District Court Finds Communications Decency Act Provides Automotive Device Manufacturer Immunity for Clean Air Act Violations

On March 28, 2024, in US v. EZ Lynk, the U.S. District Court for the Southern District of New York dismissed the Department of Justice’s (DOJ) claim that an automotive device manufacturer violated Section 203 of the Clean Air Act (CAA), holding that Section 230 of the Communications Decency Act (CDA) provided complete immunity from CAA liability for the sale of certain aftermarket automotive devices. This decision of first impression offers an important precedent in the automotive industry and beyond. The decision gives effect to the CDA as drafted and will make it significantly harder for the government to hold manufacturers and online retailers liable for content, including software, created and sold by third parties.

Statutory frameworks. The decision focuses on the interplay between two federal statutes:

Clean Air Act §203. Section 203 of the CAA has been the foundation for the last decade of Environmental Protection Agency (EPA) enforcement actions against manufacturers and sellers of certain automotive aftermarket parts and software. Under CAA §203, it is illegal to manufacture, sell, or install a “defeat device” where the “principal effect” of the device is to delete or bypass a vehicle’s emissions controls. A person who manufactures, sells, or installs such a device—and who “knows or should know” that the device is being sold or installed for such use—may be liable under the CAA. Someone may also be liable for causing the manufacture, sale, or installation of a defeat device.

Communications Decency Act §230. Congress enacted the CDA in 1996 to promote the growth of the internet and “other interactive computer services” and to limit government interference in those services. To facilitate that, among other provisions, Congress established what is generally referred to as CDA §230 immunity. Under this immunity provision, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”1 This provision is not complete immunity as the CDA does still exempt certain laws from immunity, but not the CAA.

The government’s complaint. In EZ Lynk, DOJ sued EZ Lynk, its two principals, and Prestige Worldwide SEZC (Prestige). The complaint alleged that EZ Lynk and its principals violated the CAA by selling the “EZ Lynk System,” which has three components: 1) the physical device that plugs into the vehicle, 2) the cloud services that allow storing and sharing of software, referred to as “tunes,” and 3) an app that connects the physical device to the cloud. Modern vehicles rely on an electronic control unit, a computer that monitors and controls vehicle operations, including emission controls. Tunes adjust vehicle operations and in some cases will defeat the emission controls. The tunes available in the EZ Lynk Cloud are created by third parties, not the defendants. The government claimed that Prestige facilitates the sale of the EZ Lynk System by purchasing the physical devices from EZ Lynk and selling them to distributors that resell the devices within the United States.

The government alleged that although the EZ Lynk System may be sold without any tunes and the physical device is also sold on its own, many retailers sell the EZ Lynk System bundled together with tunes, many of which are capable of defeating or bypassing a vehicle’s emission control system. The government cited numerous social media websites, including the “EZ Lynk Forum,” where third parties discuss using the EZ Lynk System to defeat emission controls. As further support for defendants’ liability, the government claimed that EZ Lynk representatives interacted with posts and videos about deleting emission controls.

Defendants’ motion to dismiss.  In a motion to dismiss, EZ Lynk and its co-defendants raised two arguments. Defendants argued that the government failed to state a claim under CAA §203 because the EZ Lynk System is not a “part or component” whose “principal effect” is to defeat emission controls and that defendants did not “know[] or should know” that the use of the system would defeat emission controls. Further, defendants argued they were immune from CAA liability under Section §230 of the CDA. EZ Lynk argued that the system is an “interactive computer service” and that under the government’s liability theory, EZ Lynk would be liable for the acts of the third-party developers of the software tunes that the government claims violate the CAA.

District court opinion. The district judge had two basic holdings:

First, the court found that the government stated a claim that the full EZ Lynk System is a defeat device under CAA §203 but not as to the physical device alone. The court held that the government adequately alleged that the EZ Lynk System is a defeat device under Section 203 of the CAA because the complaint asserted that (1) a principal effect of the system is to defeat emission controls, and (2) EZ Lynk “knows or should know” the system is used to defeat such controls. However, the court further held that the government did not state a valid claim against Prestige because it sold only the physical device and not the software required to use the device. According to the court, the physical device cannot, by itself, have “a principal effect” of defeating emissions controls, and thus selling that part is not prohibited by CAA 203.

Second, the court found that the defendants are immune from CAA §203 liability under the Communications Decency Act. Although the government adequately alleged that EZ Lynk violated Section 203 of the CAA by selling the EZ Lynk System, the court held that based on a straightforward reading of the CDA, EZ Lynk is immune from CAA liability based on the immunity granted under CDA §230. The court found that the EZ Lynk System “is a platform on which people exchange information in the form of software,” and thus EZ Lynk was a provider of an “interactive computer service” under the CDA. Accordingly, EZ Lynk could not be treated as the “publisher or speaker” of the allegedly violative software that third parties shared through this service.

The court rejected the United States’s argument that CDA §230 is intended only for “social media platforms.” The government had argued that Congress created CDA §230 immunity to immunize service providers from liability for statements on “messaging boards” where individuals “exchange information and ideas” and “post political, educational, cultural, and entertainment” comments. The court dismissed this reading of the CDA. The court reasoned that software itself is information, and the EZ Lynk cloud service is therefore a platform for exchanging information in the form of software. Moreover, the court declined the government’s invitation to speculate on Congress’ intent, finding the statutory language plain on its face.

Finally, the court noted that the “Second Circuit has squarely rejected” the government’s argument that EZ Lynk had “encouraged” unlawful conduct simply by maintaining the EZ Lynk Forum: “The Circuit has explained that such an ‘argument would eviscerate Section 230(c)(1),’ since ‘a defendant interactive computer service would be ineligible for Section 230(c)(1) immunity by virtue of simply organizing and displaying content exclusively provided by third parties.’” The court explained that EZ Lynk did not “directly and materially contribute[]” to the allegedly violative third-party content and that posts mentioning EZ Lynk technical support assistance were not enough to allege that EZ Lynk helped users defeat emission controls. Ultimately, while the social media posts “are useful to show what EZ Lynk knew or should have known for purposes of stating a claim under Section 203 of the Clean Air Act … they fall far short of alleging direct and material contributions to illegal activity for purposes of nullifying immunity under Section 230 of the Communications Decency Act.”

What’s next. The United States may seek to appeal the ruling. However, providers of physical devices may now cite EZ Lynk to support CDA immunity from government CAA claims alleging liability based on tuning software introduced by third parties. Beyond the automotive industry, online retailers that operate an interactive computer service may point to this precedent to support immunity from liability under other statutes where liability is based on third-party statements, including claims made in customer reviews about a product.

147 U.S.C. § 230(c)(1).

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.