Troubling Ruling About 47 USC 230 and Moderators–Cornelius v. DeLuca

By Eric Goldman

Cornelius v. DeLuca, 2010 WL 1709928 (D. Idaho April 26, 2010)

I blogged about this case last year. In that post, I described the situation:

DeLuca runs bodybuilding.com, a fitness website and online retailer. The plaintiffs sell dietary supplements (“syntrax,” whatever that is). The plaintiffs allege that their competitors posted shill reviews to bodybuilding.com designed to harm the plaintiffs’ business. The plaintiffs sued both bodybuilding.com and the putative shillers.

In the previous ruling, a Missouri judge dismissed without prejudice a civil conspiracy claim against bodybuilding.com per 47 USC 230. Since then, the case has been transferred to Idaho, and the plaintiffs have launched another foray against bodybuilding.com, alleging that bodybuilding.com is derivatively liable for a Lanham Act false advertising claim. The court sidesteps a number of interesting questions, such as how 230 interacts with a Lanham Act false advertising claim, to what extent Lanham Act false advertising claims support derivative liability, and how a derivative claim interacts with the printer/publisher defenses in the Lanham Act. Instead, the court reaches two conclusions in response to bodybuilding.com’s 12(b)(6) motion to dismiss:

1) Even though bodybuilding.com uses third party moderators, bodybuilding.com is not liable for every posting made on the site. This is a correct ruling and fully consistent with 230’s immunization of the editorial function.

2) However, allegations that a moderator posted one of the offending messages survives a 12(b)(6) motion to dismiss based on the allegations that the moderator was a representative of the site and posted the message within the scope of the representation.

My hope is that the court will see the error of conclusion #2 on summary judgment. There are a number of cases that have rejected this agency-style argument as a workaround to 230, including the cases I cited in the last post:

* Joyner v. Lazzareschi: conspiracy argued but not alleged

* Higher Balance v. Quantum Future Group: no “alter ego” liability

* Cisneros v. Yahoo: no “aiding and abetting” liability. Accord: Goddard v. Google

* Best Western v. Furber: no liability for co-website operator activities

More recently, Novins v. Cannon says that there can be only 1 online defamation defendant per case. I also note the questionable Delfino v. Agilent case, where the court found the employer had a 230 defense for its employee’s rogue actions.

Should conclusion #2 be followed by other courts (a doubtful proposition), it puts further legal pressure on websites relying on third party moderators. I have already raised this concern in my post on the uncited Columbia v. Fung case, which had some gratuitous language about site admins and moderators that is consistent with this case. I wrote:

The court also attributes the statements of site admins and moderators to the defendants, such as the admins’ technical support to people looking for or downloading copyrighted works. This part of the opinion was especially troublesome. Generally, UGC site moderators are unquestionably independent contractors, not agents, so the website isn’t automatically liable for their statements and actions. Here, the court finds an “apparent agency” relationship between the admins and moderators because “Defendants assign this status and give these individuals authority to moderate the forums and user discussions. These individuals were under the control of Defendants and assigned duties related to the administration of the web forums.” I believe this is a bad ruling, both normatively and doctrinally (see contrary discussion in, e.g., the Furber and Higher Balance cases in the 230 context). I could see UGC sites deciding to crack down or even eliminate non-employee moderators based on the agency exposure suggested by this opinion.

I am hoping these two rulings are outliers that other courts won’t follow. I really can’t imagine Web 2.0 succeeding without a robust cadre of site admins and moderators helping self-police an online community.

The rest of the opinion is filled with interesting nuggets too. For example, there is an interesting discussion about the (non-existent) statute of limitations in Lanham Act cases. Regarding the posters’ direct liability for their allegedly shill posts, Rebecca recaps the discussion. The short story is that the court concluded many of the posts were non-actionable puffery. In her own unique way, she explains why the discussion about the commerciality of the allegedly shill posts may be “not just odd and marginal, it is bizarrely wrong.”

My favorite part of the opinion was the court’s straight-faced discussion about whether calling someone a “Cornholio” is defamatory. Believe it or not, this is not the first opinion in Westlaw to use the term “Cornholio”–that “honor” is reserved for State v. Lane, 2006 WL 687949 (Ohio App. Ct. March 17, 2006), which described a person as walking with his shirt over his head, “Cornholio style.” This court says:

Calling Cornelius “Cornholio” is not a statement of fact. Cornholio is the alter-ego of a cartoon character, Beavis, from “Beavis and Butt-Head.” See Beavis, in Wikipedia, the Free Encyclopedia, http://en.wikipedia.org/wiki/Beavis, last visited on April 8, 2010 FN6. While being compared to Cornholio is not flattering, it is not a “specific and measurable claim.” Nor can it be reasonably interpreted as a statement of objective fact.

In FN6, the court admits to being embarrassed to having to cite the Wikipedia entry: “The Court does not encourage citations to Wikipedia. However, in rare circumstances, citation to a pop-culture encyclopedia is necessary in order to explain a pop-culture character.” In fact, the Wikipedia cite looks significantly better than the Urban Dictionary, the only other marginally credible cite I could see in the first page of my Google results.

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