In this summer of gridlock, it is important to remember that legislation can make a real difference. Section 230 of the Communications Decency Act of 1996 is a case in point. Enacted by Congress during the infancy of the Internet, the CDA is online publishers' first line of defense against claims that seek to hold them liable for user-generated content (UGC) and has been critical in the development of the Internet as a wide-open public forum.

Section 230(c)(1) of the CDA 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." The CDA thus draws a clear distinction between the "provider…of an interactive service," which is immune, and the "information content provider," who is not. 47 U.S.C. §230(c)(1). Section 230(e)(3) further provides that "[n]o cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section," with three exceptions: intellectual property, federal criminal, and violations of the Electronic Communications Privacy Act or analogous state laws.

As the Court of Appeals explained in Shiamili v. Real Estate Group, 17 N.Y. 3d 281, 952 N.E.2d 1011 (2011), Section 230 reflects Congress' policy decision to grant a broad immunity to publishers of third-party content, recognizing that "the internet offers a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity." Id. at 287. Courts have repeatedly found CDA immunity available not only to traditional Internet service providers, but also to operators of websites, including businesses built on soliciting third-party content and criticism (e.g., reviews on Yelp). Thus, in Shiamili, the Court of Appeals embraced the "consensus opinion" that Section 230 bars "[l]awsuits 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." Id. at 289. The plaintiff sought to hold the publishers of a blog dedicated to the New York City real estate industry responsible for a user's defamatory comments, based on the moderator's decision to take a user comment and turn it into a separate blog post and to preface that post with certain commentary that the court felt was not independently actionable. Id. at 292-93.1

The Court of Appeals found these traditional editorial functions to be fully protected under the CDA. Id. at 291-92. Likewise, the court rejected plaintiff's argument that defendant should be liable because the website "implicitly encouraged users to post negative comments about the New York City real estate industry," stating that "[c]reating an open forum for third parties to post content—including negative commentary—is at the core of what Section 230 protects." Id. at 290-91.

These basic principles were followed in the recent decision Braverman v. Yelp, Case No. 155629/12, NYLJ July 11, 2013 (Sup. Ct. N.Y. Co.). There, a Manhattan dentist sued Yelp over allegedly defamatory user posts, seeking to circumvent Section 230 by alleging that Yelp "filtered out positive reviews" in favor of negative ones, "placed a list of other dentists entitled 'Best of Yelp: New York—Cosmetic Dentists' on the same page and encouraged users to use these dentists instead of [the plaintiff.]" Applying Shiamili, the court readily disposed of plaintiff's claims, finding "the alleged act of filtering out positive reviews," "choosing to publish certain reviews—whether positive or negative," or "placing a Best of Yelp list on the same page as the reviews" of plaintiff did not remove Section 230 immunity, but instead is "an exercise of the publisher's traditional editorial function." Other cases have found that Yelp's actions in changing the order in which reviews appear, or filtering reviews using an automated filter that suppresses certain reviews, are also protected.

While there is no consensus "test," courts have typically found exceptions to Section 230 immunity only where the defendant actively facilitated, induced or otherwise participated in the development of the unlawful content. In Fair Housing Council of San Fernando Valley v. Roommates.com, 521 F.3d 1157 (9th Cir. 2008) (en banc), the U.S. Court of Appeals for the Ninth Circuit focused on whether the "website help[ed] to develop unlawful content" by "contribut[ing] materially to the alleged illegality of the conduct," as opposed to providing "neutral" tools for user-generated content. Specifically, the Ninth Circuit found that Roommates.com contributed to the unlawful content because its questionnaire "require[d] the use of discriminatory criteria"—users seeking roommates were required to disclose their own sex, family status and sexual orientation (all protected categories under the federal and state fair housing laws) and identify roommate preferences in the same categories. 521 F.3d at 1169.

