A recent 4th Circuit opinion interpreted Section 230 of the Communications Decency Act of 1996 to provide Internet Service Providers immunity from liability for defamatory content posted by third party subscribers. See Zeran v. America Online, 959 F.Supp 1124 (E.D. Va. 1997). The decision marks the end of the authority of the controversial Stratton Oakmont v. Prodigy decision of 1995, and allows Internet Service Providers the freedom to develop the editorial functions of their services without the threat of publisher liability. Stratton Oakmont v. Prodigy, 1995 WL 323710 (N.Y.Sup.).
In Stratton Oakmont, a New York court considered a securities investment banking firm’s claim that Prodigy, an Internet Service Provider, was liable for the defamatory remarks posted by an unidentified subscriber on its "Money Talk" bulletin board. The court held Prodigy liable as a publisher of the defamatory remarks. It based Prodigy’s publisher status on the fact that the company held itself out as a Provider that exercised editorial control over the content of the postings on its network, and that the company actively screened messages posted on its bulletin boards. In so doing, the court distinguished the case from Cubby v. CompuServe, in which an earlier New York District Court held that CompuServe was merely a distributor of the material provided over its network. Cubby v. CompuServe, 776 F. Supp. 135 (S.D.N.Y. 1991). Unlike Prodigy, CompuServe did not attempt to exercise editorial control. According to the Stratton Oakmont court, "Prodigy’s conscious choice, to gain the benefits of editorial control, has opened it up to a greater liability than CompuServe and other computer networks that make no such choice." See Stratton Oakmont, Inc. v. Prodigy Services Company, 1995 WL 323710 (N.Y.Sup.); Cubby Inc. v. CompuServe Inc., 776 F. Supp. 135 (S.D.N.Y. 1991).
The Stratton Oakmont decision received widespread attention marked by the fear that the holding would compel Internet Service Providers to abandon attempts to exercise editorial control over their networks for fear of liability. In response to this concern, Congress specifically overruled the decision in Section 230 of the Communications Decency Act of 1996. The purpose of the provision was to encourage self regulation of the computer networks of Internet Service Providers. Congress sought to encourage the development of technologies and procedures through which the Internet Service Provider could edit or block objectionable material, or provide its subscribers with the means to edit the material received. To this end, Section 230 barred lawsuits that sought to establish publisher liability for Internet Service Providers. Specifically, Section 230 immunized providers from defamation claims for content originating from third party subscribers, and from claims alleging harm from the restriction or deletion of material provided by third party subscribers. See 47 U.S.C. § 230.
Section 230 survived the Reno v. ACLU decision of 1997 in which the U.S. Supreme Court held that the Internet warranted full First Amendment protection, and that the indecency provisions of the Communications Decency Act violated the Constitution. See Reno v. ACLU, 117 S.Ct. 2329 (1997). The scope and application of Section 230 protection, however, remained unclear.
Section 230 received its first federal appellate court interpretation in Zeran v. America Online, 959 F.Supp 1124 (E.D. Va. 1997). In Zeran, an anonymous AOL subscriber posted advertisements for "Naughty Oklahoma T-shirts" over an AOL bulletin board. The T-shirts featured offensive slogans concerning the bombing of the Oklahoma City federal building. The advertisements directed readers to contact Ken Zeran, and offered Zeran’s telephone number. Zeran was not an AOL subscriber, and had no knowledge of the advertisements. He became aware of the posting only after receiving a barrage of angry phone calls intimidating Zeran and threatening his life. Zeran contacted AOL, and the advertisement was removed. On the same day, however, a subsequent advertisement was posted. Again Zeran contacted AOL, and was assured that the advertisement would be deleted and the account terminated. In spite of AOL’s assurances, the advertisement remained on the bulletin board for six days, and Zeran continued to receive an angry phone call approximately every two minutes. When the advertisement was finally removed, AOL refused to post a retraction as a matter of policy.
Zeran’s claim against AOL was based on negligence. He sought to establish that AOL was liable as a distributor of material which they knew or should have known was of a defamatory character. AOL contended that the action was preempted by Section 230, and the court agreed. The court rejected Zeran’s claim that Section 230 does not protect a provider from distributor liability and construed the provision to protect providers from all liability relating to content originating from third party subscribers. The court reasoned that distributor liability was actually a type of publisher liability, and therefore, that Section 230 barred the claim. According to the court, "Indeed the most effective means by which an Internet provider could avoid the inference of a ‘reason to know’ of objectionable material on its service would be to distance itself from any control over or knowledge of online content provided by third parties. This effect frustrates the purpose of the CDA and, thus, compels preemption of state law claims for distributor liability against interactive service providers." See Zeran v. America Online, 958 F. Supp 1124 (E.D. Va. 1997).
The 4th Circuit’s broad interpretation of the scope of the protection of Section 230 suggests a laissez-faire attitude toward regulation of the content of material provided over the Internet. The decision leaves Internet Service Providers free to develop the editorial functions of their services, but denies recourse to innocent victims like Zeran when the provider’s measures fail.
POSTED MARCH 22, 1998