Ben Ezra, Weinstein, and Co., Inc. v. America Online, Inc.

DATE: March 14, 2000

COURT: United States Court of Appeals, Tenth Circuit (Baldock, Brobby and Lucero, Circuit Judges. Opinion by Baldock

PLAINTIFF: Ben Ezra, Weinstein, and Company, Inc. (“Ben Ezra”)

DEFENDANT: America Online Incorporated (“AOL”)

INTERACTIVE COMPUTER SERVICE: Ben Ezra does not dispute that AOL is an interactive computer service.

ORIGINAL PUBLISHERS/SPEAKERS: “[Ben Ezra] does not dispute that ComStock and Townsend are ‘information content providers.’”

MATERIAL ALLEGATIONS: “Through [AOL’s] Quotes & Portfolios service area, [AOL] publishes continuously updated stock quotation information concerning more than 40,000 publicly traded stocks and securities. The stock quotation information includes data about the market price for specific stocks and the volume of shares traded in the current or previous trading day. Two independent third parties – S & P ComStock, Inc., a stock quote provider, and Townsend Analytics, Ltd., a software provider designated by ComStock – jointly provide this information to [AOL]. The original sources for this information are major national and international stock exchanges and stock markets, including the New York Stock Exchange, the American Stock Exchange, and the Over-the-Counter market. . . . [Ben Ezra, a publicly-trade company] alleged that on three occasions [AOL] published incorrect information concerning [Ben Ezra’s] stock price and share volume.”

CAUSES OF ACTION: “[Ben Ezra] claimed [AOL] defamed [it] by publishing the allegedly inaccurate information. [Ben Ezra] also claimed [AOL] failed to exercise reasonable care in the manipulation, alteration, and change of the stock information.”

PROCEDURAL HISTORY: AOL answered the complaint and moved for summary judgment on the ground that §230 provided AOL with immunity from Ben Ezra’s suit. Ben Ezra filed a cross-motion for summary judgment. A magistrate judge permitted Ben Ezra to inquire into five factual topics relating to whether AOL qualified for §230 immunity. The district court granted AOL’s motion for summary judgment and denied Ben Ezra’s cross-motion for summary judgment. Ben Ezra appealed.

PROCEDURAL ACTION TAKEN HERE: Affirmed.

OUTCOME: “[T]he district court in this case correctly concluded [AOL] is immune from suit pursuant to § 230 and properly granted [AOL]’s motion for summary judgment. . . . We hold that America Online acted solely as an interactive computer service provider and therefore is immune from suit under § 230.”

OPINION: The panel, noting that “§230 creates a federal immunity to any state law cause of action that would hold computer service providers liable for information originating with a third party,” considered but rejected two assertions by Ben Ezra that AOL was ineligible for such immunity.

AOL’s communications with ComStock. Ben Ezra argued that AOL “worked so closely with ComStock and Townsend in the creation and development of the stock quotation information that it also operated as an ‘information content provider.’” The panel concluded that Ben Ezra “ha[d] not demonstrated [AOL] worked so closely with ComStock and Townsend regarding the allegedly inaccurate stock information that [AOL] became an information content provider. While [AOL] did communicate with ComStock and Townsend each time errors in the stock information came to its attention, such communications simply do not constitute the development or creation of the stock quotation information. Rather, the evidence [Ben Ezra] presented indicated that the communications consisted of e-mails from [AOL] requesting ComStock correct the allegedly inaccurate information.”

AOL’s deletion of information. “[Ben Ezra] argues that [AOL] deleted some stock symbols or other information from the data base in an effort to correct the errors. [It] further argues that such alteration of information constitutes “creation or development” of information and transforms [AOL] into an “information content provider.” By deleting the symbols, however, [AOL] simply made the data unavailable and did not develop or create the stock quotation information displayed.. . . Congress clearly enacted § 230 to forbid the imposition of publisher liability on a service provider for the exercise of its editorial and self-regulatory functions. . . . By deleting the allegedly inaccurate stock quotation information, [AOL] was simply engaging in the editorial functions Congress sought to protect.”

Thus Ben Ezra presented no evidence “to contradict [AOL]’s evidence that ComStock and Townsend alone created the stock information at issue” or “to suggest that [AOL] was ‘responsible, in whole or in part, for in the creation and development of information” published on its Quotes & Portfolios area.’” “Imposing liability on [AOL] for the allegedly inaccurate stock information provided by ComStock would “treat” [AOL] as the “publisher or speaker,” a result § 230 specifically proscribes.”