Indiana’s Lawsuit Against TikTok Fails As Well

Last week we wrote about how Montana's ridiculous TikTok ban was blocked by a judge for being fairly obviously unconstitutional. But in the rush of the moral panic over TikTok coming from all over, I had missed that Indiana had sued the company. The argument was that TikTok had violated child safety laws," and in some ways appears to have some similarities with the recent state lawsuits against Meta.

If you want a preview of how that might go, well, a judge has dismissed the lawsuit.

The case was in local court, not federal court (TikTok tried to move it to federal court, but for procedural reasons it went back to the state court), but the reasoning for the dismissal is pretty straightforward: basically, wtf does any of this have to do with Indiana?

Here, the Amended Complaint does not allege facts sufficient to establish this Court's jurisdiction over Defendants. The Amended Complaint does not allege that Defendants made any of their allegedly deceptive statements or omissions in Indiana, nor does it allege that those statements or omissions were specifically directed at Indiana users. The statements and alleged omissions are found in multiple sources, all of which can be characterized as directed to the U.S. market as whole. Some of these places include letters and testimony to legislators, interviews with news outlets, and statements on TikTok's website.

While the Amended Complaint alleges that the TikTok platform is available to Hoosiers through third-party app stores, this is insufficient to establish specific jurisdiction because the State does not allege that TikTok specifically targeted Indiana. See Wolf's Marine, N.E.3d at 17 (If the defendant merely operates website, even highly interactive' website, that is accessible from, but does not target, the forum state, then the defendant may not be haled into court in that state without offending the Constitution") (quoting be2 LLC v. Ivanov, 642 F.3d 555, 559 (7th Cir. 2011)).

Moreover, it is well-established that the unilateral act of third party such as Hoosier downloading and using TikTok, or third-party app store offering TikTok in Indiana cannot establish specific jurisdiction. See, e.g., Walden, 571 U.S. at 28586. As the Seventh Circuit has observed, if having an interactive website were enough in situations like this one, there is no limiting principle and plaintiff could sue everywhere. Adv. Tactical Ordnance Sys., LLC v. Real Action Paintball, lnc., 751 F.3d 796, 803 (7th Cir. 2014).

Still, the court looks at whether or not TikTok's conduct here would have violated the state's Deceptive Consumer Sales Act and finds that... no... it would not. First, downloading a free app is not a sale or transaction, so the law doesn't actually apply:

As the downloading of the free TikTok app is not consumer transaction, the State has failed to state claim under the DCSA and TikTok is entitled to dismissal of the State's Amended Complaint under Trial Rule 12(B)(6).

Furthermore, the court notes that it does not appear that TikTok made any deceptive acts or omissions" that were related to any consumer transaction.

There are no allegations that Indiana users even heard these alleged misstatements, let alone relied on them. when deciding to download and use the TikTok platform. ln the absence of such allegations, the State has not asserted claim under the DCSA and TikTok's Motion to Dismiss shall be granted.

Was TikTok deceptive? Well, the court doesn't think the state presented any such evidence:

But notably absent from the State's allegations is the how" of the fraudin other words, the identity of what was procured by fraud." Cont'l Basketball Ass'n, /nc., 669 N.E.2d at 132; see also Himan v. Thor Indus, lnc., 2022 WL 683650, at 14 (N.D. Ind. Mar. 8, 2022). In particular, the Amended Complaint does not assert that TikTok's alleged statements or omissions led [consumers] to" download the TikTok platform, which [they] would not have otherwise done if [they] had been fully informed." Himan, 2022 WL 683650, at 14. This is dispositive and requires dismissal of the Amended Complaint.....

Similarly, the Amended Complaint does not allege facts establishing that TikTok's alleged misrepresentations were material, or that TikTok acted with an intent to defraud," as required to state claim of incurable deceptive acts.

Even more to the point, regarding Indiana's arguments that TikTok users were deceived and unaware that ByteDance employees in China might be able to access their data, well, the company has been kinda public about that?

First, the State's allegations establish that TikTok disclosed to TikTok users the ways in which their data may be accessed and with whom it may be shared. TikTok users in the United States are subject to TikTok's Privacy Policy, which is available on TikTok |nc.'s website. The Privacy Policy states that the TikTok platform is supported by certain entities within our corporate group, which are given limited remote access to Information We Collect," and that entities with whom TikTok may share [user] data may be located outside of the United States." Relying on the Privacy Policy, the Amended Complaint alleges that current and recent versions of TikTok's privacy policy state that it may share data it collects with its parent company ByteDance or other affiliates, or certain entities, within its corporate group, many of whom are subject to Chinese law." Additionally, the Amended Complaint alleges that in 2020 former executive stated: TikTok relies on China-based ByteDance personnel for certain engineering functions that require them to access encrypted TikTok user data." Similarly, the Amended Complaint alleges that in a June 2022 letter to multiple U.S. senators, TikTok acknowledged that [e]mployees outside the U.S., including China:based employees, can have access to TikTok U.S. user data subject to series of robust cybersecurity Controls....

ln light of these alleged disclosures, TikTok cannot be held liable under the DCSA for not alert[ing] Indiana consumers to the ability of TikTok to share their data with individuals or entities located in China, or for individuals or entities located in China to access that data."

Indiana tried to argue that TikTok isn't totally forthcoming about its relationship to ByteDance, but that's not enough for a cause of action, especially since there's no clear standard for what is the appropriate" disclosure regarding the relationship:

Third, the allegations that TikTok downplays the influence and control" that ByteDance has over TikTok" are not actionable. The Amended Complaint does not allege that TikTok's statements about TikTok lnc.'s relationship with ByteDance are false. Instead, the State argues that TikTok does not disclose the full extent of ByteDance's control over TikTok" and thereby paints a picture for Indiana consumers that TikTok is an independent company and that the risk of consumers' data being accessed and exploited by the Chinese Government or the Chinese Communist Party is minimal to nonexistent."

These allegations do not state claim under the DCSA. The extent of ByteDance's control over TikTok" is not fact capable of being proven true or false, and is too general" and subjective to support claim under the statute.

Look, we get it. Politicians (including Attorneys General) are going to grandstand about evil social media" and TikTok in particular. But just saying gee, this is scary" does not a credible legal claim make. And, really, if you're filing bogus lawsuits to distract from the latest ethics investigation against you as Attorney General, it seems like a generally poor strategy.