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A lawsuit against consumer review site Yelp! has yielded an opinion that demonstrates the breadth of the protection afforded interactive service providers under Section 230 of the Communications Decency Act. In Levitt v. Yelp! Inc., 2011 U.S. Dist. LEXIS 124082 (N.D. Cal. Oct. 26, 2011), a group of putative class action plaintiffs filed an action against the site under Section 17200 of the California Business and Professions Code, claiming that the site manipulated its consumer review functionality to extort advertising revenues from the plaintiff businesses.

A key element of the business owners’ claims against Yelp! was the attempt to construct a theory of liability that would avoid the protection from liability for user content that is afforded interactive service providers under CDA Section 230. The business owners’ complaint based its claims on alleged conduct on the part of Yelp! and its employees. This approach has succeeded in a very small group of cases, e.g., Barnes v. Yahoo!, Inc., No. 05-36189 (9th Cir. May 7, 2009) (as amended June 22, 2009) (see our prior blog post here) and Anthony v. Yahoo! Inc., 2006 WL 708572 (N.D. Cal. March 17, 2006) (see Prof. Eric Goldman’s blog post here).

In an opinion rendered last spring, Judge Marilyn Patel rejected most of the business owners’ claims of “implied extortion” that were based upon allegations that Yelp! manipulated reviews in order to coerce businesses into purchasing advertising on the site, but granted leave to amend the complaint. Levitt v. Yelp! Inc, 2011 U.S. Dist. LEXIS 99372 (N.D. Cal. Mar. 22, 2011). A Third Amended Complaint was filed and Yelp! renewed its motion to dismiss. Judge Edward Chen, now assigned to the case, concluded that the Third Amended Complaint failed to cure the pleading and substantive defects identified by Judge Patel and finally dismissed the complaint without leave to amend.

The plaintiffs’ Third Amended Complaint allege!d several different categories of conduct by Yelp!: that the service removed positive reviews, resulting in a lowered overall “star” rating for a business; that the service retained negative reviews, even if those reviews violated the service’s terms of use; that the service’s own employees wrote negative reviews; and that the service said it would manipulate reviews in a positive direction for businesses that paid for advertising on the service.

Judge Chen found that the allegations that Yelp!’s own employees wrote negative reviews or paid users to do so were speculative. They relied, he said, on factually unsupported allegations that one of the plaintiffs was told by an unnamed source that Yelp! employees had been discharged for unspecified “scamming relating to advertising.”

Judge Chen then concluded that allegations that Yelp! either removed user reviews, or changed their order on the site in order to extort businesses, fall within CDA Section 230(c)(1), which prohibits treatment of a provider as the publisher or speaker of information provided by a third party.  Decisions to remove or reorder user content fall within the publisher’s “traditional editorial functions,” he concluded, citing, e.g., Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, 521 F.3d 1157 (9th Cir. 2008) (en banc).

The court also rejected the theory that Yelp! created the overall “star” reviews of businesses, which were derived from aggregating the ratings of individual reviews, finding that the aggregation of user content to generate the reviews did not make Yelp! a content provider. On this point, the court cited Gentry v. eBay, Inc., 99 Cal. App. 4th 816, 834, 121 Cal. Rptr. 2d 703 (2002), which absolved eBay of liability for its star ratings of users based upon user-generated data.

The court recognized that there was a distinction in Yelp! based on the business owners’ allegations that the provider included and excluded certain user reviews upon which Yelp! star ratings are based. But Judge Chen noted that the plaintiffs’ did not argue that the inclusion and exclusion of certain reviews per se fell outside of CDA Section 230(c)(1). Rather, they argued that the inclusion and exclusion of certain reviews was done in bad faith. The court framed the issue as whether the exercise of a traditional editorial function, otherwise protected by CDA Section 230, falls outside of that protection when the provider has a bad faith motive.

