Opinion ID: 2588352
Heading Depth: 2
Heading Rank: 2

Heading: The Court of Appeal Analysis

Text: 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.
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 (Ct.App.2003) 267 Wis.2d 919, 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). [10] 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, 113 S.Ct. 1631.) 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, 121 Cal.Rptr.2d 703; 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(e)(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. [11] 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. [12] 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, 117 S.Ct. 2329, 138 L.Ed.2d 874.) As the high court noted, [a]ny person or organization with a computer connected to the Internet can `publish' information. ( Id. at p. 853, 117 S.Ct. 2329.) 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.
The Court of Appeal noted that section 230 was enacted along with other CDA provisions that prohibited the knowing transmission of obscene or indecent or patently offensive messages to persons under the age of 18. [13] It reasoned that immunizing Internet service providers and users from primary publisher liability advanced a similar purpose by protecting those providers and users who try but fail to identify and remove offensive material. However, according to the Court of Appeal, immunization from distributor liability would be inconsistent with this goal because it would protect providers and users who make no effort to screen for offensive material, along with those who refuse to take action once on notice. The Court of Appeal claimed support for this view in the legislative history of section 230, though it conceded that the history is meager. (See Sheridan, Zeran v. AOL and the Effect of Section 230 of the Communications Decency Act Upon Liability for Defamation on the Internet (1997) 61 Alb. L.Rev. 147, 168 (hereafter Sheridan).) The court recognized that section 230 was enacted to remove the disincentives to self-regulation created by the Stratton Oakmont case, in which a service provider was held liable as a primary publisher because it actively screened and edited messages posted on its bulletin boards. ( Stratton Oakmont, supra, 1995 WL 323710, 23 Media L.Rep. 1794; see Zeran, supra, 129 F.3d at p. 331; fn. 7, ante. ) However, the Court of Appeal considered an earlier Internet defamation case to be equally important in ascertaining the purpose of section 230. In Cubby, Inc. v. CompuServe, Inc. (S.D.N.Y.1991) 776 F.Supp. 135, a journalist claimed he was defamed by a competitor's remarks posted on an Internet forum provided by CompuServe. ( Id. at pp. 137-138.) The court applied the common law distributor standard of liability, concluding the forum was essentially an electronic library over which CompuServe exercised little or no editorial control. ( Id. at pp. 139-140.) Because there was no evidence CompuServe knew or had reason to know of the statements, the court granted it summary judgment. ( Id. at p. 141.) The Court of Appeal noted that Cubby was distinguished in Stratton Oakmont, and also in comments by the sponsors of section 230. As related in a law review article relied on by the court, Representative Cox, one of two sponsors of the immunity provision, characterized the imposition of distributor liability in Cubby as holding that CompuServe `was not the publisher or editor' of the material. He clearly used the term `publisher' to exclude parties held to the distributor liability standard applied to CompuServe in that case. 141 Cong. Rec. H8469 (daily ed. Aug. 4, 1995) (statement of Rep. Cox). The provision's sponsors summarized both the Cubby and Stratton [Oakmont] decisions, and then repeatedly discussed the need to overrule Stratton [Oakmont], without again mentioning Cubby. See [141 Cong.Rec. H8469 (daily ed. Aug. 4, 1995) (statements of Rep. Cox and Rep. Wyden]; see also 141 Cong.Rec. S8345 (daily ed. June 14, 1995) (statements of Sen. Coats) (distinguishing between publisher and distributor liability and noting that the [CDA] was not intended to hold intermediaries to publisher liability). (Freiwald, Comparative Institutional Analysis in Cyberspace: The Case of Intermediary Liability for Defamation (2001) 14 Harv. J.L. & Tech. 569, 632, fn. 259 (hereafter Freiwald).) From these sources, the Court of Appeal discerned a congressional intent to preserve distributor liability. It cited several academic commentators for the view that immunizing Internet service providers from distributor liability would actually frustrate the objective of self-regulation, because no liability would flow from failing to screen for defamatory content. (McManus, Rethinking Defamation Liability for Internet Service Providers (2001) 35 Suffolk U. L.Rev. 647, 668 (hereafter McManus); Patel, Immunizing Internet Service Providers From Third Party Internet Defamation Claims: