Nemet takes issue with 20 allegedly defamatory posts that appeared on the Consumeraffairs.com website.  Before getting to the meat of the case, the panel reminded everyone that, per its previous ruling in Zeran, “our Circuit clearly views the § 230 provision as an immunity.”  Thus when applicable, Section 230 should stop a lawsuit dead in its tracks, not just bar liability, says the court.  Such immunity is to be “generally accorded effect at the first logical point in the litigation process…[w]e thus aim to resolve the question of § 230 immunity at the earliest possible stage of the case. . . .”

Key to its case, Nemet alleges that Consumeraffairs.com, at least with respect to the posts at issue, is an information content provider, and thus ineligible for Section 230 immunity.  Construing a recent Supreme Court ruling regarding the sufficiency of allegations, the court considered whether plaintiff’s allegations regarding defendant’s ICP status were plausible.

Referred to as the “Development Paragraph,” plaintiff included allegations for each allegedly actionable post that Consumeraffairs.com had some role in developing the post.

Distinguishing the case from Ninth Circuit’s Roommates.com decision, the court noted that plaintiff

has merely alleged that Consumeraffairs.com structured its website and its business operations to develop information related to class-action lawsuits. But there is nothing unlawful about developing this type of content; it is a legal undertaking….the amended complaint ‘does not show, or even intimate,’ that Consumeraffairs.com contributed to the allegedly fraudulent nature of the comments at issue.

The court found other allegations similarly lacking:

• “Nemet fails to make any cognizable argument as to how a website operator who contacts a potential user with questions thus ‘develops’ or ‘creates’ the website content.”

• “Nemet’s claim of revising or redrafting is both threadbare and conclusory.”

The panel concluded that the Development Paragraph failed to state facts upon which it could be concluded that it was plausible that defendant was an ICP.

As to eight of the posts, Nemet also alleged that Consumeraffairs had to some extent fabricated same (referred to as the “Fabrication Paragraph”).  Yet the sole basis for such assertion was that, utilizing the information contained in the posts, Nemet itself could not find the purported customer/poster in its records.  “There is nothing but Nemet’s speculation which pleads Consumeraffairs.com’s role as an actual author in the Fabrication Paragraph.”

Chief District Judge Jones dissented from this part of the ruling, opining that plaintiff’s allegations were adequate.  “By stating sufficient factual assertions, Nemet has created the reasonable inference that Consumeraffairs.com wrote the eight posts to attract additional complaints.”

Affirming the district court’s dismissal of the complaint, the panel’s opinion concluded that “[v]iewed in their best light, Nemet’s well-pled allegations allow us to infer no more than ‘the mere possibility’ that Consumeraffairs.com was responsible for the creation or development of the allegedly defamatory content at issue. Nemet has thus failed to nudge its claims that Consumeraffairs.com is an information content provider for any of the twenty posts across the line from the ‘conceivable to plausible.’ As a result, Consumeraffairs.com is entitled to § 230 immunity.”

The panel noted that the acquisition of personal telephone records “would almost inevitably require someone to violate the Telecommunications Act or to circumvent it by fraud or theft.”  It concluded that Section 230 immunity was unavailable to Accusearch, given it acted as an “information content provider” with respect to “the information that subjected it to liability under the FTC Act.”

In reaching its decision, the court focused on the definition of information content provider, specifically “whether confidential telephone records are “developed,” within the meaning of the CDA, when, as here, they are sold to the public over the Internet,” and whether Accusearch was responsible for such development.

The court determined that “when confidential telephone information was exposed to public view through Abika.com, that information was ‘developed.’”  Also concluding that “a service provider is ‘responsible’ for the development of offensive content only if it in some way specifically encourages development of what is offensive about the content,” the panel found that Accusearch was responsible for the aforesaid development, having disclosed the confidential information.

Circuit Judge Tymkovich submitted a concurring opinion, explaining that a Section 230 interpretation was unnecessary here, because “the FTC sought and ultimately held Accusearch liable for its conduct rather than for the content of the information it was offering on the Abika.com website.”  Section 230 “says nothing about immunizing publishers or speakers for their own conduct in acquiring the information.”  My favorite line from the concurring opinion?

In sum, the CDA does not extend to immunize a party’s conduct outside the realm of the Internet just because it relates to the publishing of information on the Internet.

