If the title of this post didn’t really grab you, how about the fact that I’m reviewing a recent decision handed down in the District of Wyoming? Yep, Wyoming, which as you may know (I didn’t) sits within the friendly confines of the Tenth Circuit.

Here are the undisputed, relevant facts as I understand them. The opinion is a little thin on the inner workings of the subject website during the relevant time period. If anybody has some additional insights and/or has explored the docket closer than I have, please jump in.

Prior to the January 2006 enactment of the federal Telephone Records and Privacy Protection Act (which criminalized the sale, transfer, purchase and receipt of confidential phone record information), Accusearch, Inc. (“in the business of information brokering”), by means of its Abika.com website, advertised the availability of, and accepted orders for, consumer phone records, which even before the TRPPA was passed were deemed confidential under federal law. So somebody interested in who I called in 2005 from my landline (or cell), how long we talked, etc., and who doesn’t think that I’d voluntarily share that information with a stranger (safe bet), could apparently submit an order at Abika.com and obtain the sought after information via the website (for a fee, of course, paid to Accusearch).

To fill its orders Accusearch paid third parties to procure the requested information. Given the nature of the data, the third parties utilized illegal methods to obtain same. These “wholesale” dealings were apparently via email, and Accusearch paid the third parties for their services.

In May 2006 the Federal Trade Commission filed suit against Accusearch and Jay Patel, its sole officer and director, accusing the defendants of an “unfair business practice” in violation of the Federal Trade Commission Act (here’s the accompanying press release). The FTC did not, however, name any of Accusearch’s third party procurers, or seek to hold defendants liable for their wholesalers’ illegal conduct. Instead the FTC’s beef was that “[e]ach time the Defendants placed an order for phone records, they caused others to use false pretenses and other fraudulent means to obtain confidential consumer phone records.” In other words, “the ‘unfair business practice’ relied upon by the FTC is Defendants’ obtaining and selling of confidential consumer phone records where that practice was necessarily accomplished through illegal means.” (emphasis added).

Late last month Judge William F. Downes granted the FTC’s motion for summary judgment, having found that “Defendants’ practice of selling consumer phone records constitutes an unfair business practice within the meaning of” 15 USC 45(a). But not before Accusearch’s counsel argued that Abika.com functioned as an “interactive person to person search engine,” merely an intermediary between “searchers” and “independent researchers” and thus was entitled to Section 230 protection, given that the FTC’s core allegations, according to the defendants, were that the defendants “disclosed, made available or sold information.” The court’s order covers both FTC Act liability and the applicability of Section 230.

On the Section 230 point, the FTC countered that any “publication” here by Abika.com “is not the type of publication contemplated by Section 230 of the CDA. The FTC . . . seeks to hold Defendants liable not for ‘publishing’ anything, but instead for committing acts in the course of trade or commerce, i.e., buying and selling.”

The court zeroed in on two key issues impacting whether Section 230 immunity would apply. First, did the FTC seek to treat the defendants as publishers? The court quickly concluded that such statutory requirement was “ambiguous.” (understandable in my opinion, particularly in this context). Seeking evidence of congressional intent for guidance, the court looked to Zeran, which pointed to the threat of tort-based lawsuits, and desire to encourage self-regulation of offensive material. With that the court concluded without a great deal of analysis (but after expressing skepticism about defendants’ search engine claim) that the FTC’s claims here do not “seek to treat Defendants as a publisher within the meaning of the CDA.”

The second (now moot?) question was whether Abika.com participated in the creation or development of the subject consumer phone records. On this point the court stated that

[w]hile Defendants made admittedly few changes to the records themselves, the Court finds that by soliciting requests for such phone records and purchasing them for resale Defendants ‘participated in the creation or development of the information, and thus do not qualify for §230 immunity.

Thus the District Court presumably had in mind, but did not cite, the Ninth Circuit’s Roommate.com decision. Several weeks later of course the Ninth Circuit agreed to rehear Roommate.com en banc. Regardless, in light of the more reasoned analysis of the publication issue, I imagine many people will consider the above language dicta.

Concluding that the defendants’ “strained interpretation” would “expand Section 230 immunity well beyond its intended scope,” the court denied the defendants’ Section 230-based motions for summary judgment. An evidentiary hearing will be held to ascertain appropriate injunctive and equitable relief, which may include rescission of contracts, restitution, disgorgement of ill-gotten gains by the defendants, and notifying all consumers whose phone records were distributed by the defendants.

An interesting case and decision which I’m still kicking around in my head.

One preliminary observation is that perhaps the order doesn’t say much about how the website operated because, upon reflection, it really wasn’t relevant. The FTC persuaded the court that it was targeting defendants’ supply-side activities – the purchase for resale of confidential consumer phone records which could only be procured by the defendants’ wholesalers via illicit means. The case thus did not turn on the defendants’ delivery mechanism to their customers – Abika.com, seemingly rendering the content and functionality of the website, and, thus, Section 230, irrelevant here.

As for whether Abika.com was/is a search engine, here’s what the company presently has to say on the issue.