Endorsement is the currency of social media. Individuals and companies alike create content for social media, not for immediate monetary gain (though that may be an ultimate goal) but for “likes,” “+1s,” “favorites” or whatever other indicator of approval their chosen platform provides. A step up from these simple, virtual up-votes is the “share,” the highest expression of appreciation for a social media post. A “share” represents the decision not only to support the content, but to pass it on wholesale to one’s own audience through whatever mechanism is available. Whether this is called a share, a link, a reblog, a repost, a retweet or any of a multitude of other names, lawyers recognize it as a republication. Republication is what makes social media social, and, when it takes off, it can introduce content to large, diverse audience pools that would otherwise have little in common.

Savvy, youth-oriented companies have known all of this for years and have long included social media as an integral part of their marketing strategies; more mainstream brands have been quick to follow. The fondest hope of these companies is that some piece of their content goes “viral”—that it is picked up by Internet opinion-makers and shared across thousands of heterogeneous demographic networks leading to massively increased brand awareness and sales. But the flip side of explosive approval is unbridled complaint, and social media can end up being an arena for some very harsh, gloves-off commentary. When a client becomes involved in that kind of battle—or when it chooses to take a side in one—counsel may be asked to provide answers to some tough questions: What can I say online without incurring legal liability? Can I republish what someone else has said? How do I do that, exactly, in my chosen form of social media?

The law in this area is rapidly developing, but Adelson v. Harris,1 a recent case decided by Judge J. Paul Oetken of the U.S. District Court for the Southern District of New York, answers some important questions and gives some excellent guidance to attorneys faced with defamation, republication and related issues in the online context.

‘Adelson’

In Adelson v. Harris, plaintiff Sheldon Adelson filed a defamation action against defendants David Harris, Marc Stanley, and their organization, the National Jewish Democratic Council (NJDC) arising out of the 2012 presidential campaign. Adelson’s suit arose out of an online petition published by the NJDC that republished allegedly false accusations regarding Adelson’s purported involvement in a prostitution scheme at casinos owned by his companies in Macau. In a dense and carefully reasoned 57-page opinion, entered on Sept. 30, 2013, Oetken considered a host of complex issues arising out of the republication of allegations in the context of an online political debate. The court addressed, among other things, the proper choice of law, the extent of the fair reporting privilege, the use of hyperlinks to identify sources and the applicability of Nevada’s anti-SLAPP statute. After a thorough analysis, the court dismissed plaintiff’s claims, and although it did so under Nevada’s substantive defamation law, its analysis provides useful guidance to New York attorneys in several areas.

Background and Facts. Plaintiff in Adelson was the chairman and CEO of Las Vegas Sands, a Nevada corporation that builds and operates casinos globally. Adelson brought a libel suit against the NJDC, its president and its chairman arising out of a political posting by the NJDC that encouraged visitors to sign a position, directed at the presidential campaign of Mitt Romney, urging the Romney campaign to reject donations from Adelson. At issue in the lawsuit were a number of statements in the petition that characterized Adelson’s donations to the Romney campaign as “dirty” or “tainted” money,2 as well as “the Petition’s claims that ‘reports surfaced that…Adelson “personally approved” of prostitution in his Macau casinos’ and that Adelson ‘reportedly approved of prostitution.’”3 One term in the petition, “personally approved,” was an underlined, blue hyperlink that connected the reader who clicked on it to an Associated Press article. The article reported on a declaration made in an unrelated court case brought by a former employee, in which the employee stated that a “prostitution strategy” in a Sands casino in Macau “had been personally developed and approved by Adelson.” Adelson alleged that this statement was false and the employee knew it to be false, and that it was therefore libelous. Adelson sued, and defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6) and (in various separate motions) under various state anti-SLAPP laws.4 The court granted the motion.

