouai Decl. at Ex. 1.
3 The Notice also threatens immediate and irreparable harm to Maffick’s branded

4 partnerships and cross-posting partnerships. See Second Naouai Decl. at ¶ 18. Every time Maffick
5 posts a business partner’s branded content, such as an advertisement for a bio-degradable phone
6 case, the post is labeled “Russia state-controlled media.” Id. Likewise, every time Maffick posts a
7 story provided by one of its cross-posting partners, like a video from “Our Incredible World” about
8 stork parents laying an egg, the post is labeled “Russia state-controlled media.” Id. This not only
9 confuses Maffick’s viewers about the true source of content and products from Maffick’s business
10 partners, it threatens Maffick’s existing business relationships with other entities who do not want
11 their products or content falsely identified as originating from, or being controlled by, the Russian
12 government. Id. It is certainly no coincidence that, since the Notice was posted, Maffick has been
13 unable to form any new partnerships. Id.
14 C. Facebook’s Labeling Maffick As “Russia State-Controlled Media” Is Not A Statement

15 Of Opinion

16 The Court should reject out of hand Facebook’s argument that the Notice is a

17 constitutionally protected opinion. Facebook argues that an organization’s application of multiple

18 criteria to reach a collective judgment constitutes an opinion, but that is not the recognized test.
19 Statements of opinion do not enjoy absolute protection under the First Amendment. See Milkovich
20 v. Lorain Journal Co., 497 U.S. 1, 18–19 (1990). To the contrary, the operative question is
21 whether a statement expressly or impliedly represents verifiable facts. Id. at 21; Okun v. Super. Ct.,
22 29 Cal.3d 442, 451-52 (1981). Facebook’s assertion that Maffick is “Russia state-controlled
23
24
3
Notwithstanding Facebook’s careful quotation from Lilith Games (Shanghai) Co. v. UCool,
25 Inc., 2015 WL 5591612 (N.D. Cal. Sept. 23, 2015)(unpublished), there is no rule that internet
comments cannot support a finding of likelihood of irreparable harm to business reputation. In
26 Lilith, the Court examined whether there was a likelihood of consumer confusion over stolen video
game code and found that, because the internet comments came only from Asia, they were not
27 enough to establish damage to the plaintiff’s reputation in the U.S. and Europe where the stolen
code was used. Id. at *11. The case does not support Facebook’s argument.
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1 media,” which it tells the world means that Maffick is controlled editorially by a foreign
2 government, misrepresents verifiable facts. That is a factual representation that can give rise to
3 liability, if it is found false and defamatory. It is not “the sort of loose, figurative, or hyperbolic
4 language” that can be characterized as non-factual. Milkovich, 497 U.S. at 21. 4
5 Moreover, even if Facebook’s factual statement is based on an assessment of relevant

6 factors, the federal courts frequently resolve fact questions using multi-factor analyses. For
7 example, the Ninth Circuit has repeatedly held that “likelihood of confusion” in trademark
8 infringement “is a question of fact.” Gen. Conf. of Seventh-Day Adventists v. Seventh-Day
9 Adventist Congregational Church, 887 F.2d 228, 231 (9th Cir. 1989); accord One Indus. LLC v.
10 Jim O’Neal Distrib., Inc., 578 F.3d 1154, 1162 (9th Cir. 2009). Yet, courts in this circuit decide
11 likelihood of confusion by applying the eight-factor test articulated in AMF, Inc. v. Sleekcracft
12 Boats, 599 F.2d 341, 348-49 (9th Cir. 1979). Similarly, federal courts have held that, in cases
13 under the “results” standard of Section 2 of the Voting Rights Act of 1965, “[t]he ultimate finding
14 that minorities do or do not possess equal opportunities to participate in the political process is a
15 question of fact.” Alabama State Conference of NAACP v. Alabama, 2020 WL 583803, at *8
16 (M.D. Ala. Feb. 5, 2020); accord Southern Christian Leadership Conf. v. Sessions, 56 F.3d 1281,
17 1294 (11th Cir. 1995). Yet courts decide that factual issue by applying a nine-factor test, set forth
18 in the Senate Report that accompanied the 1982 amendments to Section 2 and later endorsed by the
19 Supreme Court. See Thornburg v. Gingles, 478 U.S. 30, 36-37, 44-45 (1986). Clearly, a multi-
20 factor analysis does not convert a factual statement into an opinion.
21
22
23
24
4
The “opinion” cases that Facebook cites are inapposite because they involve vastly different
25 types of statements than the verifiably false assertion that Maffick is controlled editorially by
Russian governmental entities or officials. See Bostos v. L.A. Cty. Bar Ass’n, 151 Cal. App. 3d
26 1083, 1090 (1984) (bar association rating of judicial candidate qualifications); Forsythe v. MPAA,
2016 WL 6650059 (N.D. Cal. Nov. 10, 2016) (motion picture parental control ratings); ZL Techs,
27 Inx. v. Gartner, Inc. 709 F. Supp. 2d 789 (N.D. Cal. 2010) (rating company as a “Niche Player”);
Davis v. Avvo, 345 F. Supp. 3d 534 (S.D.N.Y. 2018) (attorney rating system).
28
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1 D. The Actual Malice Standard Poses No Barrier To The Requested TRO

