Stratton Oakmont, Inc. v. Prodigy Services Co. | |
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Court | New York Supreme Court |
Decided | May 24, 1995 |
Citation(s) | 23 Media L. Rep. 1794; 1995 WL 323710; 1995 N.Y. Misc. LEXIS 229 |
Case opinions | |
Majority | Stuart L. Ain |
Stratton Oakmont, Inc. v. Prodigy Services Co., 23 Media L. Rep. 1794 (N.Y. Sup. Ct. 1995), [1] is a 1995 decision of the New York Supreme Court [nb 1] holding that online service providers can be liable for the speech of their users. The ruling caused controversy among early supporters of the Internet, including some lawmakers, leading to the passage of Section 230 of the Communications Decency Act in 1996.
Prodigy, an early online content hosting site, hosted a bulletin board called Money Talk on which anonymous persons could post messages about finance and investing. In October 1994, an unidentified user on Money Talk submitted a post claiming that Stratton Oakmont, a securities investment banking firm based in Long Island, New York, and its president Danny Porush, had committed criminal and fraudulent acts in connection with a stock IPO. Stratton Oakmont sued Prodigy as well as the unidentified poster for defamation. [2]
Stratton Oakmont argued that Prodigy should be considered a publisher of the defamatory material, and was therefore liable for the postings under the common law definition of defamation. Prodigy requested a dismissal of the complaint, on the grounds that it could not be held liable for the content of postings created by its third-party users. This argument cited the 1991 precedent Cubby, Inc. v. CompuServe Inc. , which had found CompuServe, an online service provider, not liable as a publisher for user-generated content. [3]
The Stratton court held that Prodigy was liable as the publisher of the content created by its users because it exercised editorial control over the messages on its bulletin boards in three ways: 1) by posting content guidelines for users; 2) by enforcing those guidelines with "Board Leaders"; and 3) by utilizing screening software designed to remove offensive language. [1] The court's general argument for holding Prodigy liable, distinguishing from the CompuServe case, was that "Prodigy's conscious choice, to gain the benefits of editorial control, has opened it up to a greater liability than CompuServe and other computer networks that make no such choice." [1]
This case conflicted with the 1991 federal district court decision in Cubby, Inc. v. CompuServe Inc. , which had suggested that courts should not consider online service providers to be publishers. In that case, the court held that CompuServe and other website operators should be considered more like a library than a publisher. [3] The important difference between CompuServe and Prodigy for the Stratton court was that Prodigy engaged in content screening and therefore exercised editorial control. [1]
Some federal legislators noticed the contradiction in the two rulings, [4] while Internet enthusiasts found that expecting website operators to accept liability for the speech of third-party users was both untenable and likely to stifle the development of the Internet. [5] Senator Ron Wyden (D. Or.) proposed legislation that would resolve the contradictory precedents on liability while enabling websites and platforms to host speech without needing to worry about legal consequences. [6] Wyden's proposal developed into Section 230 of the Communications Decency Act, passed in 1996. While the rest of the Communications Decency Act was overturned by the Supreme Court as an unconstitutional speech restriction, [7] Section 230 was severed from the rest of the statute and is still in effect, because it was intended to enable speech rather than restrict it. [8] Section 230 also served to overturn the New York Supreme Court ruling in the Stratton case, [4] as the legislation clarified that website operators and Internet service providers are not to be considered "publishers" of third-party content and instead merely provide a platform for their users. [5]
The Communications Decency Act of 1996 (CDA) was the United States Congress's first notable attempt to regulate pornographic material on the Internet. In the 1997 landmark case Reno v. ACLU, the United States Supreme Court unanimously struck the act's anti-indecency provisions.
Online service provider law is a summary and case law tracking page for laws, legal decisions and issues relating to online service providers (OSPs), like the Wikipedia and Internet service providers, from the viewpoint of an OSP considering its liability and customer service issues. See Cyber law for broader coverage of the law of cyberspace.
Cubby, Inc. v. CompuServe Inc., 776 F. Supp. 135, was a 1991 court decision in the United States District Court for the Southern District of New York which held that Internet service providers were subject to traditional defamation law for their hosted content. The case resolved a claim of libel against CompuServe, an Internet service provider that hosted allegedly defamatory content in one of its forums. The case established a precedent for Internet service provider liability by applying defamation law, originally intended for hard copies of written works, to the Internet medium. The court held that although CompuServe did host defamatory content on its forums, CompuServe was merely a distributor, rather than a publisher, of the content. As a distributor, CompuServe could only be held liable for defamation if it knew, or had reason to know, of the defamatory nature of the content. As CompuServe had made no effort to review the large volume of content on its forums, it could not be held liable for the defamatory content.
Zeran v. America Online, Inc., 129 F.3d 327, cert. denied, 524 U.S. 937 (1998), is a case in which the United States Court of Appeals for the Fourth Circuit determined the immunity of Internet service providers for wrongs committed by their users under Section 230 of the Communications Decency Act (CDA). Section 230(c)(1) of the CDA provides that "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."
Barrett v. Rosenthal, 40 Cal.4th 33 (2006), was a California Supreme Court case concerning online defamation. The case resolved a defamation claim brought by Stephen Barrett, Terry Polevoy, and attorney Christopher Grell against Ilena Rosenthal and several others. Barrett and others alleged that the defendants had republished libelous information about them on the internet. In a unanimous decision, the court held that Rosenthal was a "user of interactive computer services" and therefore immune from liability under Section 230 of the Communications Decency Act.