What Law Applies? The first question facing the Adelson court was what law to apply. Plaintiff lived in Nevada, defendants were located in Washington, D.C., the suit was brought in New York federal court and the communication at issue concerned the presidential election—perhaps, as defendants argued, of special significance to Washington, D.C. The court noted that choice of law issues in defamation cases are inevitably complex, difficult and fact-specific: “‘a dismal swamp, filled with quaking quagmires, and inhabited by learned but eccentric professors who theorize about mysterious matters in a strange and incomprehensible jargon.’”5 The court then undertook a lengthy analysis that included several notable points. It noted that, where a tort occurs on the Internet, it is not generally helpful to ask “where” the tort occurred, thus eliminating that factor. It also noted that, while the domicile of the plaintiff is often a controlling factor (because the plaintiff’s home state has a strong interest in protecting the rights of its citizens) it may not be dispositive if some other state has equally strong or stronger interests.

For example, New York courts have recognized that New York state—a traditional home for publishing and media—has an especially strong interest in protecting the free-speech rights of local defendants in defamation cases. Thus, in diversity cases including a New York defendant, New York federal courts will apply New York law rather than the law of plaintiff’s state.6 Here, however, neither party was located in New York. Further, the court held that the presidential election was of national import and not of any special significance to Washington D.C., justifying application of D.C. law. Critically, it also noted that, in this day and age, anyone posting to the Internet should know that they may be subject to the laws of the state in which their communication finds a plaintiff. With all this in mind, the court determined that Nevada defamation and anti-SLAPP laws should apply, but much of its remaining analysis is applicable far more broadly.

The Fair Report Privilege and How to Keep It. The court next addressed whether the fair report privilege protected certain of defendants’ statements. Specifically, the court had to assess whether the statements in the petition that “reports [had] surfaced ‘that Adelson “personally approved” of prostitution in his Macau casinos’ and ‘reportedly approved of prostitution’” constituted privileged reports of a judicial proceeding.7 The court found that they did, in part because of the hyperlink under the words “personally approved” (clearly indicated by underlining and blue text), which linked to the source of the report.

The fair report privilege grants “‘absolute immunity from defamation…to the news media and the general public to report newsworthy events in judicial proceedings’” and “‘extends to any person who makes a republication of a judicial proceeding from material that is available to the general public.’”8 To determine the applicability of the privilege, the court evaluated two elements: first, whether it was “apparent either from specific attribution or from the overall context that the article is quoting, paraphrasing, or otherwise drawing upon official documents and proceedings”; and second, whether the statement constituted a “fair and accurate” description of the underlying proceeding.9

Defendants argued that, for the average Internet user, the blue, underlined hyperlink satisfied the need for attribution as both a signal of attribution and direct quotation from, and link to, the source material. They also emphasized the use of the words “reportedly” and “reports” that surrounded the allegation. Although the hyperlink did not link directly to court papers, it linked to an AP article reporting on the case, which the parties agreed was protected by the privilege. The court agreed with defendants’ analysis.

The opinion briefly surveyed Second Circuit case law on the increasing prevalence of the hyperlink and the public’s corresponding familiarity and held that “[t]he Hyperlink is the twenty-first century equivalent of the footnote for purposes of attribution in defamation law, because it has become a well-recognized means for an author or the Internet to attribute a source.”10 In fact, the court found hyperlinks to have a key additional benefit that traditional footnotes do not, in that they provide instantaneous access to the source material to verify the author’s claims. The court rejected plaintiff’s argument that a hyperlink fails to provide sufficient attribution because it is not part of the “four corners of a publication” and requires “external navigation,” analogizing that a footnote could similarly be regarded as requiring a trip to the library. Further, it found no reason to believe that footnotes are read more frequently than hyperlinks are clicked on.

Finally, the court articulated a public policy basis for accepting the hyperlink as a proper tool for attribution: “foster[ing] the facile dissemination of knowledge on the Internet.” The court wrote: “It is to be expected, and celebrated, that the increasing access to information should decrease the need for defamation suits.”11 In doing so, the court made clear its view that having more information in the public domain—and more public engagement with that information—would be a positive development that the law should foster. Based on all of this, the court found that reposting the allegations made against Adelson in the petition, with a supporting link, fell within the first prong of the fair report privilege analysis. It also found that the failure to describe “both sides” of the allegation (that is, that Adelson’s subsequent denial) did not prevent the report from being “fair and accurate,” and thus that it satisfied the second prong. Since the court found that the other statements in the petition (regarding “dirty” or “tainted” money) were protected expressions of opinion, it granted defendants’ motion to dismiss for failure to state a claim.

