Facebook vs. AREND NOLLEN, LEON HEDGES, DAVID PASANEN, and SOCIAL MEDIA SERIES LIMITED
Facebook vs. AREND NOLLEN, LEON HEDGES, DAVID PASANEN, and SOCIAL MEDIA SERIES LIMITED
Facebook vs. AREND NOLLEN, LEON HEDGES, DAVID PASANEN, and SOCIAL MEDIA SERIES LIMITED
17 v.
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AREND NOLLEN, LEON HEDGES,
19 DAVID PASANEN, and SOCIAL
20 MEDIA SERIES LIMITED,
21 Defendants.
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12 with Instagram’s service, create an inauthentic experience for Instagram users, and
13 attempt to fraudulently influence Instagram users for their own enrichment. Facebook
14 and Instagram bring this action for injunctive relief to stop any continued and future
15 misuse of its platform by Defendants in violation of Instagram’s TOU and Community
16 Guidelines. Facebook and Instagram also bring this action to obtain compensatory,
17 punitive, and exemplary damages under California Penal Code § 502 and the Computer
18 Fraud and Abuse Act, 18 U.S.C. § 1030.
19 PARTIES
20 2. Plaintiff Facebook is a Delaware corporation with its principal place of
21 business in Menlo Park, California.
22 3. Plaintiff Instagram is a Delaware limited liability company with its
23 principal place of business in Menlo Park, California. Instagram is a subsidiary of
24 Facebook.
25 4. Defendant Nollen is a resident of Upper Hutt, New Zealand. Exhibit 1.
26 5. Defendants Hedges and Pasanen are residents of Lower Hutt, New
27 Zealand. Exhibits 2 and 3.
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COMPLAINT; DEMAND FOR JURY TRIAL
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Case 3:19-cv-02262 Document 1 Filed 04/25/19 Page 3 of 18
12 9. At all times material to this action, each Defendant was the agent,
13 employee, partner, alter ego, subsidiary, or coconspirator of and with the other
14 Defendants, and the acts of each Defendant were in the scope of that relationship. In
15 doing the acts and failing to act as alleged in this Complaint, each Defendant acted with
16 the knowledge, permission, and the consent of each of the other Defendants; and, each
17 Defendant aided and abetted the other Defendants in the acts or omissions alleged in
18 this Complaint.
19 JURISDICTION AND VENUE
20 10. The Court has federal question jurisdiction over the federal causes of
21 action alleged in this Complaint pursuant to 28 U.S.C. § 1331.
22 11. The Court has supplemental jurisdiction over the state law causes of action
23 alleged in this Complaint pursuant to 28 U.S.C. § 1367 because these claims arise out
24 of the same nucleus of operative fact as Facebook and Instagram’s federal claim.
25 12. In addition, the Court has jurisdiction over all the causes of action alleged
26 in this Complaint pursuant to 28 U.S.C. § 1332 because complete diversity between the
27 Plaintiffs and each of the named Defendants exists, and because the amount in
28 controversy exceeds $75,000.
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1 13. The Court has personal jurisdiction over Defendants because each
2 Defendant personally used Instagram, their business used thousands of Instagram
3 accounts, and, accordingly, they agreed to Instagram’s TOU. Instagram’s TOU require
4 Defendants to submit to the personal jurisdiction of this Court for litigating any claim,
5 cause of action, or dispute with Instagram.
6 14. In addition, the Court has personal jurisdiction because Defendants
7 knowingly directed their actions at Facebook and Instagram, which have their principal
8 place of business in California. For example, Defendants’ entire business model
9 depends on accessing and using Instagram in order to artificially manipulate Instagram
10 accounts in exchange for money.
11 15. Venue is proper in this Judicial District pursuant to 28 U.S.C. § 1391(b),
Los Angeles, California 90071-2627
550 South Hope Street, Suite 2000
Hunton Andrews Kurth LLP
12 as the threatened and actual harm to Facebook and Instagram occurred in this District.
13 Venue is also proper with respect to each of the Defendants pursuant to
14 28 U.S.C. §1391(c)(3) because none of the Defendants resides in the United States.