The alleged facts are straight-forward and, as is often the case in these actions, disturbing. Without her authorization, plaintiff’s former boyfriend allegedly posted public profiles of her on Yahoo that included nude photos of plaintiff (taken without her knowledge), a solicitation for sex, and plaintiff’s workplace contact information. The ex-boyfriend also allegedly posed as plaintiff in Yahoo chat rooms, directing others to the aforementioned profiles. Strangers began contacting plaintiff at her office, and in some cases showing up in person, seeking sex.

Plaintiff claims that on several occasions she asked Yahoo to remove the materials, but got no response. Eventually Yahoo told plaintiff that they’d take care of it, but still nothing happened. Plaintiff then filed suit in an Oregon state court. Shortly thereafter the offending materials vanished from the site.

Yahoo removed the case to federal court, where plaintiff’s complaint was dismissed on Section 230 grounds. On appeal, the Ninth Circuit considered whether the statute indeed immunizes defendant from what appear to be claims of negligent undertaking and breach of contract (promissory estoppel).

The panel’s negligent undertaking analysis focused on Section 230(c)(1)’s language and history. “Looking at the text, it appears clear that neither this subsection nor any other declares a general immunity from liability deriving from third-party content . . . [s]ubsection (c)(1) does not mention ‘immunity’ or any synonym . . . [it] precludes liability only by means of a definition.” The court zeroed in on the meaning of publisher or speaker, and instances when a plaintiff’s theory of liability indeed treats a defendant as a publisher or speaker of third-party content. Noting that the statutory language does not “limit its application to defamation cases,” the court concluded a plaintiff cannot “escape section 230(c) by labeling as a ‘negligent undertaking’ an action [here the removal of indecent profiles] that is quintessentially that of a publisher.”

However, the panel viewed plaintiff’s promissory estoppel claim as distinct from her negligent undertaking claim, noting that it “does not seek to hold Yahoo liable as a publisher or speaker of third-party content, but rather as the counter-party to a contract, as a promisor who has breached . . .. Contract liability would come not from Yahoo’s publishing conduct, but from Yahoo’s manifest intention to be legally obligated to do something, which happens to be removal of material from publication.” The court held that to the extent plaintiff alleges a breach of contact claim under the theory of promissory estoppel, 230(c)(1) does not preclude her cause of action.

Operate a website? Don’t be alarmed, says the court:

[A] general monitoring policy, or even an attempt to help a particular person, on the part of an interactive computer service such as Yahoo does not suffice for contract liability. This makes it easy for Yahoo to avoid liability: it need only disclaim any intention to be bound.

I don’t know exactly what the district court had before it, or what the record was before the panel here. However, while I don’t necessarily disagree with any of its reasoning, I’m wondering whether it would have been better had the panel instead ruled on the adequacy of plaintiff’s allegations, with an eye toward dismissing insufficiently pleaded claims. Why make law if you don’t have to?

On appeal, the Sixth Circuit affirmed the lower court’s dismissal, but on non-Section 230 grounds. I only mention it here because of a few lines in the opinion that strongly hint at how the panel viewed the district court’s application of Section 230:

Because we agree with the district court that Doe’s complaint failed to state a claim, we do not reach the question of whether the Communications Decency Act provides SexSearch with immunity from suit. We do not adopt the district court’s discussion of the Act, which would read § 230 more broadly than any previous Court of Appeals decision has read it, potentially abrogating all state- or common-law causes of action brought against interactive Internet services. We do not have before us any issue concerning the criminal liability of the parties or the voidability of contracts for sexual services. . . . [We] explicitly reserve the question of [Section 230's] scope for another day.

To my knowledge this would have been the Sixth Circuit’s first foray into constructing Section 230. While it took a rain check, the panel clearly signaled to lower courts that it doesn’t consider the statute an absolute bar to all causes of action.

I’m not sure why the ruling noted the absence of any criminal liability or contract voidability issues. Presumably neither issue would have been quashed by Section 230. But then again perhaps I’m just a little rusty.

Consumer-centric AgentsCompared.com Helps Prospective Chicagoland Home Buyers and Sellers Make More Informed Decisions When Selecting a Real Estate Agent

Chicago, IL – July 7, 2009 – Consumer-centric website AgentsCompared.com, launching today in Chicagoland, helps prospective home buyers and sellers make more informed decisions when selecting a real estate agent.  The site lets consumers efficiently discover, evaluate and compare – on an apples to apples basis – competing local agents on the criteria most important to them, such as an agent’s track record (success stories, relevant statistics, etc.), price (commissions, rebates, etc.), specialties (first time buyers, short sales, REOs, etc.), local market knowledge, and over a dozen others.  Prospective home buyers and sellers can use AgentsCompared.com to see how a referral stacks up against competing agents, and find other local agents that may offer better value, greater expertise, etc.

