EPA Appeals Dismissal of Suit Against eBay

On November 26, 2024, the United States, on behalf of the U.S. Environmental Protection Agency (EPA), appealed a district court decision dismissing the government’s claims that eBay violated the Clean Air Act (CAA), the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), and the Toxic Substances Control Act (TSCA).

In United States v. eBay, Inc., No. 1:23-cv-07173-OEM-LB (E.D.N.Y.), the government sought to hold eBay liable for three categories of  products listed for sale by third-party users that allegedly violated various laws: (1) defeat devices under the CAA; (2) pesticides under FIFRA; and (3) paint removal products under TSCA. The court granted eBay’s motion to dismiss and held that: (1) eBay was not a seller of products offered by third parties on ebay.com; (2) eBay’s involvement in transactions between third-party sellers and third-party buyers failed to support the government’s “causation” theory; and (3) Communications Decency Act Section 230 immunity applied because eBay’s assistance to third parties who list products for sale on eBay.com did not amount to a material contribution to third-party content. [1] The United States is expected to ask the U.S. Court of Appeals for the Second Circuit to reverse some or all of the district court’s decision, including the application of Section 230.

This appeal joins another related government appeal in the Second Circuit. That case comes out of the Southern District of New York and dismissed CAA claims against an alleged defeat device manufacturer based on Section 230 immunity. As we reported previously, in United States v. EZ Lynk, No. 21-cv-1986, 2024 WL 1349224 (S.D.N.Y. Mar. 28, 2024), the court held that a company that manufactured and sold certain defeat devices was entirely immune from CAA liability for the sale of certain defeat devices because the allegedly violative software that EZ Lynk users were installing to interfere with their vehicles’ emissions systems came from third parties. In its appeal brief, the United States argued that EZ Lynk is not immune because it is not a publisher but “a manufacturer and seller of a system that installs unlawful emissions-control defeating software.” In response, EZ Lynk rejected the government’s characterization, arguing it only “manufactures a wireless pass-through interface and smart phone application” and “neither creates nor sells any content, unlawful or otherwise, that users” alleged transmitted through the EZ Lynk system. The government’s rely brief is due January 21, 2025.

[1] The court relied, in part, on Tiffany v. eBay, a precedent-setting suit in which Sidley lawyers successfully defended eBay against Tiffany’s attempt to transfer responsibility for policing its trademarks to eBay.

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