{"id":36248,"date":"2008-03-26T16:35:41","date_gmt":"2008-03-26T21:35:41","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/uncategorized\/zeran-v-aol-why-the-fourth-circuit-is-wrong.html"},"modified":"2008-03-26T16:35:41","modified_gmt":"2008-03-26T21:35:41","slug":"zeran-v-aol-why-the-fourth-circuit-is-wrong","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/law-library\/zeran-v-aol-why-the-fourth-circuit-is-wrong.html","title":{"rendered":"Zeran v. AOL: Why the Fourth Circuit is Wrong"},"content":{"rendered":"
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Published in the Journal of Internet Law<\/i>, March 1998<\/font><\/strong><\/p>

In Zeran v, America Online, Inc.,<\/i>1<\/sup><\/a> the Fourth Circuit broadly construed subpart (1) of the Good Samaritan exemption, created by the Telecommunications Act of 1996, to exempt interactive computer services2<\/sup><\/a> from negligence claims premised on either publisher or distributor liability for third party acts of online defamation. District Court Judge Ellis had held that Section 230(c)(1) not only reversed Stratton Oakmont v. Prodigy Services, Inc.<\/i>3<\/a><\/sup> and eliminated online republication liability, but preempted any claims based on distributor liability under the standard articulated in Cubby, Inc. v. CompuServe Inc.<\/i> In affirming the trial court, the Fourth Circuit held more broadly that "[b]y 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."4<\/sup><\/a><\/font><\/p>

The district court had rested its decision on two grounds. First, Judge Ellis concluded that the term "publisher or speaker," which is not defined in the Act or its legislative history, encompasses distributors such as AOL. Second, the trial court determined that the congressional intent of promoting content monitoring would be undermined unless distributor liability, which is imposed in cases where a distributor knows or has reason to know that it is distributing defamatory material, was deemed preempted. Judge Wilkinson of the Fourth Circuit, in a more sweeping, less carefully thought-out opinion, adopted Judge Ellis's conclusions, but went well beyond the district court, and the statute or its legislative history, in finding a board objective to promote free speech in (ironically) a provision of the Communications Decency Act crafted to encourage constant screening and blocking of certain adult content.<\/font><\/p>

The rule of Zeran v. America Online, Inc.<\/i> is wrong on all three grounds relied upon by the Fourth Circuit. First, although the term "publisher"<\/i> is not defined in the statute, the legislative history shows that Congress was concerned about publisher liability as imposed in Stratton Oakmont v. Prodigy Service, Inc.,<\/i>5<\/sup><\/a> where Judge Ain expressly distinguished between "publishers"<\/i>, on the one hand, and "distributors<\/i>,"<\/i> such as AOL, on the other. It is this narrow definition, and not a broader definition taken from the Restatement of Torts, that Congress likely intended to incorporate in the Act. Second, the policy of promoting online content screening would be furthered, not undermined, if Section 230 were constructed to allow distributor liability because of the effect of subpart (2) of the Good Samaritan exemption— which the Fourth Circuit failed to address. Third, and finally, the Fourth Circuit's unsubstantiated conclusion that Congress intended "to promote unfettered speech on the Internet" by its passage of the Communications Decency Act is simply insupportable.<\/font><\/p>

In this author's view, Congress effectively codified an altered version of the Cubby<\/i> standard under which a service provider (or user) may be held indirectly liable for third party acts of defamation only in instances where it actually knew that material posed online was defamatory and failed to take any action, or in very limited circumstances where it failed to act despite reason to know that material was defamatory (provided that the basis for imputed knowledge is not the provider's acts of monitoring online content).6<\/sup><\/a><\/font><\/p>

CUBBY AND STRATTON OAKMONT<\/font><\/b><\/p>

In Cubby, Inc. v. CompuServe Inc.,<\/i>7<\/sup><\/a> a federal court in New York held in 1991 that CompuServe was the equivalent of "an electronic, for profit library," and therefore, entitled to the same first amendment protection as a "distributor" such as a news vendor (subject to liability only if it knew or had reason to know of the allegedly defamatory statements), rather than as a "publisher", which is liable regardless of its knowledge or intent. The court wrote that "CompuServe has no more editorial control over such a publication than does a public library, bookstore, 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."8<\/sup><\/a><\/font><\/p>

Four years later, however, in Stratton Oakmont v. Prodigy Services, Inc.,<\/i>9<\/sup><\/a> Judge Ain of New York's Nassau County Supreme Court held that Prodigy Services, Inc. would be treated as a "publisher", subject to liability regardless of its actual or imputed knowledge. In so ruling, Judge Ain expressly distinguished Cubby, Inc. v. CompuServe Inc.<\/i> on several grounds. First, he found that Prodigy held itself out as a family-oriented online service that exercised editorial control over the content of messages on its bulletin boards, thereby expressly differentiating itself from its competitors and likening itself to a newspaper. Second, Judge Ain found that Prodigy in fact regulated the content on its bulletin boards by (a) promulgating "content guidelines," (b) using software that automatically prescreened all bulletin board postings for offensive language, and (c) using "Board Leaders" to enforce Prodigy's content guidelines. Third, and finally, Judge Ain distinguished Cubby because in that case CompuServe had had no opportunity to review the contents of the publication before it was uploaded.<\/font><\/p>

