Defamation - Discussion

SERVICE PROVIDER LIABILITY

Defamation: Discussion

● Libel and Slander

Libel and slander are the two ways a defamation can occur. Generally, "[s]lander is publication in a transitory form - speech, for example, is slander." E-Law 3.0.1. Slander, then, is a spoken defamatory statement communicated to someone other than the plaintiff. Slander is deemed to be less serious because the spoken defamation is not thought to be as deliberate as if it were written and it does not persist beyond the moment in which it is spoken. "Libel, on the other hand, is embodied in a physical, longer lasting form, or 'by any other form of communication that has the potentially harmful qualities characteristic of written or printed words.'" E-Law 3.0.1. Libel is considered a more serious form of defamation because it is considered more deliberate and because it persists beyond the moment in which it is "published." Libel is more likely than slander to occur on the Internet due to the "printed" nature of Internet communications. The distinction between libel and slander may be of some importance, however, if a defamation were to occur in a chat room or via a video conferencing connection hosted by a service provider. This commentary, however, will focus on libel in the discussion that follows.

● Cases and analysis

Two cases have been decided that represent opposite ends of the spectrum regarding Service Provider liability for defamation. Interestingly, the Service Provider's conduct was more dispositive to the cases outcomes than the courts' analysis or use of different rules. Both courts analyzed Service Provider liability by analogy with existing media.

In Cubby, Inc. v. CompuServe, Inc., the plaintiffs complained that they had been defamed by several postings to a bulletin board, which was available on the CompuServe Information System and that CompuServe, as the "publisher" of the defamatory statement, should be held liable. Under the law of defamation, "one who repeats or otherwise republishes defamatory matter is subject to liability as if he had originally published it." Cubby, quoting Cianci v. New Times Publishing Co.. However, courts have maintained an exception to this rule for distributors and vendors of defamatory material if they did not know or have reason to know of the defamatory statement. The purpose of this exception was to prevent book stores, libraries, and distributors from being held to a strict liability standard, which would undoubtedly have a chilling effect on the availability of material in violation of the First Amendment's guarantee of free speech. Cubby.

The court relies on Smith v. California in making this analysis. In Smith, the U.S. Supreme Court declared an ordinance that imposed liability on a bookseller for carrying an obscene book unconstitutional on the basis that "'the constitutional guarantees of the freedom of speech and the press stand in the way of imposing strict liability' on distributors for the contents of the reading materials they carry." Cubby, quoting Smith. The Smith court reasoned that "[e]very bookseller would be placed under an obligation to make himself aware of the contents of every book in his shop. It would be altogether unreasonable to demand so near an approach to omniscience." Furthermore, the burden of such a high standard of liability would be borne by the public as booksellers dramatically reduced their inventory in response to the fear of liability and the impossibility of reviewing and censoring every book and publication in stock. Cubby.

The court considered CompuServe a distributor rather than a publisher or republisher on the basis of the facts presented. Primarily, CompuServe exercised no editorial control over the forum in which the defamatory statements were alleged to have appeared. CompuServe had contracted with a separate entity, CCI, to "manage, review, create, delete, edit and otherwise control the contents" of the forum in question "in accordance with editorial and technical standards and conventions of style as established by CompuServe." Cubby. CCI had further contracted with yet another entity, DFA, to make a daily newsletter available in the forum. It was in this newsletter that the alleged defamatory statements were made. CompuServe had no input into or control over the material that DFA posted to the forum pursuant to DFA's contract with CCI. Thus, CompuServe's role was more like that of a distributor or a newsstand than like that of a publisher which had editorial control over the content of the newsletter. Cubby. The court, considering CompuServe a distributor for purposes of determining the standard of liability to which it should be held, granted CompuServe's motion for summary judgment on the basis that the plaintiff had presented no specific facts showing that CompuServe knew or had reason to know of the allegedly defamatory nature of the comments distributed on its bulletin board.

On the other end of the spectrum, the court in Straton Oakmont v. Prodigy Services Company held that Prodigy would be considered a publisher for purposes of determining the standard of liability to which it would be held as the defendant in an action for defamation. Again, a finding that Prodigy's role was analogous to that of a publisher would mean that Prodigy would be held liable for defamatory content as if it had originally published it. The court in Straton discussed the role of a publisher by looking to a newspaper as a model of what a publisher is and does. A newspaper has control over what material it publishes and is more than "a passive receptacle or conduit for news, comment and advertising." Straton, citing Miami Herald Publishing Co. v. Tornillo. Furthermore, and most importantly, along "with this editorial control comes increased liability." Straton, construing Cubby.