“I’m not a Realtor®, but I think it’s fair to say that none of the current “Find an Agent” websites appear to have been created with the consumer firmly in mind,” explained Chicago lawyer Michael Erdman, founder of AgentsCompared.com.  “The space has unfortunately become stagnant, to the detriment of both consumers and agents.  AgentsCompared.com will deliver some much needed innovation to the process of selecting a local real estate agent,” Erdman added.

AgentsCompared.com is unlike existing “Find an Agent” websites.  It does not restrict the number or types of agents that can join the site or appear in relevant search results, or attempt to match consumers with agents.  “Featured” placements and broker advertisements are not displayed in search results.  Consumers simply run a search, review the results, and choose whether to make direct contact with an agent.  They are not asked to pay a fee, register, provide personal information, navigate through multiple pages, or wait for an email in order to search the site or obtain results.

“Who you choose as your real estate agent can obviously make a big difference to your bottom line, end result, and overall experience when buying or selling real estate.  AgentsCompared.com helps prospective home buyers and sellers understand their choices and ask important questions when selecting an agent, something that is especially important in the current housing market,” stated Erdman.

For Chicagoland real estate agents, AgentsCompared.com offers an opportunity to stand out from competing agents, and attract prospective home buyers and sellers that are looking for a local agent, by distinguishing themselves across a variety of categories that are important to consumers, and on a level playing field.

For additional information contact:

Michael Erdman
President & Founder
AgentsCompared.com
merdman@AgentsCompared.com

or visit www.AgentsCompared.com

Features, pricing, availability and specifications set forth herein are subject to change without notice.

# # #

Lots of juicy issues here, but time constraints force me to simply take this opportunity to quickly vent on a longstanding pet peeve of mine.  Why don’t all “news” articles on the web contain a static publication date in or very near the article text?  I’m not necessarily sympathetic to all of Google’s positions on this matter, but one thing I will agree with is that I find it terribly annoying when I view a news article on the web, whether following a search or while browsing a media outlet’s website, and find myself struggling to determine when the article was written.  How difficult can it be for online publishers to get this right?  Maybe there is some SEO, advertiser and/or “staleness” issue out there that is beyond my comprehension.  But they should all take a backseat to including critical information such as a publication date when disseminating “news” articles.

Kudos to the New York Times, which in my experience not only consistently lets you know the date an article was published, but whether, when, and where the article appeared in the hard copy version of the newspaper.

*  *  *

A note to my faithful readers (if there are any of you left):  It’s been an unusually busy summer for me.  I won’t bore you with any of the details, but I do hope to get back on the horse here soon and resume regular postings.  If that proves to be impossible, I may accept the invitation (if it’s still outstanding when the time comes) of one of my favorite technology bloggers to submit occasional posts on his blog.  In the meantime, I hope you’ll continue to subscribe/stop by here.

-Michael

The minor had lied about her age, enabling her to create a public MySpace profile. A nineteen year old male MySpace user (“Pete”) subsequently discovered her profile and initiated contact with her. The minor eventually shared her phone number with Pete and agreed to meet him in person, at which time he sexually assaulted her. Plaintiffs believe that had MySpace been utilizing age verification software, the assault never would have occurred.

The Court ruled that the plaintiffs’ negligence claims are barred by Section 230,

notwithstanding [plaintiffs'] assertion that they only seek to hold MySpace liable for its failure to implement measures that would have prevented [the minor] from communicating with [her assailant]. Their allegations are merely another way of claiming that MySpace was liable for publishing the communications and they speak to MySpace’s role as a publisher of online third-party-generated content. . . . [plaintiffs'] negligence and gross negligence claims are barred by the CDA, which prohibits claims against Web-based interactive computer services based on their publication of third-party content.

Read here about MySpace’s commitment earlier this year to forty-nine state AGs to make the site safer for minors.

Anybody care to enlighten us?

In an unremarkable but informative decision from the Federal Court sitting in the Western District of Washington at Tacoma, Judge Franklin Burgess, on April 15 of this year, declined to subject YouTube to the Court’s jurisdiction in that State merely because YouTube appears on the Internet in Washington.

