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)