SANTA ANA, Calif. – In an order filed July 29, U.S. District Judge Cormac Carney of the U.S. District Court of the Central District of California granted in part and denied in part a motion to dismiss filed by Visa Inc. in a civil lawsuit naming the payment processor along with various MindGeek entities and other defendants.
Noting that in considering a motion to dismiss the court “must accept all material allegations in the complaint as true and construe them in the light most favorable to the non-moving party,” Carney found that the plaintiff has pled facts sufficient to defeat Visa’s motion to dismiss on several points.
“If Visa was aware that there was a substantial amount of child porn on MindGeek’s sites, which the Court must accept as true at this stage of the proceedings, then it was aware that it was processing the monetization of child porn, moving money from advertisers to MindGeek for advertisements playing alongside child porn like Plaintiff’s videos,” Carney wrote. “And so, after opening the door, Visa was there at the end of the line, too, performing the final act necessary to establish Plaintiff’s section 1591(a)(2) claim against MindGeek: the movement of money.”
In several sections of his order, Carney referenced the fallout from Nicholas Kristof’s “The Children of Pornhub” article for The New York Times, using the sequence of events to underscore the judge’s view that Visa might have more influence over MindGeek’s content policies than the processor suggested in its arguments.
“Visa might not be directly involved in MindGeek’s day-to-day operations, as Visa does not control precisely how MindGeek goes about satisfying its drive for profit,” Carney wrote. “And MindGeek might be happy to profit from just about any type of content if there exists a market of users demanding such content. But the (complaint) supports an inference that Visa draws the informal boundaries of what types of content are fair game for profit, or fair game for its payment network, the mechanism through which MindGeek earns profit.
“When MindGeek crosses the line, or at least when MindGeek is very publicly admonished for crossing the line, Visa cracks the whip and MindGeek responds vigorously,” Carney continued. “Yet, here is Visa, standing at and controlling the valve, insisting that it cannot be blamed for the water spill because someone else is wielding the hose.”
Carney wasn’t persuaded by Visa’s argument that the involvement of multiple third parties should serve to isolate Visa’s potential liability from that of MindGeek.
“This is not a case in which the ‘independent decisions’ of ‘numerous third parties’ separate Visa from Plaintiff, to borrow Visa’s words,” Carney wrote. “It is simple: Visa made the decision to continue to recognize MindGeek as a merchant, despite its alleged knowledge that MindGeek monetized child porn, MindGeek made the decision to continue monetizing child porn, and there are enough facts pled to suggest that the latter decision depended on the former, at least judging from the fallout from the New York Times piece.”
In his order, Carney also directed the plaintiff to “plead a more definite statement of her civil conspiracy claim,” noting that while Visa itself did not file a motion demanding a more specific pleading, “the Court finds it necessary to demand of Plaintiff a more definite statement with respect to her common law civil conspiracy cause of action against Visa.”
In a statement provided to Vanity Fair, Visa expressed disappointment with the ruling and reiterated the company’s belief that it shouldn’t be part of the lawsuit.
“Visa condemns sex trafficking, sexual exploitation and child sexual abuse materials as repugnant to our values and purpose as a company,” the company said. “This pre-trial ruling is disappointing and mischaracterizes Visa’s role and its policies and practices. Visa will not tolerate the use of our network for illegal activity. We continue to believe that Visa is an improper defendant in this case.”
A MindGeek rep also offered a statement to Vanity Fair, echoing the legal standard in play that “at this point in the case, the court has not yet ruled on the veracity of the allegations, and is required to assume all of the plaintiff’s allegations are true and accurate” and adding that when the court does “consider the facts, we are confident the plaintiff’s claims will be dismissed for lack of merit.”
“MindGeek has zero tolerance for the posting of illegal content on its platforms and has instituted the most comprehensive safeguards in user-generated platform history,” the company added in its statement. “We have banned uploads from anyone who has not submitted government-issued ID that passes third-party verification, eliminated the ability to download free content, integrated several leading technological platform and content moderation tools, instituted digital fingerprinting of all videos found to be in violation of our Non-Consensual Content and CSAM [child sexual abuse material] Policies to help protect against removed videos being reposted, expanded our moderation workforce and processes, and partnered with dozens of non-profit organizations around the world. Any insinuation that MindGeek does not take the elimination of illegal material seriously is categorically false.”
Further developments in the case are likely to be months away. In a companion order to his ruling on the motion to dismiss, Carney ordered the MindGeek defendants to “submit to jurisdictional discovery until December 30, 2022” after which the plaintiff has leave to amend her complaint. Click here to read in full Carney’s order on the motion to dismiss.
