One update this week, and news regarding a significant new California Supreme Court decision on distributor immunity for defamatory Internet publications.

New AG Position on Prop 83

We previously reported on cases challenging recently passed Proposition 83, which increases penalties and parole terms for many sex crimes, requires felony sex offenders to wear GPS tracking devices for life, and subjects former offenders to expanded residency restrictions. Despite having taken the position on November 15 that the law does not apply retroactively, Attorney General Bill Lockyer appeared to reverse course on Monday, arguing that the measure bars all sex offenders from moving within 2,000 feet of a park or school. U.S. District Judge Jeffrey White of the Northern District of California set a hearing for February 23, 2007, extended the temporary restraining order barring law enforcement officials from evicting sex offenders now living within 2,000 of a school or park, and ordered the AG to submit briefing regarding their position after new AG Jerry Brown takes office. The AG asserted that its position had not changed; rather, it was responding to new circumstances.

Distributor Immunity for Defamatory Internet Publication

On November 20, 2006, the California Supreme Court held that the federal Communications Decency Act of 1996 prohibits distributor liability for defamation with respect to Internet publications, and immunizes individual “users” of interactive computer services.  Barrett v. Rosenthal, S122953.

In Barrett, Defendant Ilena Rosenthal posted an article written by another individual on the Web sites of two newsgroups. The article contained allegedly false and defamatory statements about Plaintiff Dr. Timothy Polevoy. Polevoy filed suit, and asserted that Rosenthal should be held liable for defamation for posting the article. The trial court held that Rosenthal was immunized by the Communications Decency Act of 1996 (the “Act”). The California Court of Appeal reversed, and the case ultimately reached the California Supreme Court.

Section 230 of the Act protects Internet “publishers” from liability for allegedly harmful comments written by others. At issue in Barrett was the scope and interpretation of section 230 and the impact of the common law distinction between “publishers” and “distributors” of information. Under the common law, distributors like newspaper vendors and book vendors could only be held liable if they had notice of a defamatory statement in their merchandise. However, the publisher of the newspaper or book where the statement appeared could be held liable even absent such notice. Section 230 explicitly eliminated such liability for “publishers.”

However, the Court of Appeals held that common law “distributor” liability survived the congressional grant of immunity, so that Internet providers and users are exposed to liability if they republish a statement with notice of its defamatory statement.

The Supreme Court reversed. The Court held that (1) section 230 prohibits “distributor” liability for Internet publications, and (2) that the section applies to individual “users” of interactive computer services who re-post allegedly defamatory statements.

The Court explained that the traditional distinction between publishers and distributors does not apply in the Internet environment. The distinction is “based on rules developed in the post-Gutenberg, pre-cyberspace world, [which] would foster disputes over which category the defendant should occupy.” The Court also emphasized that a notice-based liability regime would significantly chill online speech, and would undermine Congressional intent to promote speech on the Internet. A notice-based liability would result in a “heckler’s veto” by encouraging people to lodge complaints whenever they were displeased by an online posting.

The Court also concluded that the immunity of section 230 applies to individual “users” like Rosenthal who post articles on newsgroups. The Court explained that there is no statutory basis for the distinction between users and providers, and the Congressional intent in fostering free speech on the Internet supported extending section 230 immunity to individual users.

The Barrett Court “acknowledge[d] that recognizing broad immunity for defamatory republications on the Internet has some troubling consequences,” but deferred to Congress’s judgment as to whether the statute should be amended to offer heightened defamation protection.

Importantly, victims of on-line defamation are not without any legal remedy. They can still sue the originator of the defamatory publication. And, as Justice Moreno wrote in a concurring opinion, the poster of the article may be subject to liability if the poster conspired with the originator of the publication, notwithstanding section 230.

The potential limitations of Section 230 immunity are demonstrated by a Northern District of Illinois decision issued only a few days before the Barrett decision. Chicago Lawyers’ Committee for Civil Rights Under the Law, Inc. v. Craigslist, Inc., __ F.Supp.2d __, 2006 WL 3307439 (N.D. Ill. Nov. 14, 2006). In that case, the plaintiff alleged that Craigslist violated the Fair Housing Act by posting advertisements on its website that indicated a preference, limitation, or discrimination in the sale or rental of housing. The court granted Craigslist’s motion to dismiss on the ground that its conduct was protected from liability under Section 230.

However, the court rejected the interpretation advanced by Craigslist and by other courts (most notably, the Fourth Circuit in Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997)) that Section 230 confers broad immunity as to all causes of action against Internet users or providers. Instead, the court adopted a middle-ground approach, holding that Section 230 only bars claims that require “publishing as a critical element.”

Proskauer associate Navid Soleymani contributed to this post.