1. Courts In Two-Thirds Of The Federal Circuits, And Several
States, Have All Interpreted This Federal Statute In A Manner
Squarely At Odds With The Court Of Appeal's Decision Below
The panel justified its refusal to follow federal courts' interpretation of this federal statute by citing a rule that, "'while federal circuit court precedence on issues of federal law is certainly entitled to substantial deference, it is not binding.'" Exh. A at 17-18 (quoting Yee v. City of Escondido, 224 Cal. App. 3d 1349, 1351 (1990)). While this would be appropriate if Zeran were the only case that had interpreted section 230, or if the federal courts were split, the panel's decision overlooks that courts in two-thirds of the federal circuits have addressed the issue, that all of them reached the same conclusion, and that state courts generally should not part company with federal courts interpreting federal law in such a case.
Since the Fourth Circuit's decision in Zeran, three other circuits -- the Third, Ninth and Tenth -- have agreed with Zeran that, with respect to speech in cyberspace, section 230 "overrides the traditional treatment of publishers, distributors, and speakers under statutory and common law." Batzel, 333 F.3d at 1026; [FN 7] Green v. America Online, Inc., 318 F.3d 465 (3rd Cir. 2003); [FN 8] Ben Ezra, Weinstein, and Co. v. America Online Inc., 206 F.3d 980 (10th Cir. 2000). [FN 9] In four other circuits -- the Fifth, Seventh, Eighth and District of Columbia -- district courts have interpreted section 230 in a manner consistent with Zeran, and in conflict with the panel's decision in this case, finding that, "[i]n enacting 230, Congress meant to insulate distributors as well as publishers from liability for defamation." Patentwizard, Inc. v. Kinko's, Inc., 163 F. Supp. 2d 1069, 1071 (D.S.D. 2001); [FN 10] Smith v. Intercosmos Media Group, Inc., U.S. Dist. LEXIS 24251 (E.D. La. 2002); [FN 11] Morrison v. America Online, Inc., 153 F. Supp. 2d 930 (N.D. Ind. 2001); [FN 12] Blumenthal v. Drudge, 992 F. Supp. 44 (D.D.C. 1998). [FN 13]
[FN 8] Green affirmed dismissal of a lawsuit seeking to hold AOL liable for, inter alia, failing to remove messages posted to a chat room after plaintiff faxed AOL notice of the defamatory messages. 318 F.3d at 469, 471.
[FN 9] The Tenth Circuit refused to hold AOL liable for third-party content even after having notice, 206 F.3d at 983, because plaintiff's theory "would ‘treat' Defendant as the ‘publisher or speaker,' a result § 230 specifically proscribes." Id. at 986. "In this regard," the Tenth Circuit said, "we agree with the Fourth Circuit's decision in Zeran, 129 F.3d at 327." Id.
[FN 10] "Kinko's is a publisher for purposes of § 230. As the Fourth Circuit explained in Zeran ..., the common law of defamation applied both to publishers and distributors and lumped both under the term ‘publisher.'" Patentwizard, 163 F. Supp. 2d at 1071.
[FN 11] Smith rejected plaintiffs' theory that the defendant was not immune under section 230 for "‘allow[ing] the defamation to continue,'" 2002 U.S. Dist. LEXIS 24251, *9, after they advised the defendant of the defamatory content, id. at *2, because plaintiffs' theory "treats the defendant as publisher of the alleged defamatory statements." Id. at *10-11.
[FN 12] In enacting section 230, Congress "did not intend for various parties to bring a cause of action against such service providers because of voluntary actions taken by AOL based upon the content transferred via its medium. See 47 U.S.C. § 230(c)(2). The wisdom of Congress in providing such immunity is well taken considering the myriad of constitutional and other legal issues that could be raised by various parties without giving such interactive computer service providers the ability to regulate without fear of legal action." Morrison, 153 F. Supp. 2d at 934.
[FN 13] In Blumenthal, the district court rejected the argument that AOL should be held, "at least, like a book store owner or library, to the liability standards applied to a distributor" because "Congress has made a different policy choice by providing immunity even where the interactive service provider has an active, even aggressive role in making available content prepared by others." 992 F. Supp. at 51-52.
