Limiting Tort Liability for Online Third-party Content Under Section 230 of the Communications Act.

• Author: Friedman, Jonathan A.

1. INTRODUCTION

   On December 2, 1999, the New York Court of Appeals resolved a long-running dispute pitting Prodigy, one of the nation's largest online service providers (OSPs),(1) against Alexander Lunney, a teenage boy scout.(2) The lawsuit had its origins in an e-mail message sent in Lunney's name by a Prodigy account holder to a scoutmaster in Bronxville, New York.(3) The e-mail contained a subject line that read "HOW I'M GONNA' KILL U," followed by a profanity-laced message.(4) The scoutmaster alerted the police and Lunney's local scoutmaster, who confronted the boy with the e-mail and accepted his denial of authoring the message.(5) After he learned that Prodigy terminated the accounts in his name despite his claim that he was not the holder of the accounts, Lunney sued Prodigy, claiming that Prodigy was negligent in allowing the accounts to be opened in his name and was responsible for his having been defamed.(6) Lunney later amended his complaint to add claims against Prodigy based on two bulletin board messages that had been posted on the Prodigy network in Lunney's name.(7) A New York appellate court granted Prodigy's summary judgment motion based on state common law grounds, and the New York Court of Appeals affirmed.(8)

   The Lunney decision marks another chapter in an ongoing battle over whether and when OSPs might be held liable for the third-party content posted on their networks. Potential liability arises from a number of sources. For example, an OSP, like Prodigy, that offers a chat or message board service may be liable if one of its users posts defamatory content on the service, or if the OSP, on its own initiative, blocks postings that it deems to be offensive or defamatory or that otherwise violate any terms of service for message board users. Independent of these new interactive services, an OSP could also be sued for allegedly defamatory material created by third-party content providers that the OSP itself has placed on its Web site. In fact, on several occasions, America Online (AOL) has been subject to suits involving postings by users as well as content partners.

   An OSP has several lines of defense against defamation-related claims arising from the postings of third parties. First, the OSP can include language in its general terms of service (and require every user to assent to such terms) indemnifying the OSP for claims arising from uses of its services. Second, the OSP can provide special terms of service for users of its interactive services, such as its message boards and chat services, that set out appropriate uses and specifically indemnify the OSP for claims arising out of user postings. AOL and other major OSPs have both of these types of terms of service.(9)

   Perhaps more importantly, OSPs have defended against such defamation claims based on a mix of federal statutory and state common law grounds. Prodigy argued successfully in Lunney that it was merely a "conduit" of the allegedly defamatory content and, as such, should not be treated as a publisher of that content under state common law principles applied to telephone companies.(10) More commonly, however, OSPs have relied on the federal statutory immunity created by section 230 of the Communications Act(11) for protection from defamation suits.(12) Section 230, as interpreted by courts over the last four years, provides an OSP with broad immunity from liability for harms arising from third-party content that is made available through the OSP's services. Such immunity clearly covers defamation-related claims arising from the postings of third-party users of these services.(13) As discussed below, some courts have recently held that section 230 provides immunity from any tort claim that would make online providers liable for information originating with a third-party, including users and commercial partners.(14)

   This Article presents a brief overview of common law principles of defamation. It then provides background on the enactment of section 230 and describes how state and federal courts interpret section 230 as well as the implications of those interpretations. This Article concludes by arguing that section 230 has been properly interpreted by the courts and that, contrary to the claims of critics, those decisions have not created a disincentive for OSPs aggressively to monitor their sites for defamatory or otherwise harmful content.