THE TELECOMMUNICATIONS ACT OF 1996<\/font><\/b><\/p>

Congress in the Telecommunications Act of 1996, expressly overruled the Stratton Oakmont<\/i> decision. Section 230 of the Act10<\/sup><\/a> provides that "[n]o 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."11<\/sup><\/a> Subpart (2) of the same section further provides that:<\/font><\/p>

No provider or user of an interactive computer service shall be held liable on account of —<\/font><\/p>

(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or<\/font><\/p>

(B) any action taken to enable to make available to information content providers or others the technical means to restrict access to material described in paragraph (1).12<\/sup><\/a><\/font><\/p><\/blockquote>

As expressed in terms of stated policy, the purpose of the section is to promote the development of the Internet and other interactive computer services and media, preserve the free market for the Internet and online services without state or federal government regulation, encourage the development of technologies that maximize user control over what information is received by users, remove disincentives for the development and use of blocking and filtering technologies that parents may use to restrict children's access to objectionable or inappropriate online material, and ensure the enforcement of federal criminal laws to detect and punish trafficking in obscenity, stalking, and harassment by means of computer.13<\/sup><\/a><\/font><\/p>

The Act expressly preempts inconsistent state laws.14<\/sup><\/a> The legislative history states that it is intended to overrule Oakmont v. Prodigy Services, Inc.<\/i> and any other similar decisions that have treated online "providers and users as publishers and speakers of content that is not their own because they have restricted access to objectionable material."15<\/sup><\/a><\/font><\/p>

The Fourth Circuit, in an opinion noteworthy for its omission of any specific citation to the statute's legislative history, held in Zeran v. America Online, Inc.<\/i> that the Telecommunications Act of 1996 immunizes interactive computer services (and users) from liability not only for republication<\/i> of defamatory stats (as in Stratton Oakmont<\/i>), but also for distribution<\/i> of such statements.<\/font><\/p>

THE ZERAN FACTS<\/font><\/b><\/p>

The facts of the case were as egregious as an online defamation case could be. A pseudonymous AOL subscriber posted plaintiff Kenneth M. Zeran's name and home phone number on purported advertisements for highly offensive and vulgar T-shirts celebrating the bombing of the Oklahoma City federal building and praising accused bomber Timothy McVeigh. Zeran learned of the first posting on April 25, 1995 (the day it appeared) when a reporter called him.16<\/sup><\/a> Zeran immediately notified AOL, which assured his that the notice would be removed.<\/font><\/p>

Although the original message was deleted by AOL on April 26, 1995, the day after it was posted, a new notice appeared later that same day.17<\/sup><\/a> Zeran again contacted AOL, which advised him that the new message also would be deleted and that AOL was taking steps to terminate the account of the pseudonymous subscriber known only as "Ken ZZ03." Nonetheless, similarly offensive messages continued to be posted through May 1, 1995. To make matters worse, a radio disc jockey in Oklahoma City received a copy of the bogus posting and read it on the air, urging his listeners to call "Ken" to complain. Zeran claimed to have received angry and offensive telephone calls as a result of the postings at a rate of about once every two minutes in late April 1995. The plaintiff, at AOL's suggestion, contacted the FBI, and was placed under protective surveillance by local police. The deluge of threatening calls continued until May 15, 1995, when they subsided to about 15 per day. As District Court Judge Ellis wrote, "[t]his posting of the bogus notice on AOL's bulletin board, an act within the capacity of even novice Internet users, had its intended pernicious effect."<\/font><\/p>

In April 1996, after the Telecommunications Act was signed into law, Zeran filed suit against AOL.18<\/sup><\/a> Zeran alleged that AOL had been negligent in failing to respond adequately to the bogus notices posed on its bulletin boards after being made aware of their malicious and fraudulent nature. Relying on cases such as Cubby, Inc. v. CompuServe, Inc.,<\/i>19<\/sup><\/a> Zeran argued that AOL had a duty, imposed by state law on distributors, to refrain from distributing material it knew or should have known was defamatory. On appeal, Zeran argued more specifically that AOL unreasonably delayed removing defamatory messages posted online and failed to screen for similar postings thereafter.<\/font><\/p>

"PUBLISHER" UNDER THE RESTATEMENT<\/font><\/b><\/p>

Nothing that the statute "contains no explicit expression of congressional intent with respect to the scope of preemption," District Court Judge Ellis found that Zeran's claim based on state distributor liability was preempted because imposing such liability on AOL would have been tantamount to treating it as a "publisher or speaker." The Fourth Circuit concurred, finding that liability under the Cubby<\/i> "reason to know" standard imposed on news vendors, bookstores, and libraries (which, while not charged with a duty to review the material they distribute, may be held liable if they distribute<\/i> material knew or had reason to knew was defamatory), was equivalent to publisher<\/i> or speaker<\/i> liability.<\/font><\/p>