Judge Chen concluded that, despite the “ethical underpinnings” of the business owners’ position, a provider’s motive in exercising its editorial function is irrelevant under the language of Section 230 as well as prior court interpretations, which have not recognized an intent test for the application of Section 230(c)(1). The court pointed out that while Section 230(c)(2), which protects a provider’s actions taken to restrict obscene and otherwise objectionable material, includes a good faith requirement, Section 230(c)(1) contains no good faith language. As to the policy of protecting possible bad-faith exercises of editorial functions, Judge Chen referred to the strong policy of Section 230 to protect providers from lawsuits over third-party content:

Furthermore, it should be noted that traditional editorial functions often include subjective judgments informed by political and financial considerations. *** Determining what motives are permissible and what are not could prove problematic. Indeed, from a policy perspective, permitting litigation and scrutiny motive could result in the "death by ten thousand duck-bites" against which the Ninth Circuit cautioned in interpreting § 230(c)(1) [citing Fair Housing Council v. Roommates]. *** As illustrated by the case at bar, finding a bad faith exception to immunity under § 230(c)(1) could force Yelp to defend its editorial decisions in the future on a case by case basis and reveal how it decides what to publish and what not to publish. Such exposure could lead Yelp to resist filtering out false/unreliable reviews (as someone could claim an improper motive for its decision), or to immediately remove all negative reviews about which businesses complained (as failure to do so could expose Yelp to a business's claim that Yelp was strong-arming the business for advertising money). The Ninth Circuit has made it clear that the need to defend against a proliferation of lawsuits, regardless of whether the provider ultimately prevails, undermines the purpose of section 230.

In accordance with this conclusion, the court dismissed the business owners’ claims under California Business and Professions Code § 17200, as well as civil extortion and attempted extortion claims.

Plaintiffs Boris Levitt, et al, filed a notice of appeal to the Ninth Circuit on November 7, 2011.

 

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A divided New York Court of Appeals ruled on June 14, 2011, that an online forum administrator’s additions to an allegedly defamatory post by a user are protected by Section 230 of the Communications Decency Act. Shiamili v. The Real Estate Group of New York, Inc., No. 105, (N.Y. June 14, 2011). This is the first ruling by New York’s highest court on the scope of CDA Section 230, it was noted in both the majority opinion and the dissent.

For the most part, the dispute presents a typical scenario in a CDA Section 230 case: An anonymous user of an online forum posts statements that are alleged to be defamatory, the operator (often, and in this case) refuses to remove the comments, and the subject of the statements brings suit, seeking to hold the forum operator responsible. Thus stated, the case is a slam-dunk situation for the application of CDA Section 230, which protects online service providers from liability for “information” provided by a third-party user of the service. The twist in this case is that the subject of the statements, Christakis Shiamili, is the head of a real estate company, and the online forum was operated by a rival real estate company. And Shiamili alleged that the operator made additions to the user-supplied statements that took them outside the protection of Section 230.

According to the complaint, the anonymous user alleged in a comment to a preexisting discussion thread that Shiamili was racist and anti-Semetic, and that he mistreated his employees. The forum administrator copied the comment and re-posted it as a “stand-alone post,” and prefaced it with a new heading, some additional comments, and an image (later described in the majority opinion as satirical) containing the plaintiff’s name. This re-posting was followed by additional allegedly defamatory statements by anonymous users.

 In its dissection of the complaint, the majority separately considered the original comment (which is assumed was defamatory), and concluded that the defendants were protected by Section 230 because Shiamili did not allege that they had authored that post. The court rejected the argument that they should nevertheless be deemed information content providers on the theory that they created and ran a Web site that implicitly encouraged users to post negative comments about the New York City real estate industry: “Creating an open forum for third-parties to post content – including negative commentary – is at the core of what Section 230 protects.”

With respect to the moving of the comment to a new thread, the majority found that this action fell within the compass of Section 230 protection as an exercise of a publisher’s “traditional editorial function.” With respect to the additional content that the forum operator did supply, the court concluded that it was not defamatory as a matter of law.