Analogous tests likewise focus on whether the service provider was integral to the "development" of the content at issue. See, e.g., F.T.C. v. Accusearch, 570 F.3d 1187, 1199 (10th Cir. 2009) (service provider "specifically encourage[d] development of what is offensive about the content" by paying reviewers to obtain information in a manner likely to violate the Telecommunications Act); see also Doctor's Assoc. v. QIP Holder, No. 06 Civ. 710, 2010 WL 669870, at *24 (D. Conn. Feb. 19, 2010) (where Quizno's online contest sought user videos that would explain why Quizno's was superior to its competitor Subway, and thus Quizno's could be found "responsible for the creation or development of the offending contestant videos"). In the wake of Roommates.com, plaintiffs have increasingly sought to allege that defendant made a "material contribution" to the UGC at issue, albeit with relatively limited success.

Based on existing CDA case law, it is often relatively easy to identify conduct that definitely falls into (or out of) the scope of Section 230 immunity, particularly with respect to traditional online publishers. However, as Shiamili acknowledged, Section 230 still presents tricky issues when the defendant is both a content provider and a service provider. Because the Court of Appeals reached its decision without construing the term "development" (including the Roommates.com view whereby liability attaches only when a publisher materially contributes to the alleged unlawfulness rather than "augmenting the content generally"), New York remains one of many jurisdictions where the outer limits on Section 230 immunity are ill-defined. 17 N.Y.3d at 289-90.

Shiamili also leaves open the possibility that a plaintiff could defeat a motion to dismiss on Section 230 grounds solely by alleging that defendant "authored" the allegedly unlawful content, see id. at 286, potentially subjecting publisher-defendants to time-consuming and costly discovery before their immunity can be established. This possibility is particularly disturbing to publisher defendants in a jurisdiction without a robust anti-SLAPP statute, and indeed, a number of cases have denied up-front motions on this ground.

Other Jurisdictions

Decisions elsewhere inconsistently interpret whether a website operator loses Section 230 immunity because it is responsible for the "development" of the content, even where the same content provider is concerned. The website thedirty.com—which gained notoriety in recent weeks surrounding the latest Anthony Weiner revelations—solicits gossip and photos from its users, which the site refers to as "the Dirty Army." Nik Richie, the operator of thedirty.com, reviews and selects certain third-party submissions for publication, sometimes contributing a comment on the subject of the post, and leading to further commentary on the subject matter of the post from the site's users.

Applying the Accusearch formulation, Jones v. Dirty World Entmt Recordings, 840 F.Supp.2d 1008 (E.D. Ky 2012), found that "the very name of the site, the way in which it was managed, and the personal comments [of the operator] have specifically encouraged the development of what is offensive about the site." In another thedirty.com case, Hare v. Richie, the district court denied Richie's motion to dismiss on Section 230 grounds, finding that further discovery was needed to determine whether Dirty World (the company that operates dirtyworld.com) "specifically encourages what is offensive about the content" under Accusearch. Two months after Jones, however, another district court applying the same Accusearch test reached the opposite conclusion. S.C. v. Dirty World, No. 11-CV-392-DW, 2012 WL 3335284 (W.D. Mo. March 12, 2012).

Expressly distancing itself from Jones as inconsistent with the broad immunity recognized by the U.S. Court of Appeals for the Eighth Circuit, the district court noted that Richie had not himself made any comments that could be seen as inducing or ratifying the offensive post or encouraging further offensive commentary, while he arguably had done so in Jones. Id. at 5. "[M]erely encouraging defamatory posts is not sufficient to defeat CDA immunity." Id. at *4. Cf. Global Royalties, v. Xcentric Ventures, 544 F.Supp.2d 929, 933 (D. Ariz. 2008) (holding that operator of consumer review website titled "Ripoff Report" was entitled to Section 230 immunity even though it was "obvious that a website entitled Ripoff Report encourages the publication of defamatory content").