Subpart (1) of the Good Samaritan exemption refers to publishers<\/i> and speakers<\/i>, but not distributors.<\/i> That subsection provides:<\/font><\/p>

(1) TREATMENT OF PUBLISHER OR SPEAKER. – 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.20<\/sup><\/a><\/font><\/p><\/blockquote>

Neither "publisher" nor "speaker" is a term defined in the Act. The Good Samaritan provision addresses publisher or speaker liability, but not necessarily distributor liability. The legislative history accompanying the Telecommunications Act states that:<\/font><\/p>

This section provides "Good Samaritan" protections from civil liability for providers or users of an interactive computer service for actions to restrict or to enable restriction of access to objectionable online material. One of the specific purposes of this section is to overrule Stratton Oakmont v. Prodigy<\/i> and any other similar decisions which have treated such providers and users as publishers or speakers of content that is not their own because they have restricted access to objectionable material. The conferees believe that such decisions create serious obstacles to the important federal policy of empowering parents to determine the content of communications their children receive through interactive computer services.21<\/a><\/font><\/p><\/blockquote>

The legislative history speaks specifically of Stratton Oakmont v. Prodigy<\/i>, in which, unlike Cubby<\/i> or Zeran<\/i>, the defendant was held to the standard of a publisher, rather than a mere distributor, based on acts undertaken to monitor content. There is no reference in the legislative history to Cubby<\/i>. Had legislators intended to exempt online providers from distribution liability, as well as republication liability, Congress arguably would not have limited its discussion to Stratton Oakmont<\/i> and "any other similar decisions which have treated such providers and users as publishers or speakers of content that is not their own because they have restricted access to objectionable material.<\/i>"22<\/sup><\/a> In neither Cubby<\/i> nor Zeran<\/i> was liability premised on actions of the defendant to restrict access to objectionable material. In Cubby<\/i>, the court held that an online provider that does not<\/i> monitor content is subject to liability as a distributor, rather than a publisher or speaker, and in Zeran<\/i>, plaintiff's claim was premised, under the Cubby<\/i> test, on AOL's failure to adequately respond to postings once it had knowledge of their existence.<\/font><\/p>

Congress also arguably would not have used the term "speaker" as a synonym for "publisher" in the text of Section 230 if it had intended to broadly define "publisher" to include distributors.<\/font><\/p>

In holding that imposing common law distributor liability on AOL would amount to treating AOL as a publisher or speaker, both the district court and Fourth Circuit relied on the definition of "publisher" set forth in the Restatement of Torts. In the words of the Fourth Circuit, "distributor liability is merely a subset, or species, of publisher liability and is therefore also foreclosed by ' 230."<\/font><\/p>

While distribution may indeed be a form of publication under the Restatement, it does not necessarily follow that Congress intended to adopt the Restatement definitions and preempt all claims for distributor liability involving interactive computer services. Although Congress did not define the terms "publisher" or "speaker" in the Telecommunications Act, the legislative history suggests that Congress had a more narrow definition of "publisher" in mind than the one ascribed to the term by either the Fourth Circuit or Judge Ellis.<\/font><\/p>

The legislative history shows a preeminent concern with the Stratton Oakmont<\/i> case. In that decision, Judge Ain did not draw the fine distinction between republication, publication,<\/i> and distribution<\/i> suggested by the Restatement of Torts. To the contrary, Judge Ain held in Stratton Oakmont that Prodigy would be held to the liability standard of a publisher by virtue of its having exercised editorial control over online content. Strictly speaking, Judge Ain held Prodigy to the liability standard of a republisher, rather than a mere distributor. The distinctions he drew, however, between providers he termed "publishers ", and mere "distributors" such as AOL, likely were the terms that Congress had in mind in drafting Section 230, especially since the Statton Oakmont<\/i> case is the only outside source expressly referenced in the legislative history.<\/font><\/p>

Prior to the enactment of the Telecommunications Act of 1996, online providers were only subject to liability as publishers, under Stratton Oakmont<\/i> (as well as Cubby<\/i>), if they took affirmative steps to monitor content, and therefore acted like republishers (or what Judge Ain referred to as "publishers"), rather an "distributors". In seeking to encourage online screening and blocking of certain content, Congress's reference to the liability of "publishers and speakers" logically would seem directed more narrowly to the case cited in the legislative history, Stratton Oakmont<\/i>, rather than to other circumstances not obviously intended to be covered by the Act. This interpretation is also consistent with the principle that the preemptive effect of a federal law should be narrowly construed where there is no evidence that Congress intended to regulate the field since "the basic assumption is that Congress did not intend to displace state law."23<\/sup><\/a><\/font><\/p>

Given the more narrow definition of the term "publisher" used by Judge Ain, and the legislative history's focus on Stratton Oakmont<\/i> and republication liability, a reasonable interpretation is that Congress merely adopted the meaning of "publisher" used by Judge Ain in Stratton Oakmont<\/i>, rather than the expansive definition offered by Judge Ellis and subsequently adopted in toto by the Fourth Circuit.<\/font><\/p>

