Defamation and liability of web service providers

California Supreme Court Reports

BARRETT v. ROSENTHAL, S122953 (Cal. 11-20-2006) STEPHEN J.
BARRETT et al., Plaintiffs and Appellants, v. ILENA
ROSENTHAL, Defendant and Respondent. S122953 Supreme
Court of California Filed November 20, 2006

Appeal from the Superior Court of Alameda County, No.
833021-5, James A. Richman Judge, Ct.App. 1/2 A096451.
Review Granted 114 Cal.App.4th 1379.

Law Offices of Christopher E. Grell, Christopher E. Grell,
Richard R. Rescho and Ian P. Dillon for Plaintiffs and
Appellants.

Mark Goldowitz, Jesper Rasmussen; Piper Rudnick, Roger
Myers, Lisa Sitkin and Katherine Keating for Defendant and
Respondent.

Lee Tien and Kurt Opsahl for Electronic Frontier Foundation
as Amicus Curiae on behalf of Defendant and Respondent.

Ann Brick for American Civil Liberties Union Foundation of
Northern California as Amicus Curiae on behalf of Defendant
and Respondent.

Cooley Godward, Michael G. Rhodes, Lori R.E. Ploeger, and
Laura C. Pirri for eBay Inc. as Amicus Curiae on behalf of
Defendant and Respondent.

Wilmer Cutler Pickering Hale and Dorr, Patrick J. Carome,
Samir Jain, and C. Colin Rushing for Amazon.com, Inc.,
America Online, Inc., eBay Inc., Google Inc., Microsoft
Corporation, Yahoo! Inc., ABC, Inc., Ask Jeeves, Inc.,
Cable News Network LP, LLLP, Compuserve Interactive
Services, Inc., Earthlink, Inc., ESPN, Inc., Netscape
Communications Corporation, SBC Internet Services, Time
Warner Cable Inc., The Washington Post Company, Association
for Competitive Technology, California Newspaper Publishers
Association, Information Technology Association of America,
Internet Alliance, Internet Commerce Coalition, National
Cable & Telecommunications Association, Netchoice,
Netcoalition Newspaper Association of America, Online News
Association, Online Publishers Association, TechNet and
United States Internet Service Provider Association as
Amici Curiae on behalf of Defendant and Respondent.

Deidre K. Mulligan for Law Professors with Expertise in
Internet Law as Amicus Curiae on behalf of Defendant and
Respondent.

CORRIGAN, J.

In the Communications Decency Act of 1996, Congress
declared: “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).)[fn1] “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.” (§ 230(e)(3).)

These provisions have been widely and consistently
interpreted to confer broad immunity against defamation
liability for those who use the Internet to publish
information that originated from another source. The
immunity has been applied regardless of the traditional
distinction between “publishers” and “distributors.” Under
the common law, “distributors” like newspaper vendors and
book sellers are liable only if they had notice of a
defamatory statement in their merchandise. The publisher of
the newspaper or book where the statement originally
appeared, however, may be held liable even without notice.

In this case, the Court of Appeal diverged from the
prevailing interpretation of section 230. It decided that
common law “distributor” liability survived the
congressional grant of immunity, so that Internet service
providers and users are exposed to liability if they
republish a statement with notice of its defamatory
character.

We granted review to decide whether section 230 confers
immunity on “distributors.” Because this case involves the
liability of an individual rather than a service provider,
we asked the parties to address the definition of the
statutory term “user.” We also requested briefing on
whether the immunity analysis is affected if a user engages
in active rather than passive conduct. We conclude that
section 230 prohibits “distributor” liability for Internet
publications. We further hold that section 230(c)(1)
immunizes individual “users” of interactive computer
services, and that no practical or principled distinction
can be drawn between active and passive use. Accordingly,
we reverse the Court of Appeal’s judgment.

We acknowledge that recognizing broad immunity for
defamatory republications on the Internet has some
troubling consequences. Until Congress chooses to revise
the settled law in this area, however, plaintiffs who
contend they were defamed in an Internet posting may only
seek recovery from the original source of the statement.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs, Dr. Stephen J. Barrett and Dr. Timothy
Polevoy, operated Web sites devoted to exposing health
frauds. Defendant Ilena Rosenthal directed the Humantics
Foundation for Women and operated an Internet discussion
group. Plaintiffs alleged that Rosenthal and others
committed libel by maliciously distributing defamatory
statements in e-mails and Internet postings, impugning
plaintiffs’ character and competence and disparaging their
efforts to combat fraud.[fn2] They alleged that Rosenthal
republished various messages even after Dr. Barrett warned
her they contained false and defamatory information.