Where, as here, the Court of Appeal fails to follow this rule, review should be granted to ensure uniformity in federal law and to bring California into compliance not only with all the federal courts that have interpreted this federal statute, but also with the courts in five other states, all of which have interpreted the scope of section 230 immunity in a manner consistent with Zeran and in conflict with the decision below. [FN 15] Unless review is granted and the decision below reversed, Rosenthal will face potential liability in California on the very theory of liability the state courts in Illinois refused to allow plaintiff Barrett to pursue against an Illinois resident who posted to his own web site emails by Tim Bolen, author of the e-letter that gave rise to Polevoy's claims against Rosenthal in this case. Barrett v. Fonorow, 799 N.E.2d 916, 922-26 (Ill. App. 2003).
2. Unless Review Is Granted And The Conflict With The Federal
Authorities, Including The Ninth Circuit, Is Resolved, It Will
Encourage Forum Shopping And Leave California Internet
Intermediaries Liable While All Others Have Federal Immunity
The panel's refusal to follow unanimous federal authority is especially problematic here, and review is especially appropriate, because, as the panel concedes, the Ninth Circuit is among the federal courts with which its interpretation of section 230 conflicts. Exh. A at 4 n.4.
Where, as here, the Ninth Circuit has taken a broad view of a federal immunity that preempts state law claims, California courts have followed the approach taken by the Ninth Circuit because, "[w]ere we to adopt a different view, we would encourage forum shopping." IT Corp., 83 Cal. App. 3d at 451. "To rule otherwise is to invite forum shopping by creative lawyers who could not assert the [claims] in federal court but could in California [state courts]. This could have a negative impact on the courts of this state and would damage the uniform policy [concerning federal preemption of state law claims] that 'the federal courts have the paramount power to fashion.'" Webb, 225 Cal. App. 3d at 1000 (quoting Farmland Irrigation Co. v. Dopplmaier, 48 Cal. 2d 208, 219 (1957)).
The conflict with Batzel thus creates another way in which the decision below places interactive service providers in California, such as eBay, Yahoo! and Google, at a perverse disadvantage to competitors based outside of California, such as AOL and MSN. When sued in California by a California plaintiff, AOL and MSN will generally be able to remove the case to federal court and obtain dismissal under Batzel, but eBay, Yahoo! and Google will not. Review should be granted to provide California Internet intermediaries with the same protection that section 230 will provide to their counterparts everywhere else in federal court.
In section 230, Congress mandated that "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." 47 U.S.C. § 230(c)(1). The court below determined the term "publisher" in section 230(c)(1) should be construed to mean only a "primary publisher," as that term is used in the common law, and to exclude "secondary publishers" also known as "distributors" who would continue to be subject to "knowledge-based liability." Exh. A at 36. As illustrated by the universal rejection of this argument by every other court that has considered it, the Court of Appeal's cramped reading of section 230 is flawed for at least three reasons.
First, the Court of Appeal's anomalous interpretation misreads the plain language of the statute by construing the broad term "publisher" to mean only a "primary publisher" and not a "secondary publisher" of third-party content. Second, the legislative history supports the unanimous view of other courts that section 230 immunizes all republishers of third-party content on the Internet. Third, the ill-defined notice liability standard the Court of Appeal reimposes in cyberspace undermines the very policies that Congress sought to advance in section 230 because it will encourage the automatic removal of challenged content and discourage the monitoring and screening of other parties' content. For these reasons, among others, the consensus of all other courts that section 230 abrogates all common law liability based on the publication of another party's content is the only proper interpretation of the statute, and this Court should grant review to correct the contrary position taken below.
A. Section 230 Prohibits Imposing Liability Regardless Of Whether
A Defendant Would Be Classified As A "Primary Publisher" Or
A "Distributor" At Common Law Because Distributors Who
Meet The Notice Liability Standard Are Treated As Publishers
In Zeran, the Fourth Circuit concluded that when Congress said that no Internet provider or user could be "treated as the publisher or speaker" of another's content, it immunized those parties against tort liability based on the publication of such content, regardless of whether they would be classified as primary publishers or secondary publishers (also known as distributors) at common law. Cognizant of the rule of statutory construction requiring that a statute must "speak directly" to a question addressed by the common law if it is to abrogate a common law principle, United States v. Texas, 507 U.S. 529, 534 (1993), the Zeran court based its decision on the plain language of section 230: "Congress has indeed spoken directly to the issue [of distributor liability] by employing the legally significant term 'publisher,' which has traditionally encompassed distributors and original publishers alike." 129 F.3d at 334.