2 Nor can Facebook rely on the “actual malice” standard to avoid entry of a TRO for at least

3 three reasons. First, the actual malice standard is a damages rule that does not apply to a request
4 for injunctive relief only. The seminal case of New York Times v. Sullivan holds that the First
5 Amendment “prohibits a public official from recovering damages for a defamatory falsehood
6 relating to his official conduct unless he proves that the statement was made with "actual malice" --
7 that is, with knowledge that it was false or with reckless disregard of whether it was false or not.”
8 376 U.S. at 279-80 (emphasis added). Similarly, the Supreme Court held in Gertz v. Robert Welch,
9 Inc., 418 U.S. 323 (1974) that a private figure plaintiff my recover actual damages for defamation
10 on a lesser showing, but must prove actual malice in order to recover presumed or punitive
11 damages. Id. at 350. New York Times, Gertz and their progeny are thus cases about when the First
12 Amendment permits recovery of damages for defamation. The “actual malice” rule they establish
13 exists to prevent self-censorship by those commenting on public concerns, who might otherwise
14 seek to avoid monetary liability. Maffick’s ex parte application seeks limited injunctive relief only
15 and not damages. Maffick asks the Court to order the removal of the Notice once it is determined
16 false and defamatory. By their terms, the holdings of New York Times and Gertz do not apply to
17 this situation, which does not involve the same risk of self-censorship, when the sole consequence
18 of losing the motion is an order requiring Facebook to stop repeating a false and defamatory factual
19 statement, which has no constitutional value. See Gertz, 418 U.S. at 339. 5
20 Second, to the extent the Court requires Maffick to establish actual malice to obtain a TRO,

21 Maffick can meet that standard. While Facebook asserts it had “ample evidence” to support its
22 representation that Maffick is “Russia state-controlled media,” (Opp. at 25:15-16), it has never
23
24
5
Facebook wrongly claims that the Ninth Circuit, in San Antonio, 125 F.3d at 1235, required
25 a defamation plaintiff to prove actual malice to obtain a preliminary injunction, in order to satisfy
First Amendment concerns. While the court required the plaintiff to prove actual malice to obtain
26 an injunction, it did so because that case involved a labor dispute and, under Supreme Court
precedent, state law libel claims are pre-empted by federal labor law to the extent they are based on
27 statements in labor disputes that are not made with reckless disregard for their truth or falsity. Id.
The requirement was based on a special rule of labor law, not general First Amendment principles.
28
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1 identified what evidence it relied upon. To the extent that Facebook relied on evidence concerning
2 Maffick’s ownership structure in early 2019, Maffick provided Facebook with documentary
3 evidence that it has been a Delaware LLC, i.e., a different corporate entity, since July 2019 and that
4 the current Maffick is owned and controlled, operationally and editorially by a U.S. citizen, who is
5 the sole member of Maffick LLC and is not an employee of Russia Today or any other Russian
6 governmental entity. See Second Naouai Decl. at ¶ 14. Confronted with that evidence, Facebook
7 nevertheless decided to go forward with publishing a false statement about editorial control at
8 Maffick that it now appears was based on outdated, hearsay news reports. Facebook’s decision to
9 publicly label Maffick as “Russia state-owned media,” or at least to continue publishing the Notice
10 after it had documentary evidence of Maffick’s U.S. ownership, was thus made with reckless
11 disregard for the truth and satisfies the “actual malice” standard.
12 Third, as discussed below, Facebook’s effort to promote its service as a responsible social