Chief Judge Lippman, who authored the dissent, concluded to the contrary that the defendants were erroneously being shielded by Section 230 “from the allegation that they abused their power as website publishers to promote and amplify defamation targeted at a business competitor.” The operator’s actions were not merely the reposting of outrageous statements to a more prominent position on the Web site, which the dissent conceded could “plausibly” fall into the compass of a traditional editorial function. A reasonable reader could view the additional material added by the operator as endorsing the truth of the original defamatory statement, Judge Lippman opined. In concluding he emphasized that his disagreement with the majority was not on the applicable legal principles, but on the characterization of the facts, and whether the plaintiff’s claims should have survived a motion to dismiss:

While I do not dispute the adoption of a broad approach to immunity for on-line service provider under the CDA, an interpretation that immunizes a business’s complicity in defaming a direct competitor takes us so far afield from the purpose of the CDA as to make it unrecognizable. Dismissing this action on the pleadings is not required by the letter of the law and does not honor its spirit. (Judge Lippman, dissenting)

 

 

 

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Electronic technologies have greatly reduced the costs of distributing information, but for content owners, that's been a mixed blessing. Just as their costs of content distribution have shrunk and their ease of distribution has increased, the same is true for parties who obtain and redistribute that content unlawfully, to the competitive disadvantage of the content owners. That equation has been repeated over and over, reflected in numerous litigation battles fought over the last several decades. One of those battles has been fought by major financial firms that have sought to regain control over the dissemination of the stock analysts' research reports that are central to their business model.

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A hard-fought battle between two sandwich franchises has yielded an opinion dealing with the application of Section 230 of the Communications Decency Act to videos submitted as part of an online contest. The result is an unusual ruling that sends to a jury the issue of whether the advertiser that sponsored the contest was an "information content provider" with respect to the videos, and thus is ineligible for CDA Section 230 protection. Doctor's Associates v. QIP Holder LLC, 2010 U.S. Dist. LEXIS 14687 (D. Conn. Feb. 19, 2010).

The dispute between the Subway sandwich franchise (Doctor’s Associates) and the Quiznos sandwich franchise (QIP Holder) stems from an advertising campaign that commenced in 2006. Quiznos sought to compare the meat content of certain of its sandwich products to comparable Subway offerings, and fashioned a campaign that included television advertisements and an online video contest that solicited submissions from users who were asked to create a video demonstrating "why you think Quiznos is better." The contest Web site was hosted at a domain, "meatnomeat.com," which featured four sample videos prepared by the advertising agency that fashioned the campaign and also displayed user-generated videos that Quiznos and its advertising agency deemed to satisfy the contest rules.

Subway brought an action against Quiznos and iFilm, which partnered with Quiznos on the video contest, under the Lanham Act for false and deceptive advertising and various related state law claims, alleging that, in brief summary, the tv ads, the sample videos and the user-submitted videos unfairly compared its products with Quiznos products. On Quiznos’s motion for summary judgment, the court found numerous issues of material fact, including on the issue of whether Quiznos made false representations in connection with the Internet portion of the campaign.

With respect to the user-generated videos, Quiznos argued that it was immune from liability under CDA Section 230 because the contestants were the exclusive creators of the videos, and that Subway sought to hold Quiznos liable as a publisher of those videos in contravention of the proscription in CDA Section 230(c)(1) against treating a provider or user of an interactive computer service as the "publisher or speaker of any information provide by another information content provider." Subway argued that Quiznos went beyond the role of a traditional publisher in that it solicited disparaging material and shaped the ultimate content of the videos such that it was "responsible" for the creation or development of the content.

On this issue, the court referenced the opinion in MCW v. badbusinessbureau.com, 2004 U.S. Dist. LEXIS 6678 (N.D. Tex. Apr. 14, 2004), which featured that perennial CDA Section 230 litigant, the RipoffReport Web site and its operator, Ed Magedson. The MCW ruling is one of the very few of the many brought against the RipoffReport (a/k/a badbusinessbureau.com, Xcentric Ventures) in which the plaintiff survived a pre-trial motion brought pursuant to CDA Section 230.