Rosenthal moved to strike the complaint under the
anti-SLAPP statute. (Code Civ. Proc., § 425.16;
SLAPP is an acronym for strategic lawsuit against public
participation.) She claimed her statements were protected
speech, and argued that plaintiffs could not establish a
probability of prevailing because she was immune under
section 230. (See Code Civ. Proc., § 425.16, subd.
(b); Equilon Enterprises v. Consumer Cause, Inc. (2002) 29
Cal.4th 53, 67.) She also contended her statements were not
actionable.

The court granted the motion, finding that Rosenthal’s
statements concerned an issue of public interest within the
scope of the anti-SLAPP statute, and were, for the most
part, not actionable because they contained no provably
false assertions of fact. Plaintiffs do not challenge that
ruling. The court determined that the only actionable
statement appeared in an article Rosenthal received via
e-mail from her codefendant Tim Bolen. This article,
subtitled “Opinion by Tim Bolen,” accused Dr. Polevoy of
stalking a Canadian radio producer. Rosenthal posted a copy
of this article on the Web sites of two newsgroups devoted
to alternative health issues and the politics of medicine,
not on the site of her own discussion group. According to
Rosenthal, these newsgroups were part of “the wild west of
the Internet,” with “no administrators and no one to
enforce rules of conduct.”[fn3] The trial court ruled that
this republication was immunized by section 230(c)(1).

The Court of Appeal vacated the order granting the motion
to strike insofar as it applied to Dr. Polevoy. It held
that section 230 did not protect Rosenthal from liability
as a “distributor” under the common law of defamation. We
granted Rosenthal’s petition for review.[fn4]

II. DISCUSSION

The leading case on section 230 immunity rejected the
“distributor” liability theory adopted by the Court of
Appeal here. (Zeran v. America Online, Inc. (4th Cir.
1997) 129 F.3d 327, 331-333 (Zeran).) We first discuss the
Zeran holding and rationale, then the Court of Appeal’s
contrary analysis.[fn5] Recognizing “distributor” liability
would have a dramatic impact on Internet service providers.
We agree with the Zeran court that Congress did not intend
to create such an exception to section 230 immunity.[fn6]

Rosenthal, however, is not a service provider, at least
with respect to the newsgroups where she posted the Bolen
article. This appears to be the first published case in
which section 230 immunity has been invoked by an
individual who had no supervisory role in the operation of
the Internet site where allegedly defamatory material
appeared, and who thus was clearly not a provider of an
“interactive computer service” under the broad definition
provided in the CDA. (§ 230(f)(2); see fn. 7, ante.)
Accordingly, we asked the parties to brief the meaning of
the term “user” in section 230, and whether any distinction
might be drawn between active and passive use under the
statute. In part C of our discussion, we conclude that
Congress employed the term “user” to refer simply to anyone
using an interactive computer service, without
distinguishing between active and passive use.

A. Zeran

Kenneth Zeran was bombarded with angry and derogatory
telephone calls, including death threats, after an
unidentified person posted a message on an America Online,
Inc. (AOL) bulletin board. The message advertised t-shirts
with offensive slogans referring to the Oklahoma City
bombing of the Alfred P. Murrah Federal Building, and
instructed prospective purchasers to call Zeran’s home
telephone number. Zeran notified AOL of the problem, and
the posting was eventually removed. However, similar
postings appeared, and an Oklahoma radio announcer aired
the contents of the first message. Zeran was again
inundated with threatening phone calls. He sued AOL for
unreasonable delay in removing the defamatory messages,
refusing to post retractions, and failing to screen for
similar postings. (Zeran, supra, 129 F.3d at pp. 328-329.)

AOL successfully moved for judgment on the pleadings,
relying on section 230. (Zeran, supra, 129 F.3d at pp.
329-330.) The Fourth Circuit Court of Appeals affirmed,
holding that the plain language of section 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.” (Zeran, at
p. 330.)

Referring to the congressional finding that the Internet
has flourished “with a minimum of government regulation”
(§ 230(a)(4)), and the policy statement favoring a
free market for interactive computer services “unfettered
by Federal or State regulation” (§ 230(b)(2)), the
Zeran court reasoned that Congress viewed “[t]he imposition
of tort liability on service providers for the
communications of others” as “simply another form of
intrusive government regulation of speech.” (Zeran, supra,
129 F.3d at p. 330.) While original posters of defamatory
speech do not escape accountability, Congress “made a
policy choice . . . not to deter harmful online speech [by]
imposing tort liability on companies that serve as
intermediaries for other parties’ potentially injurious
messages.” (Id. at pp. 330-331.) This policy reflects a
concern that if service providers faced tort liability for
republished messages on the Internet, they “might choose to
severely restrict the number and type of messages posted.”
(Id. at p. 331.)

