Are Internet Providers, in Fact, at Risk for Defamation Liability?

A potentially precedent-setting case may be making its way to the U.S. Court of Appeals for the Sixth Circuit, if not beyond.  The case, Sarah Jones v. Dirty World Entertainment, raises a fundamental question about the scope of immunity for Internet Service Providers from defamation liability under Section 230 of The Communications Decency Act (CDA).  That immunity has long been considered to be both wide and broad, but according to senior status U.S. District Court Judge William O. Bertelsman, it does not immunize the Arizona-based  website “the dirty.com” when defaming a citizen of the Eastern District of Kentucky, where Judge Bertelsman has presided since 1979.

A Summary of the Jones v. Dirty Proceedings

Sarah Jones, who lives in Northern Kentucky, was a teacher at Dixie Heights High School in Edgewood Kentucky.  She was also a cheerleader for the Cincinnati Bengals.  On October 27, 2009 a visitor posted a message on “the dirty.com” falsely stating that Ms. Jones had been sleeping with Bengal team members, and on December 7, 2009, another post falsely accused her of having a sexually transmittable condition.  On repeated occasions, Ms. Jones requested that the posts be removed, but the site took no action.

On December 23, 2009, Ms. Jones filed a complaint as a Jane Doe plaintiff, and at an evidentiary hearing on August 15, 2010, she entered her true name as she filed for a default judgment against “the dirty.com.”  On August 25, 2010, Judge Bertelsman entered a default judgment against “the dirty.com” in the amount of $1 million in compensatory damages and $10 million in punitive damages.  The default judgment brought forth the actual owners and operators of the website, and on August 31, 2010 the court granted the plaintiff’s motion to amend her complaint to name Hooman Karamian a/k/a Nik Richie or Nik Lamas-Richie, and the corporations through which he operates “the dirty.com,” Dirty World LLC, and Dirty World Entertainment, LLC as defendants.

From the filing of the amended complaint through the notice of appeal after a second jury trial granted Ms. Jones $38,000 in compensatory damages and $300,000 in punitive damages, the only issue the defendants have focused on is their immunity under the CDA’s  Section 230. Judge Bertelsman, however, rejected their motions for Section 230 immunity at several stages of the proceeding.  CDA’s Section 230 remains the core issue on appeal.

The CDA Section 230 Immunity Issue

The language of the CDA’s Section 230 is clear: “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.” This law preempts any state laws to the contrary: “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.” If a person or entity is not a publisher or speaker, then there is no liability for defamatory statements. Thus, an interactive computer service is immune from liability for postings of third-party information content providers.

To some degree, the parties disagree as to how the Sixth Circuit should approach this case, which is of first impression in that Circuit.  In their final motion seeking immunity under Section 230, defendants pointed out “there have been approximately 300 reported decisions addressing immunity claims” under the CDA’s Section 230 “in lower federal and state courts.” This suggests a broad and liberal interpretation of Section 230. Plaintiff responded to the actions of the lower courts, however, by pointing out that the Sixth Circuit had already made clear that “it does not accept a broad interpretation of the CDA.” And Judge Bertelsman, a seasoned jurist, drew on other federal circuits, or higher court, precedents for his analysis of the law.

Both the plaintiff (Jones) and the defendants (Dirty) do agree, however, that the courts have established a three-part test as to whether there is Section 230 immunity.  Both cite, for example, Courtney v. Vereb for the test.  If all three key questions that that case sets forth are answered yes, then there is immunity.  The test questions are: (1) Is the defendant a provider or user of an “interactive computer service”? (2) Do the plaintiff’s claims require treating the defendant as a “publisher or speaker” of information? (3) Was the allegedly actionable material provided by another information content provider? Judge Bertelsman, while not beholden to this three-part test, generally followed it in his analysis.