The court In Doctor's Associates v. QIP concluded that it is "unclear" at this stage of the litigation whether Quiznos went beyond the traditional role of a publisher with respect to the contest videos and "actively participated in creating or developing the third-party content" and thereby went beyond the traditional role of a publisher with respect to the contest videos:

In MCW, for instance, the operator of a consumer complaint website was found to have gone beyond the traditional publisher's role because they "actively encourage, instruct, and participate in the consumer complaints posted on the websites" by, inter alia, encouraging consumers to take pictures of a company's owner and offices for posting on the website. 2004 U.S. Dist. LEXIS 6678 at *34-*35. In the MCW Court's view, by actively soliciting disparaging material, the defendants went beyond the publisher's role and "incurred responsibility for the information developed and created by consumers." Id. at *35.

Here, the Defendants invited contestants to submit videos comparing Subway and Quiznos and demonstrating "why you think Quiznos is better." The domain name used to solicit entrants for the Contest, "meatnomeat.com," is arguably a literal falsity because it implies that the Subway sandwich has "no meat." In addition, the four "sample videos" designed by the Defendants to shape the Contest submissions arguably contain false representations because they depict the Subway sandwich as having no meat or less meat than a Quiznos sandwich. In these circumstances, the Court cannot conclude, as a matter of law, that the Defendants are not responsible for the creation and development of the contestant materials. Whether the Defendants are responsible for creating or developing the contestant videos is an issue of material fact, best submitted to the jury after viewing all of the relevant evidence. A reasonable jury may well conclude that the Defendants did not merely post the arguably disparaging content contained in the contestant videos, but instead actively solicited disparaging representations about Subway and thus were responsible for the creation or development of the offending contestant videos. FN 5

FN 5:

As the MCW Court explained, the CDA "does not require a court to determine only whether a party creates or develops the information at issue. Being responsible for the creation or development is sufficient." 2004 U.S. Dist. LEXIS 6678 at *35 n.12. "This distinction is significant because a party may be responsible for information created or developed by a third party without actually creating or developing the information itself." Id

 

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Apple probably could not have satisfied all the wild and hopeful imaginings of everyone who weighed in on what its new iPad device would look like, and what its functionality would be. Whether or not the iPad will be the content distribution game-changer that so many are looking for is another matter, but it's still a pretty interesting device. In any case, however, the iPad does at least raise certain legal issues to consider.

As smart as lawyers have become in trying to address new technologies in agreements, there is always the question of whether a particular device or distribution method falls within the scope of the agreement.  In some cases, the party drafting the agreement is lucky enough to have their counterparty agree to unlimited, unrestricted descriptions of technology (e.g., in all media, technology and distribution methods, now known or hereafter to become known, anywhere in the Universe).  However, all the parties to technology oriented transactions are aware of the importance of this issue, and the counterparty in more cases than not will push back to limit the scope to the "intended" technology.

Which leads us to the question: Where will the iPad fall within the scope of these types of agreements? 

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We have previously described as "robust," the protection afforded interactive service providers from liability for defamatory contents posted by third parties by Section 230 of the Communications Decency Act.  But in Blockowitz v. Williams, 1:09-cv-03955 (N.D. Ill. Dec. 21, 2009), involving post-judgment efforts to have defamatory postings removed from a consumer complaint Web site ,  the protection comes, not from CDA Section 230, but from Fed. R. Civ. P. 65, which governs the enforcement of injunctions.

Perhaps predictably, for followers of CDA Section 230 jurisprudence, the consumer complaint Web site involved is the Ripoff Report, operated by perennial defendant Xcentric Ventures, Inc.