13 media platform that users and advertisers can rest assured is addressing concerns about foreign
14 governmental efforts to influence U.S. elections constitutes commercial speech, which is not
15 entitled to heightened First Amendment protection and can certainly support injunctive relief
16 without a showing of actual malice. See U.S. Healthcare, Inc. v. Blue Cross of Greater
17 Philadelphia, 898 F.2d 914, 939 (3d Cir. 1990).
18 E. Facebook’s Notice Is Unquestionably Defamatory

19 Facebook’s claim that the Notice is not defamatory and has no tendency to expose Maffick

20 to “hatred, contempt, ridicule, or obloquy” is directly contradicted by the hundreds of negative,

21 sometimes graphic and expletive-filled comments leveled at Maffick as a direct result of the
22 Notice. Maffick has been labeled a “communist,” a “propaganda machine,” and “despicable,”
23 among other things – and Facebook launches similar attacks in its brief. In the first paragraph of its
24 opposition, Facebook accuses Maffick of being owned by Russia Today, which it describes as “the
25 Kremlin’s principal international propaganda outlet.” It goes on to claim the Notice is necessary
26 “to preserve the integrity of U.S. elections from improper social media influence by foreign
27 governments.” These are very serious accusations that Facebook is leveling at Maffick with no
28 objective evidence of their validity. In fact, Facebook knows full well that the Notice is
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1 defamatory and intends for the Notice to be interpreted negatively in order to persuade the social
2 media users not to put any stock into what Maffick posts. And users get the message, as Maffick’s
3 statistics about the significant drops in views, reach, followers, liked posts, and recommended posts
4 since Facebook’s published the Notice reveal. See Second Naouai Decl. at Ex. 1.
5 F. Facebook’s Notice Is Actionable Under The Lanham Act And The UCL

6 Facebook argues that the Notice cannot give rise to a Lanham Act or UCL claim because it

7 is not commercial speech. In making this argument, Facebook relies on an unduly narrow
8 definition of commercial speech and ignores the key California Supreme Court case holding that
9 statements like the Notice, made in the context of an effort to promote a commercial entity’s image
10 as a responsible company to its users or customers, constitutes commercial speech that is subject to
11 scrutiny under unfair competition laws like Section 43(a) of the Lanham Act and California’s UCL.
12 See Kasky v. Nike, Inc., 27 Cal. 4th 939, 962-69 (2002).
13 In Kasky, Nike had come under scrutiny over allegations of unsafe and illegal labor

14 conditions at its factories in Asia. In response, Nike made public statements concerning working
15 conditions at its factories that the plaintiff claimed were false and misleading. The statements were
16 made in press releases, letters to newspapers, and letters to university presidents and athletic
17 directors, among other places. The California Supreme Court rejected Nike’s argument that it
18 could not be held liable for unfair competition because the Court found that its comments on labor
19 standards at its factories were commercial speech.
20 To be sure, commercial speech consists at its core of “‘speech proposing a commercial

21 transaction.’” Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n, 447 U.S. 557, 562
22 (1980). But “the category of commercial speech is not limited to this core segment.” Kasky, 27
23 Cal. 4th at 253; see Rubin v. Coors Brewing Co., 514 U.S. 476, 481-81 (1995) (statement of
24 alcohol content on a beer bottle label); Ibanez v. Fla. Dept. of Bus. & Prof. Reg., 512 U.S. 136, 142
25 (1994) (statements on attorney letterhead and business cards). The Supreme Court has recognized
26 “the difficulty of drawing bright lines that will clearly cabin commercial speech in a distinct
27 category,” Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 419 (1993), and has further
28 cautioned that statements may properly be categorized as commercial “notwithstanding the fact that
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1 they contain discussions of important public issues,” and that “advertising which ‘links a product to
2 a current public debate’ is not thereby entitled to the constitutional protection afforded
3 noncommercial speech.” Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 67–68 (1983).
4 The Kasky court considered three factors in determining whether Nike’s speech was subject

