The First Amendment in Cyberspace - Unit 6
Eric B. Easton, University of Baltimore School of Law

Unit 1 | Unit 2 | Unit 3 | Unit 4 | Unit 5 | Unit 6

Libel Law in Cyberspace

In New York Times v. Sullivan, 376 U.S. 254 (1964), the U.S. Supreme Court held that the First Amendment prevented a public official from recovering libel damages without first proving that the defendant acted with "actual malice." Thus began a 35-year process of constructing a constitutional "gloss" on the ancient law of libel. We conclude this module on the First Amendment with an inquiry into the constitutional implications of libel in Cyberspace.

Zeran v. America Online Inc.

129 F.3d 327 (4th Cir. 1997)

Wilkinson, C.J. Kenneth Zeran brought this action against America Online, Inc. (AOL), arguing that AOL unreasonably delayed in removing defamatory messages posted by an unidentified third party, refused to post retractions of those messages, and failed to screen for similar postings thereafter. The district court granted judgment for AOL on the grounds that the Communications Decency Act of 1996 (CDA) - 47 U.S.C. 230 - bars Zeran's claims. Zeran appeals, arguing that 230 leaves intact liability for interactive computer service providers who possess notice of defamatory material posted through their services. He also contends that 230 does not apply here because his claims arise from AOL's alleged negligence prior to the CDA's enactment. Section 230, however, plainly immunizes computer service pro- viders like AOL from liability for information that originates with third parties. Furthermore, Congress clearly expressed its intent that 230 apply to lawsuits, like Zeran's, instituted after the CDA's enactment. Accordingly, we affirm the judgment of the district court.

* * * The instant case comes before us on a motion for judgment on the pleadings, so we accept the facts alleged in the complaint as true. On April 25, 1995, an unidentified person posted a message on an AOL bulletin board advertising "Naughty Oklahoma T-Shirts." The posting described the sale of shirts featuring offensive and tasteless slogans related to the April 19, 1995, bombing of the Alfred P. Murrah Federal Building in Oklahoma City. Those interested in purchasing the shirts were instructed to call "Ken" at Zeran's home phone number in Seattle, Washington. As a result of this anonymously perpetrated prank, Zeran received a high volume of calls, comprised primarily of angry and derogatory messages, but also including death threats. Zeran could not change his phone number because he relied on its availability to the public in running his business out of his home. Later that day, Zeran called AOL and informed a company representative of his predicament. The employee assured Zeran that the posting would be removed from AOL's bulletin board but explained that as a matter of policy AOL would not post a retraction. The parties dispute the date that AOL removed this original posting from its bulletin board.

On April 26, the next day, an unknown person posted another message advertising additional shirts with new tasteless slogans related to the Oklahoma City bombing. Again, interested buyers were told to call Zeran's phone number, to ask for "Ken," and to "please call back if busy" due to high demand. The angry, threatening phone calls intensified. Over the next four days, an unidentified party continued to post messages on AOL's bulletin board, advertising additional items including bumper stickers and key chains with still more offensive slogans.

During this time period, Zeran called AOL repeatedly and was told by company representatives that the individual account from which the messages were posted would soon be closed. Zeran also reported his case to Seattle FBI agents. By April 30, Zeran was receiving an abusive phone call approximately every two minutes.

Meanwhile, an announcer for Oklahoma City radio station KRXO received a copy of the first AOL posting. On May 1, the announcer related the message's contents on the air, attributed them to "Ken" at Zeran's phone number, and urged the listening audience to call the number. After this radio broadcast, Zeran was inundated with death threats and other violent calls from Oklahoma City residents. Over the next few days, Zeran talked to both KRXO and AOL representatives. He also spoke to his local police, who subsequently surveilled his home to protect his safety. By May 14, after an Oklahoma City newspaper published a story exposing the shirt advertisements as a hoax and after KRXO made an on-air apology, the number of calls to Zeran's residence finally subsided to fifteen per day.