PROMOTING FREE SPEECH<\/font><\/b><\/p>

Judge Wilkinson wrote that the purpose of the Good Samaritan exemption "is not difficult to discern." He concluded that Congress enacted Section 230 not only "to remove the disincentives to self-regulation created by the Stratton Oakmont<\/i> decision," which is consistent with legislative history, but to address "the threat that tort-based lawsuits pose to freedom of speech in the new and burgeoning Internet medium." Specifically, he found that the provision was intended "to promote unfettered speech on the Internet." Judge Wilkinson reasoned that:<\/font><\/p>

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.<\/font><\/p><\/blockquote>

This reading of legislative intent, however, is tenuous at best.<\/font><\/p>

Section 230 is entitled "Protection for Private Blocking and Screening of Offensive Material," and does not refer to free speech. According to the legislative history, Section 230 was adopted by the House Senate Conference Committee with only "minor modifications" from Section 104 of the House Amendment.24<\/sup><\/a> That amendment was described in the Conference Report as protecting "from civil liability providers and users of interactive computer services for actions to restrict or enable restriction of access to objectionable online material."25<\/sup><\/a> There is not comparable provision in the Senate bill26<\/sup><\/a> and no reference to free speech in the conference Report.<\/font><\/p>

While Congress plainly was concerned about the effects of republisher liability imposed in cases such as Stratton Oakmont<\/i>, it was troubled because under that decision, providers such as Prodigy, which had been held to the standard of a republisher because it promoted itself as a family-oriented service that screened and blocked certain adult material, would be discouraged from screening offensive content. In explaining Congress' reason for overruling Statton Oakmont<\/i>, the conference Report states that such decisions 'create serious obstacles to the important federal policy of empowering parents to determine the content of communications their children receive through interactive computer services."27<\/sup><\/a> Further, overruling Stratton Oakmont<\/i> is identified as merely "[o]ne of the specific purposes of this section. . ."28<\/sup><\/a> making the absence of express reference to free speech in the legislative history appear more significant than it had been the only objective of the statutory provision. In addition, subpart (2) of the Good Samaritan exemption, which Judge Wilkinson overlooked in his opinion, grants broad immunity to any interactive computer service (or user) from liability which otherwise might be imposed on account of "any action voluntarily taken in good faith to restrict access to or [the] availability of" certain categories of information, "whether or not such material is constitutionally protected.<\/i>"29<\/sup><\/a> Similarly, a companion section of the same bill, the Communications Decency Act,30<\/sup><\/a> affirmatively sought to regulate and limit certain online speech (to the extent "indecent" or "patently offensive"). Judge Wilkinson's argument that Congress intended to promote unfettered free speech stretches congressional intent too far.<\/font><\/p>

Judge Wilkinson forcefully argued that "[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." This liability standard would impose an incentive for interactive service providers to censor speech:<\/font><\/p>

Each notification would require a careful yet rapid investigation of the circumstances surrounding the posted information, a legal judgment concerning the information's defamatory characters, 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. Cf. Auvil v. CBS 60 Minutes,<\/i> 800 F. Supp. 928, 931 (E.D. Wash. 1992) (recognizing that it is unrealistic for network affiliates to "monitor incoming transmissions and exercise on-the-spot discretionary calls"). 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. See Philadelphia Newspapers, Inc. v. Hepps,<\/i> 475 U.S. 767, 777, . . . (1986) (recognizing that fears of unjustified liability produce a chilling effect antithetical to First Amendment's protection of speech). Thus, like strict liability, liability upon notice has a chilling effect on the freedom of Internet speech.<\/font><\/p><\/blockquote>

While this analysis may be correct as a matter of policy, there is no support in the statute or its legislative history for the proposition that Congress intended to protect free speech by enacting the Good Samaritan exemption or to do so by preempting all potential third party claims. Although civil libertarians were upset in 1995 and early 1996 that the Stratton Oakmont<\/i> case threatened free speech online, Congress was at least equally, if not more, concerned that the decision discouraged companies such as Prodigy from screening and blocking offensive content.<\/font><\/p>

Judge Wilkinson's extensive analysis of congressional intent is notable for its omission of any specific citation to the Conference Report accompanying the Telecommunications Act,31<\/sup><\/a> which does not support the Fourth Circuit's finding that Section 230 was intended to promote unfettered free speech. The Fourth Circuit relied, instead, on specific legislative findings that either constitute general policy statements which do not have any bearing on whether Congress intended to preempt distribution liability or merely speak to Congress's intention to eschew government regulation, and which is not necessarily the same thing as promoting unrestricted speech through elimination of all potential third party liability for online defamation. He wrote:<\/font><\/p>

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<\/i>. ' 230(a)(3). It also found that the Internet and interactive services "have flourished, to the benefit of all Americans, with a minimum of government regulation." Id<\/i>. ' 230(a)(4) (emphasis added). 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.<\/i> ' 230(b)(2) (emphasis added).<\/font><\/p><\/blockquote>