5 to laws aimed at commercial deception or false advertising: the speaker, the intended audience and
6 the content of the message. 27 Cal. 4th at 960. In commercial speech, the speaker is typically
7 someone engaged in commerce and the intended audience includes users of the speaker’s goods or
8 services. Id. The content of speech is commercial in character when it “consists of representations
9 of fact about the business operations… or service of the speaker” made for promoting the speaker’s
10 goods or services. Id. at 961-62. Such speech is subject to scrutiny under unfair competition laws
11 because it constitutes part of the commerce that Congress and the states may regulate and because
12 it is more verifiable by the speaker and less likely to be chilled by proper regulation because it is
13 profit motivated. See Virginia. State Bd. of Pharm. v. Va. Consumer Council, 425 U.S. 748, 772
14 (1976).
15 In Kasky, the court found Nike was a commercial speaker because it was engaged in

16 commerce, i.e., selling athletic gear, and its statements concerning labor conditions at its factories
17 were intended to reach Nike’s consumers, both university administrators and the purchasing public.
18 Kasky, 27 Cal. 4th at 963. Finally, Nike’s advertising made statements about its own labor
19 practices, which were within Nike’s own knowledge, in order to promote its business in the face of
20 allegations that its athletic gear was made in factories using unacceptable labor standards. Id. For
21 these reasons, the Court found Nike’s advertising was commercial speech and subject to regulation
22 of trade against false and misleading statements about products and services. Id. at 963-64. The
23 fact that Nike’s commercial speech touched on issues of public concern, i.e., labor standards in
24 foreign factories, did not change its commercial nature. Id. at 964-67.
25 The same is true here. Facebook is a commercial speaker, engaged in the business of

26 operating a social media platform from which it earns billions of dollars. The audience for
27 Facebook’s statements about its business consists of users and potential users of its platform, who
28 generate the reach necessary to generate such enormous advertising revenues, and the advertisers
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1 themselves, who have recently put considerable pressure on Facebook to modify its content
2 moderating practices. And Facebook’s challenged statements are part of an effort to promote its
3 company to users and advertisers as a responsible social media platform that is taking action to
4 address foreign governmental influence in U.S. elections, so that they continue to use and support
5 Facebook and generate massive revenues. Under Kasky and the federal authorities it analyzes,
6 Facebook’s statements are therefore commercial speech that are subject to the Lanham Act, the
7 UCL, and other appropriate commercial regulations.
8 G. Maffick’s Economic Interference Claim Supports The Requested TRO

9 Maffick has presented evidence of its business relationships with 27 other companies with

10 which it does business through its Facebook pages. Twelve of them are branded content partners,
11 who pay and/or barter with it to promote their products on Maffick’s pages. See Second Naouai
12 Decl. at ¶ 18. Every time Maffick promotes one of their products, such as an advertisement for a
13 bio-degradable phone case, the post is labeled “Russia state-controlled media.” Id. The other
14 fifteen companies are content providers whose content Maffick reposts on its pages and vice versa
15 – a process called “cross-posting.” Id. Cross-posting allows social media pages to post a
16 substantial amount of content every day, in addition to the content they create themselves, creating
17 significant cost savings. Id. Every time Maffick posts a video created by one of its cross-posting
18 partners, the video is flagged as “Russia state-controlled media.” The Notice creates viewer
19 confusion about the association of branded posts and cross-posted content with the Russian
20 government and interferes with the messaging of Maffick’s business partners. Id. For this reason,
21 Maffick’s branded and cross-posting partnerships are in serious jeopardy and Maffick has been
22 unable to develop new partnerships since the Notice was published. Id.
23 Facebook knows about these business relationships because Maffick’s branded and cross-