Zeran first filed suit on January 4, 1996, against radio station KRXO in the United States District Court for the Western District of Oklahoma. On April 23, 1996, he filed this separate suit against AOL in the same court. Zeran did not bring any action against the party who posted the offensive messages.(1)1 After Zeran's suit against AOL was transferred to the Eastern District of Virginia..., AOL answered Zeran's complaint and interposed 47 U.S.C. 230 as an affirmative defense. AOL then moved for judgment on the pleadings.... The district court granted AOL's motion, and Zeran filed this appeal.



Because 230 was successfully advanced by AOL in the district court as a defense to Zeran's claims, we shall briefly examine its operation here. Zeran seeks to hold AOL liable for defamatory speech initiated by a third party. He argued to the district court that once he notified AOL of the unidentified third party's hoax, AOL had a duty to remove the defamatory posting promptly, to notify its subscribers of the message's false nature, and to effectively screen future defamatory material. Section 230 entered this litigation as an affirmative defense pled by AOL. The company claimed that Congress immunized interactive computer service providers from claims based on information posted by a third party. The relevant portion of 230 states: "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." 47 U.S.C. 230(c)(1).(2) By its plain language, 230 creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.

Specifically, 230 precludes courts from entertaining claims that would place a computer service provider in a publisher's role. Thus, lawsuits seeking to hold a service provider liable for its exercise of a publisher's traditional editorial functions - such as deciding whether to publish, withdraw, postpone or alter content - are barred.

The purpose of this statutory immunity is not difficult to discern. Congress recognized the threat that tort-based lawsuits pose to freedom of speech in the new and burgeoning Internet medium. The imposition of tort liability on service providers for the communications of others represented, for Congress, simply another form of intrusive government regulation of speech. Section 230 was enacted, in part, to maintain the robust nature of Internet communication and, accordingly, to keep government interference in the medium to a minimum. In specific statutory findings, Congress recognized the Internet and interactive computer services as offering "a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity." Id. 230(a)(3). It also found that the Internet and interactive computer services "have flourished, to the benefit of all Americans, with a minimum of government regulation." Id. 230(a)(4). Congress further stated that it is "the policy of the United States . . . to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation." Id. 230(b)(2).

None of this means, of course, that the original culpable party who posts defamatory messages would escape accountability. While Congress acted to keep government regulation of the Internet to a minimum, it also found it to be the policy of the United States "to ensure vigorous enforcement of Federal criminal laws to deter and punish trafficking in obscenity, stalking, and harassment by means of computer." Id. 230(b)(5). Congress made a policy choice, however, not to deter harmful online speech through the separate route of imposing tort liability on companies that serve as intermediaries for other parties' potentially injurious messages. Congress' purpose in providing the 230 immunity was thus evident. Interactive computer services have millions of users. The amount of information communicated via interactive computer services is therefore staggering. The specter of tort liability in an area of such prolific speech would have an obvious chilling effect. It would be impossible for service providers to screen each of their millions of postings for possible problems. Faced with potential liability for each message republished by their services, interactive computer service providers might choose to severely restrict the number and type of messages posted. Congress considered the weight of the speech interests implicated and chose to immunize service providers to avoid any such restrictive effect.

Another important purpose of 230 was to encourage service providers to self-regulate the dissemination of offensive material over their services. In this respect, 230 responded to a New York state court decision, Stratton Oakmont, Inc. v. Prodigy Servs. Co., 1995 WL 323710 (N.Y. Sup. Ct. May 24, 1995). There, the plaintiffs sued Prodigy - an interactive computer service like AOL - for defamatory comments made by an unidentified party on one of Prodigy's bulletin boards. The court held Prodigy to the strict liability standard normally applied to original publishers of defamatory statements, rejecting Prodigy's claims that it should be held only to the lower "knowledge" standard usually reserved for distributors. The court reasoned that Prodigy acted more like an original publisher than a distributor both because it advertised its practice of controlling content on its service and because it actively screened and edited messages posted on its bulletin boards.