15 16. Pursuant to Civil L.R. 3-2(c), this case may be assigned to the San
16 Francisco Division because Facebook and Instagram are located in San Mateo County.
17 FACTUAL ALLEGATIONS
18 A. Background on Instagram and Facebook
19 17. Facebook is a social networking website and mobile application that
20 enables its users to create their own personal profiles and connect with each other on
21 their personal computers and mobile devices. As of December 2018, Facebook daily
22 active users averaged 1.52 billion and monthly active users averaged 2.32 billion,
23 worldwide. Facebook has several products, including Instagram.
24 18. Instagram is a photo and video sharing service, mobile application, and
25 social network. Instagram users can post photos and videos to their profile. They can
26 also view, comment on, and like posts shared by others on Instagram. As of June 2018,
27 Instagram had over one billion active accounts.
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1 19. When an Instagram user posts a photo, other Instagram users can view the
2 photo and choose to “like” it. For private accounts, followers of the account can see the
3 post. For public accounts, anyone can see the post. When a photo is liked, that like can
4 be seen by anyone who can see the post. For marketing and other commercial purposes,
5 certain Instagram users strive to increase the number of followers, views, and likes they
6 receive to increase their visibility and popularity on Instagram.
7 20. Instagram users can gain followers, views, and likes, but only from other
8 registered Instagram users. If a visitor to Instagram does not have an Instagram account
9 and tries to like a post, the visitor is redirected to the Instagram login page to enter their
10 Instagram credentials or to create a new Instagram account.
11 21. Everyone who uses Instagram agrees to Instagram’s TOU1 and other rules
Los Angeles, California 90071-2627
550 South Hope Street, Suite 2000
Hunton Andrews Kurth LLP
12 9-11. Social Envy Limited was incorporated and registered as a New Zealand Limited
13 Company. Exhibit 9. Social Envy Limited is registered at 9 McCarthy Grove, Clouster
14 Park, Upper Hutt, 5018 NZ, which is the same address used by Social Media Series.
15 Exhibits 4 and 9.
16 26. Between July 23, 2015, and February 2018, Defendants Nollen and Hedges
17 controlled and operated the website SocialEnvy.co4 through Social Envy Limited.
18 SocialEnvy.co sold artificial Instagram views and other fake engagement services.
19 Exhibits 12 and 13.
20 27. Between December 2, 2015, and February 2018, Defendants Nollen and
21 Hedges controlled and operated the website IGFamous.net through Social Envy
22 Limited. IGFamous.net sold artificial Instagram likes and other fake engagement
23 services. Exhibit 14.
24 28. On February 20, 2018, Facebook and Instagram sent a cease and desist
25 letter to Defendants Nollen and Hedges for operating SocialEnvy.co and IGFamous.net.
26 Exhibit 15. At that time, Instagram also disabled multiple Instagram accounts
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Socialenvy.co is presently operated by individuals unassociated with Defendants.
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1 associated with SocialEnvy.co and Defendants Nollen and Hedges. Some of those
2 accounts had been used by Defendants Nollen, Hedges, and Pasanen.
3 29. In the February 20, 2018 cease and desist letter, Facebook and Instagram
4 demanded that Defendants Hedges and Nollen stop violating Instagram’s TOU,
5 including:
6 Misleading Instagram users;
7 Creating false or duplicate profiles;
8 Collecting user credentials;
9 Automating interactions between profiles that have no prior
10 relationship;
11 Facilitating or encouraging others to violate Instagram’s [TOU].
Los Angeles, California 90071-2627
550 South Hope Street, Suite 2000
Hunton Andrews Kurth LLP
12 The February 20, 2018 cease and desist letter also informed Defendants that their
13 actions may have violated state and federal laws, including Computer Fraud and Abuse
14 Act, 18 U.S.C. § 1030, and California Comprehensive Computer Data Access and Fraud
15 Act, Cal. Penal Code § 502(c).
16 30. After receiving the February 20, 2018 cease and desist letter, Defendants
17 stopped offering fake engagement services on Socialenvy.co and IGFamous.net but
18 began selling fake engagement services on other websites, including Likesocial.co.
19 2. Likesocial.co
20 31. Since on or about July 9, 2018, Defendants controlled and operated the
21 website Likesocial.co through Social Media Series.