2. BACKGROUND ON DEFAMATION LAW

   1. Common Law Overview

      At common law, one who repeats or otherwise republishes defamatory matter is just as responsible for the defamatory content as the original speaker.(15) Courts, however, have generally recognized three standards or types of liability for republication of defamatory material: publisher liability, distributor liability, and common carder liability. First, an entity that exercises some degree of editorial control over the dissemination of the defamatory material will be generally liable for its publication (i.e., publisher liability).(16) A newspaper, for example, may be liable for defamation if a letter to the editor that it publishes contains false and defamatory statements. Second, an entity that distributes but does not exercise editorial control over defamatory material may only be liable if such entity knew or had reason to know of the defamation (i.e., distributor liability).(17) News vendors, bookstores, and libraries generally qualify for this standard of liability. Third, an entity that merely acts as a passive conduit for the transmission of defamatory material, such as a telephone company, is not subject to defamation liability, even if such entity knew or had reason to know of the defamation.(18) Furthermore, in the event that the conduit service could be characterized as a publisher, it is entitled to a qualified immunity from liability subject to the common law exception for malice (i.e., common carder liability).(19) The Lunney court, for example, analyzed Prodigy under this common carrier framework, concluding that Prodigy was not a publisher of the allegedly defamatory content because the OSP was "merely a conduit" of that content.(20)

   2. Cubby v. CompuServe and Stratton Oakmont v. Prodigy

      For the last several years, the courts and Congress have grappled with how these liability standards apply to OSPs, particularly as OSPs republish user postings on message board services. The two seminal court cases in this area are Cubby v. CompuServe(21) and Stratton Oakmont v. Prodigy.(22) In Cubby, the plaintiffs claimed that CompuServe was liable for allegedly defamatory statements made about their service in Rumorville, a rival online electronic newsletter made available to certain CompuServe subscribers.(23) CompuServe responded that it acted as a distributor, not a publisher, of the content and could not be held liable for the statements in Rumorville because it "did not know and had no reason to know of the statements."(24) The federal district court in New York agreed with CompuServe and did not subject CompuServe to publisher liability because the OSP did not exercise editorial control over the postings to its service.(25) CompuServe, as the court noted, reserved the right to decline to post materials on the message board service, but once it agreed to the postings, it exercised little or no control over the contents of such postings.(26) The court concluded that CompuServe's service was "in essence an electronic, for-profit library that carries a vast number of publications," and, consequently, CompuServe must be considered a "distributor" for purposes of assessing the plaintiff's claim.(27) The court then determined that CompuServe was not liable because it did not know or have reason to know of Rumorville's content.(28)

      In contrast, a New York state court, presented with similar facts in Stratton Oakmont, reached the opposite conclusion.(29) In Stratton Oakmont, the plaintiffs, a securities investment banking firm and its president, asserted that Prodigy was liable for allegedly defamatory statements made about the plaintiffs by an unidentified user of one of Prodigy's bulletin boards.(30) The critical issue for the court was whether Prodigy "exercised sufficient editorial control over its computer bulletin boards to render it a publisher with the same responsibilities as a newspaper."(31) The court concluded that it did, distinguishing Cubby on the grounds that: (1) Prodigy "held itself out to the public and its members as controlling the content of its computer bulletin boards" (even though, as a practical matter, Prodigy could not manually review the sixty thousand or so messages posted on its service every day); and (2) Prodigy implemented this control directly through its automatic screening software (whereas in Cubby, the screening was done by an independent contractor).(32) The court rejected claims that its decision would have a "chilling effect" on OSP efforts to police their services, noting that such claims "incorrectly presume[] that the market will refuse to compensate a network for its increased control and the resulting increased exposure."(33)

3. SECTION 230 AND RELATED CASE LAW

   1. Background on Section 230

      The online community and Capitol Hill roundly criticized the Stratton Oakmont decision at a time when Congress was considering telecommunications reform legislation as well as the Communications Decency Act.(34) Lawmakers of all political stripes found common cause in opposing the decision, which they believed would discourage OSPs from monitoring their sites for objectionable content.(35) In response, Congressmen Christopher Cox and Ron Wyden introduced a floor amendment to the House version of the telecommunications bill that its authors intended to achieve two basic objectives: (1) in response to Stratton Oakmont, to protect OSPs that police their sites for offensive material;(36) and (2) in response to the Senate-passed Communications Decency Act (which involved government extensively in...