A person who is found to have published a defamatory statement may evoke a defence of innocent dissemination, which absolves them of liability provided that they had no knowledge of the defamatory nature of the statement, and that their failure to detect the defamatory content was not due to negligence. The defence, sometimes also known as "mechanical distributor", is of concern to Internet Service Providers because of their potential liability for defamatory material posted by their subscribers.
The origins of the United States' defamation laws pre-date the American Revolution; one influential case in 1734 involved John Peter Zenger and established precedent that "The Truth" is an absolute defense against charges of libel. Though the First Amendment of the U.S. Constitution was designed to protect freedom of the press, for most of the history of the United States, the U.S. Supreme Court failed to use it to rule on libel cases. This left libel laws, based upon the traditional "Common Law" of defamation inherited from the English legal system, mixed across the states. The 1964 case New York Times Co. v. Sullivan, however, radically changed the nature of libel law in the United States by establishing that public officials could win a suit for libel only when they could prove the media outlet in question knew either that the information was wholly and patently false or that it was published "with reckless disregard of whether it was false or not". Later Supreme Court cases barred strict liability for libel and forbade libel claims for statements that are so ridiculous as to be obviously facetious. Recent cases have added precedent on defamation law and the Internet.
Section 230 is a section of Title 47 of the United States Code that was enacted as part of the Communications Decency Act of 1996, which is Title V of the Telecommunications Act of 1996, and generally provides immunity for online computer services with respect to third-party content generated by its users. At its core, Section 230(c)(1) provides immunity from liability for providers and users of an "interactive computer service" who publish information provided by third-party users:
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.
Doe v. MySpace, Inc., 528 F.3d 413 (2008), is a 2008 Fifth Circuit Court of Appeals ruling that MySpace was immune under Section 230 of the Communications Decency Act of 1996 from liability for a sexual assault of a minor that arose from posts on the MySpace platform.
Thomas Dart, Sheriff of Cook County v. Craigslist, Inc., 665 F. Supp. 2d 961, is a decision by the United States District Court for the Northern District of Illinois in which the court held that Craigslist, as an Internet service provider, was immune from wrongs committed by their users under Section 230 of the Communications Decency Act (CDA). Sheriff Thomas Dart had sought to hold Craigslist responsible for allegedly illegal content posted by users in Craigslist's erotic services section, but Section 230(c)(1) of the CDA provides that "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."
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Barnes v. Yahoo!, Inc., 570 F.3d 1096, is a United States Court of Appeals for the Ninth Circuit case in which the Ninth Circuit held that Section 230 of the Communications Decency Act (CDA) rules that Yahoo!, Inc., as an Internet service provider cannot be held responsible for failure to remove objectionable content posted to their website by a third party. Plaintiff Cecilia Barnes made claims arising out of Defendant Yahoo!, Inc.'s alleged failure to honor promises to remove offensive content about the plaintiff posted by a third party. The content consisted of a personal profile with nude photos of the Plaintiff and her contact information. The United States District Court for the District of Oregon had dismissed Barnes' complaint.
Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, 521 F.3d 1157, is a case in which the United States Court of Appeals for the Ninth Circuit, sitting en banc, held that immunity under Section 230 of the Communications Decency Act (CDA) did not apply to an interactive online operator whose questionnaire violated the Fair Housing Act. However, the court found that Roommates.com was immune under Section 230 of the CDA for the “additional comments” portion of the website. This case was the first to place a limit on the broad immunity that Section 230(c) gives to service providers that has been established under Zeran v. AOL (1997).
Jane Doe No. 14 v. Internet Brands, Inc., 767 F.3d 894 (2014), is a 2014 ruling at the Ninth Circuit Court of Appeals on the legal liability of an Internet service provider for criminal offenses committed by its users. The ultimate ruling in the case has caused confusion over the amount of liability faced by service providers during such incidents.
FOSTA and SESTA are U.S. Senate and House bills which became law on April 11, 2018. They clarify the country's sex trafficking law to make it illegal to knowingly assist, facilitate, or support sex trafficking, and amend the Section 230 safe harbors of the Communications Decency Act to exclude enforcement of federal or state sex trafficking laws from its immunity. Senate sponsor Rob Portman had previously led an investigation into the online classifieds service Backpage, and argued that Section 230 was protecting its "unscrupulous business practices" and was not designed to provide immunity to websites that facilitate sex trafficking.
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Green v. America Online, Inc., 318 F.3d 465 (2003), was a case of the United States Court of Appeals for the Third Circuit, over the protections granted to Internet service providers from legal liability for tort offenses committed by their users.
Gonzalez v. Google LLC, 598 U.S. 617 (2023), was a case at the Supreme Court of the United States which dealt with the question of whether or not recommender systems are covered by liability exemptions under Section 230 of the Communications Act of 1934—which was established by the Telecommunications Act of 1996—for Internet service providers, in dealing with terrorism-related content posted by users and hosted on their servers. The case was granted certiorari alongside another Section 230 and terrorism-related case, Twitter, Inc. v. Taamneh.
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