24 posts are posted on Facebook’s social media platform and because it apparently has closely
25 monitored Maffick’s pages. Facebook also knows that by posting the false Notice, it is creating
26 viewer confusion and threatening Maffick’s business relationships with business partners, who do
27 not want their products or their videos associated with, or labeled as belonging to, a company
28 accused of acting as a “weapon of Russian propaganda.” Moreover, Facebook’s conduct is
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1 independently actionable as defamation and in violation of the Lanham Act and California
2 Business and Professions Code Section 17200. Maffick is therefore likely to prevail on its
3 intentional interference claim, see Della Penna v. Toyota Motor Sales, U.S.A., Inc., 11 Cal.4th 376,
4 392-93 (1995), which supports entry of a TRO.
5 H. The Balance Of Hardships Weighs Heavily In Maffick’s Favor

6 Nothing about the requested TRO prevents Facebook from policing its social media

7 platform or enforcing its state-controlled media entity policy. Maffick merely challenges one
8 instance in which Facebook got the facts wrong. If the TRO is granted, Facebook can still label
9 entities that actually are controlled by foreign states as “SCMEs.” The TRO would simply prevent
10 it from applying that label falsely to Maffick. Facebook’s claim that it will suffer harm to its First
11 Amendment interests wrongly assumes that it can demonstrate the truth of the Notice. But the
12 Notice is false, and Facebook has presented no evidence to the contrary. It therefore has “no
13 constitutional value” and Facebook will not suffer from taking it down. See Gertz, 418 U.S. at 340.
14 Nor are Maffick’s harms slight. Facebook’s attack on Maffick’s reputation cuts straight to the
15 heart of its business.
16 I. The Public Interest Is Served By Judicial Checks On Facebook’s Recklessness

17 The public interest is served by having access to unbiased, meaningful stories about current

18 events, environmental issues, and heartwarming acts of kindness - especially during a time of great
19 public turmoil. The public interest is not served by being falsely informed that a story about a man
20 dancing to entertain his young child suffering through chemotherapy is originating from the
21 Russian government in an attempt to somehow influence the election or otherwise sow seeds of
22 discord. Facebook has massive influence and can, through one false statement on a user’s page,
23 shift the public opinion of millions of people around the world. With that influence comes the
24 responsibility to make sure that what it is stating is true. If Facebook will not willingly assume this
25 responsibility, the Court should ensure that it does. See Polk Cty. v. Dodson, 454 U.S. 312, 318
26 (1981) (recognizing the “public interest in truth and fairness”).
27
28
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1 III. CONCLUSION
2 For the reasons presented here and in Maffick’s opening brief, the Court should grant the

3 requested TRO and/or open discovery immediately and set this matter for early resolution on the
4 merits.
5 Dated: August 10, 2020
TROYGOULD PC
6
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By: /s/ John Ulin
8 JOHN ULIN
AMY NASHON STALLING
9 Attorneys for Plaintiff
MAFFICK LLC
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1 JOHN C. ULIN (SBN 165524)

Email: julin@troygould.com
2 AMY NASHON STALLING (SBN 316353)
Email: astalling@troygould.com
3 TROYGOULD PC
1801 Century Park East, 16th Floor
4 Los Angeles, CA 90067-2367
Telephone: (310) 553-4441
5 Facsimile: (310) 201-4746

6 Attorneys for Plaintiff

MAFFICK LLC
7
8 UNITED STATES DISTRICT COURT

9 NORTHERN DISTRICT OF CALIFORNIA

10
11 MAFFICK LLC, a Delaware limited liability Case No. 3:20-cv-05222
company,
12 SECOND DECLARATION OF ANISSA
Plaintiff, NAOUAI IN SUPPORT OF EX PARTE
13 APPLICATION FOR TRO AND OSC RE:
v. PRELIMINARY INJUNCTION
14
FACEBOOK, INC., a Delaware corporation, Assigned for All Purposes To:
15 and DOES 1-10, inclusive, Hon. James Donato

16 Defendants.

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PC SECOND DECLARATION OF ANISSA NAOUAI
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 Case 3:20-cv-05222-JD Document 17-1 Filed 08/10/20 Page 2 of 23

1 I, Anissa Naouai, declare as follows:

2 1. I am the CEO of Maffick LLC (“Maffick”), the plaintiff in this case. Except where

3 indicated, I make this declaration of my own personal knowledge in support of Maffick’s Ex Parte
4 Application for a TRO and OSC re: Preliminary Injunction. If called upon to do so, I could and
5 would testify competently to the matters stated below.
6 2. I was born and raised in New York. As a child and young adult, I was very active in

7 the theater and wanted to be a professional actress.