Advertising

The CDA's reach within the world of advertising is another unresolved issue. Advertisers or sellers of products increasingly seek to engage with customers and potential customers through non-traditional media, such as social media or online user forums hosted by the advertiser. Under a straightforward Section 230 analysis, advertisers should not be considered the "information content provider" of postings on such forums and therefore should be immune from statements made by third-party users about their products or those of competitors, even where these statements appear in a forum controlled by the advertiser. However, the extent to which the agencies that regulate advertising content will be willing to take Section 230 into account when considering enforcement actions is not clear.

The FTC, which is responsible for enforcing the Federal Trade Commission Act, has lately evinced an increased focus on regulating digital content controlled by advertisers. The FTC's Guides Concerning Use of Endorsements and Testimonials in Advertising, 16 C.F.R. §255 et seq., address an advertiser's obligations with respect to traditional third-party endorsements and testimonials, but offer little guidance on other situations where advertisers publish or control UGC or interact with users. The National Advertising Division of the Council of Better Business Bureaus (NAD) (a self-regulatory advertising dispute resolution forum) recently concluded that a Nutrisystem initiative which encouraged users to "pin" photographs demonstrating the consumers' weight loss results to Nutrisystem's Pinterest board was a marketing tool designed to distribute testimonials. Nutrisystem, NAD Case No. 5479 (June 29, 2012). Because the consumers who "pinned" the photos in question reported atypical weight loss results, Nutrisystem was required to include disclosure in close proximity that "clearly and conspicuously disclose the generally expected performance in the depicted circumstances," in accordance with the FTC's Guides.

Recent warning letters issued by the FDA, which is responsible for enforcing the Federal Food, Drug and Cosmetic Act (FDCA), 21 U.S.C. §301 et seq., suggest that the FDA is likewise monitoring online interactions between users and advertisers. For example, one such warning letter suggests that when an advertiser "likes" a third-party post on its Facebook page, the FDA will view this as an endorsement of the UGC, subjecting the advertiser to potential liability under the FDCA.2

The position taken by regulators may well conflict with Section 230 (and, for that matter, the commercial speech doctrine) and it seems likely that courts will take a narrower view of what is "advertising" or "promotional" content than that adopted by the regulators. See, e.g., AFL Telecommunications v. SurplusEQ.com, 2013 WL 1976515 (D. Ariz. May 20, 2013) (dismissing false advertising claim arising out of defendant's blog post on the ground that a blog post is not "classic advertising" and that there was no evidence that it has been sufficiently disseminated to the commercial public to constitute an advertisement). Yet, until these actions actually result in lawsuits by the respective government agencies, we are unlikely to see clear guidance in this area.

One final issue to watch: The National Association of Attorneys General recently announced its intent to ask Congress to expand exemptions under Section 230(e) to also include state criminal laws. Commentators widely view this as an attempt to counter decisions that have found that Section 230 bars the enforcement of state criminal laws that prohibit prostitution, human trafficking and/or child exploitation against publishers of online classifieds (such as Craigslist and Backpage.com). See, e.g., Dart v. Craigslist, 665 F.Supp.2d 961 (N.D. Ill. Oct. 20, 2009) (rejecting attempt to hold Craigslist liable on ground that it induced illegal content by providing a section for erotic ads); see also BACKPAGE.COM v. McKenna, 881 F.Supp.2d 1262 (W.D. Wa. 2012) (enjoining enforcement of a Washington state law that would criminalize the "knowing" publication, dissemination, or display of advertising related to commercial sexual abuse of a minor on Section 230 grounds). It will be interesting to see how Congress reacts, given the inherent conflict between such a proposal and the intent underlying Section 230.

Elizabeth McNamara is a partner in the New York office of Davis Wright Tremaine. Joanna Summerscales is an associate at the firm.

Endnotes:

1. Chief Judge Jonathan Lippman's dissent would have found that the moderator's actions in adding a preface and illustration to the post, as well as the allegation that defendants made efforts to instigate attacks against plaintiff, sufficient to defeat Section 230 on an up-front motion.

2. http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2012/ucm340266.htm.