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 To the great frustration of plaintiffs and their attorneys, and even some judges, courts have construed Section 230 of the Communications Decency Act in such a way as to make it virtually impossible to hold a Web site operator liable for defamatory material that is posted on the site by a third party, even if the operator has knowledge of the defamatory nature of the material and refuses to remove it. Many plaintiffs have tried to plead around the robust protection provided by Section 230, but only a very few have succeeded. One of them is Cecilia Barnes, who alleged that she was defamed by false dating profiles posted by an ex-boyfriend on Yahoo!'s dating Web site. Any claim that Yahoo! was liable for the posting of the profiles by the ex-boyfriend is precisely the sort of claim that is barred by Section 230. But Barnes claimed that a separate promise by a Yahoo! employee to remove the profiles was not precluded.

Earlier this year, in Barnes v. Yahoo!, Inc., 570 F.3d 1096 (9^th Cir. 2009), the Ninth Circuit agreed with Barnes. The court concluded that because her claim alleged a separate undertaking by Yahoo!, distinct from the act of publishing the profiles, it did not implicate the Section 230 provision that bars holding a Web site operator liable as the “publisher” of information provided by a third party. The circuit court remanded the case for further consideration of Barnes's surviving claim, which has now withstood a further motion to dismiss in the district court in Barnes v. Yahoo!, Inc., 2009 U.S. Dist. LEXIS 116274 (D. Ore. Dec. 8, 2009).

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If you refer to a professional model a "skank" and a "ho," that's defamation, not mere opinion or hyperbole, and it is no less defamatory for having been said on a blog, a Supreme Court judge in New York ruled in In re Application of Cohen (N.Y. Sup. Ct. N.Y. Cty Aug. 17, 2009).

The object of the blog statements, professional model Liskula Cohen, sought an order to compel pre-action disclosure of information about the identity of the blogger from Google, Inc., the parent company of blog site Blogger.com. The court rejected the argument of the anonymous blogger that the court should find as a matter of law that a blog is a "modern day forum for conveying personal opinions, including invective and ranting," and that consequently the statements on the "Skanks of NYC" blog should be considered mere hyperbolic "trash talk."

The court also rejected the anonymous blogger's argument that the court should follow other courts, such as the New Jersey appellate court in Dendrite International, Inc. v. Does (App. Div. 2001), in adopting a special standard for evaluating the merits of defamation actions against anonymous bloggers before granting requests for discovery directed to their identity. The court found that the provisions in New York CPLR 3102(c) governing requests for pre-action discovery "appear to address the constitutional concerns raised in this context." What is required, the court found, is a "prima facie showing of a meritorious cause of action," and a showing that the information sought is "material and necessary to identify the potential defendant or defendants."

As to Cohen's cause of action, the court found that the terms used on the blog in captions describing or commenting on photographs of Cohen (which apparently were copied both from Cohen's own Facebook site as well as from other, unauthorized sources) "could be understood to describe the petitioner as sexually promiscuous." Looking at the blog in context, the court found that the statements conveyed "facts" that were capable of being proven true or false. Finally, the court found that the terms used were "reasonably susceptible of a defamatory meaning," and not, as the anonymous blogger argued, "comparable in meaning to the word 'jerk' or any other loose or vague insult."

A note on Google's position with respect to the requested discovery: The opinion recites that Google refused to supply the discovery at the request of Cohen's attorney and stated it would not provide the information "unless required to do so pursuant to applicable law, regulation, legal process or enforceable governmental request." Google also and took no position on the substantive merits of Cohen's application but objected on the ground that it was "overbroad, vague, ambiguously worded and unduly burdensome." The court notes that upon being served with Cohen's application, Google notified the anonymous blogger at the e-mail address provided in the blog's registration information, and the blogger appeared anonymously through counsel.