This analysis, however, is misleading and incomplete, Section 230 contains five "findings," all of which are general in nature and do not specifically bear on the question of how Congress intended to define the term "publisher or speaker."32<\/sup><\/a> By contrast, Congress set forth five specific policy objectives to be served by the Good Samaritan Exemption, three of which specifically relate to the promotion of screening and blocking of offensive online content.33<\/sup><\/a> One of the two other policies is the general goal of promoting the continued development of the Internet and other interactive computer services, while the final policy is "to preserve the vibrant and competitive free market<\/i> that presently exists for the Internet and other interactive computer services, unfettered<\/i> by Federal or State regulation.34<\/sup><\/a> Evidently, Judge Wilkinson's conclusion that Congress intended to promote unfettered speech came about in part as a result of an erroneous transmutation of the policy goal of promoting an unfettered free market.<\/font><\/p>

Despite these flaws, the opinion may seem superficially convincing because of Judge Wilkinson's excellent writing style and carefully placed, but irrelevant, citations to sources such as Reno v. ACLU<\/i>, 117 S. Ct. 2329 (1997), which is a free speech case decided approximately 18 months after Section 230 was enacted, in which the U.S. Supreme Court struck down another provision of the Communications Decency Act as unduly restrictive and therefore unconstitutional under the First Amendment. For example, Judge Wilkinson writes, notably without any citation to Section 230 or its legislative history, that:<\/font><\/p>

Congress' purpose in providing the ' 230 immunity was thus evident. Interactive computer services have millions of users. See Reno v. ACLU<\/i>, 117 S. Ct. at 2334 (noting that at time of district court trial, "commercial online services had almost 12 million individual subscribers"). 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.<\/font><\/p><\/blockquote>

In a similar vein, Judge Wilkinson similarly cites the statutory policy objective of ensuring "vigorous enforcement of Federal criminal laws to deter and punish trafficking in obscenity, stalking, and harassment by means of computer,"35<\/sup><\/a> for the proposition that Congress made a policy choice "not to deter harmful on-line speech through the separate route of imposing tort liability on companies that serve as intermediaries for other parties' potentially injurious messages."<\/font><\/p>

The Fourth Circuit's finding that Congress intended to promote unfettered free speech is inconsistent with the stated purpose, acknowledged in Zeran<\/i>, of immunizing providers from liability for blocking or screening content. Having erroneously found an objective of promoting unfettered free speech, the Fourth Circuit's conclusion that distributor liability was preempted followed more logically than in the opinion rendered by the district court, which had carefully analyzed the legislative history, and therefore issued a decision which appeared to involve a certain leap of logic.36<\/sup><\/a> While the elimination of all third party liability for defamation would be generally consistent with the goal of promoting unfettered free speech online, it is inconsistent with the objective of encouraging online screening and blocking (or what the Fourth Circuit referred to as self-regulation).<\/font><\/p>

MISAPPLYING LEGISLATIVE INTENT<\/strong><\/font><\/p>

Judge Wilkinson adopted Judge Ellis's alternate ground for finding preemption in concluding that "notice-based liability would deter service providers from regulating the dissemination of offensive material over their own services." As explained by Judge Ellis, distributor liability would stand "as an obstacle to the accomplishment of the full purposes and objectives of Congress" in enacting Section 230, which he characterized as the promotion of development of "technologies, procedures and techniques by which objectionable material could be blocked or deleted either by the interactive computer service itself or by the families and schools receiving information via the Internet."37<\/sup><\/a><\/font><\/p>

The trial court had reasoned that if interactive computer services were subject to distributor liability they would be discouraged<\/i> from monitoring content or soliciting customer complaints for fear of being held to have "reason to know" of the defamatory nature of third party statements online (especially in cases of persistent posters). The Fourth Circuit wrote that "[a]ny 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." Notice-based liability, in the view of the Fourth Circuit, would "provide third parties with a no-cost means to create the basis for future lawsuits[, which . . . ] could produce an impossible burden for service providers, who would be faced with ceaseless choices of suppressing controversial speech or sustaining prohibitive liability." While this may be true as a matter of policy, neither section 230 nor its legislative history are directed at protecting free speech.<\/font><\/p>

Judge Wilkinson wrote that, "[i]nstead of subjecting themselves to further possible lawsuits, service providers would likely eschew any attempts at self-regulation." This conclusion, however, was made in apparent disregard for subpart (2) of Section 230, which immunizes interactive computer services (and users) from liability on account of "any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be . . . objectionable."38<\/sup><\/a> Internet providers therefore could not be held liable on account of efforts undertaken to screen material. Judge Wilkinson's argument that so-called "notice-based liability" would therefore deter service providers from self-regulation is incorrect. In light of subpart (2) of Section 230, distributor liability could only be imposed where a provider was notified and failed<\/i> to act (in good faith) in response.<\/font><\/p>