8 3. While attending LaGuardia High School in New York, I had a Ukrainian theater

9 teacher who was passionate about Russian theater and wanted to form the first American group of
10 theater students to study and perform with the prestigious Moscow Art Theater (“MXAT”).
11 4. While attending Hunter College in 2001, my former theater teacher reached out to

12 inform me that his idea had come to fruition and he invited me to participate in the group of
13 American students that would travel to Russia to study at the MXAT. Already becoming
14 disenchanted with the notion of being yet another starving actress in New York City, I accepted the
15 invitation.
16 5. While in Moscow, I fell in love with a Russian man and we remained in contact

17 after I returned home to the United States. Therefore, when I was invited back to Moscow to
18 participate in a six-month English-language educational program, I happily accepted.
19 6. After my six-month program ended, I decided to remain in Russia with my then-

20 boyfriend (later husband), but I needed to quickly find a job to support myself. Through a distant
21 contact, I learned that Russia Today (“RT”), an English language news channel, was hiring
22 Americans who could read and write in English, so I reached out for an interview. I was hired and
23 began work as an intern, learning under the British expats who ran the newsroom at that time.
24 7. Eventually, I was offered a job on-camera and, thanks to my theater training, I did

25 well as a reporter and was soon traveling the world and reporting on current events. I worked
26 under a Style Guide that instructed all reporters to reference both sides of every story, even if one
27 side of the story reflected negatively upon Russia or Russian interests.
28
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1 8. By 2009, my constant travelling had taken its toll on me and my relationship and I

2 sought a role as a news anchor. I worked as an anchor for approximately three years, but I soon
3 found it boring to simply read copy and I decided I wanted to do my own news commentary show.
4 9. In 2013, I conceived of the idea of “In the Now” and pitched it as an opinion show,

5 filmed late in the evening, where I would comment on the news stories of that day. RT agreed and
6 allowed me to film the show.
7 10. “In the Now” became very successful online, and in 2016, I decided I wanted to

8 move the show to a completely digital format and monetize it.

9 11. In 2017, I informed RT that I wanted to form a separate corporate entity in order to

10 monetize “In the Now” and I wanted to receive 90% of the profit from the corporation because it
11 was my idea and my work. RT agreed, so I formed Maffick Media GmBH in Germany as a
12 subsidiary of Ruptly. During this period, I launched additional digital media channels, including
13 SoapBox and Waste-Ed. I maintained editorial control, and neither RT nor any other Russian
14 government entity or official exercised editorial control over content on In the Now, Soapbox or
15 Waste-Ed’s digital media channels.
16 12. Ultimately, I had difficulty operating in Germany because of a lack of digital media

17 talent, and it was also not a place where I wanted to live with my family. Meanwhile, over the
18 years, I had frequently visited a good friend of mine who lived in Los Angeles, and in June 2018, I
19 decided I wanted to relocate to L.A. and raise my children there. Exactly one year later, I
20 completed the move.
21 13. Upon moving to L.A. in June 2019, I promptly formed a Delaware limited liability

22 company called Maffick LLC, through which I have operated the In the Now, Soapbox and Waste
23 Ed digital media channels for the past year. I did not invite RT or any of its affiliates to partner
24 with me in the company and I have run it as my own, independent company since its formation.
25 14. I am not an employee of RT or any of its affiliates and RT does not exercise control

26 over me, nor does it exercise control over the content on Maffick’s channels.
27
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1 15. Maffick LLC’s interaction with RT is limited to the sale of content to RT, which is

2 something major media companies, including, for example, the Associated Press (“AP”) and
3 Reuters, also do. Maffick is currently negotiating with other news outlets to sell its content.
4 16. Maffick’s content is not biased in favor of Russia or any other country and does not