The court noted that another important purpose of section
230 was “to encourage service providers to self-regulate
the dissemination of offensive material over their
services.” (Zeran, supra, 129 F.3d at p. 331.) The
legislative history indicates that section 230 was enacted
in response to an unreported New York trial court case.
(Stratton Oakmont, Inc. v. Prodigy Services Co.
(N.Y.Sup.Ct. May 24, 1995) 1995 WL 323710, 23 Media L.Rep.
1794 (Stratton Oakmont).)[fn7] There, a service provider
was held liable for defamatory comments posted on one of
its bulletin boards, based on a finding that the provider
had adopted the role of “publisher” by actively screening
and editing postings. “Fearing that the specter of
liability would . . . deter service providers from blocking
and screening offensive material, Congress enacted §
230’s broad immunity,” which “forbids the imposition of
publisher liability on a service provider for the exercise
of its editorial and self-regulatory functions.” (Zeran,
supra, 129 F.3d at p. 331.)

Zeran made the same argument adopted by the Court of
Appeal here: that Congress intended to distinguish between
“publishers” and “distributors,” immunizing publishers but
leaving distributors exposed to liability. At common law,
“primary publishers,” such as book, newspaper, or magazine
publishers, are liable for defamation on the same basis as
authors. Book sellers, news vendors, or other
“distributors,” however, may only be held liable if they
knew or had reason to know of a publication’s defamatory
content. (Zeran, supra, 129 F.3d at p. 331; Prosser &
Keeton, The Law of Torts (5th ed. 1984) § 113, pp.
810-811; Rest.2d Torts, § 581, subd. (1), & coms. c,
d, & e, pp. 232-234; see also Osmond v. EWAP, Inc. (1984)
153 Cal.App.3d 842, 852-854.)[fn8] Zeran contended that
because Congress mentioned only the term “publisher” in
section 230, it intended to leave “distributors”
unprotected. He claimed that once he gave AOL notice that
it was posting defamatory statements on its bulletin board,
AOL became liable as a “distributor.” (Zeran, supra, 129
F.3d at pp. 331-332.)

The Zeran court held that the publisher/distributor
distinction makes no difference for purposes of section 230
immunity. Publication is a necessary element of all
defamation claims, and includes every repetition and
distribution of a defamatory statement. (Zeran, supra, 129
F.3d at p. 332, citing Prosser & Keeton, The Law of Torts,
supra, § 113, pp. 799, 802, 803, and Rest.2d Torts,
§§ 558, subd. (b) & 577.) Although
“distributors” become liable only upon notice, they are
nevertheless included in “the larger publisher category.”
(Zeran, supra, 129 F.3d at p. 332.) “Zeran simply attaches
too much importance to the presence of the distinct notice
element in distributor liability. . . . [O]nce 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.” (Id. at
pp. 332-333.)

Subjecting service providers to notice liability would
defeat “the dual purposes” of section 230, by encouraging
providers to restrict speech and abstain from
self-regulation. (Zeran, supra, 129 F.3d at p. 333.) A
provider would be at risk for liability each time it
received notice of a potentially defamatory statement in
any Internet message, requiring an investigation of the
circumstances, a legal judgment about the defamatory
character of the information, and an editorial decision on
whether to continue the publication. “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.”
(Ibid.)

“Similarly, notice-based liability would deter service
providers from regulating the dissemination of offensive
material over their own services. 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. . . . 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.” (Zeran, supra, 129 F.3d at p. 333.)

In support of his argument for notice-based liabilty,
Zeran invoked the rule against abrogation of common law
principles unless Congress speaks directly to the question.
(Zeran, supra, 129 F.3d at pp. 333-334; United States v.
Texas (1993) 507 U.S. 529, 534.) However, the court
reasoned that Congress had spoken directly by employing the
term “publisher,” and that preserving “distributor”
liability would defeat the primary purposes of section 230.
The policy of strictly construing statutes in derogation of
the common law does not require a literal interpretation
conflicting with the obvious legislative purpose. (Zeran,
supra, 129 F.3d at p. 334, citing Isbrandtsen Co. v.
Johnson (1952) 343 U.S. 779, 783.)