Distributor liability generally is premised on either imputed<\/i> or actual knowledge<\/i>. While distributor liability based on knowledge imputed as a result of good faith actions voluntarily undertaken to restrict access to or the availability of objectionable material plainly would be preempted under subpart (2) of the Good Samaritan exemption, liability based on actual or imputed knowledge obtained independently<\/i> of online screening activities would not be immunized by this exemption. Subpart (1) of the Good Samaritan exemption eliminates distributor liability (at least to the extent based on online conduct, as opposed to other factors), but does not insulate providers from liability where they have actual knowledge and choose not to act. Moreover, if the term "publisher"<\/i> is interpreted as it is used in the context of the Stratton Oakmont<\/i> case cited in Section 230's legislative history, rather than as it is defined under the Restatement of Torts, potential distributor liability under subpart (1) of section 230, when read in conjunction with the exemption created in subpart (2) to promote monitoring of online contents, is consistent with Congress's stated objective of encouraging content monitoring (or what the Fourth Circuit refers to as "self-regulation"). If interactive computer services could be held liable in cases where they had actual knowledge that defamatory material had been posted online, they would have a strong incentive to respond to customer complaints.39<\/sup><\/a> If, however, services and users were immune from any<\/i> liability for third party acts of defamation they would have no legal incentive to respond to customer complaints or monitor their domains.<\/font><\/p>

The scope of preemption found by the Zeran<\/i> court would effectively create a neutral system where users and providers would neither be encouraged nor penalized for monitoring content. Under such a system, many of the larger service providers would continue to be responsive to customer complaints and, based on market pressures and economic incentives, some services would continue to monitor and screen content. Other companies, however, would offer unscreened content to attract free speech advocates and people who are especially interested in engaging in the type of communications that Congress specifically sought to discourage online. While many "netizens" undoubtedly would prefer a value-neutral system, Congress has established a legal regime intended to encourage the "development of technologies, procedures and techniques by which objectionable material could be blocked or deleted either by the interactive computer service provider itself or [others]."40<\/sup><\/a> The Zeran<\/i> court's conclusion that section 230 preempts all forms of distributor liability undermines that objective.<\/font><\/p>

THE PROPER SCOPE OF SECTION 230<\/strong><\/font><\/p>

The rule of Zeran v. America Online, Inc.<\/i> does not represent a faithful interpretation of congressional intent. Section 230 was plainly intended to encourage (or at the very least not penalize)41<\/sup><\/a> interactive computer services and users for restricting access to objectionable content. Under the rule announced in Zeran<\/i>, Internet providers would be completely immune from distribution liability, and therefore would have no incentive to monitor their services for offensive content or respond to customer complaints. The result of Zeran<\/i> therefore would be to discourage<\/i>, rather than encourage<\/i> services to restrict access to objectionable material, which is exactly the opposite result that Congress intended in enacting the statute.<\/font><\/p>

A more consistent reading of Section 230 is that subpart (1) overrules Stratton-Oakmont<\/i> and eliminates liability for online republication, but not distribution liability, while subpart (2) immunizes users and providers from any<\/i> state law liability merely for monitoring online content (or responding to notification that defamatory material may be available online). Subpart (2) presumably would immunize providers who actively monitor online content from liability premised on the fact that they should have known<\/i>42<\/sup><\/a> that the content was defamatory, but not exempt them from liability in cases where they have actual knowledge, and leave in tact the Cubby<\/i> rule in cases where providers fail to take any steps at all to monitor content.<\/font><\/p>

CONCLUSION<\/font><\/b><\/p>

The Fourth Circuit ultimately may have reached the right result in the Zeran<\/i> case for the wrong reason. AOL, in responding to Zeran's complaints, appears to have acted reasonably in removing offending postings within a day of their appearance online, and therefore ultimately may have been entitled to judgment in its favor based on subpart (2), rather than subpart (1) of the Good Samaritan provision.43<\/sup><\/a> By responding to plaintiff's complaints, AOL could well have been found exempt from liability based on its having taken action "in good faith to restrict access to or availability of material that the provider or user considers to be . . . objectionable."44<\/sup><\/a> However, by broadly construing subpart (1) instead of applying subpart (2) of Section 230, however, the Fourth Circuit has announced a rule of law which will also immunize providers who take no action to restrict defamatory online content, disregard legitimate complaints about offensive online content or even intentionally post third party content, which they know to be defamatory. The ruling in Zeran<\/i> therefore could have the effect of discouraging Internet providers from acting responsibly and undermines the congressional objective of promoting online screening and blocking.<\/font><\/p>

Endnotes:<\/font><\/p>

1<\/a>. 129 F.3d 327 (4th Cir. 1997).<\/font><\/p>

2<\/a>. An interactive computer service<\/i> is defined under the Telecommunications Act 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 . . . ." 47 U.S.C. ' 230(e)(2). An access software provider<\/i> is defined as "a provider of software . . . or enabling tools that do any of the following: (A) filter, screen, allow or disallow content; (B) pick, choose, analyze, or digest content; or (C) transmit, receive, display, forward, cache, search, subset, organize, or translate content." 47 U.S.C. ' 230(e)(4)<\/font><\/p>