Drawing on rulings from the Seventh, Eighth, Ninth, and Tenth Circuits, which clearly outweigh the authority of “approximately 300” lower court rulings, Judge Bertelsman did an analysis of the law.  He noted that the Seventh Circuit emphasized in Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. v. Craigslist (2008) that the CDA did not provide “a grant of comprehensive immunity from civil liability for content provided by a third party.” While the Eighth Circuit similarly upheld immunity based on the facts in Johnson v. Arden (2010), Judge Bertelsman pointed out that the ruling noted  that “the record contains no evidence that [the internet service provider] designed its website to be a portal for defamatory material or [did] anything to induce defamatory postings.” Judge Bertelsman found most persuasive the holding from the (en banc) Ninth Circuit in Fair Housing Council of San Fernando Valley v. Roommate.com (2012), where the court repeated its earlier ruling that the website did not enjoy CDA immunity because its actions constituted the “creation or development of information” and thus made the site an “information content provider.” Finally, Judge Bertelsman noted that the Tenth Circuit had ruled in Federal Trade Commission v. Accusearch, Inc. (2009) that there is no immunity under the CDA if the website was “responsible for the development of the specific content that was the source of the alleged liability.” The ruling further noted that  a website operator was not “responsible” for “developing” allegedly actionable information “if one’s conduct was neutral with respect to the offensiveness of the content.” In short, if it was not neutral, then there could be liability.

Based on this analysis, Judge Bertelsman found that the defendants’ actions were not entitled to Section 230 immunity.

The Defendants’ Actions

Not surprisingly, it is the analysis and application of the facts in Jones v. Dirty where the parties appear to differ the most.  Let’s look at both sides under two of the three tests that the lower court focused on.

The threshold question was whether defendants were an “interactive computer service” Defendants argued they operated the website “the dirty.com,” as “an interactive computer service.” Plaintiff disagreed, as did Judge Bertelsman.  The definition of an interactive computer service under 47 USC 230(f)(2) is “any information service, system, or access software provider that provides or enables computer access by multiple users to a computer service, including specifically a service or system that provides access to the Internet.” Based on deposition and trial testimony, plaintiff made the case that defendants had total control over the content of the website, and it was not merely third-party postings and comments, but rather material selected by defendants as “worthy of going on the website.”  In short, the plaintiff claims that the only way material was posted on the site was through defendants, so, by definition, they were not an interactive computer service.

Defendants admit that they control the content on their site.  But they claim that this fact did not, as a matter of law, remove their immunity under Section 230. Citing a case relied on by Judge Bertelsman, defendants claim, “In passing Section 230, Congress sought to spare interactive computer services this grim choice by allowing them to perform some editing or user — generated content without thereby becoming liable for all defamatory or otherwise unlawful messages that they didn’t edit or delete.” (Citing Roommate.com, above.) They believed that this provided them with immunity, but the trial court disagreed.

Plaintiff claimed that not only were defendants not qualified as an interactive computer service, they also were, in fact, an “information content provider,” for which there is no immunity. 47 USC 230 (f)(3) states that information content provider is “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.” The plaintiff claims, and Judge Bertelsman agreed, that the defendant had total control of the content of “the dirty.com,” both in whole, and by adding comments to third-party posts as well, and as such, defendants were an information content provider without immunity under Section 230.

In addition, the plaintiff argued, and the judge agreed, that even if an entity is not an interactive content provider, an interactive computer service defendant can be held liable if their website is specifically designed to encourage the posting of, or assist in the development of, defamatory material.  The plaintiff here cites evidence from the trial that defendants “directly encourage[d] people to post offensive and defamatory content that will get noticed.” Defendants argued, unsuccessfully at the trial level, that their editorial conduct was “absolutely protected” as a matter of law.

Why This Case Has Wide Implications

The Sixth Circuit will reexamine the issues in this case soon.  Judge Bertelsman’s ruling is carefully reasoned, so he will not be easily overturned.  Section 230 of the CDA has created something of a Wild West on the Internet, which has provoked everything from defamation lawsuits, to rapes, to death threats.  And, to date, the operators of the Internet open forums where deeply offending words have been posted have been exonerated from any liability for their role in what has often been tragic outcomes. Jones v. Dirty may change that situation.

This case does not raise serious First Amendment issues. Rather, it raises matters of statutory interpretation: What, in fact, did Congress contemplate with Section 230, which was added in 1996 as an amendment during floor debate in Congress?  Lower courts have been far more lenient than higher courts with this law. As Jones v. Dirty works its way through the Sixth Circuit appeal process, it will be watched closely to see if the courts will, in fact, start policing the nearly unlimited immunity that has evolved under Section 230.  There are good arguments on both sides of this case, even if “the dirty.com” specializes in, well, the dirty.