The Standard of Care for Electronic Information Providers

In the not-so-distant past, the most important issue facing providers of on-line information in the defamation context has been to determine whether the information provider would be classified by a court as a publisher or a distributor. In traditional defamation contexts, a publisher is deemed to be exercising editorial judgment about the information it disseminates (as in the case of a newspaper publisher), and is therefore held liable for the words it publishes. On the other hand, a distributor (such as a newsstand operator) is deemed not to exercise any editorial control, and is therefore deemed not liable if it happens to distribute defamatory content. Early attempts by courts to analyze defamation claims arising out of on-line activities generally hinged on whether the defendant was thought to be acting more like a traditional publisher or a traditional distributor. As courts wrestled with the problem of applying old concepts to a new paradigm, the results were often inconsistent and unpredictable.

Cubby, Inc. v. CompuServe Inc., 776 F. Supp. 135 (S.D.N.Y. 1991), was probably the first significant case on the topic. In Cubby, the District Court held that CompuServe was not liable for defamation claims arising out of statements contained in Rumorville, an on-line newsletter which CompuServe disseminated as part of its "Journalism Forum."

Key to the result was the fact that CompuServe did not write, edit, or even review the newsletter before it was uploaded onto the computer banks and made available to subscribers. Under contract to CompuServe, Cameron Communications, Inc., managed and edited the contents of the Journalism Forum "in accordance with editorial and technical standards and conventions of style as established by CompuServe." Cameron in turn contracted with third-party publishers, who uploaded publications, such as Rumorville, directly onto the CompuServe database and "accept[ed] total responsibility for the contents" thereof.

The plaintiffs, publishers of a competing newsletter called Skuttlebut, sued CompuServe for allegedly defamatory statements about them in Rumorville. Concluding that CompuServe "is in essence an electronic, for-profit library" and that "[a] computerized database is the functional equivalent of a more traditional news vendor," the court held that the proper standard of liability to impose on CompuServe is the same as that applied to libraries, book stores and news vendors, i.e., that of distributor of printed publications, rather than publisher.

The court found that CompuServe neither knew nor had reason to know of the allegedly defamatory statements, "especially given the large number of publications it carries and the speed with which [Rumorville's publisher] uploads Rumorville into its computer banks and makes the publication available." In other words, the Court concluded that, at least in this context, Compuserve was a distributor, not a publisher.

However, the court's opinion left open the possibility that a database operator that exercises editorial control over content could be deemed a "publisher" rather than a mere "distributor," giving rise to potential liability.

Perhaps the most important case in this area was Stratton Oakmont, Inc. v. Prodigy Computer Services Inc. No. 031063/94 (N.Y. Sup. Ct. Nassau Co. 1995) 1995 WL 323710, 63 U.S.L.W. 2765, Computer Industry L.R., January 5, 1995, p. 19,812. This decision, which was widely criticized as ill-advised, seems to have been the impetus for Congress pass the "good samaritan" provision of the Communications Decency Act of 1996, discussed in further detail below.

A partial summary judgment ruling by the state trial court in favor of Stratton Oakmont held that Prodigy was potentially liable for the statements posted on its service. The court distinguished the Cubby case because Prodigy had, in the past, reserved the right to control the content of its bulletin boards, and utilized special computer software to screen out obscene or offensive language. Thus, the court found that Prodigy had functioned more as a publisher than as a mere passive distributor.

Prodigy moved to reargue and overturn the ruling, based on new information that Prodigy was merely editing its boards for taste, not for content, at the time the remarks about Stratton were posted. While the motion was pending, Stratton and Prodigy reached a settlement, under which Prodigy said it was "sorry" for the incident, and Stratton agreed not to oppose Prodigy's motion to reargue and overturn. However, the judge refused to rehear the case, citing "a real need for some precedent" in this area of the law.

The Good Samaritan Provision of the Telecommunications Act of 1996

Congress acted to limit the potential liability of computer services for defamation with the enactment of the Telecommunications Act of 1996, . In what appears to be a direct response to the Stratton Oakmont case, Congress included in the new Telecommunications Act a provision (47 U.S.C. § 230(c)) designed to protect "good samaritan" services which exercise some editorial control over user postings. This exception prevents a service from being treated as the publisher or speaker of any information provided by another content provider, and further precludes treating such a service as a publisher or speaker simply because it makes voluntary, good faith efforts to restrict other content providers from posting objectionable material, regardless of whether or not such material is constitutionally protected.