3<\/a>. Index No. 31063\/94, 1995 N.Y. Misc. LEXIS 229 (Nassau County, N.Y. Sup. Ct. May 26, 1995).<\/font><\/p>

4<\/a>. The trial court had not addressed the issue of whether a claim based on a service provider's intentional or malicious refusal to remove material known to be defamatory would be preempted. See<\/i> 958 F. Supp. at 1133-34 n.20. Nevertheless, in light of the district court's holding that claims for negligent distribution are preempted because such claims would hold distributors liable as publishers, intentional or malicious conduct logically would be preempted on the same grounds.<\/font><\/p>

5<\/a>. Index No. 31063\/94, 1995 N.Y. Misc. LEXIS 229 (Nassau County, N.Y. Sup. Ct. May 26, 1995).<\/font><\/p>

6<\/a>. Online providers and users, of course, may still be held directly liable as publishers for any content they create themselves and post online (as opposed to third party content).<\/font><\/p>

7<\/a>. 776 F. Supp. 135 (S.D.N.Y. 1991).<\/font><\/p>

8<\/a>. Id.<\/i> at 140.<\/font><\/p>

9<\/a>. Index No. 31063\/94, 1995 N.Y. Misc. LEXIS 229 (Nassau County, N.Y. Sup. Ct. May 26, 1995).<\/font><\/p>

10<\/a>. The Telecommunications Act of 1996, 47 U.S.C. ' 230 (c)(1).<\/font><\/p>

11<\/a>. An information content provider is defined as "any person or entity that is responsible, in whole or part, for the creation or development of information provided through the Internet or any other interactive computer service." 47 U.S.C. ' 230(e)(3).<\/font><\/p>

12<\/a>. 47 U.S.C. ' 230(c)(2). Subpart (2) inverts the common law rules on distributor and publisher liability by immunizing conduct undertaken to monitor or screen content. Traditionally, the more editorial control exerted, the more likely it was that a company would be subject to the greater potential liability of a publisher, rather than the lower exposure to defamation claims faced by distributors, such as newspaper vendors and bookstores. See, e.g.,<\/i> Restatement (Second) of Torts ' 581, at 231 (1977).<\/font><\/p>

13<\/a>. Id.<\/i> ' 230(b).<\/font><\/p>

14<\/a>. 47 U.S.C. ' 230(d)(3).<\/font><\/p>

15<\/a>. Conference Report 104-458, 104th Cong. 2d Sess. 194 (1996).<\/font><\/p>

16<\/a>. The first advertisement was posted by "Ken ZZ03" and, under the heading "Naughty Oklahoma T-shirts," invited AOL subscribers to call Ken, the plaintiff's first name, at plaintiff's actual phone number, to purchase shirts with slogans such as "Putting the Kids to Bed . . . Oklahoma 1995" and "McVeigh for President 1996."<\/font><\/p>

17<\/a>. The second notice, which was also pseudonymously posted by "Ken" and included plaintiff's phone number, announced that t-shirts with several new slogans were now available. The new slogans included "Finally a day care center that keeps the kids quiet—Oklahoma 1995" and "Forget the rescue, let the maggots take over—Oklahoma 1995."<\/font><\/p>

18<\/a>. Although the facts underlying Zeran's claim arose prior to the enactment of the Telecommunications Act, the Fourth Circuit held that Congress intended the statute to apply to all suits filed after the date of its enactment. 129 F.3d at 327, citing<\/i> Landgraf v. USI Film Products<\/i>, 511 U.S. 244 (1994) (setting forth the criteria used to evaluate whether a statute should be given retroactive application).<\/font><\/p>

19<\/a>. 776 F. Supp. 135, 141 (S.D.N.Y. 1991).<\/font><\/p>

20<\/a>. 47 U.S.C. ' 230(c)(1).<\/font><\/p>

21<\/a>. Conference Report 104-458, 104th Cong. 2d Sess. 194 (1996).<\/font><\/p>

22<\/a>. Id.<\/i> (emphasis added).<\/font><\/p>

23<\/a>. Louisiana v. Maryland<\/i>, 451 U.S. 725, 746 (1981).<\/font><\/p>

24<\/a>. Conference Report 104-458, 104th Cong. 2d Sess. 194 (1996).<\/font><\/p>

25<\/a>. Id.<\/i><\/font><\/p>

26<\/a>. Id.<\/i> at 193.<\/font><\/p>

27<\/a>. Id.<\/i> at 194 (1996).<\/font><\/p>

28<\/a>. Id<\/i>. (emphasis added).<\/font><\/p>

29<\/a>. 47 U.S.C. ' 230(c)(2) (emphasis added). For a more detailed analysis of this subsection, see<\/i> Ian C. Ballon, The Law of the Internet<\/i> (Glasser LegalWorks 1998), at Ch. 5.<\/font><\/p>

30<\/a>. See<\/i> 47 U.S.C. ' 223. Portions of this statute were held unconstitutional in Reno v. ACLU<\/i>, 117 S. Ct. 2329 (1997).<\/font><\/p>