22 32. On December 18, 2018, Facebook and Instagram sent a cease and desist
23 letter to Defendants Nollen and Hedges for offering fake engagement services through
24 Likesocial.co. Exhibit 16. The December 2018 letter referenced the February 20, 2018
25 letter:
26 We first contacted you on February 20, 2018 demanding that you stop
selling Instagram Followers and Likes through your websites
27 SocialEnvy.co and IGFamous.net. Facebook is aware that you have
continued your improper activities through your current websites including
28 but not limited to, LikeSocial.co, Social10x.com, smseries.co.nz, and
SocialSteeze.net, where you continue to sell services that automate actions
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1 36. Defendants charge a fixed weekly price for their fake engagement services.
2 The cost of the service depends on the number of automatic likes being purchased and
3 ranges from $10 to $99 per week. The image shown below lists Defendants’ pricing
4 structure as of March 19, 2019, (Exhibit 19), from their website Likesocial.co:
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17 37. Defendants used PayPal to accept payments for their services. The PayPal
18 account used to receive payments from customers was in the name of Social Media
19 Series. Exhibits 21 and 22.
20 38. Defendants used a network of bots and Instagram accounts that they
21 controlled to deliver millions of automated likes to their customers. Some of the
22 Instagram accounts controlled by Defendants were responsible for tens of thousands of
23 likes on a daily basis.
24 39. For example, on November 28, 2018, after purchasing 500 likes on
25 Likesocial.co, an Instagram user posted a photo of an empty gym on their Instagram
26 account. Although the account had no followers and the photo had no comments, the
27 photo received approximately 500 likes within seconds. All the likes came from
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1 Defendants’ network of Instagram accounts using two internet service providers located
2 in Turkey.
3 40. Between on or about March 14, 2019 and March 22, 2019, multiple photos
4 were posted by the same Likesocial.co customer. Although the account had no
5 followers and the photos had no comments, each photo received between 500 and 600
6 likes shortly after the photos were posted. Defendants used a network of thousands of
7 Instagram accounts to deliver these likes.
8 D. Defendants Unjustly Enriched Themselves and Their Unlawful Acts
9 Have Caused Damage and a Loss to Facebook and Instagram
10 41. Defendants’ breaches of Instagram’s TOU and Community Guidelines
11 have caused Facebook and Instagram substantial harm. Defendants interfered and
Los Angeles, California 90071-2627
550 South Hope Street, Suite 2000
Hunton Andrews Kurth LLP
12 continue to interfere with Instagram’s service and burden Facebook and Instagram’s
13 computer network. Moreover, Defendants created and continue to create an inauthentic
14 experience for Instagram users who used, viewed, and relied on Defendants’ fake
15 engagement services, thus damaging Instagram’s brand.
16 42. Defendants’ actions injured Facebook and Instagram’s reputation, public
17 trust, and goodwill.
18 43. Facebook and Instagram have suffered damages attributable to the efforts
19 and resources it has used to address this Complaint, investigate and mitigate
20 Defendants’ illegal conduct, and attempt to identify, analyze, and stop their fraudulent
21 and injurious activities.
22 44. Since July 2018, Defendants unjustly enriched themselves at the expense
23 of Facebook and Instagram in the amount of approximately $9,430,000.
24 FIRST CAUSE OF ACTION
25 (Breach of Contract)
26 45. Facebook and Instagram incorporate all other paragraphs as if fully set
27 forth herein.
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1 52. Defendants’ many breaches have caused Facebook and Instagram to incur
2 damages in the amount of at least $9,430,000, in addition to an amount to be determined
3 at trial.
4 SECOND CAUSE OF ACTION
5 (California Penal Code § 502)
6 53. Facebook and Instagram incorporate all other paragraphs as if fully set
7 forth herein.
8 54. Defendants knowingly accessed and without permission otherwise used
9 Facebook and Instagram’s data, computers, computer system, and computer network in
10 order to (A) devise or execute any scheme or artifice to defraud and deceive, and (B) to
11 wrongfully control or obtain money, property, or data, in violation of California Penal
Los Angeles, California 90071-2627
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Hunton Andrews Kurth LLP
12 Code § 502(c)(1).
13 55. Defendants knowingly and without permission used or caused to be used
14 Facebook and Instagram’s computer services in violation of California Penal Code
15 § 502(c)(3).