In the case, Victoria S. Bowen vs. YouTube, Inc., the plaintiff, Ms. Bowen, a YouTube registered user, alleged that certain YouTube users posted harassing comments on YouTube directed at her. She also alleged that her “intellectual property rights have been repeatedly violated,” and that YouTube had engaged in negligent affliction of emotional distress upon her. She also, apparently, alleged that YouTube violated her civil rights under Section 1983 of Federal law.

The Court summarily disposed of her emotional distress claim stating that it was barred by Section 230 of the Communications Decency Act. The Court also dismissed her civil rights claim, saying that it could not proceed because YouTube was not acting under color of State law. As to her intellectual property rights claim, the Court similarly dismissed it because of its “infirmities,” without going into detail.

Most of the opinion, however, was devoted to a discussion of whether, under the facts as alleged in the Complaint, YouTube is subject to jurisdiction in the State of Washington.

The Court noted that in order for Washington State jurisdiction to attach, the defendant must have: (1) committed an act or transaction with the State; (2) the claim must have arisen out defendant’s activities in the State; and (3) the exercise of jurisdiction must be reasonable. Citing several Ninth Circuit cases as precedent, the Court ruled that there was no personal jurisdiction over YouTube in Washington because YouTube’s “presence” in the State was merely passive, and that the plaintiff’s use of YouTube in the State was not enough to render YouTube subject to Washington State jurisdiction.

The Court further found that under YouTube’s “terms of use,” to which plaintiff, by virtue of her being a registered user, had agreed, YouTube “shall be deemed to be a passive website that does not give rise to personal jurisdiction over [it]…in jurisdictions other than California,” and that, “any claim between you [the user] and YouTube that arises in whole or in part from the YouTube website shall be decided exclusively by a court…located in San Mateo County, California.” Therefore, said the Court, Ms. Bowen could not maintain a suit against YouTube in the State of Washington.

Interestingly, after YouTube had filed its motion to dismiss, the plaintiff, probably recognizing that her attempt to keep the case in Washington was doomed, moved to transfer the case to California. The Court, however, ruled that dismissal, not transfer, of the case was the proper way to go. Whether the plaintiff can get another shot at YouTube by re-filing the case in California was not discussed, but the success of any such subsequent case seems unlikely, absent any new facts or legal theories alleged, given the apparent substantive infirmities in plaintiff’s case.

The lesson of this case is clear and simple. If you, as a user, especially a registered user, of a website agree to that site’s posted terms of use, and you later wish to make a claim or file suit against the site, you most likely will be bound by the site’s designated forum where claims may be made and lawsuits can be brought. Furthermore, even in the unlikely event that the site’s terms of use do not designate a state or states where claims and suits must be brought, there is a chance you will be required to make an affirmative showing that the website had more than just a passive presence in the state where you choose to sue.

The en banc panel here consisted of eleven Circuit Judges: Alex Kozinski, Stephen Reinhardt, Pamela Ann Rymer, Barry G. Silverman, M. Margaret McKeown, William A. Fletcher, Raymond C. Fisher, Richard A. Paez, Carlos T. Bea, Milan D. Smith, Jr. and N. Randy Smith.

The Court’s opinion was authored by Chief Judge Kozinski, and a partial Concurrence/partial Dissent was issued by Judge McKeown, who was joined by Judges Rymer and Bea.

The bottom line you ask? Jump to page 28 of the slip opinion, wherein the Court advises that “[t]he message to website operators is clear: If you don’t encourage illegal content, or design your website to require users to input illegal content, you will be immune.” Now for the loooong version, which excludes any consideration of the partial concurrence/dissent (maybe later).

We are of course dealing with a statute here, and the Court appropriately begins by asking what Congress had in mind when it enacted the law.

In passing section 230 . . . Congress sought to immunize the removal of user generated content, not the creation of content: “[S]ection [230] provides ‘Good Samaritan’ protections from civil liability for providers . . . of an interactive computer service for actions to restrict . . . access to objectionable online material.” (quoting from a 1996 Conference Report)

I’m not so sure the “Good Samaritan” phrase is properly applied to Section 230(c)(1), but I think the point being made here is valid: In the online context, acting as an editor is generally protected. Acting as an author is not.