How Far Should Courts Go? (2002) 55 Vand. L.Rev. 647, 684; see also Sheridan, supra, 61 Alb. L.Rev. at pp. 169-170.) The Court of Appeal and the commentators on which it relied read too much into the legislative record. We note that the comments of Senator Coats, summarized by Professor Freiwald as quoted above, pertained not to section 230 but to a separate provision of the CDA, codified at 47 United States Code section 223(f)(4). (141 Cong.Rec. S8328, S8345 (daily ed. June 14, 1995).) The comments of Representative Cox, a sponsor of section 230, are pertinent but do not indicate that distributors were meant to be excluded from statutory protection. [14] Representative Cox said section 230 was intended to encourage people like ... CompuServe ... by ... protect[ing] them from taking on liability such as occurred in the [ Stratton Oakmont ] case in New York that they should not face for helping us [ ] solve this problem. (141 Cong. Rec. H8470 (daily ed. Aug. 4, 1995).) Thus, he meant that distributors like CompuServe would be protected from rather than threatened with liability, to encourage responsible screening of the content provided on their services. Under the Court of Appeal's interpretation of section 230, a distributor could be sued if it deleted material after receiving notice of offensive content, but did not act quickly or thoroughly enough to suit the offended party. Primary publishers who decide not to remove offensive postings would be immunized, while distributors making the same decision would be unprotected. It is unlikely that Congress intended such incongruous results. Both the terms of section 230(c)(1) and the comments of Representative Cox reflect the intent to promote active screening by service providers of online content provided by others. Congress implemented its intent not by maintaining the common law distinction between publishers and distributors, but by broadly shielding all providers from liability for publishing information received from third parties. [15] Congress contemplated self-regulation, rather than regulation compelled at the sword point of tort liability. It chose to protect even the most active Internet publishers, those who take an aggressive role in republishing third party content. It would be anomalous to hold less active distributors liable upon notice. Thus, the immunity conferred by section 230 applies even when self-regulation is unsuccessful, or completely unattempted. ( Blumenthal v. Drudge, supra, 992 F.Supp. at p. 52; Schneider v. Amazon.com, Inc., supra, 31 P.3d at p. 43; Donato v. Moldow, supra, 865 A.2d at p. 726.) As Rosenthal and amici curiae point out, subsequent legislative history contains explicit support for the Zeran court's interpretation. In 2002, Congress enacted the Dot Kids Implementation and Efficiency Act. [16] A House committee report notes that the purpose of this legislation was to facilitate the creation of a new, second-level Internet domain within the United States country code domain that will be a haven for material that promotes positive experiences for children and families using the Internet. (H.R. Rep. 107-449 (2002) p. 5), U.S.Code Cong. & Admin.News 2002, p. 1741 The legislation includes a provision that the new registry it created, and related entities, are deemed to be interactive computer services for purposes of section 230(c) of the Communications Act of 1934 (47 U.S.C. 230(c)). (47 U.S.C. § 941(e)(1).) The committee report explains that this provision was intended to shield the `.kids.us' registry, registrars, and parties who contract with the registry, from liability based on self-policing efforts to intercept and take down material that is not `suitable for minors' or is `harmful to minors.' The Committee notes that ISPs [Internet service providers] have successfully defended many lawsuits using section 230(c). The courts have correctly interpreted section 230(c), which was aimed at protecting against liability for such claims as negligence[.] (See, e.g., Doe v. America Online, 783 So.2d 1010 (Fla.2001)) and defamation ( Ben Ezra, Weinstein, and Co. v. America Online, 206 F.3d 980 (2000); Zeran v. America Online, 129 F.3d 327 (1997)). The Committee intends these interpretations of section 230(c) to be equally applicable to those entities covered by H.R. 3833. [17] (H.R.Rep.107-449, p. 13, U.S.Code Cong. & Admin.News 2002, p. 1749)
