Designer Skin LLC v. S & L Vitamins, Inc., et al.
Stephen J. Barrett, et al. v. Ilena Rosenthal
9 Cal.Rpt.3d 142, A096451 (Cal. App. Crt., 1st App. Dist., October 15, 2003) reversed 40 Cal.4th 33, S 122953 (Cal. Sup. Ct., November 20, 2006)
Rejecting Zeran v. America Online, (4th Cir. 1997) and its progeny, an intermediate California Appellate court holds that the Communications Decency Act ("CDA") does not immunize a user of interactive computer services from a defamation claim arising out of her republication of statements authored by a third party, when the user knew or had reason to know of the falsity of those statements. As a result, the Appellate Court reversed to much of the decision of the trial court below which had dismissed a defamation claim brought against defendant Ilena Rosenthal as a result of her republication in Usenet postings of a statement authored by a third party (defendant Timothy Bolen) which accused plaintiff Polevoy of criminal conduct.
The trial court had also rested its dismissal under California's Anti-SLAPP statute of plaintiffs' defamation claims on its determination that Polevoy lacked the requisite probability of success because, as a public figure, he could not prove that defendant Rosenthal acted with 'malice' when republishing Bolen's statements. The Appellate court rejected this determination, holding that plaintiff may be able to establish that Rosenthal acted with the required malice, and therefore could proceed, notwithstanding Rosenthal's allegation that she had checked the veracity of the statements she was republishing with the alleged victim. The Appellate Court held that such was insufficient to require dismissal of plaintiff's complaint, because of the alleged bias of both the victim and the original author of the posting against the plaintiff.
The Appellate Court did affirm the lower court's dismissal of defamation claims advanced by plaintiff Barrett, because the statements at issue were non-actionable opinion, as well as the trial court's decision to award Rosenthal attorney's fees expended in pursuing her Anti-SLAPP motion to dismiss (though reducing the recoverable amounts to reflect the reversal of that court's decision as to the claims asserted by Polevoy).
This decision, if followed, could have important ramifications for internet service providers and others who regularly repost publications authored by third parties without reviewing their content. Under the court's ruling, service providers can be liable for defamation as a result of their republication of such statements if they know or have reason to know of the falsity of those statements. According to the court "distributor liability would [generally] not require a service provider to review communications in advance of posting them but only to act reasonably after being put on notice that the communication is defamatory." As a result, once the service provider receives notice (from the allegedly defamed individual) of falsity, it must either undertake adequate steps to ascertain the veracity of the statement, remove it, or face potential liability. This creates tremendous uncertainty as the court did not specify what such adequate steps would be. Indeed, as noted above, in the case at bar, where plaintiff alleged he was defamed by a statement that he had engaged in criminal conduct, the court held that contacting the victim was not sufficient as a matter of law to warrant dismissal of plaintiff's suit because of the victim's purported bias against plaintiff Polevoy. Subsequent developments in this case should be watched closely by those interested in this field.
Plaintiffs Stephen Barrett ("Barrett") and Terry Polevoy ("Polevoy") "are physicians primarily engaged in combating the promotion and use of 'alternative' or 'nonstandard' healthcare practices and products." Each plaintiff "maintains websites that expose 'health frauds and quackery.'" Defendant Ilena Rosenthal ("Rosenthal") "directs the Humantics Foundation for Women."
Plaintiffs asserted libel claims against Defendant Rosenthal as a result of a series of postings she made to various Usenet and Internet newsgroups. The most significant of these was a posting Rosenthal made on August 14, 2000. In this posting, Rosenthal redistributed e-mail she received from another defendant, Timothy Bolen, which accused Dr. Polevoy of "stalking women." The e-mail claimed that "Polevoy stalked Christine McPhee, a … radio personality whose program in support of 'alternative medicine' he disliked." The e-mail went on to urge readers to file complaints with government officials, media organizations and regulatory agencies "bringing this and other unspecified 'criminal conduct'" to their attention.
Shortly thereafter, plaintiffs informed Rosethal that Bolen's message was defamatory, and asked that her posting be withdrawn. Plaintiffs threatened suit if the posting was not withdrawn. Rosenthal refused, and instead, posted additional messages describing plaintiffs' threat and republishing Bolen's e-mail. These messages also referred to plaintiffs as "quacks." Rosenthal also allegedly made several additional unflattering posts about plaintiffs.
Rosenthal moved under California's Anti-SLAPP statute to dismiss the claims asserted against her, claiming this was a "strategic lawsuit against public participation." The trial court agreed, and found that plaintiffs lacked the requisite probability of success on their claims to be permitted to go forward. For the reasons set forth below, the Appellate Court reversed in part and affirmed in part, allowing plaintiff Polevoy to pursue claims arising out of Rosenthal's republication of Bolen's e-mail, and otherwise affirming the dismissal of plaintiffs' claims against Rosenthal.
