Yesterday, Judge Reed O’Connor (N.D. Tex.) issued an opinion in X Corp. v. Media Matters for America, addressing the allegations made by the Plaintiff against the Defendants:
The Plaintiff claims that the Defendants deliberately created false images of advertisers’ posts on the X social media platform, juxtaposed with extremist content, to falsely portray X as a platform dominated by neo-Nazism and anti-Semitism. This was allegedly done to alienate advertisers, publishers, and users from X, with the intent to harm the platform. Based on the facts presented in the complaint, the Court denies the Defendants’ Motion to Dismiss as all well-pleaded facts must be accepted as true and viewed favorably towards the Plaintiff.
[1.] Tortious Interference with Contract
For a claim of tortious interference with existing contractual relations, the Plaintiff must establish the existence of a contract, intentional interference, proximate causation, and actual damages. The Plaintiff has provided sufficient allegations to survive dismissal, including the existence of contracts subject to interference, intentional interference, and proximate causation.
Furthermore, the termination of an at-will contract can give rise to a tortious interference claim, even without a breach. The Plaintiff has plausibly alleged interference with their advertising contracts, supported by facts indicating the Defendants’ intent.
The Plaintiff has also demonstrated that the Defendants proximately caused harm, meeting the requirements of cause-in-fact and foreseeability. While alternative explanations are presented by the Defendants, the Court refrains from choosing between interpretations at this stage.
[2.] Business Disparagement
Elements of a business disparagement claim include the publication of false and disparaging information with malice, resulting in special damages. The Plaintiff has sufficiently alleged that the Defendants manipulated information to deceive advertisers, acted with malice, and caused special damages by undermining advertisers’ faith in X Corp.’s content monitoring capabilities.
While these facts are disputed, the Court does not determine the validity of competing interpretations at this stage.
[3.] Tortious Interference with Prospective Economic Advantage
The Defendants argue that the Plaintiff failed to allege an independent tortious act, a crucial element of the tortious interference with prospective economic advantage claim. However, business disparagement can serve as an independently tortious act. The Plaintiff has successfully alleged an independent tortious act, satisfying the requirements for this claim.
The opinion also discusses personal jurisdiction and venue. X is represented by Judd E. Stone II, Christopher D. Hilton, Ari Cuenin & Alexander M. Dvorscak of Stone | Hilton PLLC and John C. Sullivan of S|L Law PLLC.
