August 09, 2006
Whitney Information v. Xcentric Update
By Eric Goldman
Whitney Information Network v. Xcentric Ventures, 2006 WL 2243041 (11th Cir. Aug 1, 2006)
I previously blogged on this case, where the operators of ripoffreport.com and ripoffrevenge.com won a 230 defense in district court. However, the judge gave the plaintiffs an opportunity to amend their complaint, which they did to allege, in essence, that the website operators wrote various product reviews rather than posting third party reviews. The defendants then moved to dismiss for lack of jurisdiction based in part on an affidavit from the defendants that they didn't write the reviews. Normally this affidavit would be irrelevant at the motion to dismiss stage, but instead under applicable law, the affidavit prompted a weird and complicated burden-shifting analysis. Based on this, the district court granted the motion to dismiss on jurisdictional grounds.
In this ruling, the appeals court reversed the district court's granting of the motion to dismiss on jurisdictional grounds. There is some substantive discussion about 47 USC 230 along the way, but the only item of note is that the 11th circuit, reinforcing its dicta from its recent ruling in Almeida v. Amazon case, appears to be laboring under the erroneous assumption that editing third party content would preclude eligibility for the 230 immunization.
There are still other grounds why jurisdiction may be infirm, so this ruling does not mean that the case will advance substantively in this circuit. However, the 11th circuit is in desperate and urgent need of a tutorial on 47 USC 230!
Posted by Eric at August 9, 2006 09:30 AM | Derivative Liability
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you wrote, " the 11th circuit... appears to be laboring under the erroneous assumption that editing third party content would preclude eligibility for the 230 immunization." Your comment seems to suggest that under no circumstances could the editing of third party content remove the sec. 230 immunity. I don't think the court said that editing third party content would necessarily preclude eligibility for 230 immunization. I think what the court observed is that the evidence proffered by the defense failed to establish (sufficiently to warrant dismissal) that third parties authored the content. Website operators who edit content in such a fashion that defamation is the forseeable result should not be immune under the CDA. The CDA should not be interpreted in such a fashion as to permit it to be used as a weapon rather than a shield. Before you offer the 11th Circuit a tutorial on the CDA, you may want to reconsider. What possible motive could Magedson and Xcentric have for editing rip-off reports to make them appear more eggregious than those originally authored by the third party? He sells testimonials on the same website. When businesses call to complain about false claims and outright lies on the site, the reports magically increase in number and in the salacious and damaging nature of their content, in order to support the website owner's demand for huge fees for "remediation". Should the CDA immunize extortion?
Posted by: chris mcfarland at August 9, 2006 11:44 AM
Some of this involves factual disputes, which generally should be irrelevant at the motion to dismiss stage. My only point is that a website's editing of third party content--even if extensive--is still immunized by 230. After all, editing is exactly what a "publisher" does. However, 230 doesn't protect content authored solely by the website operator itself. This is not a bright-line distinction, but conflating the two is incorrect. Eric.
Posted by: Eric Goldman at August 9, 2006 01:13 PM
I read this opinion and I didn't think the court was as wrong-headed about Section 230 as Prof. Goldman suggests. The plaintiff is alleging that the Web site operators added inflammatory words to third-party postings -- words like "ripoff," "dishonest," and "scam." The site operators didn't directly controvert this claim in their affidavit. Can't a fair argument be made that the site operators crossed the line separating protected "editing" of postings and unprotected authoring? Section 230 doesn't provide immunity for parties that are even partially responsible for the creation and development of online content. Isn't that what happened here?
Posted by: Thomas O'Toole at August 10, 2006 08:15 AM
Tom writes: "Section 230 doesn't provide immunity for parties that are even partially responsible for the creation and development of online content." I disagree with this statement. 230 absolutely immunizes providers even if they have some partial responsibility--the immunization applies so long as any third party had partial responsibility for the content. The statutory language is very clear, but also counter-intuitive, which is causing the courts to misread the statute. Eric.
Posted by: Eric Goldman at August 19, 2006 09:55 AM
Eric, I agree that much of this is fact intensive, but let me ask you your opinion based on a hypothetical. What if the partial author/publisher wrote only the defamatory and salacious part of what was published?
Under your interpretation of 230, anyone who publishes a third party's content can add whatever additional false and salacious content they may choose, with absolute immunity from defamation claims. This is more than simply counter-intuitive. This seems like an absurd result, IMHO. What possible reason could Congress have had for intending this horrific result? Don't principles of statutory construction require courts to find that another, non-absurd, interpretation was intended by Congress?
Say a third party claims that XYZ company has poor customer service, but the publisher/partial author then falsely adds to the report that the owner of XYZ company is a pedophile. Is there absolute immunity for the publisher?
How about if I write to the publisher/partial author to say what a great resource your website is, but then the publisher/partial author falsely adds that you have been arrested numerous times for child pornography? Would that change your view of absolute immunity? How about if he brings your family members into it, by phoning to draw their attention to these lies and to intimidate them in an effort to get you to pay him money? Should he have absolute immunity from claims based on the false content he, himself, authored? If not, how do you square this with your suggested interpretation of 230? Is it just a poorly written law that doesn't say what it means, or is there some public policy that is fostered by giving creeps like this a get out of jail free card?
Posted by: chris mcfarland at September 5, 2006 11:14 AM
Chris, sorry if my earlier post was unclear. If X writes A and putative ICS Y appends B to A, Y is the sole ICP of B and fully responsible for B--230 provides no cover for B. But if Y edits A, X is still the ICP of A and Y should not be liable for it. Naturally, at some point Y's editing of A may change the meaning of A; at that point, Y may no longer be protected by 230 for the changed meaning. Eric.
Posted by: Eric Goldman at September 6, 2006 11:02 AM