The cases that have come down since the enactment of the Telecommunications Act have afforded strong protection to on-line service providers. In particular, American Online has reaped many of the benefits of the new law, simply because of dominance in the field of on-line service providers.

In the first and most important case decided under the new law, Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997), cert. denied, 118 S. Ct. 2341 (1998), the plaintiff was the victim of another AOL user who "spoofed" Zeran's identity, and posted a message stating that Zeran was selling "shirts featuring offensive and tasteless slogans" related to the Oklahoma City Federal Building bombing. Interested people were instructed to call Zeran's home phone number in Seattle, which Zeran also used for business purposes. Not surprisingly, Zeran was bombarded with angry and threatening calls, including some death threats. Eventually, the phone calls were coming in at an average of one every two minutes. Zeran asked AOL to remove the posts, which AOL indicated would be done, but AOL also refused to print a retraction, as a matter of policy. AOL did eventually remove the postings, and closed the account from which the messages had been posted.

The person who posted the messages was never discovered, but Zeran sued AOL on theories essentially the same as traditional publisher or distributor liability. The appellate court affirmed the dismissal of the case on the basis of the good samaritan law. The court found that the law was intended to insulate on-line service providers from precisely this type of liability, regardless of whether the case was framed as one of publisher liability or distributor liability. The court also placed no weight on the fact that AOL had notice of at least some of the messages. The court found that to do so would be contrary to the clear objectives of the good samaritan law.

A more problematic issue was raised by Blumenthal v. Drudge, 992 F. Supp. 44 (D. D.C. 1998). In this case, White House aide Sidney Blumenthal sued the well-known Internet gossip columnist Matt Drudge for allegedly defamatory comments about Mr.. Blumenthal's alleged history of spousal abuse. Blumenthal also sued AOL. In this case, AOL was not simply transmitting Drudge's column, as it simply transmitted the posts of the prankster in the Zeran case, but AOL actually had a contract with Drudge in which it paid Drudge $36,000 per year for his column. The contract also gave AOL the "right to remove, or direct [Drudge] to remove, any content, which as reasonably determined by AOL . . . violated AOL's then-standard Terms of Service . . ." AOL also actively promoted Drudge's column as a benefit of AOL membership.

While the suit against Drudge was allowed to go forward (and is still pending as of this writing), the Judge dismissed the case against AOL, despite his own misgivings. The Court wrote, "Because it has the right to exercise editorial control over those with whom it contracts and whose words it disseminates, it would seem only fair to hold AOL to the liability standards applied to a publisher, or, at least, like a book store owner or library, to the standards applied to a distributor. But Congress has made a different policy choice in providing immunity even where the interactive service provider has an active, even aggressive role in making available content prepared by others. In some sort of tacit quid pro quo arrangement with the service provider community, Congress has conferred immunity from tort liability as an incentive to Internet service providers to self-police the Internet for obscenity and other offensive material, even where self-policing is unsuccessful or not even attempted."

The protections of this good samaritan law have also been applied to confer immunity upon a service provider for allegedly distributing child pornography. In Doe v. America Online, Inc., 718 So.2d 385 (Fla. Dist. Ct. App. 1998), a mother sued AOL and Richard Lee Russell for Russell's distribution of pornographic material on AOL which allegedly depicted her eleven year old son engaging in sexual activities at Russell's instance. Doe argued that the good samaritan provision did not apply here, because she was not attempting to hold AOL liable as a publisher or a speaker, but as a distributor of child pornography. However, the Court, following the reasoning of the Zeran decision, determined that AOL was statutorily immune, regardless of whether it was characterized as a speaker, publisher or distributor. The Court also determined that the federal preempted Florida state law on the subject. Recognizing the importance of these questions, the Court requested that the Florida Supreme Court address the question of the retroactively of § 230, whether it does preempt state law, and whether notice to a service provider of a defamatory positing destroys the statutory immunity. The Florida Supreme Court has yet to respond to these questions.

LINKS:

Basic Elements of a Cause of Action for Defamation

The Standard of Care for Electronic Information Providers

Other Legislative Initiatives Relating to the Standard of Care Issue

Procedural and Jurisdictional Issues