Congress enacted 230 to remove the disincentives to self-regulation created by the Stratton Oakmont decision. Under that court's holding, computer service providers who regulated the dissemination of offensive material on their services risked subjecting themselves to liability, because such regulation cast the service provider in the role of a publisher. Fearing that the specter of liability would therefore deter service providers from blocking and screening offensive material, Congress enacted 230's broad immunity "to remove disincentives for the development and utilization of blocking and filtering technologies that empower parents to restrict their children's access to objectionable or inappropriate online material." 47 U.S.C. 230(b)(4). In line with this purpose, 230 forbids the imposition of publisher liability on a service provider for the exercise of its editorial and self-regulatory functions.


Zeran argues, however, that the 230 immunity eliminates only publisher liability, leaving distributor liability intact. Publishers can be held liable for defamatory statements contained in their works even absent proof that they had specific knowledge of the statement's inclusion. According to Zeran, interactive computer service providers like AOL are normally considered instead to be distributors, like traditional news vendors or book sellers. Distributors cannot be held liable for defamatory statements contained in the materials they distribute unless it is proven at a minimum that they have actual knowledge of the defamatory statements upon which liability is predicated. Zeran contends that he provided AOL with sufficient notice of the defamatory statements appearing on the company's bulletin board. This notice is significant, says Zeran, because AOL could be held liable as a distributor only if it acquired knowledge of the defamatory statements' existence.

Because of the difference between these two forms of liability, Zeran contends that the term "distributor" carries a legally distinct meaning from the term "publisher." Accordingly, he asserts that Congress' use of only the term "publisher" in 230 indicates a purpose to immunize service providers only from publisher liability. He argues that distributors are left unprotected by 230 and, therefore, his suit should be permitted to proceed against AOL. We disagree. Assuming arguendo that Zeran has satisfied the requirements for imposition of distributor liability, this theory of liability is merely a subset, or a species, of publisher liability, and is therefore also foreclosed by 230.

The terms "publisher" and "distributor" derive their legal significance from the context of defamation law. Although Zeran attempts to artfully plead his claims as ones of negligence, they are indistinguishable from a garden variety defamation action. Because the publication of a statement is a necessary element in a defamation action, only one who publishes can be subject to

this form of tort liability. Publication does not only describe the choice by an author to include certain information. In addition, both the negligent communication of a defamatory statement and

the failure to remove such a statement when first communicated by another party - each alleged by Zeran here under a negligence label - constitute publication. In fact, every repetition of a defamatory statement is considered a publication.

In this case, AOL is legally considered to be a publisher. "[E]very one who takes part in the publication . . . is charged with publication." Even distributors are considered to be publishers for purposes of defamation law: Those who are in the business of making their facilities available

to disseminate the writings composed, the speeches made, and the information gathered by others may also be regarded as participating to such an extent in making the books, newspapers, magazines, and information available to others as to be regarded as publishers. They are intentionally making the contents available to others, sometimes without knowing all of the contents - including the defamatory content - and sometimes without any opportunity to ascertain, in advance, that any defamatory matter was to be included in the matter published. AOL falls squarely within this traditional definition of a publisher and, therefore, is clearly protected by 230's immunity.

Zeran contends that decisions like Stratton Oakmont and Cubby, Inc. v. CompuServe Inc., 776 F. Supp. 135 (S.D.N.Y. 1991), recognize a legal distinction between publishers and distributors. He misapprehends, however, the significance of that distinction for the legal issue we consider here. It is undoubtedly true that mere conduits, or distributors, are subject to a different standard of liability. As explained above, distributors must at a minimum have knowledge of the existence of a defamatory statement as a prerequisite to liability. But this distinction signifies only that different standards of liability may be applied within the larger publisher category, depending on the specific type of publisher concerned. To the extent that decisions like Stratton and Cubby utilize the terms "publisher" and "distributor" separately, the decisions correctly describe two different standards of liability. Stratton and Cubby do not, however, suggest that distributors are not also a type of publisher for purposes of defamation law.

