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Litigation: Statutory immunity against claims arising from third-party content online

Litigation: Statutory immunity against claims arising from third-party content online

The reach and limitations of the Communications Decency Act of 1996, Section 230

The Communications Decency Act of 1996 (CDA) was enacted to regulate online speech, and in particular, to protect minors from “patently offensive,” “obscene,” and “indecent” content on the Internet. In the 1997 case Reno v. ACLU, however, the Supreme Court struck down many of the CDA’s content-related proscriptions, concluding that they violated the First Amendment by “suppress[ing] a large amount of speech that adults have a constitutional right to receive and to address to one another.”

Among the CDA provisions spared by the Court’s ruling was Section 230, a provision designed to “promote the continued development of the Internet” and “to preserve the vibrant and competitive free market…  for the Internet and other interactive computer services, unfettered by Federal or State regulation.” To these ends, Section 230 provides, among other things, that “no 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.” Section 230 also contains a broad preemption clause, providing, with certain exceptions discussed below, that “no liability may be imposed under any State or local law that is inconsistent with this section.”

The direct beneficiaries of Section 230 have been “interactive computer services”—a term encompassing a wide variety of companies that aggregate, arrange and host user-created content online, including blog- and photo-hosting sites, news sites, social networks, classifieds, auction sites and consumer ratings services. In these contexts, Section 230 has frequently provided complete immunity in litigation arising from third-party content. Accordingly, companies operating in this space should be aware of Section 230’s basic contours and key limitations.

Since its enactment, courts have construed Section 230 broadly to create a federal immunity to any cause of action that would make websites and online service providers liable for content originating with third-party users. This immunity has foreclosed liability in a wide variety of cases, including in the following:

  • In a 1997 decision in Zeran v. America Online, the 4th Circuit held that Section 230 provided America Online with a complete defense, on a motion for judgment on the pleadings, to liability for allegedly defamatory content posted by third parties on its online bulletin boards.
  • In Gentry v. eBay, the California Court of Appeal held in 2002 that Section 230 insulated eBay at the demurrer stage from negligence and unfair competition claims arising from a third party’s sale of forged autographs.
  • The 9th Circuit held in its 2003 decision in Carafano v. Metrosplash.com that Section 230 applied at summary judgment to absolve an online dating service of liability for defamation, negligence, and privacy torts arising from a false profile created in the name of an actress.
  • In a 2009 decision in Nemet Chevrolet v. Consumeraffairs.com, the 4th Circuit held that Section 230 applied on a motion to dismiss, immunizing Consumeraffairs.com against defamation and tortious interference claims based on third-party consumer reviews.

These cases underscore the breadth of Section 230 immunity, but there are limits. Perhaps most critically, Section 230 immunity does not apply if a defendant was (or, at the motion to dismiss stage, is adequately alleged to be) “responsible, in whole or in part, for the creation or development” of the content. As an example, in a 2006 case, Anthony v. Yahoo! Inc., the Northern District of California applied this limitation, on a motion to dismiss, to foreclose immunity for Yahoo against allegations that it emailed to the plaintiff the profiles of former subscribers to induce him to renew his subscription. Because the plaintiff had challenged Yahoo’s “manner of presenting the profiles” rather than “the underlying profiles themselves,” the court concluded that Section 230 did not apply.

Similarly, in 2008, the 9th Circuit withheld Section 230 immunity when Roommates.com required users to express their preferences regarding potential roommates’ gender, sexual orientation and family status with a drop-down menu, allegedly in violation of the Fair Housing Act. The court ruled that, “by requiring subscribers to provide the [unlawful preference] as a condition of accessing its service, and by providing a limited set of pre-populated answers, [Roommates.com] becomes much more than a passive transmitter of information provided by others; it becomes the developer, at least in part, of that information.”

Notwithstanding cases such as Roommates.com, defendants do not sacrifice their Section 230 immunity by performing so-called traditional editorial functions. As a New Jersey state court explained in 2005, “deleting profanity, selectively deleting or allowing to remain certain postings, and commenting favorably or unfavorably on some postings, without changing the substance of the message authored by another, does not constitute ‘development’ within the meaning of § 230(f)(3).” But because the line between immune editorial activity and non-immune content “creation or development” may not always be obvious, online companies should tread carefully.

Finally, there are certain areas of law into which Section 230 cannot reach. By its own terms, Section 230 does not limit certain federal criminal statutes, “any law pertaining to intellectual property,” or the Electronic Communications Privacy Act. Construing the “intellectual property” exception, in 2001, the Southern District of New York refused to grant immunity to a web host, Mindspring Enterprises, against federal and state trademark infringement claims arising from third-party content on one of the websites it hosted.

On the other hand, the 9th Circuit, in Perfect 10, Inc. v. CCBill LLC, concluded that the “intellectual property” exception encompasses only “federal intellectual property,” meaning Section 230 may be available, in some jurisdictions, as a defense to claims under state intellectual property law. Online companies should be aware of these statutory exceptions, as well as other potential gaps in Section 230’s protections.

In summary, although Section 230’s broad immunity is not unlimited, the statute has given online companies the freedom to innovate and to facilitate speech online—without the specter of facing liability for content created by third parties. These protections have also earned Section 230 an important place in the litigation practitioner’s toolkit.

Contributing Author

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Matthew Brown

Matthew D. Brown is a partner in Cooley LLP’s Litigation Department in San Francisco and a member of the firm’s Privacy, Commercial Class Action Litigation,...

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Christopher Durbin

Christopher B. Durbin is a partner in Cooley LLP’s Litigation Department in Seattle and a member of the firm’s Commercial Class Action Litigation, Securities Litigation,...

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Candace Jackman

Candace A. Jackman is an associate in Cooley LLP’s Litigation Department in San Francisco. Ms. Jackman practices complex commercial litigation in both state and federal...

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