Stock Trading Message Board Protected by 47 USC 230–Deer Consumer Products v. Little

By Eric Goldman

Deer Consumer Products v. Little, Index No. 650823/11 (NY Sup. Ct. Aug. 31, 2011)

SeekingAlpha is a message board for stock traders. This is their second appearance on the blog. In Desai v. Clark, a SeekingAlpha author brought a defamation suit against the author of disparaging comments to his post. That lawsuit ended quickly with a motion to dismiss.

This case involves several third party-authored reports on SeekingAlpha discussing the business practices of Deer Consumer Products, a Chinese manufacturer of small home appliances. Deer sued both an author and SeekingAlpha, alleging defamation. Because the claims relate to third party-authored posts, SeekingAlpha is obviously not liable under 47 USC 230.

Deer mounted a lackluster attempt to work around 230’s immunity. The court discussed allegations that SeekingAlpha pre-reviews and “handpicks” third party posts for publication, but those facts push towards the immunity, not away from it. The court continues that “plaintiff failed to submit any evidence or allegation indicating that SAL is anything other than a publisher of third party content on its website. Plaintiff’s own submissions show that SAL selects, edits, and organizes the articles written by others….There is simply no allegation that SAL created or developed the alleged defamatory statements and ideas contained in the defamatory report.” Further, the court says there’s no need for discovery to figure out the relationships between SeekingAlpha and its authors, and thus the court dismisses without leave to amend.

Other New York state court rulings that have interpreted 47 USC 230 broadly include Shiamili v. Real Estate Group, Reit v. Yelp and Finkel v. Facebook.

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