The Zeran court identified three deleterious effects that would flow from reading section 230 to permit liability upon notice. First, service providers who received notification of a defamatory message would be subject to liability only for maintaining the message, not for removing it. This fact, together with the burdens involved in evaluating the defamatory character of a great number of protested messages, would provide a natural incentive to simply remove messages upon notification, chilling the freedom of Internet speech. Second, notice-based liability would deter service providers from actively screening the content of material posted on its service, because discovering potentially defamatory material would only increase the provider's liability. Finally, notice-based liability would give third parties a cost-free means of manufacturing claims, imposing on providers ceaseless choices of suppressing controversial speech or sustaining prohibitive liability. ( Zeran, supra, 129 F.3d at p. 333.) The Court of Appeal expressed doubt that a statute encouraging service providers to restrict access to offensive material was intended to promote free speech over the Internet. It also questioned the speculative conclusion that notice-based liability would significantly chill online speech, though it refrained from taking a definitive position on this point. Noting the absence of any evidence in the record regarding the burdens such liability would create, the Court of Appeal referred to the views of commentators critical of Zeran as a way to explore the contours of the debate without attempting its resolution. (See Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1363, 1 Cal.Rptr.3d 32, 71 P.3d 296.) Some critics have suggested that market forces would restrain service providers from removing postings without investigation, because any provider engaging in that practice would acquire a bad reputation in the Internet community. (Sheridan, supra, 61 Alb. L.Rev. at pp. 176; Freiwald, supra, 14 Harv. J.L. & Tech. at p. 622; Butler, Plotting the Return of an Ancient Tort to Cyberspace: Towards a New Federal Standard of Responsibility for Defamation for Internet Service Providers (1999-2000) 6 Mich. Telecomm. & Tech.L.Rev. 247, 264.) It has also been argued that the difficulty of prevailing on a defamation claim would attenuate the burden of notice-based liability on providers. Moreover, because distributor liability would only arise upon notice, and would not require service providers to review postings in advance, defamation damages would be limited to those accruing after the provider became aware of the defamatory character of a message. (Sheridan, supra, 61 Alb. L.Rev. at p. 173.) Citing McManus, supra, 35 Suffolk U. L.Rev. at page 661, the Court of Appeal asserted that Zeran has been criticized for failing to account for the many different ways defamation may be transmitted over the Internet, and the different levels of control an Internet intermediary may exercise over the content of messages. Most fundamentally, however, the Court of Appeal noted that critics have condemned Zeran for giving insufficient consideration to the interests of defamation victims. American courts have striven to develop rules that balance the legitimate protections of defamation liability with the constitutional right to free speech. The Court of Appeal resisted the notion that a blanket immunity derived from section 230(c)(1) should disturb that balance. It concluded that preserving distributor liability was consistent with the immunity provisions of section 230. The Court of Appeal gave insufficient consideration to the burden its rule would impose on Internet speech. It is inaccurate to suggest that Congress was indifferent to free speech protection when it enacted section 230. The statute includes findings welcoming the extraordinary advance in the availability of educational and informational resources on the Internet, and applauding the Internet as a forum for a true diversity of political discourse that offers myriad avenues for intellectual activity and provides a variety of political, educational, cultural, and entertainment services. (§ 230(a)(1), (3), & (5).) Congress sought to promote the continued development of the Internet and other interactive computer services. (§ 230(b)(1).) The provisions of section 230(c)(1), conferring broad immunity on Internet intermediaries, are themselves a strong demonstration of legislative commitment to the value of maintaining a free market for online expression. The fact that Congress also meant to restrict access to certain Internet content does not compel a contrary conclusion. As the court aptly observed in Batzel v. Smith, supra, 333 F.3d 1018: [T]here is an apparent tension between Congress's goals of promoting free speech while at the same time giving parents the tools to limit the material their children can access over the Internet. As a result of this apparent tension, some commentators have suggested that the Fourth Circuit in Zeran imposed ... First Amendment goals on legislation that was actually adopted for the speech-restrictive purpose of controlling the dissemination of content over the Internet. [Citation.] These critics fail to recognize that laws often have more than one goal in mind, and that it is not uncommon for these purposes to look in opposite directions. The need to balance competing values is a primary impetus for enacting legislation. Tension within statutes is often not a