The Zeran court’s views have been broadly accepted, in
both federal and state courts.[fn9] Before the Court of
Appeal issued its opinion below, two other California
Courts of Appeal had followed Zeran. In Kathleen R. v. City
of Livermore (2001) 87 Cal.App.4th 684, a taxpayer sued
after her son obtained sexually explicit photographs
through an Internet connection at a public library. She
sought injunctive relief on various theories of liability.
(Id. at pp. 690-691.) The Kathleen R. court held that the
state law causes of action were barred by section 230.
(Kathleen R., at p. 692.) It cited Zeran for the rule that
section 230(c)(1) immunizes both “publisher[s]” and
“distributor[s].” (Kathleen R., at p. 695, fn. 3.) It also
agreed with the Zeran court’s analysis of congressional
intent. (Id. at p. 697.)

In Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816, the
plaintiffs used eBay’s on-line marketing services to
purchase sports memorabilia. Claiming the items bore forged
autographs, they sued eBay for negligence, unfair trade
practices, and violation of Civil Code section 1739.7,
which regulates the sale of such collectibles. (Gentry, at
p. 820.) The Gentry court ruled that section 230 immunized
eBay from liability on all the plaintiffs’ claims. It noted
the broad scope given to section 230 immunity by the Zeran
court and others, and reasoned that the plaintiffs were
trying to hold eBay responsible for disseminating
information provided by the individual sellers who used its
service. (Gentry, at pp. 828-831.) Regarding the allegation
that eBay knew or should have known about the sellers’
illegal conduct but failed to prevent it by withdrawing or
altering the fraudulent content, the Gentry court stated:
“This is the classic kind of claim that Zeran found to be
preempted by section 230, . . . one that seeks to hold eBay
liable for its exercise of a publisher’s traditional
editorial functions.” (Id. at p. 835.)

B. The Court of Appeal Analysis

Swimming against the jurisprudential tide, the Court of
Appeal in this case disputed the ruling in Zeran,
contending it confers a more expansive immunity than is
necessary to preserve freedom of online speech, and would
actually defeat the goal of encouraging self-regulation.
The Court of Appeal focussed on three factors: (1) the
Zeran court’s interpretation of the statutory term
“publisher;” (2) the legislative history of section 230;
and (3) the practical implications of notice liability in
the Internet environment. We reject the Court of Appeal’s
analysis on each of these points.

1. The Meaning of “Publisher”

The Court of Appeal acknowledged that publication is an
element of defamation, and that “distributors” are
sometimes referred to as “secondary publishers.” (See,
e.g., Dworkin v. Hustler Magazine, Inc. (D.C.Wyo. 1985) 611
F.Supp. 781, 785; Hart v. Bennet (Wis.Ct.App. 2003) 672
N.W.2d 306, 318, fn. 14; Prosser & Keeton, The Law of
Torts, supra, § 113, at p. 803; Smolla, The Law of
Defamation (2d ed. 2005) § 4:92, p. 4-140.15.)
However, the court pronounced it “reasonable to assume”
that Congress had in mind the different standards of common
law liability imposed on “primary publishers,” who have
control over content, and “distributors,” who do not. Thus,
the omission of any reference to “distributors” in section
230(c)(1) was arguably intentional.

The Court of Appeal noted that the goal of discouraging
excessive self-censorship by immunizing publishers is at
odds with the rights of individuals to recover for
defamatory falsehood. It deemed the term “publisher”
ambiguous, because it might refer to primary publishers
only or to both primary publishers and distributors.
According to the Court of Appeal, such a “legally uncertain
word” could not support the broad immunity the Zeran court
derived from the statute. It found nothing in the statutory
findings and declarations to indicate that Congress
considered online speech in need of blanket protection.
Indeed, it detected a contrary intent in the terms of
section 230(c)(2), which immunizes providers and users
against liability for “any action voluntarily taken in good
faith to restrict access to or availability of material
that the provider or user considers to be . . .
objectionable, whether or not such material is
constitutionally protected” or to provide others with “the
technical means to restrict access to [such] material.” The
Court of Appeal reasoned that section 230(c)(2) would be
superfluous if all “publishers” enjoyed absolute immunity
under section 230(c)(1).

