Online Liability Blog™

I just finished looking over Perfect 10’s reply brief, recently filed in support of its petition for certiorari pending before the U.S. Supreme Court. Thank you to Perfect 10’s counsel, Jeff Mausner, for sharing it with me.

I still think that Perfect 10’s position on the merits is the legally correct one. My opinion is based on the text of the statute, and the apparent absence of any compelling evidence of congressional intent supporting an opposite reading. Whether withholding immunity for state IP claims is a good idea, though, is not something I’m going to address here.

Will the Supreme Court issue a writ on the basis that, simply put, the Ninth Circuit blew it by employing the wrong approach and reaching the wrong decision? I am not convinced that it will. Last week litigant and amicus briefs were distributed for consideration at a November 30, 2007 conference, so perhaps we’ll have an answer before the end of the year.

If you missed them, here are links to my prior posts on the petition itself, and the Respondents’ opposition brief, as well as a summary of the Ninth Circuit’s opinion.

A few months ago I wrote about the Petition for a Writ of Certiorari filed by Perfect 10, Inc. with the U.S. Supreme Court in Perfect 10 v. CCBill, et al. In a nutshell, the Ninth Circuit previously ruled that the intellectual property exception to Section 230 immunity only pertains to federal (not state) intellectual property claims. Perfect 10 wants the Supreme Court to hear its appeal and rule that the exception applies to both federal and state IP claims, meaning Section 230 immunity would not protect a defendant from state (and federal) IP claims. Now it’s the Respondents’ turn to weigh in.

John P. Flynn, a partner in the Phoenix law firm Dioguardi Flynn Jones LLP, represents Respondents CCBill LLC and CWIE LLC. John kindly shared with me the brief filed last Friday opposing Perfect 10’s petition. John’s co-counsel is Jay M. Spillane of the Los Angeles law firm Spillane Shaeffer Aronoff Bandlow LLP.

Zeroing in on a serious potential problem with Perfect 10’s position, Respondents argue in their submission that the Ninth Circuit’s ruling below

is consistent with the findings and intentions of Congress to promote the development of Internet computer services with a clear nationwide immunity. . . . [w]ere the rule otherwise, Internet computer service providers would be faced with uncertainty across all fifty states as to which state claims for relief are, involve, or are akin to ‘intellectual property.’

In other words, adopting Perfect 10’s interpretation of Section 230(e)(2) could/would have a chilling effect upon online publishers across the country, uncertain as to their exposure to liability from one state to another.

That said, I still find Perfect 10’s position on the merits - which if ever adopted would require guidance from the courts on what constitutes a state IP claim - more persuasive. I haven’t researched the relevant legislative history, but it would seem that if Congress meant to limit the exception to federal IP claims, it could (and would) have said so (as it did in 230(e)(1)). If the legislative history clearly supported the opposite conclusion, I would have expected to see a reference to same in the Ninth Circuit’s ruling and/or Respondents’ brief (which instead cites Zeran). And as an aside, Respondents’ use of Potomac Electric Power Co.’s rule of statutory interpretation (“members of the judiciary must put aside their ‘appraisal of the wisdom or unwisdom of a particular course consciously selected by Congress’”) could come back to haunt them. Some courts may not like Congress’ apparent decision to provide a broad IP exception to Section 230 immunity, but it’s not their (the courts’) job to approve or disapprove. However, it’s probably not fair for me to opine on the merits here, given neither parties’ brief was offered as a merits brief. Which brings me to my next and more important point. Who cares about the merits right now?

Remember, Perfect 10 is trying to persuade the Supreme Court to hear the case, not to rule in its favor, just yet, on the merits (although merits arguments can of course sometimes help get the job done). And on this issue, I think Respondents have the better arguments. For example, Respondents accuse Perfect 10 of trying to manufacture a conflict between the Ninth Circuit’s ruling and UCS v. Lycos, arguing that in UCS the First Circuit

did not analyze the meaning of ‘law pertaining to intellectual property,’ but simply assumed that the state trademark dilution claim at issue came within this exception. Such an unconsidered assumption, without analysis, does not create a conflict worthy of review.

Furthermore, “[i]n light of the [purported Florida trademark law] claim’s failure on independent First Amendment grounds, the First Circuit’s view as to the inapplicability of Section 230 is dictum and does not raise a material conflict with the Ninth Circuit decision.”

Respondents offer up plenty of other reasons why this case does not presently belong before the Supreme Court, such as (i) there is no conflict with Supreme Court precedent, (ii) the case was remanded by the Ninth Circuit to the district court, and precedent apparently directs that a case in this posture is not appropriate for High Court review, (iii) following final judgment, Perfect 10 will presumably have another opportunity to request Supreme Court review (and the Court would benefit from a richer record), and (iv) “[t]he law concerning the scope of the ‘intellectual property’ exception . . . is undeveloped.”

My guess is that Perfect 10’s petition (and the various amicus briefs filed in support thereof) will not muster enough votes to obtain the writ. But I wouldn’t mind being wrong on this one, at least from an academic standpoint.