From Justice of the Peace Decide Alex Tse’s opinion at this time in Smith v. Substack, Inc. (N.D. Cal.):
Previous to the submitting of this case, there was a sequence of interactions between Smith and the Doe defendant. Smith alleges that this unknown defendant posted unflattering statements about Smith on Cancel Watch, a weblog web site hosted by Substack. Smith initiated contact with Substack, together with twenty to thirty “complaints and queries by electronic mail” between July and September 2023, all to no avail. Substack didn’t reply to any of Smith’s emails relating to Cancel Watch.
In February, March, April, and Might of 2024, Smith requested a sequence of inquiries to a chatbot discovered within the help part of Substack’s web site. Smith requested, “do you reply to complaints,” and the chatbot responded, “Sure, we reply to all complaints.” He additionally requested, “do you reply to each criticism,” and “do you all the time [all of the time], reply to complaints?,” to which the chatbot responded with the identical reply or a really comparable one. Id. Smith then requested, “does Substack reply to emails?” and “Will you definitely reply to emails?,” the chatbot mentioned, “Sure, Substack responds to emails” in response to each inquiries. Smith alleges that the solutions from the chatbot are the identical for “queries,” and that Substack says it should reply to stories. Nevertheless, no matter its chatbot’s replies, Substack itself by no means did reply to Smith’s inquiries, or to his follow-up inquiries asking why the corporate was ignoring him….
Smith sued Substack below a promissory estoppel principle, which is said to breach of contract. No, mentioned the court docket:
The chatbot’s responses to Smith, nevertheless, should not sufficiently particular to provide rise to a declare of promissory estoppel. The chatbot mentioned that Substack would reply to complaints, emails, and queries. Nevertheless, the chatbot didn’t say something about how Substack would reply, or when. With out these important phrases, the Courtroom can’t discern when Substack is in breach of its obligations. See White v. J.P. Morgan Chase, Inc. (E.D. Cal. 2016), aff’d (ninth Cir. 2017) (discovering that plaintiffs did not allege promissory estoppel when the guarantees at problem “had been fatally unsure as a result of they contained no important phrases”). Theoretically, Substack continues to be not in breach provided that no timeframe for a response was promised….
Second, “detrimental reliance is an important characteristic of promissory estoppel.” Reliance is perhaps discovered when a “promisee suffered precise detriment in foregoing an act, … or in expending particular and substantial effort or cash in reliance on a promise.” … Smith contends that he relied on the guarantees made by the chatbot as a result of he had exhausted all different strategies searching for a response from Substack. Smith states that his reliance “was below Substack’s help or assist” as a result of the chatbot options within the help part of their web site. Substack argues Smith has did not allege detrimental reliance, because the [Complaint] doesn’t state any details exhibiting that Smith modified his place or acted to his detriment in response on a promise from Substack.
In his opposition, Smith alleges that he filed a brand new felony criticism on April 23, 2024, after receiving assurances from the chatbot. Smith wouldn’t have filed the brand new felony criticism however for the chatbot’s assurances that Substack would reply to emails and complaints. A number of weeks later, after not receiving a reply, Smith “closed his criticism.” Smith alleges that his time and police time had been wasted, and he skilled emotional misery consequently. Moreover, he alleges nominal damages to get well for wasted bills in reference to a telephone name to the police.
In deciding a Rule 12(b)(6) movement, a court docket is proscribed to the criticism. New details raised solely within the opposition could also be thought of for the needs of deciding depart to amend, however not the Rule 12(b)(6) movement. As such, in deciding the movement to dismiss, the Courtroom will solely think about the allegations within the [Complaint].
Smith’s [Complaint] right here fails to allege details to indicate detrimental reliance. 5 Plaintiff merely contends that he relied on the guarantees of the chatbot and explains why he relied. However Smith doesn’t allege what actions he took or didn’t take, or what efforts or cash he expended in reliance. With out that, the [Complaint] doesn’t comprise any details to indicate any precise detriment to Smith because of his reliance on the communications from the chatbot….
And the court docket declined to let Smith amend his criticism:
Reliance might be discovered when a celebration “expend[ed] particular and substantial effort or cash in reliance on a promise.” Smith alleges in his opposition solely that he filed a brand new police report after which dismissed it, which wasted his time and led to emotional misery and a wasted telephone name. These new allegations don’t rise to the extent of considerable effort or cash expended in reliance on the chatbot’s responses and had been made in response to Substack’s assertion that Smith failed to indicate reliance. As a result of these are the very best details (if taken true) in help of reliance that Smith can allege, one other modification would unlikely save the declare.
Furthermore, Smith filed the brand new felony criticism on April 23, 2024, however alleges reliance on chatbot responses in February, March, April, and Might. To the extent that Smith claims to have relied on responses which got here after he filed the brand new felony criticism, Smith has nonetheless did not allege any reliance in any respect, substantial or not. Thus, the Courtroom finds that permitting one other modification could be futile.
Smith has already had three alternatives to plead these claims. In mild of the earlier amendments, the Courtroom has broad discretion to disclaim depart to amend and does so. Smith’s declare for promissory estoppel is dismissed with prejudice….
Benjamin D. Margo and Maura Lea Rees (Wilson Sonsini Goodrich & Rosati) characterize Substack.