Zeran simply attaches too much importance to the presence of the distinct notice element in distributor liability. The simple fact of notice surely cannot transform one from an original publisher to a distributor in the eyes of the law. To the contrary, once a computer service provider receives notice of a potentially defamatory posting, it is thrust into the role of a traditional publisher. The computer service provider must decide whether to publish, edit, or withdraw the posting. In this respect, Zeran seeks to impose liability on AOL for assuming the role for which 230 specifically proscribes liability - the publisher role.

Our view that Zeran's complaint treats AOL as a publisher is reinforced because AOL is cast in the same position as the party who originally posted the offensive messages. According to Zeran's logic, AOL is legally at fault because it communicated to third parties an allegedly defamatory statement. This is precisely the theory under which the original poster of the offensive messages would be found liable. If the original party is considered a publisher of the offensive messages, Zeran certainly cannot attach liability to AOL under the same theory without conceding that AOL too must be treated as a publisher of the statements.

Zeran next contends that interpreting 230 to impose liability on service providers with knowledge of defamatory content on their services is consistent with the statutory purposes outlined in Part IIA. Zeran fails, however, to understand the practical implications of notice liability in the interactive computer service context. Liability upon notice would defeat the dual purposes advanced by 230 of the CDA. Like the strict liability imposed by the Stratton Oakmont court, liability upon notice reinforces service providers' incentives to restrict speech and abstain from self-regulation.

If computer service providers were subject to distributor liability, they would face potential liability each time they receive notice of a potentially defamatory statement - from any party, concerning any message. Each notification would require a careful yet rapid investigation of the circumstances surrounding the posted information, a legal judgment concerning the information's defamatory character, and an on-the-spot editorial decision whether to risk liability by allowing the continued publication of that information. Although this might be feasible for the traditional print publisher, the sheer number of postings on interactive computer services would create an impossible burden in the Internet context. Because service providers would be subject to liability only for the publication of information, and not for its removal, they would have a natural incentive simply to remove messages upon notification, whether the contents were defamatory or not. Thus, like strict liability, liability upon notice has a chilling effect on the freedom of Internet speech.

Similarly, notice-based liability would deter service providers from regulating the dissemination of offensive material over their own ser- vices. Any efforts by a service provider to investigate and screen material posted on its service would only lead to notice of potentially defamatory material more frequently and thereby create a stronger basis for liability. Instead of subjecting themselves to further possible lawsuits, service providers would likely eschew any attempts at self-regulation.

More generally, notice-based liability for interactive computer service providers would provide third parties with a no-cost means to create the basis for future lawsuits. Whenever one was displeased with the speech of another party conducted over an interactive computer service, the offended party could simply "notify" the relevant service provider, claiming the information to be legally defamatory. In light of the vast amount of speech communicated through interactive computer services, these notices could produce an impossible burden for service providers, who would be faced with ceaseless choices of suppressing controversial speech or sustaining prohibitive liability. Because the probable effects of distributor liability on the vigor of Internet speech and on service provider self-regulation are directly contrary to 230's statutory purposes, we will not assume that Congress intended to leave liability upon notice intact.

* * *

For the foregoing reasons, we affirm the judgment of the district court.

Notes to Reading 6

1. Zeran was not decided on constitutional grounds, but Judge Wilkinson uses language that would easily fit in a constitutional analysis when he talks about the "chilling effect" of subjecting ISPs to tort liability for third-party postings, even upon notice of defamatory content. Indeed, it is clear that First Amendment considerations inform the court's statutory construction: "Because the probable effects of distributor liability on the vigor of Internet speech and on service provider self-regulation are directly contrary to 230's statutory purposes, we will not assume that Congress intended to leave liability upon notice intact."