5 support Russia’s “party line.” In fact, much of Maffick’s content is progressive and directly in
6 tension with Russia’s political stance.
7 17. Maffick decides what content to publish based upon whether the data shows that the

8 issue is compelling and will attract viewers, and its decisions are in no way shaped or influenced by
9 any government policy.
10 18. Facebook’s Notice is threatening immediate and irreparable harm to Maffick’s

11 branded partnerships and cross-posting partnerships. Maffick has existing branded relationships
12 with twelve different companies – mostly eco-friendly manufacturers - who pay and/or barter with
13 it to promote their products. These companies are: Petkix; Pela Case; Durapik; Sol and Spring;
14 Georganics; Last Swab; Bluland; Let’s Go Eco; Patch Bandages; Hay Straws; FlexYah; and, Azero
15 Bags. Every time Maffick promotes one of their products, such as an advertisement for Pela’s bio-
16 degradable phone case, the post is labeled “Russia state-controlled media.” This confuses viewers,
17 who then associate the product with the Russian government, and it makes them less likely to
18 purchase the product, thereby undermining Maffick’s relationship with the product manufacturers.
19 Since the Notice was posted, Maffick has been unable to form any new partnerships.
20 Similarly, Maffick has existing cross-posting partnerships with fifteen other content
21 providers. Maffick reposts their content on its pages and vice versa – a process called
22 “cross-posting.” These cross-posting partners include: Cultura Colectiva; Bright Vibes; 60
23 Sec. Docs; Soul Pancake; Nameless Network; Namless Network Presents; Weird Wild
24 World; Our Incredible World; Joe Co. UK; Cheddar; Cheddar Gadgets; Cheddar Inc.;
25 Cheddar Health; Cheddar Health; Vocative; and Yup That Exists. In this way, Maffick and
26 its partners can post a substantial amount of content every day, in addition to the content
27 they create themselves, at a significant cost savings. As a result of the Notice, every time
28 Maffick posts a video created by one of its cross-posting partners, like a video from Our
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1 Incredible World about stork parents laying an egg, the video is flagged as “Russia state-
2 controlled media.” As with the branded posts, this creates viewer confusion about the
3 source of the content and distorts our partners’ messaging. The Notice thus threatens
4 Maffick’s existing business relationships with its cross-posting partners.
5 19. It is very damaging to Maffick’s reputation, business and vision to be falsely

6 accused of operating under the control of the Russian government. I cannot emphasize enough that
7 we are not controlled by Russia, operationally or editorially. My hand-picked team and I make all
8 editorial decisions about what to publish and not publish and no one else has a say in those
9 decisions.
10 20. Maffick’s flagship channel, In the Now had 247,706,036 views in May. In July, it

11 had 66,494,294. In the Now’s reach in May was 237,449,490 and in July, it was 70,449,087. Its
12 monthly monetization dropped by approximately 85%. Maffick’s reach and monetization grew
13 during the period from March through June 2020 and only began to fall after Facebook published
14 the Notice. Attached hereto as “Exhibit 1” are true and correct copies of Facebook analytical data
15 showing the extremely negative effects that the Notice has had on “In the Now.”
16 21. Facebook’s actions have also caused ripple effects throughout the social media

17 industry. Just last week, Twitter followed Facebook’s lead and labeled Maffick’s pages “Russia
18 state-affiliated media.” Although Maffick’s presence on Twitter is small and dwarfed by its reach
19 on Facebook, I have had to initiate an appeal of Twitter’s decision. As Facebook pointed out,
20 YouTube posted a disclaimer about Maffick’s former relationship with RT approximately 18
21 months ago. I have not taken action to address it, because Maffickno longer publishes content on
22 YouTube and does not monetize its former use of that site.
23 22. The reputational damage initiated by Facebook is rapidly increasing and I believe it

24 will become irreversible if the Notice is not taken down.

25 I declare under penalty of perjury that the foregoing is true and correct.

26 Executed on this 10th day of August , 2020 , at Los Angeles, California.

27
28 Anissa Naouai
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EXHIBIT 1
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MAY2020
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JUNE2020
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JULY2020
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