The Court proceeds to consider the challenged portions of the Roommates.com website. As to the questions asked of prospective subscribers during registration (disclosure of sex, family status, and sexual orientation), including the choice of answers provided by Roommates.com and offered in pull-down menus, the Court opines that

Roommate created the questions and choice of answers, and designed its website registration process around them. Therefore, Roommate is undoubtedly the “information content provider” as to the questions and can claim no immunity for posting them on its website, or for forcing subscribers to answer them as a condition of using its services. . . . The CDA does not grant immunity for inducing third parties to express illegal preferences. Roommate’s own acts—posting the questionnaire and requiring answers to it—are entirely its doing and thus section 230 of the CDA does not apply to them. Roommate is entitled to no immunity.”

Although it is purportedly just focused on the question of whether immunity applies, the Court further notes that “asking questions certainly can violate the Fair Housing Act and analogous laws in the physical world.” More on this apparent divergence from the topic at hand (immunity) later.

The Court considers Roommates.com’s role as a developer when considering its subscribers’ profiles:

Although it is the subscriber that has answered the questions that are ultimately displayed in his or her profile, same “does not preclude Roommate from also being an information content provider by helping “develop” at least “in part” the information in the profiles. . . . By any reasonable use of the English language, Roommate is “responsible” at least “in part” for each subscriber’s profile page, because every such page is a collaborative effort between Roommate and the subscriber.

In other words, according to the Court, Roommates.com has again crossed the Section 230 line:

By requiring subscribers to provide the information as a condition of accessing its service, and by providing a limited set of pre-populated answers, Roommate becomes much more than a passive transmitter of information provided by others; it becomes the developer, at least in part, of that information. And section 230 provides immunity only if the interactive computer service does not “creat[e] or develop[]” the information “in whole or in part.”

The Court also declines to extend immunity to Roommate.com’s operation of its search system and email notification system. Observing that “Roommate designed its search system so it would steer users based on the preferences and personal characteristics that Roommate itself forces subscribers to disclose[,]” the Court addresses head-on the key question of when does a website create or develop information:

We believe that both the immunity for passive conduits and the exception for co-developers must be given their proper scope and, to that end, we interpret the term “development” as referring not merely to augmenting the content generally, but to materially contributing to its alleged unlawfulness. In other words, a website helps to develop unlawful content, and thus falls within the exception to section 230, if it contributes materially to the alleged illegality of the conduct.” [I think this language explains the Court's interest in the underlying legality of some of Roommate.com's alleged actions here].

The preceding paragraph is a significant, uh, development in Section 230 jurisprudence, and merits close attention. What it seems to be saying is that for purposes of determining whether Section 230 immunity applies, we don’t just look at whether the site created the subject content. We must also examine whether the website “contributed materially to the alleged illegality of the conduct.”

Based upon this new standard, the Court rules that Roommate.com “is sufficiently involved with the design and operation of the search and email systems—which are engineered to limit access to housing on the basis of the protected characteristics elicited by the registration process—so as to forfeit any immunity to which it was otherwise entitled under section 230.” Rejected again.

However, the Court does rule that Roommate.com is immune to claims based upon third party submissions under the “Additional Comments” section of the site.

The case concludes with what could be construed as both a warning to the plaintiffs’ bar and an encouraging word (?) to website operators:

[T]here will always be close cases where a clever lawyer could argue that something the website operator did encouraged the illegality. Such close cases, we believe, must be resolved in favor of immunity, lest we cut the heart out of section 230 by forcing websites to face death by ten thousand duck-bites, fighting off claims that they promoted or encouraged—or at least tacitly assented to—the illegality of third parties . . .. [I]n cases of enhancement by implication or development by inference—such as with respect to the “Additional Comments” here—section 230 must be interpreted to protect websites not merely from ultimate liability, but from having to fight costly and protracted legal battles.

The Court remands the case to the District Court for a consideration of the claims not immunized by Section 230.

I’m still digesting this thing (and may alter some of this post upon further reflection), but will say that I definitely anticipate a certiorari petition in the not too distant future. In the meantime, I recommend you give the opinion a read. Check out the favorable language directed at search engines and sites that, like Roommate.com and the one in Carafano, classify user data. Also look for several generic examples offered by the Court of situations where immunity would and would not apply, and “clarifications” of two prior Ninth Circuit rulings (Carafano and Batzel).

I’m looking forward to getting through Judge McKeown’s accompanying opinion and hearing what others have to say about the case.