The facts showed that Prodigy had expressly compared itself to a newspaper in several national newspaper articles written by Geoffrey Moore, Prodigy's Director of Market Programs and Communications: "We make no apology for pursuing a value system that reflects the culture of the millions of American families we aspire to serve. Certainly no responsible newspaper does less when it chooses the type of advertising it publishes, the letters it prints, the degree of nudity and unsupported gossip its editors tolerate." Straton, quoting Exhibit J (emphasis added). Additional facts that tended to seal Prodigy's fate as a publisher were Prodigy's (1) promulgation of "content guidelines;" (2) use of a software screening program; (3) contracts with and training of "Board Leaders," whose duties included enforcement of content guidelines; and (4) testimony that the Board Leaders had the use of an emergency delete function, which enabled them to remove a posting and send an explanatory message to the posting user. Straton.

Prodigy protested that it had abandoned the "editorial" policies and procedures, which had previously been selling points for their system as a value added service. They, however produced no evidence that such a change had in fact taken place and they argued in a conclusory manner that the Board Leaders do not function as editors. Straton. The court was not persuaded by these claims made with no evidentiary support.

Interestingly, Prodigy relied on Cubby as legal support. The court distinguished Cubby on two grounds. First, Prodigy had held itself out as controlling the content of its bulletin boards. Second, Prodigy had implemented and exercised this control via the four factors just mentioned, supra. The court reasoned that by taking measures to delete messages from its bulletin boards, "Prodigy is clearly making decisions as to content, and such decisions constitute editorial control." Straton. The court went on to conclude - "[t]hat such control is not complete and is enforced both as early as the notes arrive and as late as a complaint is made, does not minimize or eviscerate the simple fact that Prodigy has uniquely arrogated to itself the role of determining what is proper for its members to post and read on its bulletin boards" and thus the court is compelled to consider Prodigy a "publisher." Straton.

The Straton court went on to point out explicitly that it is in full agreement with Cubby and that the finding that Prodigy should be considered a publisher does not conflict with Cubby because Prodigy's own "policies, technology and staffing decisions . . . mandated the finding that it was a publisher." In other words, it was "Prodigy's conscious choice, to gain the benefits of editorial control, [that] has opened it up to a greater liability than CompuServe and other computer networks that make no such choice." Straton. Furthermore, in anticipation of the criticism that ultimately followed the Straton decision, the court made the following preemptive remark (which seems to have been ignored by critics of the Straton court): "For the record, the fear that this Court's finding of publisher status for Prodigy will compel all computer networks to abdicate control of their bulletin boards, incorrectly presumes that the market will refuse to compensate a network for its increased control and the resulting increased exposure." Straton.

That is not to say, however, that such Service Providers will or should be able to enjoy the same potential for growth as an "uncensored" Service Provider, but merely that there appears to be a market for a value added service (if one considers "censorship" an added value) and a Service Provider's decision to attract that market carries with it certain business risks. Finally, and in further response to critics of the Straton decision, considering that Prodigy held itself out as akin to a newspaper, why should it not be held to have assumed a duty by virtue of its own admissions and business decisions and that to breach that duty carries a liability?

● Summary

Service Provider liability in the area of defamation presents a good model for the analysis of "vicarious liability" for Service Providers generally. The standard of liability to which Service Providers can be held is contingent upon their own business practices; they can decide for themselves how much liability they want to assume by tailoring their conduct to a particular market. Whether the Service Provider can be held liable for the actions of a subscriber or user depends upon a two part analysis: (1) if the Service Provider is the functional equivalent of a publisher, then a high standard of liability follows in which the Service Provider is held liable as if it originally published the offending material; (2) if the Service Provider is the functional equivalent of a distributor, then liability turns on whether the Service Provider knew or had reason to know of the offending material. Whether the Service Provider is the functional equivalent of a publisher or distributor is (or at least is being treated as) a question of law and is, therefore, a proper question for the court on a motion for summary judgment. The question of whether the Service Provider knew or had reason to know of the offending material is a question of fact to be determined by the evidence presented and should, therefore, be properly presented to a jury. Factors a court may consider when determining whether a Service Provider is the functional equivalent of a publisher or distributor may include, inter alia:

the use and nature of the Service Provider’s content guidelines,

the use of software which screens postings for offensive language,

the use of moderators to ensure that postings conform to content standards,

the availability of a delete function to prevent postings from getting online,

whether the Service Provider holds itself out as maintaining editorial control over content, and

whether the Service Provider likens itself to newspapers or other traditional publishers.

Service Provider Liability Pages

Introduction • Table of Contents
Servcie Providers - Overview • Service Providers - Discussion • Liability Analogies - Overview • Liability Analogies - Discussion • Defamation - Overview • Defamation - Discussion • Intellectual Property - Overview • Intellectual Property - Discussion • Obscenity - Overview • Obscenity - Discussion • Criminal - Overview • Criminal Discussion • Privacy - Overview • Privacy - Discussion • Policy Discussion • Conclusion • Pocket Part • Notes & Links

Prepared for Professor Laura Gasaway's Cyberspace Law Seminar (Law - 357C)
UNC School of Law - Spring 1997

By: Ashe Lockhart (Webmaster) & Carol Kozar

Instructor: Laura N. Gasaway, Professor of Law and Director of the Katherine R. Everett Law Library