Internet Library of Law
and Court Decisions

Stratton Oakmont, Inc. et al. v. Prodigy Services Company, et al

The plaintiffs alleged that defamatory statements had been posted by a third party on a bulletin board maintained on Prodigy. The plaintiffs sought to have Prodigy's liability tested by the standards applicable to publishers of information, as opposed to distributors. The significance of this differential was explained by the court: "one who repeats or otherwise republishes a libel is subject to liability as if he had originally published it. In contrast, distributors such as book stores and libraries may be liable for defamatory statements of others only if they knew or had reason to know of the defamatory statement at issue. A distributor, or deliverer of defamatory material is considered a passive conduit and will not be found liable in the absence of fault." The court concluded that Prodigy, based on the manner in which it had in the past conducted its business operations, was a publisher and not a distributor for defamation purposes. The court, in reaching this conclusion, relied on a number of factors, including: 1) Public pronouncements by Prodigy that it was different from other services because it exercised efforts to control the content of what was published on its bulletin boards; 2) Prodigy's promulgation of content guidelines; 3) Prodigy's use of software screening programs to automatically prescreen bulletin boards for certain offensive language; and 4) Retention of Board Leaders to enforce the content guidelines with respect to particular bulletin boards. By attempting to exercise such editorial control over the content of its bulletin boards, (even though such attempts were by no means comprehensive or covering all messages posted to bulletin boards), the court held that Prodigy was subject to liability as a publisher, rather than a distributor. The decision recites that Prodigy contends that it changed its method of operation sometime after 1993.

The full text of this decision can be found on a website maintained by the John Marshall Law School.