Facebook's adventures in content moderation continue with a defamation lawsuit from a Los Angeles-based social media and e-commerce company that argues Facebook falsely labeled its channels as state-controlled media with ties to Russia.

In a complaint filed Wednesday in the U.S. District Court for the Northern District of California,  Maffick LLC argues that Facebook threatened to shut down its three channels on the platform unless it posted a disclosure on all its accounts that Mafflick is "a brand of Maffick Media, which is owned and operated by Ruptly GmbH, a subsidiary of RT news," a Russian controlled news outlet. The complaint was surfaced on Law.com's Legal Radar.

The lawsuit comes in the wake of criticism from the public and the social media giant's own workforce that Facebook has not acted adequately to dispel misinformation surrounding President Donald Trump as well as the coronavirus pandemic.

The filing distinguishes Maffick LLC from Maffick Media, a defunct entity that was partially owned by American journalist Anissa Naouai and Ruptly. In July 2019, Naouai formed the entirely separate Maffick LLC, which is not affiliated with Ruptly or RT, according to the lawsuit.

"Facebook knows or should know that the notice is false and that Maffick is not operated or controlled, editorially or otherwise, by any Russian government entity or official," wrote Maffick's lawyers at TroyGould in Los Angeles. "At the very least, it knows that its public statement that Maffick is Russia-state controlled media is based on obsolete ownership information that requires further investigation. Facebook's statement that Maffick is Russia state-controlled media is therefore either an intentional falsehood or has been made with reckless disregard for its truth or falsity."

After Facebook did not respond to Maffick's assertions that it is not a state-controlled media outlet and that a disclosure would force it to disseminate false information, the company posted in May that it was "Affiliated with RT" on its politics channel Soapbox as a "temporary, stop-gap measure" to avoid the shutdown of its accounts, the company's lawyers wrote.

"Maffick's intention was to compromise, keep its Facebook pages operating, and engage in further dialogue with Facebook, so that it would not be required to post further inaccurate information on any of its pages," the complaint states.

On June 4, Facebook publicly announced its policy "to label media outlets that are wholly or partially under the editorial control of their government," as part of an effort to combat misinformation ahead of the November 2020 presidential election.

The next day, Facebook published a notice on the "Page Transparency" section of Maffick's accounts, that they were "Russia state-controlled media," according to the suit.

"In the first weeks since Facebook posted the Notice, Maffick's monetization of its social media content (through advertising, e-commerce and otherwise) is down 50% from its monthly average for 2020," the lawyers wrote. "Maffick's 'reach,' a metric that measures the number of people who encounter its social media content, is down 74% over the same time period."

Maffick contends users immediately responded to the notice with negative comments on its pages.

TroyGould's John Ulin said Facebook is trying to promote an image of a responsible social media company by identifying pages that are controlled by foreign governments.

"When it does that by falsely telling the world that social media pages run by Maffick, which is a U.S. company, are 'Russia state-controlled media,' that helps nobody and only creates confusion and distrust," Ulin said.

Maffick initially tried to resolve the dispute informally, and now, it has to take action to protect its reputation and its business, he said.

"We want people to know if the news they read on Facebook is coming from a publication we believe is under the control of a government and we've made public the criteria we use to make this determination," a Facebook spokesperson said in an email. "This lawsuit is without merit and we will defend ourselves vigorously."

The company is suing for defamation, intentional interference with contractual relations and prospective economic relations, negligent interference with prospective economic relations and violations of the Lanham Act and California's Unfair Competition Law.

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