 

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Deleting information in the digital world can be a problematic issue. A Web site that appears to a viewer to present unitary pages of text and images actually consists of text and graphic elements that can be drawn from a variety of sources. For a variety of technical reasons, it is not unusual for text elements included in a Web page to be stored on one server and the images to be stored on another, even where the Web page, the text and image elements are all the property of a single entity. When references to text or images are deleted from the HTML code that makes up a Web page, the text and image files themselves may remain exactly where they were, still accessible directly via their original URL addresses, or via a search engine.

Security researchers at the University of Cambridge in the UK recently studied this issue in the context of social networking sites. They found that for a variety of reasons, when users delete references to images that they have uploaded to social networking sites, those images may remain accessible for a period of time after they have been "deleted" by the user.

A recent judicial opinion also briefly addressed the phenomenon of "zombie" photos, in the context of a dispute between a law firm and a group of its former associates, and a claim of violation of the right of publicity.

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UPDATE:  The Ninth Circuit issued an amended opinion on June 22, 2009, see discussion below. The amended opinion included an order denying the parties' petitions for rehearing and rehearing en banc.

Many attempts have been made to plead around the immunity provided to interactive computer services under Section 230 of the Communications Decency Act, and only a very few such attempts have succeeded. Here's one that has succeeded at least to the point of getting a remand back to the district court. The appeals court concluded that the victim of the "incedent" false profiles posted on Yahoo! by a spurned boyfriend may have a cause of action against Yahoo! for allegedly promising to remove the profiles, then failing to do so.
 
Barnes v. Yahoo!, Inc., No. 05-36189 (9th Cir. May 7, 2009).

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The copyright lawsuits brought by record company plaintiffs to redress file-sharing have yielded many decisions of first impression. However, the recent ruling by the First Circuit in In re Sony BMG, Inc. (1st Cir. Apr. 16, 2009)  is one of the few that is of interest not just to copyright litigators, but scholars of appellate procedure as well. The ruling includes a discussion of the contours of federal court of appeals mandamus jurisdiction and the circumstances under which prerogative writs should be issued to the lower federal courts. A rarefied discussion indeed.

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The "Ripoff Report" consumer complaint Web site is well known to those who follow rulings involving the application of Section 230 of the Communications Decency Act, including some who self-identity as "Section 230 junkies." Xcentric Ventures, the operator of the Ripoff Report, and its founder Ed Magedson have been serial defendants in defamation cases brought by various parties who sought to establish that the site was liable for defamatory statements made by posters to the site. Xcentric and Magedson have prevailed in almost all of those cases, even in situations where the plaintiffs sought to establish that the Magedson and Xcentric employees either wrote or substantially edited some of the alleged defamatory postings and thus were not entitled to CDA Section 230 immunity. And the Ripoff Report boasts about those successes on the Web site.

Now a defamation plaintiff, instead of bringing an action against Magedson or Xcentric with respect to a Ripoff Report post, has filed a John Doe lawsuit and is seeking discovery of the identity of the authors of the anonymous posts via a third-party subpoena to Xcentric.

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The cause of action for misappropriation of reports of breaking news, i.e., "hot news" misappropriation, has been around for going on a century, since the U.S. Supreme Court opinion in International News Service v. Associated Press, 248 U.S. 215 (1918). In that landmark case the Court recognized a "quasi property" right in such reports on the part of a news-gathering organization under federal common law.

Survival of the hot news misappropriation claim, and its applicability to online news aggregators, has been the subject of much discussion and debate as news aggregation sites have become ubiquitous on the Internet, on sites ranging from Google News to thousands of more modest offerings. The AP, which was the prevailing plaintiff in the landmark case 90 years ago, has been successful in obtaining settlements with a number of online news aggregators that used its material, including a settlement with Google News in 2006 and a settlement with Moreover and its parent company Verisign last year.

The AP has again made progress in this ongoing battle, this time in its hot news misappropriation lawsuit against online aggregator All Headline News Corp. In this case, the court issued a ruling that recognizes not only the AP's misappropriation claim, but its claim under the Digital Millennium Copyright Act copyright management provision as well.

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