16 56. By artificially inflating certain Instagram users’ likes and impairing the
17 intended operation of Instagram, Defendants knowingly and without permission
18 disrupted or caused the disruption of computer services of Facebook and Instagram’s
19 computers, computer systems, and/or computer networks in violation of California
20 Penal Code § 502(c)(5).
21 57. Defendants knowingly and without permission accessed and caused to be
22 accessed Facebook and Instagram’s computers, computer systems, and/or computer
23 networks in violation of California Penal Code § 502(c)(7). Defendants accessed
24 Facebook and Instagram’s computer network after Facebook and Instagram disabled
25 their Instagram accounts, and sent cease and desist letters to the Defendants revoking
26 their access.
27 58. Because Facebook and Instagram suffered damages and a loss as a result
28 of Defendants’ actions and continues to suffer damages as result of Defendant’s actions,
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1 Facebook and Instagram are entitled to compensatory damages, in the amount of at least
2 $9,430,000, attorney fees, and any other amount of damages proven at trial, and
3 injunctive relief under California Penal Code § 502(e)(1) and (2).
4 59. Because Defendants willfully violated California Penal Code § 502, and
5 there is clear and convincing evidence that Defendants committed “fraud” as defined
6 by section 3294 of the Civil Code, Facebook and Instagram are entitled to punitive and
7 exemplary damages under California Penal Code § 502(e)(4).
8 THIRD CAUSE OF ACTION
9 (Computer Fraud and Abuse Act, 18 U.S.C. § 1030)
10 60. Facebook and Instagram incorporate all other paragraphs as if fully set
11 forth herein.
Los Angeles, California 90071-2627
550 South Hope Street, Suite 2000
Hunton Andrews Kurth LLP
12 61. Defendants’ access and use of Facebook and Instagram’s computers and
13 computer systems was unauthorized because Defendants accessed Facebook and
14 Instagram’s computer network after Facebook and Instagram disabled their Instagram
15 accounts and sent cease and desist letters to Defendants revoking their access.
16 62. Facebook and Instagram computers and servers are protected computers as
17 defined by 18 U.S.C. § 1030(e)(2).
18 63. Defendants violated 18 U.S.C. § 1030(a)(4) because they knowingly and
19 with intent to defraud accessed Facebook and Instagram-protected computers by
20 sending unauthorized commands to Facebook and Instagram computers. Defendants
21 sent the commands to Facebook and Instagram computers to manipulate Instagram’s
22 service by fraudulently inflating likes of certain Instagram accounts. Defendants did
23 these acts in exchange for profit.
24 64. Defendants violated 18 U.S.C. § 1030(a)(5)(A) because they knowingly
25 and intentionally caused the transmission of a program, information, code, or command,
26 and, as a result of such conduct, intentionally damaged Facebook and Instagram-
27 protected computers.
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12 other economic damages, including, among other things, the expenditure of resources
13 to investigate and respond to Defendants’ fraudulent scheme. Facebook and Instagram
14 are entitled to be compensated for losses and damages in the amount of at least
15 $9,430,000, and any other amount proven at trial.
16 70. Facebook and Instagram have no adequate remedy at law that would
17 prevent Defendants from continuing their unlawful scheme. Permanent injunctive relief
18 is therefore warranted.
19 FOURTH CAUSE OF ACTION
20 (Unjust Enrichment)
21 71. Facebook and Instagram incorporate all other paragraphs as if fully set
22 forth herein.
23 72. Defendants’ acts as alleged herein constitute unjust enrichment of the
24 Defendants at Facebook and Instagram’s expense.
25 73. Defendants accessed and used, without authorization or permission,
26 Facebook and Instagram’s service, platform, and computer network, all of which belong
27 to Facebook and Instagram.
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1 18 U.S.C. 1030;
2 b. Violated the California Comprehensive Computer Data Access and
3 Fraud Act, in violation of California Penal Code § 502;
4 c. Breached Defendants’ contracts with Facebook and Instagram in
5 violation of California law;
6 d. Been unjustly enriched at the expense of Facebook and Instagram in
7 violation of California law.
8 2. That the Court enter a permanent injunction enjoining and restraining
9 Defendants and their agents, servants, employees, successors, and assigns, and all other
10 persons acting in concert with or conspiracy with any of them or who are affiliated with
11 Defendants from:
Los Angeles, California 90071-2627
550 South Hope Street, Suite 2000
Hunton Andrews Kurth LLP
Jason J. Kim
550 South Hope Street, Suite 2000
Hunton Andrews Kurth LLP
12 Stacy Chen
Platform Enforcement and
13 Litigation
14 Facebook, Inc.
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