Month: October 2007

Xcentric wins one in Arizona

Michael Erdman Section 230

Earlier this year Global Royalties, Ltd. and its principal, Brandon Hall (“Plaintiffs”), sued Xcentric Ventures, LLC and its Manager, Edward Magedson (“Defendants”), in Arizona federal court for defamation.

As you may know, the defendants operate ripoffreport.com, a website that solicits consumer complaints. The basis of the defamation claim were statements by one Spencer Sullivan, who apparently posted messages on the site (i) referring to Global’s operation as a “scam”; (ii) stating that two individuals “involved with” Global “had written bad checks and otherwise treated him dishonorably”; and (iii) stating that “any upstanding commercial operation could bear the scrutiny of a crime unit without any issue” (posted after plaintiffs had discouraged potential customers from contacting Canadian law enforcement). Defendants allegedly refused Sullivan’s subsequent request to remove his posts from the website.

Noting that the allegedly defamatory statements were written by Sullivan, and not defendants, earlier this week Judge Frederick J. Martone ruled that Section 230 precluded plaintiffs’ defamation claims. In so doing, the court rejected plaintiffs’ argument that by failing to remove the subject posts, defendants had adopted them (which they argued was tantamount to creation or development). The court noted that established law rejected such assertions of notice, and the Defendants’ failure to remove the allegedly defamatory statements was an exercise of a publisher’s traditional editorial functions.

I noticed that the court characterized as “minor and passive participation in the development of content” the fact that defendants allegedly “supplied a list of titles from which Sullivan picked the phrase ‘Con Artists’ to label [his first allegedly defamatory] statement.” I have not reviewed plaintiffs’ complaint, but if the ‘Con Artists’ label is beyond the scope of the substantive defamation allegations, such participation seems entirely irrelevant to the Section 230 analysis.

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Chicago Lawyers’ Committee files appellate brief in Craigslist litigation

Michael Erdman Non-tort claims/Section 230, Pending litigation, Real Estate/Fair Housing, Section 230

Complying with the recently announced filing deadline, the Chicago Lawyers’ Committee has filed an appellate brief in its case against Craigslist, presently pending before the Seventh Circuit.

Buried in a footnote is where I found the only reference to the Ninth Circuit’s now-benched Roommate.com decision. While the issues presented in the two Fair Housing Act cases are not identical, I would have expected CLC’s counsel to try to make more of the Ninth Circuit’s decision. I suppose it’s basically a moot point now.

I’m very much looking forward to attending the oral argument in this one.

Full Ninth Circuit to rehear Roommate.com case

Michael Erdman Non-tort claims/Section 230, Pending litigation, Real Estate/Fair Housing, Section 230

Remember the Ninth Circuit’s ruling in Fair Housing Council of San Fernando Valley v. Roommate.com LLC? How could you forget.

Plaintiff fair-housing groups had charged Roommate.com with Fair Housing Act violations in connection with its online questionnaires and member profiles. This past May a three-judge Ninth Circuit panel ruled that Section 230 does not immunize Roommate.com for all of the content on its website and in its email newsletters. Specifically, the panel concluded that Roommate was “responsible” for its questionnaires because it created or developed the forms and answer choices (rendering the website a content provider of the questionnaires). Explaining that it did not read Carafano “as granting CDA immunity to those who actively encourage, solicit and profit from the tortious and unlawful communications of others,” the panel also ruled that

[b]y categorizing, channeling and limiting the distribution of users’ profiles, Roommate provides an additional layer of information that it is “responsible” at least “in part” for creating or developing.

The decision thus left Roommate.com exposed to potential FHA liability for its questionnaires and user profiles. But that may change.

Eric Goldman and Howard Bashman report on their respective blogs today that the Ninth Circuit has granted Roommate.com’s petition for rehearing en banc. Stay tuned.

Regulation of Online Intrastate Gambling

Michael Erdman Internet-specific laws, Online applications, Proposed legislation

Earlier this week Congressman Tom Feeney (R-Fla), in written materials supplementing previous floor remarks, addressed the 2006 Unlawful Internet Gambling Enforcement Act and what he views as a threat to that law:

[L]ast year, I cosponsored legislation with Congressman Bob Goodlatte to help stop the widespread growth of gambling over the internet. Though Federal law already prohibits gambling over telephone wires, the passage of this legislation was necessary to maintain the original intent of the law while also bringing it up to speed with the explosion of current and future technology. However, this update of the law made clear that it would only affect interstate commerce, respecting the rights of states by leaving to them the decision whether and how to regulate gambling within their own borders. New legislation before the Financial Services Committee attempts to undo all of this previous work, instead granting the federal government the expansive and exclusive right to regulate all online gambling. This new legislation would represent the first time in history that the Federal Government would be given power to issue gambling licenses, and it marks a significant shift away from allowing states to determine for themselves what type of policy is best. Proponents of this legislation state that the bill offers states the right to “opt out” of this regulation, but the truth is that the states already have the right to determine their own policy towards gambling without any broader federal regulation that threatens to undermine their control over licensing standards and enforcement actions.

I haven’t seen the bill the Congressman is referring to, and I’m not expressing any opinion here about gambling, or whether it should be legal. But I am scratching my head about the concept of online intrastate gambling.

Is it technologically feasible for a wagering site based in Illinois to only allow persons physically located in Illinois to place bets? I suppose it could be tried, but something tells me that lots of determined people would find ways around such a restriction, which would presumably invite federal attention.

Perhaps the bill’s opponents are instead worried about states losing out on tax revenues that could one day be extracted from online gambling sites purportedly operating exclusively within a single state?

If anyone is familiar with the proposed legislation, I’d be interested in your opinion.

Lawyer asserts copyright, forbids publication of cease and desist letter

Michael Erdman Cease & Desist letters, Section 230

Ponder this one. Users (including, allegedly, Website Owner) post allegedly defamatory Statements about Company on Website. Company isn’t pleased, and hires Lawyer to submit cease and desist letter to Website Owner. Lawyer asserts in his letter that the Statements are actionable and, per the Ninth Circuit’s recent Roommate.com ruling, Section 230 does not protect Website Owner.

But Lawyer does not stop there. He asserts that the cease and desist letter is copyrighted, and forbids publication thereof. Website Owner proceeds to share the novel letter with Ralph Nader’s Public Citizen. Then things get interesting.

Check out Greg Beck’s account at PC’s Consumer Law & Policy Blog.

Think Lawyer will similarly prohibit publication of the takedown notice that is undoubtedly coming next, notwithstanding, inter alia, DMCA provisions that may expose Lawyer to liability for such a demand?