The court below rejected Zeran's straightforward reading of the statute. It viewed the omission of the term "distributor" from the list including "publisher" and "speaker" as a better guide to Congress's intent, reasoning that, because the word "publisher" could be interpreted to include or exclude distributors, section 230 does not "speak directly" to the issue of distributor liability and therefore cannot be construed to abrogate the common law in that respect. Exh. A. at 19-22. But this logic rests on a misunderstanding of what it means at common law to "treat" a party as a "publisher or speaker" of content authored by another.
The common law of libel initially classifies non-author defendants based on the level of editorial control they exercise over the content they disseminate. Parties such as newspapers or book publishers, which exercise editorial control over the materials they disseminate, are classified as "primary" or "original" publishers and may be held liable as publishers of the materials based simply on the fact that they published them. Exh. A at 11; Dobbs, The Law of Torts, § 402, p 1123 (2001); Rest. 2d Torts, § 578(b). If a plaintiff can prove publication and the other elements of the tort, the defendant will be liable as a publisher even absent any knowledge about the statement at issue. Batzel, 333 F.3d at 1026-27.
Parties such as bookstores and libraries, which disseminate content over which they do not exercise editorial control but who do have some ability to screen and control what they disseminate, are classified as "secondary publishers" -- also known as "distributors". As the Court of Appeal concedes, such parties may be "held liable as publishers if they know or have reason to know of the defamatory nature of matter they disseminate." Exh. A at 12 (citing Rest. (2d) Torts 581 (1) coms. d and e).
It necessarily follows, then, that the purpose of this initial classification is only to determine the applicable threshold test for when a particular defendant can be treated as a publisher of the content at issue not to fix in stone the defendant's status as a "publisher" or "distributor".
For this reason, the Court of Appeal's conclusion that the term "publisher" as used in section 230 can be read to encompass only "primary publishers" makes no sense. To excise the category of "secondary publishers" from the term "publisher" is to ignore the way the common law of libel actually operates -- i.e., to ignore that secondary publishers, or "distributors," are in fact treated as publishers if they have notice of alleged defamation. [FN 16] Thus, the only reasonable interpretation of "publisher" in section 230 includes all publishers, whether or not they exercise editorial control over the content they disseminate.
A careful analysis of the entirety of section 230(c) also supports the holding in Zeran and all other courts that have addressed the issue, rather than the Court of Appeal's anomalous view. It is not the case that subsection 230(c)(2) would be "mere surplusage" if Zeran and all the other courts were correct in holding that 230(c)(1) means what it says and immunizes all republishers, primary and secondary alike. Exh. A at 23. Subsection 230(c)(2) immunizes providers and users from liability for:
In fact, the inclusion of 230(c)(2) provides further evidence of Congress's intent to immunize all republishers and not just primary publishers. Section 230(c)(2) proscribes liability arising out of "any action voluntarily taken in good faith to restrict access to or availability of [certain] material." The content-screening and -monitoring programs employed by, for example, an ISP in order to allow it to restrict access to certain content includes not only the use of blocking and screening software, but also mechanisms by which visitors can notify the ISP of problematic content. See, e.g., Stratton Oakmont, 23 Media L. Rptr. at 1796 (Prodigy's guidelines informed subscribers that offending content "will be removed when brought to PRODIGY's attention"). However, under the "knew or had reason to know" liability rule the decision below resurrects, a republisher would be penalized precisely for having invited others to provide notice of defamatory content -- i.e., for an "action taken in good faith to restrict access to or availability of [certain] material." Such a rule cannot be squared with the broad immunity provided in section 230(c)(2).
B. The Legislative History Supports The Conclusion That Congress
Intended Section 230 To Bar All Forms Of Publisher Liability
As explained above, Congress enacted section 230 to overrule Stratton Oakmont, which threatened to undermine Congress' goal of encouraging self-regulation on the Internet by imposing liability on the basis of monitoring and screening of third-party content. In Congress's view, the result in Stratton Oakmont was particularly perverse when contrasted with the result in Cubby, where the defendant was absolved of liability because it did not monitor or screen third-party content.