The Court of Appeal sought further support for limiting
the scope of the term “publisher” to primary publishers by
comparing the immunity provisions of the CDA with those of
the Digital Millenium Copyright Act, enacted in 1998
(DMCA; 17 U.S.C. § 512).[fn10] The DMCA immunizes
Internet service providers from liability for copyright
infringement if the provider is unaware of the infringement
and acts expeditiously to remove the copyrighted material
upon notice. It includes detailed notice requirements, and
procedures for replacement of the disputed material upon
sufficient counter-notification. (17 U.S.C. § 512(c)
& (g).) Because Congress did not include such specific
regulation of notice liability in the CDA, the Court of
Appeal decided it had failed to “speak directly” to the
issue, thus preserving common law distributor liability.
(See United States v. Texas, supra, 507 U.S. at p. 534.)

We conclude the Zeran court’s construction of the term
“publisher” is sound. The terms of section 230(c)(1) are
broad and direct: “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.” Given that “distributors” are also known
as “secondary publishers,” there is little reason to
believe Congress felt it necessary to address them
separately. There is even less reason to suppose that
Congress intended to immunize “publishers” but leave
“distributors” open to liability, when the responsibility
of publishers for offensive content is greater than that of
mere distributors. The Court of Appeal failed to respond to
the Zeran court’s point that once online distributors are
notified of defamatory content, they are placed in a
position traditionally occupied by publishers, and must
make an editorial decision on how to treat the posted
material. (Zeran, supra, 129 F.3d at p. 332.) This is a
persuasive justification for giving the term “publisher” an
inclusive interpretation. (See, e.g., Gentry v. eBay, Inc.,
supra, 99 Cal.App.4th at p. 835; Green v. America Online,
supra, 318 F.3d at p. 471; Donato v. Moldow, supra, 865
A.2d at pp. 725-726; Schneider v. Amazon.com, Inc., supra,
31 P.3d at pp. 41-42.)

We are not convinced by the Court of Appeal’s reasoning
that a broad reading of section 230(c)(1) would make
section 230(c)(2) unnecessary. These provisions address
different concerns. Section 230(c)(1) is concerned with
liability arising from information provided online. Section
230(c)(2) is directed at actions taken by Internet service
providers or users to restrict access to online
information.[fn11] Liability for censoring content is not
ordinarily associated with the defendant’s status as
“publisher” or “speaker.” Those terms, employed in section
230(c)(1), are drawn from the law of defamation. (See,
e.g., Prosser & Keeton, The Law of Torts, supra, §
113, at p. 803; Rest.2d Torts, § 568.) Section
230(c)(1) provides immunity from claims by those offended
by an online publication, while section 230(c)(2) protects
against claims by those who might object to the restriction
of access to an online publication.

The Court of Appeal’s reference to the DMCA does not
support its conclusion that Congress’s use of the term
“publisher” was insufficient to abrogate “distributor”
liability. To the contrary, the DMCA shows that Congress
has crafted a limited immunity in a closely related
context, with specific provision for notice liability. (17
U.S.C. § 512(c).) The fact that it did not do so in
the CDA, and has not amended section 230 to add a similar
provision in the 10 years since it was enacted, or in the
eight years since the example of the DMCA has been in
existence, strongly supports the conclusion that Congress
did not intend to permit notice liability under the
CDA.[fn12]

We note that it is far from clear how the distinction
between traditional print publishers and distributors would
apply in the Internet environment, with its many and
various forms of discourse. (See Reno v. American Civil
Liberties Union, supra, 521 U.S. 844, 850-853.) As the high
court noted, “[a]ny person or organization with a computer
connected to the Internet can `publish’ information.” (Id.
at p. 853.) Whenever such information is copied from
another source, its publication might also be described as
a “distribution.” The distinction proposed by the Court of
Appeal, based on rules developed in the post-Gutenberg,
pre-cyberspace world, would foster disputes over which
category the defendant should occupy. The common law of
defamation would provide little guidance.

In this case, for example, Rosenthal could claim that her
active role in selecting and posting material disparaging
plaintiffs qualified her as a primary publisher. Her
participation in the dissemination of the Bolen article,
particularly considered in light of her other alleged
verbal attacks on plaintiffs, arguably went beyond mere
distribution. (See Prosser & Keeton, The Law of Torts,
supra, § 113, at p. 803; Smolla, The Law of
Defamation, supra, § 4:92, p. 4-140.15; Rest.2d
Torts, § 568.) The Court of Appeal provided no
analysis justifying its conclusion that Rosenthal could be
held liable as a “distributor,” noting only that she
alleged no facts preventing her from being so
characterized. We need not decide the question, but
certainly the argument could be made that plaintiffs’
allegations cast Rosenthal in the role of a “publisher.”

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