31<\/a>. Judge Wilkinson's omission of any citations to the Conference Report Accompanying the Telecommunications Act of 1996 could have been justified based on his conclusion that congressional intent and the meaning of publisher were apparent from the face of the statutory provision. The term publisher, however cannot be understood apart from reference to extrinsic sources, as evidence by Judge Ellis's initial reliance on the Restatement definition, ultimately adopted by the Fourth Circuit, and the conclusions Wilkinson draws about the free speech objectives of Congress are contradicted by the legislative history.<\/font><\/p>

32<\/a>. 47 U.S.C. ' 230(a).<\/font><\/p>

33<\/a>. Those policies are:<\/font><\/p>

To promote the continued development of the Internet and other interactive computer services and other interactive media;<\/font><\/p>

To preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services;<\/font><\/p>

To encourage the development of technologies which maximize the user control over what information is received by individuals, families, and schools who use the Internet and other interactive computer services;<\/font><\/p>

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 materials; and<\/font><\/p>

To ensure vigorous enforcement of Federal criminal laws to deter and punish trafficking in obscenity, stalking, and harassment by means of computer.<\/font><\/p>

Id<\/font>. ' 230(b).<\/i><\/p><\/blockquote>

34<\/a>. Id.<\/i> ' 230(b)(2) (emphasis added).<\/font><\/p>

35<\/a>. 47 U.S.C. ' 230(b)(5).<\/font><\/p>

36<\/a>. See<\/i> Ian C. Ballon, "Defamation and Preemption Under the Telecommunications Act of 1996: Why the Rule of Zeran v. America Online, Inc<\/i>. Is Wrong," The Cyberspace Lawyer, July\/Aug. 1997, at 6 (analyzing the District Court opinion).<\/font><\/p>

37<\/a>. 958 F. Supp. at 1134, citing in part<\/i> English v. General Electric Co.<\/i>, 496 U.S. 72, 79 (1990). While the statute and its legislative history are not a model of clarity, Judge Ellis implicitly acknowledged the weakness of this alternative argument by adding that, "[c]losely examined<\/i>, distributor liability has just this effect." 958 F. Supp. at 1135 (emphasis added).<\/font><\/p>

38<\/a>. 47 U.S.C. ' 230(c)(2).<\/font><\/p>

39<\/a>. Liability premised on a "reason to know" basis also would encourage online monitoring, but would be inconsistent with subpart (2)(A) of the Act to the extent that liability could be premised on the provider taking "any action to restrict access to or the availability of . . ." material considered to be, among other things, "harassing, or otherwise objectionable . . ." 18 U.S.C. ' 230(c)(2)(A).<\/font><\/p>

40<\/a>. Zeran v. America Online, Inc.<\/i>, 958 F. Supp. 1124, 1134 (E.D. Va) aff'd<\/i>, 129 F.3d 327 (4th Cir. 1997); see also<\/i> 47 U.S.C. ' 230(b) (setting forth the policy objectives of the Good Samaritan exemption).<\/font><\/p>

41<\/a>. Subsection (2), which potentially applies to a broad range of state law causes of action, creates an affirmative incentive for interactive computer services and users to monitor content. Subsection (1), which more specifically applies to defamation claims, reverses Stratton Oakmont<\/i>, which penalized an interactive computer service for monitoring content.<\/font><\/p>

42<\/a>. Distribution liability should be deemed preempted in cases where a defendant did not have actual knowledge, but arguably had reason to know based on content available online<\/i> that material was defamatory, since in such cases liability would be premised on actual monitoring, which would undermine the purpose of the statute (to encourage online screening for objectionable content). Where a defendant had reason to know material was defamatory based on reasons unrelated to online monitoring of content, liability still could be imposed, as when a defendant has actual knowledge. The Telecommunications Act therefore modifies somewhat the liability formulation articulated in Cubby<\/i> in cases where Internet providers monitor online content, but does not overrule it.<\/font><\/p>

43<\/a>. AOL alleged that it timely removed the postings. The issue should have been decided by motion for summary judgment or later in the case, instead of by motion to dismiss, under which the allegations of the complaints must be taken as true and all inferences drawn in favor of the plaintiff. E.g.,<\/i> Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit<\/i>, 507 U.S. 163, 164 (1993).<\/font><\/p>

44<\/a>. 47 U.S.C. ' 230(c)(2). It is unclear from the facts of the case whether AOL would have been entitled to prevail at this stage in the proceedings under subpart 2. Zeran<\/i> was decided on a motion for judgment on the pleadings pursuant to Fed. R. Civ. P. 12, where all inferences must be drawn in favor of the plaintiff. In a subsequent motion based on evidence, rather than more allegations, such as a motion for summary judgement, AOL may well have been found to have acted in good faith, which it would have needed to show in order to benefit from the exemption set forth in Section 230(c)(2).<\/font><\/p>

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While we have attempted to maintain the information in this article as accurately as possible, this information may contain errors or omissions, for which we disclaim any liability.<\/font><\/p>

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