It is clear from the legislative history that section 230 was intended to eliminate the possibility that a court would convert a service provider that would otherwise be immune because it had no actual or constructive knowledge of the allegedly actionable content into a primary publisher who could be held liable merely because it monitored and screened content and thereby acquired such knowledge. In the words of Representative Cox, the co-author of section 230:
Congress therefore intended to draw a very different and brighter line than the common law, that would allow state law liability to attach only to parties who participated in the "creation or development" of the content. 47 U.S.C. § 230(c)(1) & (f)(3). No one else -- no other "provider or user of an interactive computer service," § 230(c)(1) & (e)(3), regardless of whether they might be deemed an original publisher or a distributor -- could be held liable for content originating from another content provider. Accordingly, as commentators have explained, "when Congress adopted section 230, it did not intend to split the difference between Cubby and Stratton Oakmont," as the court below mistakenly believed, "but rather sought to replace the then-current legal regime with a clear policy of ... immunity relative to third-party content, regardless of whether the [defendant] was acting as a publisher or distributor of such third-party content." Friedman & Buono, supra, at 662. Only under such an approach would Internet intermediaries "have clear guidance that they could police their networks without fear of being held liable for content originating with ... third parties." Id.
Contrary to the Court of Appeal's view, the bright line that Congress drew, and that every other court has recognized, need not be judicially redrawn to prevent the so-called "'clever libeler,'" from "escap[ing] liability by having some other Internet user who is not subject to the jurisdiction of the Court, or who is anonymous, or who is judgment proof, publish libelous statements which another 'Internet user' is free to republish." Exh. A at 13. Under section 230, such a libeler would not escape liability because, "by participating in the creation or development of information," such a person would be "act[ing] as an information content provider" or co-provider, "and thus not qualify for § 230 immunity." Ben- Ezra, 206 F.3d at 985 n.4; accord Blumenthal, 992 F. Supp. at 50 ("Section 230 does not preclude joint liability for the joint development of content").
C. Unless Review Is Granted And The Decision Below Reversed, It
Will Frustrate The Very Policies That The Text And Legislative
History Of Section 230 Show It Was Intended To Advance
By enacting Section 230, Congress sought to advance the twin goals of (1) encouraging "the unfettered and unregulated development of free speech on the Internet," and (2) removing disincentives for Internet providers and users to "self-police the Internet for obscenity and other offensive material." Batzel, 333 F.3d at 1027-28. To accomplish these goals, Congress granted Internet providers and users immunity from liability for third-party content. The failure of the court below to identify and follow the bright line drawn by Congress, and its mistaken "imposing [of] distributor liability," will "undermine Congress's central public policy goals in enacting section 230." Friedman & Buono, supra, at 663.
By subjecting Internet intermediaries to a "knew or should have known" standard of liability, the rule of notice-based distributor liability effectively requires that, upon receipt of any email challenging the veracity of any third-party content, the recipient must either conduct a costly factual and legal inquiry -- to determine, as this case illustrates, whether the statements at issue are fact or opinion and, if the former, whether they are true -- or remove it. Given this choice -- and given the ease with which anyone can dispute posted content, [FN 18] as well as the high potential cost if the Internet intermediary is ultimately wrong on the law or the facts -- notice-based liability would seriously undermine Congress' first goal by causing removal of large volumes of content from the Internet. Id. at 663-64.
The threat the panel's decision poses to section 230's much- lauded second goal of self-regulation is equally grave. For one thing, distributor liability does not require actual knowledge; constructive knowledge will suffice for liability to be imposed. Rest. 2d Torts, § 581 (1). An Internet intermediary that actively monitors and screens content runs the significant risk of being found to have constructive knowledge i.e., of a court finding that, because of its self-regulating activity, it "should have known" of the problematic content and taken action to delete it.
A notice-based rule of liability thus presents an Internet provider or user with a strange choice: take action to monitor content and risk a finding of liability based either on self-regulating activity generally or on receipt of "notice" to an email address established for complaints or abandon all efforts at policing third-party content to guard against liability. Like the perverse rule espoused in Stratton Oakmont, such a state of affairs would act as "a massive disincentive" for those who might otherwise adopt and enforce basic standards of self-regulation on the Internet, and review should be granted to prevent the Court of Appeal's decision from thwarting Congress' intent.
Even if the panel's policy arguments were based on solid ground -- and, as shown, they are not -- all other courts that have addressed the issue have concluded "Congress has made a different policy choice." Blumenthal, 992 F. Supp. at 52. If all these courts were correct, the court below erroneously substituted its policy choice for that of Congress. It is therefore imperative that this Court grant review not only to resolve the conflict between decisions in this state, but also because this state should not part company with all other precedent interpreting this federal statute and carve out California as the only jurisdiction in which liability may be imposed for Internet speech protected throughout the rest of the country.
DATED: March 1, 2004
PIPER RUDNICK LLP
CALIFORNIA ANTI-SLAPP PROJECT
By: _________________
Roger Myers
Piper Rudnick LLP
Attorneys for Petitioner