defect but an indication that the legislature was doing its job. ( Id. at p. 1028; see also Carafano v. Metrosplash.com, Inc., supra, 339 F.3d at pp. 1122-1123.) We agree with the Zeran court, and others considering the question, that subjecting Internet service providers and users to defamation liability would tend to chill online speech. (See Carafano v. Metrosplash.com, Inc., supra, 339 F.3d at pp. 1123-1124; Batzel v. Smith, supra, 333 F.3d at pp. 1027-1028; Noah v. AOL Time Warner, Inc. (E.D.Va.2003) 261 F.Supp.2d 532, 538; Blumenthal v. Drudge, supra, 992 F.Supp. at p. 52; Donato v. Moldow, supra, 865 A.2d at p. 726.) Certainly, that conclusion is no more speculative than the surmise that market forces might deter providers from removing postings without investigating their defamatory character. We reject the argument that the difficulty of prevailing on a defamation claim mitigates the deterrent effect of potential liability. Defamation law is complex, requiring consideration of multiple factors. These include whether the statement at issue is true or false, factual or figurative, privileged or unprivileged, whether the matter is of public or private concern, and whether the plaintiff is a public or private figure. (See 5 Witkin, Summary of Cal. Law (9th ed. 1988) Torts, §§ 529, 556 et seq., pp. 782, 814 et seq.) Any investigation of a potentially defamatory Internet posting is thus a daunting and expensive challenge. For that reason, we have observed that even when a defamation claim is clearly nonmeritorious, the threat of liability ultimately chills the free exercise of expression. ( Baker v. Los Angeles Herald Examiner (1986) 42 Cal.3d 254, 268, 228 Cal.Rptr. 206, 721 P.2d 87; see also Time, Inc. v. Hill (1967) 385 U.S. 374, 389, 87 S.Ct. 534, 17 L.Ed.2d 456.) Nor are we convinced by the observation that a distributor faces no liability without notice. Distributors are liable not merely upon receiving notice from a third party, but also if they independently knew or had reason to know of the defamatory statement. ( Osmond v. EWAP, Inc., supra, 153 Cal.App.3d 842, 854, 200 Cal.Rptr. 674; Prosser & Keeton, The Law of Torts, supra, § 113, pp. 811; Rest.2d Torts, § 581, subd. (1).) Thus, as the Zeran court pointed out, this aspect of distributor liability would discourage active monitoring of Internet postings. ( Zeran, supra, 129 F.3d at p. 333.) It could also motivate providers to insulate themselves from receiving complaints. Such responses would frustrate the goal of self-regulation. The third practical implication noted in Zeran is no less compelling, and went unaddressed by the Court of Appeal. Notice-based liability for service providers would allow complaining parties to impose substantial burdens on the freedom of Internet speech by lodging complaints whenever they were displeased by an online posting. ( Zeran, supra, 129 F.3d at p. 333.) The volume and range of Internet communications make the heckler's veto a real threat under the Court of Appeal's holding. The United States Supreme Court has cautioned against reading the CDA to confer such a broad power of censorship on those offended by Internet speech. ( Reno v. American Civil Liberties Union, supra, 521 U.S. at p. 880, 117 S.Ct. 2329.) The great variety of Internet publications, and the different levels of content control that may be exercised by service providers and users, do not undermine the conclusion that Congress intended to create a blanket immunity from tort liability for online republication of third party content. Requiring providers, users, and courts to account for the nuances of common law defamation, and all the various ways they might play out in the Internet environment, is a Herculean assignment that we are reluctant to impose. We conclude the Zeran court accurately diagnosed the problems that would attend notice-based liability for service providers. Finally, we cannot ignore another practical implication raised by Rosenthal and amicus curiae eBay Inc. Adopting a rule of liability under section 230 that diverges from the rule announced, in Zeran and followed in all other jurisdictions would be an open invitation to forum shopping by defamation plaintiffs. (Cf. Webb v. Superior Court (1990) 225 Cal.App.3d 990, 1000, 275 Cal.Rptr. 581.) This consideration provides strong justification for following the approach we endorsed in Etcheverry v. Tri-Ag Service, Inc. (2000) 22 Cal.4th 316, 320-321, 93 Cal.Rptr.2d 36, 993 P.2d 366: While we are not bound by decisions of the lower federal courts, even on federal questions, they are persuasive and entitled to great weight. [Citation.] Where lower federal precedents are divided or lacking, state courts must necessarily make an independent determination of federal law [citation], but where the decisions of the lower federal courts on a federal question are `both numerous and consistent,' we should hesitate to reject their authority [citation]. [18]