2. Judge Wilkinson points out that 230 was enacted in response to Stratton Oakmont v. Prodigy, in which the court held Prodigy to the same kind of liability imposed on original publishers of libelous material. He repeatedly characterizes this as "strict liability," but are publishers strictly liable for libelous content in their publications? In Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974), Justice Powell wrote, "[S]o long as they do not impose liability without fault, the states may define for themselves the appropriate standard of liability for a publisher or broadcaster of defamatory falsehood injurious to a private individual." Why does Judge Wilkinson use that term?

3. The question of what kind of liability to impose on ISPs really begins with the earlier case that Judge Wilkinson cites: Cubby v. CompuServe. In that case, the online service provider, CompuServe, won summary judgment in a libel action brought by an Internet news and gossip service called "Skuttlebut." The plaintiff alleged that "Rumorville," a rival service distributed through CompuServe, engaged in libel, business disparagement and unfair competition. CompuServe argued that it should not be liable because it did not prescreen the material in contract information services like Rumorville. The court agreed:

With respect to the Rumorville publication, the undisputed facts are that DFA [a CompuServe contractor] uploads the text of Rumorville into CompuServe's data banks and makes it available to approved ... subscribers instantaneously. CompuServe has no more editorial control over such a publication than does a public library, book store, or newsstand, and it would be no more feasible for CompuServe to examine every publication it carries for potentially defamatory statements than it would be for any other distributor to do so. "First Amendment guarantees have long been recognized as protecting distributors of publications.... Obviously, the national distributor of hundreds of periodicals has no duty to monitor each issue of every periodical it distributes. Such a rule would be an impermissible burden on the First Amendment."

Technology is rapidly transforming the information industry. A computerized database is the functional equivalent of a more traditional news vendor, and the inconsistent application of a lower standard of liability to an electronic news distributor such as CompuServe than that which is applied to a public library, book store, or newsstand would impose an undue burden on the free flow of information. Given the relevant First Amendment considerations, the appropriate standard of liability to be applied to CompuServe is whether it knew or had reason to know of the allegedly defamatory Rumorville statements.

4. In Stratton Oakmont, an unidentified bulletin board user or "poster" on Prodigy's "Money Talk" computer bulletin board accused Stratton Oakmont, a securities firm, of committing criminal acts in connection with an initial public offering. Prodigy relied on Cubby for its defense, but Judge Stuart Ain distinguished the two cases:

First, Prodigy held itself out to the public and its members as controlling the content of its computer bulletin boards. Second, Prodigy implemented this control through its automatic software screening program, and the Guidelines which Board Leaders are required to enforce. By actively utilizing technology and manpower to delete notes from its computer bulletin boards on the basis of offensiveness and "bad taste," for example, Prodigy is clearly making decisions as to content, and such decisions constitute editorial control. That 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. Based on the foregoing, this Court is compelled to conclude that for the purposes of Plaintiffs' claims in the

action, Prodigy is a publisher rather than a distributor.

5. Ironically, Judge Ain's decision, if followed, would have imposed a greater burden on defendant ISPs who made an effort to find and remove libel, pornography, hate speech and other undesirable material from their services than on ISPs who did nothing. That is why Congress enacted 230 as a "safe harbor" for "good samaritans." A good idea? Not everyone thinks so. When White House aide Sidney Blumenthal sued America Online and its gossip columnist Matt Drudge over an item in the "Drudge Report" accusing Blumenthal of physically abusing his wife, U.S. District Judge Paul L. Friedman let AOL off the hook. But he was not happy about it:

If it were writing on a clean slate, this Court would agree with plaintiffs. AOL has certain editorial rights with respect to the content provided by Drudge and disseminated by AOL, including the right to require changes in content and to remove it; and it has affirmatively promoted Drudge as a new source of unverified instant gossip on AOL. Yet it takes no responsibility for any damage he may .

cause. AOL is not a passive conduit like the telephone company, a common

carrier with no control and therefore no responsibility for what is said over the telephone wires. Because it has the right to exercise editorial control over those with whom it contracts and whose words it disseminates, it would seem only fair to hold AOL to the liability standards applied to a publisher or, at least, like a book store owner or library, to the liability standards applied to a distributor. But Congress has made a different policy choice by providing immunity even where the interactive service provider has an active, even aggressive role in making available content prepared by others. In some sort of tacit quid pro quo arrangement with the service provider community, Congress has conferred immunity from tort liability as an incentive to Internet service providers to self-police the Internet for obscenity and other offensive material, even where the self-policing is unsuccessful or not even attempted.