Some Additional Take-Away

It may seem obvious to technically sophisticated lawyers that a hyperlink can serve the same purpose as a footnote, but in fact the issue is not so simple. For example, social media content is fundamentally ephemeral—sometimes deliberately so—and a link is not necessarily forever. Even the Adelson court acknowledged that “Internet sources often go stale after a period of time” as websites are moved or taken down, a phenomenon that has been dubbed “link rot.”12 A recent Harvard Law School study, noted by the court, found that nearly half of the hyperlinks in Supreme Court decisions no longer work.13 This has been a live topic of discussion for some time among attorneys in this area, but the court was not overly troubled by it, noting (among other things) that in the context of defamation, the harm is most likely to occur at the time of publication, when the links are most likely to be “alive.”

Similarly, the court’s assertion that increased access to information (in this case, additional Internet sources) will decrease the number of defamation suits makes sense on its face. As noted above, however, the “republication economy” has not empirically proved that out and there is little evidence of a decline in such suits in the age of the Internet. The traditional thrust of First Amendment law is to avoid regulating speech where possible and instead to foster a “marketplace of ideas” by encouraging counter-speech. This may well be appropriate if the goal is a robust debate and free airing of every point of view, but it is not clear that it will always help to prevent or redress the individual harm from any particular false or malicious statement. On the Internet, where communication is entirely unregulated (even by traditional social norms), more speech may create more, rather than less, litigation.

Finally, while Adelson provides some excellent guidance—most notably “link your sources”—it does not answer every question. For example, in the context of social media, republication is not always direct. The petition in Adelson linked to an AP article, which in turn quoted court documents, and that was considered protected, but how long can the chain of attribution be? Is it acceptable to link to an article that in turn links to a source? Clicking two links is still easier than a trip to a library chasing a footnote, but of course it increases the chance of link rot. Similarly, in some media, the indicia of republication are not as clear as the blue underline of the hyperlink. A user well-versed in Twitter knows that “RT” means the words in a “tweet” come from another source, but is that enough recognition from the “Average” reader to invoke the report privilege? This area of law continues to develop at a rapid pace, and Adelson will certainly see a great deal of citation as it does.

Stephen M. Kramarsky, a member of Dewey Pegno & Kramarsky, focuses on complex commercial and intellectual property litigation. Joseph P. Mueller, an associate at the firm, provided substantial assistance with the preparation of this article.

Endnotes:

1. —F.3d—, 12 CIV. 6052 JPO, 2013 WL 5420973 (S.D.N.Y. Sept. 30, 2013).

2. 2013 WL 5420973, at *15-16.

3. Id. at *15.

4. An anti-SLAPP (Strategic Lawsuit Against Public Participation) law is a law that provides for dismissal of, and penalties for bringing frivolous suits designed to chill participation in public debate or governance. Several states, including New York, have such laws (see N.Y. Civ. Rights Law §§70-a, 76-a), but New York’s is significantly narrower than Nevada’s and the court’s analysis under New York law would likely be different.

5. Id. at *5, quoting William L. Prosser, Interstate Publications, 51 Mich. L. Rev. 959, 971 (1953).

6. See, e.g., Davis v. Costa-Gavras, 580 F. Supp. 1082, 1092 (S.D.N.Y. 1984).

7. 2013 WL 5420973, at *19.

8. Id. at *11 (quoting Sahara Gaming v. Culinary Workers Union Local 226, 984 P.2d 164, 166 (Nev. 1999)). The privilege exists by statute, in similar form, in New York. N.Y. Civ. Rights Law §74.

9. Id. at *11.

10. Id. at *13.

11. Id. at *14.

12. Id. at *13 n.13.

13. Id.