ContractsProf Blog

Editor: Jeremy Telman
Valparaiso University Law School

Friday, January 22, 2021

Parler's Motion for a Temporary Restraining Order Against Amazon Denied

Nancy_kimNancy Kim posted last week about Parler's lawsuit against Amazon Web Services (AWS) for, among other things, breach of contract.  Nancy's prediction was that Parler's chance of winning on its breach of contract claim didn't look good.  Yesterday, U.S. District Court Judge Barbara Jacobs Rothstein agreed, denying Parler's motion for a temporary restraining order.

On the breach of contract claim, Judge Rothstein pretty much stuck to the Nancy Kim playbook.  Parler alleged that AWS had breached its Customer Service Agreement (CSA) with Parler by failing to accord Parler thirty days to cure any alleged breaches of the CSA.  Parler contends that it was given only a few hours' notice of breach before AWS suspended its web-hosting services.  However, the CSA clearly gives AWS the right to suspend or terminate its services for material breach of the CSA's conditions, and Parler does not dispute that it did terminate those conditions by violating AWS's Acceptable Use Policy.  AWS provided multiple examples of content posted on Parler that violated that Policy, which proscribes “'activities that are illegal, that violate the rights of others, or that may be harmful to others, our operations or reputation'” and "'content that is defamatory, obscene, abusive, invasive of privacy, or otherwise objectionable.'” 

Nancy Kim's post specifically noted Sections 4, 6, & 7 of the CSA.  Here is Judge Rothstein's conclusion on the breach of contract claim:

Parler has not denied that at the time AWS invoked its termination or suspension rights under Sections 4, 6 and 7, Parler was in violation of the Agreement and the AUP. It has therefore failed, at this stage in the proceedings, to demonstrate a likelihood of success on its breach of contract claim.

Good call, Nancy!

https://lawprofessors.typepad.com/contractsprof_blog/2021/01/parlers-motion-for-a-temporary-restraining-order-against-amazon-denied.html

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Comments

Parler argues that the contract clause Amazon is relying on should be discounted because it would nullify all the other breach provisions, since Amazon could always say some end user violated the terms. It would be like a contract term saying, "All five of the above clauses of this contract are invalid, and I, the drafting party, am not bound by any of it." Is this a good argument in general, or in this application?

To quote Parler's lawyer in his supplementary document after the hearing:
"AWS also appears to claim that it can rely on Clause 6.1(b), which authorizes temporary suspension if Parler, “or any End User is, in breach of this Agreement,” to invoke Clause 7.2(b)(ii) to allow immediate termination. But this also runs into the Surplusage Canon and the requirement that the contract be “most strongly” construed against AWS. That’s because, under that reading, if one End User did anything deemed to breach AWS’s User Guidelines, AWS could immediately terminate Parler’s account. That would turn the contract into an at-will contract, and it would render completely superfluous the contractual protections inhering in both a 30-days’ notice provision and a threshold for material breach. After all, if AWS can immediately terminate Parler’s account for a breach by a single end user, then Clause 7.2(b)(ii), which demands 30 days’ notice for a material breach, serves no purpose.

Posted by: Eric B Rasmusen | Jan 23, 2021 8:14:49 AM

Great stuff. I am covering canons of construction with my students this week, and this is a great illustration of those canons at work.

But we also just covered the duty of good faith and fair dealing. Seems like that implied term rescues the contract from Parler's claim that AWS's promises are illusory or that the termination-for-cause provision cannot be reconciled with the termination-on-notice provision. Judge Rothstein's opinion suggests that Parler is not alleging that AWS invoked its contractual termination rights in bad faith.

Posted by: Jeremy Telman | Jan 23, 2021 1:34:45 PM

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