* * *

As the Fourth Circuit stated in Zeran: "Congress enacted 230 to remove ... disincentives to self-regulation .... Fearing that the specter of liability would ... deter service providers from blocking and screening offensive material .... 230 forbids the imposition of publisher liability on a service provider for the exercise of its editorial and self-regulatory functions."

Any attempt to distinguish between "publisher" liability and notice-based "distributor" liability and to argue that Section 230 was only intended to immunize the former would be unavailing. Congress made no distinction between publishers and distributors in providing immunity from liability. As the Fourth Circuit has noted: "[I]f computer service providers were subject to distributor liability, they would face potential liability each time they receive notice of a potentially defamatory statement - from any party, concerning any message," and such notice-based liability "would deter service providers from regulating the dissemination of offensive material over their own services" by confronting them with "ceaseless choices of suppressing controversial speech or sustaining prohibitive liability" - exactly what Congress intended to insulate them from in Section 230. While it appears to this Court that AOL in this case has taken advantage of all the benefits conferred by Congress in the Communications Decency Act, and then some, without accepting any of the burdens that Congress intended, the statutory language is clear: AOL is immune from suit, and the Court therefore must grant its motion for summary judgment.

Blumenthal v. Drudge, 992 F. Supp. 44, 51-54 (D.D.C. 1998).

6. If Judge Wilkinson's opinion in Zeran seemed to endow Section 230 with nearly constitutional validity, Judge Friedman's opinion in Blumenthal suggests that Congress made a bad deal. What would the consequences be if Section 230 were repealed?

7. So far, the liability of the original Internet publisher - if known - has not been seriously questioned in court. But Mike Godwin, an attorney with the Electronic Frontier Foundation, has suggested that the nature of the Internet might render libel law obsolete:

Is Libel Dead?

Nowadays it's not unusual for those of us who focus on the law in cyberspace to wonder whether the Net has the potential to render libel law altogether obsolete. And if the Net (or similarly distributed and accessible successor technologies) should become the primary mass media of the next century, it's hard to see why anyone should weep if libel lawsuits disappear altogether.

One school of First Amendment theorists - a school that has included some Supreme Court justices - has long argued that the ratification of the First Amendment itself rendered defamation law obsolete. With true freedom of speech, they argued, you need not resort to the courts to repair your reputation. Instead you can simply correct the record through your own speech.

In general, however, most scholars and most courts have refused to accept this argument. Throughout our history, mass-media access (and here the term includes even the printing press of colonial America) has been distributed unevenly throughout society. As a result, few defamees have had as loud a voice in public discourse as a newspaper editor or TV programmer. Thus, the majority of the theorists argue, the balances, incentives, and penalties of libel law are necessary to make individual citizens' reputations safer from false and damaging factual statements.

But surely the Net, which has the potential to empower everyone to answer injurious false statements, can change all that. Maybe the changes have already taken place, and this is why there are so few Net libel lawsuits.

Mike Godwin, Cyber Rights: Defending Free Speech in the Digital Age 93-94 (1998).

1. Zeran maintains that AOL made it impossible to identify the original party by failing to maintain adequate records of its users. The issue of AOL's record keeping practices, however, is not presented by this appeal.

2. Section 230 defines "interactive computer service" as "any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions." 47 U.S.C. 230(e)(2). The term "information content provider" is defined as "any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service." Id. 230(e)(3). The parties do not dispute that AOL falls within the CDA's "interactive computer service" definition and that the unidentified third party who posted the offensive messages here fits the definition of an "information content provider." Continue to the next unit of this module
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