Another Tough Section 230 Ruling For Ripoff Report–Vision Security v. Xcentric
The court doesn’t use terms like principal-agent to describe the Magedson/Meade relationship, but this ruling seems to head in that direction. The allegedly unusually close relationship between website and third party content submitter helps distinguish this from most Section 230 cases we see. It probably also distinguishes it from the more traditional user submissions where Ripoff Report relies upon Section 230.
A more recent ruling is way more troubling because it’s a direct hit on Section 230’s immunity. The ruling comes in response to Ripoff Report’s request for reconsideration of a September 11, 2014 ruling that I didn’t blog. This reconsideration opinion is unstinting in its hostility towards Section 230. My apologies for the long blockquote, but I think you’ll want to see the entire discussion (some citations omitted):
The controlling authority for the interpretation of the CDA in the Tenth Circuit is FTC v. Accusearch Inc., 570 F.3d 1187 (10th Cir. 2009). Notwithstanding Xcentric’s claim that the Tenth Circuit was haphazard in its language, the Court stated: “We therefore conclude that a service provider is ‘responsible’ for the development of offensive content only if it in some way specifically encourages development of what is offensive about the content.” 570 F.3d at 1199. The Court then reaffirmed its interpretation of the CDA by distinguishing Ben Ezra Weinstein & Co. v. America Online Inc., 206 F.3d 980 (10th Cir. 2000), that “America Online had done nothing to encourage what made the content offensive—its alleged inaccuracy.” 570 F.3d at 1199. Under the CDA, a service provider is immune, among other requirements that are not at issue here, if it was “responsible, in whole or in part, for the . . . development of the offending content.” 570 F.3d at 1198 (citing Fair Hous. Council of San Fernando Valley v. Roommates.com, LLC, 521 F.3d 1157 (9th Cir. 2008)). To be held responsible under this requirement, the service provider “must be more than a neutral conduit for that content. That is, one is not ‘responsible’ for the development of the offensive content if one’s conduct was neutral with respect to the offensiveness of the content (as would be the case with a typical Internet bulletin board).” 570 F.3d at 1199. Under this analysis, a service provider is not neutral if it “specifically encourages development of what is offensive about the content.” Id. Xcentric argues that drawing all inferences in favor of Vision Security, it must be found to have been a neutral publisher. The facts as alleged, however, support a contrary conclusion.
Applying the Iqbal standard, the court must give weight to the following allegations: Xcentric maintains the “Ripoff Report” website with a tag line, “By Consumers, for consumers” and “Don’t let them get away with it. Let the truth be known.” Contrary to the stated tag line, the Ripoff Report allows competitors, not just consumers, to post comments. The Ripoff Report home page states: “Complaints Reviews Scams Lawsuits Frauds Reported, File your review. Consumers educating consumers.” These allegations allow a reasonable inference that the Ripoff Report encourages negative content.
Vision Security alleges further that the Ripoff Report published offensive content, which the author later told the Ripoff Report was false and requested that it be removed. Xcentric’s webmaster told Vision Security that positive posts about a company are not allowed and that under no circumstances will the Ripoff Report remove postings. But Xcentric offers, for a large fee, its corporate advocacy program to companies with negative postings on “How to make your search engine listings positive . . . make your reports look like they should: positive.” Thus, Vision Security could find a satisfactory solution to the offensive content—false and defamatory statements published on the Ripoff Report—by paying a large fee to join the corporate advocacy program.
These specifically pleaded facts support a reasonable inference that Xcentric was not a neutral publisher. It had an interest in, and encouraged, negative content. It refused to remove the content, even when told by the author that it was false and he wanted it removed. What interest would a neutral publisher have in maintaining false and harmful content against the wishes of the author unless it advanced its own commercial interests? The alleged facts allow a reasonable inference that Xcentric refused to remove the offensive content to promote its own corporate advocacy program. Indeed, it is reasonable to infer that the very raison d’etre for the website was to commercialize on its ability to sell its program to counter the offensive content the Ripoff Report encouraged. See Accusearch, 570 F.3d at 1200.
The facts alleged by Vision Security are more than enough to state a claim and to preclude any claim of immunity by Xcentric under the CDA. At least at this stage of the proceeding, Vision Security has alleged sufficient facts to be allowed to proceed with discovery.
Even though the case only involved denial of a motion to dismiss, there’s no denying that this is a terrible ruling for Ripoff Report, and possibly for Section 230 generally. What stands out most to me is the favorable citation to the Accusearch case. It’s the governing law in the Tenth Circuit, so it’s an entirely appropriate citation, but this is additional evidence that perhaps the Accusearch case has done more damage to Section 230 than the more publicized Roommates.com case. I’m reminded of another recent bad Section 230 ruling, the General Steel v. Chumley case, also in the Tenth Circuit and also favorably citing Accusearch. To me, I’m getting nervous that Accusearch has tainted the Tenth Circuit’s jurisprudence such that we’ll see continued anomalous cases there. It would be a green light for Section 230 haters to forum-shop their cases into the Tenth Circuit.
The court’s discussion of “neutrality” is also problematic. The court’s legal test of “neutral publisher” is an oxymoron and incoherent. By definition, no publisher is ever neutral. Instead, any legal standard dependent on “neutrality” becomes a placeholder for other social norms. As we saw in the Washington Supreme Court Backpage ruling, when the battleground shifts to a website’s purported “neutrality,” the defendants are in trouble. In this case, the court misinterprets “neutrality” to mean that soliciting only negative reviews wasn’t “neutral.” By the same implication, then, a website that only permitted positive reviews wouldn’t be “neutral” either (for example, eBay’s feedback forum restricts sellers to only leaving positive feedback for buyers). I don’t think the court can find a shred of support for that conclusion in the Roommates.com case, but we’ll never know because the Roommates.com opinion repeatedly used the term “neutral” without defining it. Now, in light of the Backpage ruling, I expect anti-230 plaintiffs will call the defendant “non-neutral” in every complaint. Can’t hurt, might help.
There are some weird undercurrents of false advertising concerns in the court’s language, especially when the court suggests that Ripoff Report’s advertising references to “consumers” indicates, by negative implication, there aren’t any fake reviews or posts by competitors. I would have thought the “consumers” language was puffery, or that readers would assume there were fake reviews in every review website. Still, the court’s discussion reminds review websites to be ultra-careful making marketing characterizations of their review database.
The court’s disdain for Ripoff Report’s Corporate Advocacy Program also clouds the court’s judgment. I am not a fan of the Corporate Advocacy Program, but it should not disqualify Ripoff Report for Section 230 immunity under any fair reading of the statute.