Under California's Anti-SLAPP suit, "a cause of action against a person arising from any act in furtherance of the person's right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim." Qualifying acts in furtherance of a person's right of free speech include "any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest."
The trial court held that Rosenthal's postings in a Usenet group constituted such a qualifying act, because their subject - the validity or invalidity of alternative medicine - was a matter of public interest, and because the statements were made in a public forum. The Appellate Court agreed, holding that:
Because plaintiffs' suit arose out of acts protected by California's Anti-SLAPP statute, plaintiffs were obligated to establish a probability that they would prevail to be permitted to proceed with their claims.
The trial court held that plaintiffs could not make the requisite showing because Rosenthal was immune from plaintiffs' defamation claim by operation of the Communications Decency Act. The Appellate Court disagreed, holding instead that the CDA did not grant Rosenthal immunity from her acts as a 'distributor' of third party content. According to the Appellate Court, under the common law, those who publicize another's libel may be treated as primary publishers, conduits or distributors. "Because they cooperate actively in the publication, primary publishers … are generally held to a strict standard of liability comparable to that of authors. Conduits, which lack the ability to screen and control defamatory speech … are ordinarily immune from liability. … Distributors (sometimes known as 'secondary publishers') … are subject to an intermediate standard of responsibility and may only be held liable as publishers if they know or have reason to know of the defamatory nature of matter they disseminate."
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."
Following Zeran v. America Online, (4th Cir. 1997) 129 F.3d 327, cert. denied (1998) 524 US 937 and its progeny, the trial court held that the CDA immunized Rosenthal, as a user of an interactive computer service, from liability for a defamation claim arising out of her republication of statements authored by defendant Bolen.
The Appellate Court recognized that under the CDA as interpreted by the Fourth Circuit in Zeran, Rosenthal would indeed be immune from suit. Said the Appellate Court:
However, the Appellate Court "decline[d] to accept Zeran's construction of the" CDA, holding instead that "the statute cannot be deemed to abrogate the common law principle that one who republishes defamatory matter originated by a third person is subject to liability if he or she knows or has reason to know its defamatory character."
In reaching this result, the Court relied on the principle that "where there is a limitation by statute which is capable of more than one construction, the statute must be given that construction which is consistent with common law."
The court found such ambiguity in the CDA's grant of immunity to users acting "as the publisher or speaker of information …". While that phrase could encompass common law distributor liability, especially because "distributors are sometimes referred to as 'secondary publishers,'" it might signal just the opposite intention, due to Congress' failure to expressly include the word distributor within the statute. ("If [Congress] intended Section 230 to immunize providers and users not merely from primary publisher liability but also from distributor liability it would have made this clear, as, for example, by adding the word 'distributor.'").
This ambiguity, coupled with the legislative history of the CDA, led the Court to conclude that the statute was not intended to immunize users from distributor liability, or abrogate the common law liability normally imposed on them. Said the Appellate Court:
In reaching this result, the Court ignored:
As the foregoing illustrates, the Zeran court's decision to extend the CDA's grant of immunity to distributor liability was supported by its belief that failing to do so would result in extensive restriction of online speech, as service providers reacted to claims of defamation by removing the allegedly offensive posting rather than risking liability therefor.
This, however, was not enough to sway the California Appellate court, which held that the record before it was insufficient to permit a determination as to whether Zeran's fear would become a reality. Said the Court:
The Appellate Court also rejected the trial court's determination that Polevoy could not proceed with his defamation claim because he could not prove that Rosenthal acted with the requisite malice.
Because plaintiffs were "limited purpose public figures" plaintiffs had to prove by clear and convincing evidence that Rosenthal republished Bolen's statements with malice to be able to pursue their defamation claims. To establish such malice, plaintiffs must show that defendant knowingly published a falsehood, or published a statement in reckless disregard of its truth. The latter standard is based on the defendant's actual state of mind, as opposed to that of a reasonable man.
The Appellate court concluded:
As a result, the court concluded that plaintiff could make the requisite showing that defendant acted with actionable malice. That Rosenthal "made an independent inquiry into the truth of Bolen's statements about Polevoy by calling Christine McPhee, who confirmed the charge that Polevoy's stalking of her was 'criminal conduct' requiring police intervention" did not mandate a contrary result. According to the Court, because "Rosenthal was aware that McPhee's radio show had been removed from the air as a result of complaints from Polevoy and others" she had "as much reason to question McPhee's objectivity and veracity as that of Bolen" and therefor, at this stage of the proceeding at least, could not obtain a dismissal based on such contact.
As a result, the Appellate Court reversed so much of the decision of the trial court which had dismissed plaintiff's defamation claim arising out of the republication of Bolen's message.
The Court did affirm both the dismissal of plaintiff Barrett's claims, finding the statements in question to be non-actionable statements of opinion, as well as so much of the lower court's decision that awarded defendant attorney's fees for prevailing on her Anti-SLAPP motion to dismiss. The court did, however, direct that those fees be reduced to reflect its ruling permitting Polevoy to proceed with his claim as outlined above.