DATE: Decided October 21, 2003

COURT: United States Court of Appeals, Seventh Circuit (Before Bauer, Easterbrook, and Diane P. Wood, Circuit Judges. Opinion by Easterbrook)

PLAINTIFFS: John Doe and other members of the football team at Illinois State University, wrestlers at Northwestern University, and varsity athletes from several other universities.

DEFENDANTS: Only defendants remaining on appeal are GTE Corporation and Genuity Inc (formerly known as GTE Internetworking). Both entities are subsidiaries of Verizon Communications and are collectively referred to herein as “GTE”). Other defendants below were the persons and organizations that allegedly offered the tapes for sale, college officials who had allegedly failed to detect the cameras (or prevent their installation), and PSInet (liquidated in bankruptcy).

MATERIAL ALLEGATIONS: “Someone secreted video cameras in the locker rooms, bathrooms, and showers of several sports teams. Tapes showing undressed players were compiled, given titles such as “Voyeur Time” and “Between the Lockers,” and sold by entities calling themselves “Franco Productions,” “Rodco,” “Hidvidco-Atlas Video Release,” and other names designed to conceal the persons actually responsible. All of this happened without the knowledge or consent of the people depicted.”

…

“According to the complaint, GTE provided web hosting services to sites such as “youngstuds.com” at which the hidden-camera videos were offered for sale. GTE did not create or distribute the tapes, which were sold by phone and through the mail as well as over the Internet. . . . Advertisements about, and nude images from, the videos [of course] passed over GTE’s network between Franco and its customers, and the data constituting the web site were stored on GTE’s servers. Franco rather than GTE determined the contents of the site, though the complaint raises the possibility that GTE’s staff gave Franco technical or artistic assistance in the creation and maintenance of its web site. Sales occurred directly between Franco and customers; communications may have been encrypted (most commercial transactions over the Internet are); and GTE did not earn revenues from sales of the tapes. Franco signed contracts with GTE promising not to use the web site to conduct illegal activities, infringe the rights of others, or distribute obscenity (a promise Franco broke). GTE thus had a contractual right to inspect each site and cut off any customer engaged in improper activity. We must assume that GTE did not exercise this right. Some domain administrators and other personnel maintaining GTE’s servers and communications network may have realized the character of Franco’s wares, but if so they did not alert anyone within GTE who had the authority to withdraw services. Managers were passive, and the complaint alleges that GTE has a policy of not censoring any hosted web site (that is, that GTE does not enforce the contractual commitments that Franco and other customers make).”

CAUSES OF ACTION: Violations of the Electronic Communications Privacy Act, negligent entrustment of a chattel, public nuisance.

PROCEDURAL HISTORY: The U.S. District Court for the Northern District of Illinois, Charles P. Kocoras, Chief Judge, dismissed action. Athletes appealed.

 

PROCEDURAL ACTION TAKEN HERE: Affirmed.

OUTCOME: Unlike the district court, the panel determined, essentially, that plaintiffs could not make a prima facie case out on any of their claims. Thus most, if not all, of the Court’s analysis relating to Section 230 appears to be dictum. The Court’s analysis essentially highlighted alternative readings of Section 230(c)(1), which, if adopted, would leave the door open for states to pass laws that, for example, would impose a duty upon ISPs to protect the interests of third parties. However, “[n]one of the arguments that plaintiffs now make shows that any of the states where their colleges and universities were located requires suppliers of web hosting services to investigate their clients’ activities and cut off those who are selling hurtful materials.”

OPINION: The panel noted that the provisions of Section 230(c) “preempt contrary state law.” “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.” 47 U.S.C. § 230(e)(3). But “[n]othing in this section shall be construed to limit the application of the Electronic Communications Privacy Act of 1986 or any of the amendments made by such Act, or any similar State law.” 47 U.S.C. § 230(e)(4). We therefore start with the question whether plaintiffs have a claim under the Electronic Communications Privacy Act.”

While the “plaintiffs rely on 18 U.S.C. § 2511 and § 2520, two provisions of that statute” . . . the Court could not identify a “source of liability for a web host” under either statute. The Court also rejected plaintiffs’ “negligent entrustment of a chattel” and public nuisance claims – without any reference to Section 230 – but not before it weighed in with its reading (dictum?) of Section 230(c).

The Court asked “[w]hy should a law designed to eliminate ISPs’ liability to the creators of offensive material end up defeating claims by the victims of tortious or criminal conduct? . . . Why not read § 230(c)(1) as a definitional clause rather than as an immunity from liability, and thus harmonize the text with the caption [the caption reads “Protection for “Good Samaritan” blocking and screening of offensive material”]? . . . On this reading, an entity would remain a “provider or user”-and thus be eligible for the immunity under § 230(c)(2)-as long as the information came from someone else; but it would become a “publisher or speaker” and lose the benefit of § 230(c)(2) if it created the objectionable information. The difference between this reading and the district court’s is that § 230(c)(2) never requires ISPs to filter offensive content, and thus § 230(e)(3) would not preempt state laws or common-law doctrines that induce or require ISPs to protect the interests of third parties, such as the spied-on plaintiffs, for such laws would not be “inconsistent with” this understanding of § 230(c)(1). There is yet another possibility: perhaps § 230(c)(1) forecloses any liability that depends on deeming the ISP a “publisher”-defamation law would be a good example of such liability-while permitting the states to regulate ISPs in their capacity as intermediaries.

“We need not decide which understanding of § 230(c) is superior, because the difference matters only when some rule of state law does require ISPs to protect third parties who may be injured by material posted on their services. . . . None of the arguments that plaintiffs now make shows that any of the states where their colleges and universities were located requires suppliers of web hosting services to investigate their clients’ activities and cut off those who are selling hurtful materials.”

However, the panel suggests at least two arguments plaintiffs perhaps should have considered: (i) GTE published the tapes, and thereby may have owed a duty to plaintiffs and/or (ii) by contracting with the sellers, GTE assumed a duty to protect the third-party plaintiffs.