230 Doesn’t Preempt State IP Claims–Atlantic Records v. Project Playlist

By Eric Goldman

Atlantic Recording Corp. v. Project Playlist, Inc., 2009 WL 766224 (S.D.N.Y. March 25, 2009). The Justia page.

This ruling addresses one of the known “circuit splits” in 47 USC 230 jurisprudence: does 230 preempt state IP claims based on third party content/conduct? The statute (230(e)(2)) says that “Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.” In the surprising 2007 ccBill opinion, the 9th Circuit read this language to mean that 230 does not preempt FEDERAL IP claims, but all state IP claims were preempted. Then, in the 2008 Friendfinder case, a New Hampshire district court expressly declined to follow the ccBill opinion, concluding that state publicity rights claims weren’t preempted by 230.

As I’ve said before, I think the Ninth Circuit’s statutory analysis in ccBill was daft, so I am not surprised to find another court expressly rejecting it. (In fact, I doubt any court outside the Ninth Circuit will follow the ccBill case).

In this case, a consortium of music copyright owners sued Project Playlist, a website where users could create song “playlists” that linked to playable versions of the songs. I have serious reservations about the legitimacy of the plaintiff’s efforts here, both doctrinally and normatively. However, this ruling focuses on Project Playlist’s efforts to dismiss any claims based on state copyright laws.

[Note: as you probably know, federal copyright law expressly preempts most state copyright laws. However, sound recordings made before 1972 were protected only under state copyright law, not federal copyright law. The plaintiffs are suing to enforce those rights (among others).]

The court conducts a very sensible textual analysis of 47 USC 230 to conclude that it preempts neither state nor federal IP. Thus, the net result is that this court, like the NH Friendfinder court, votes against the Ninth Circuit’s ccBill ruling. Personally, I think the Ninth Circuit’s reading is untenable, in which case either the Ninth Circuit will have to revise its reading (which would require an en banc opinion) or the circuit split may potentially bubble up to the Supreme Court. Congress could also amend the statute, but the chance of 230 being amended to endorse the Ninth Circuit’s rule is near-zero.

While the court says that Project Playlist can’t avail itself of the 230 immunity based on the IP subject matter of the claims, it does address other elements of a 230 defense. Most interestingly, it addresses whether Project Playlist loses immunization due to the Roommates.com opinion. In what is effectively dicta, it concludes the answer is no. The court says:

In this case, unlike Roommates.com, Playlist does not itself supply the content to which plaintiffs object-the songs. Playlist merely provides the interface for accessing that content-by permitting users to listen to the songs on Playlist’s Website-and provides links so users can download the songs on third-party websites. It is, in these respects, no different than Lycos, which provides chat rooms in which third-parties can voice their opinions, and Google, which provides users with lists of links responsive to user searches. At best, Playlist is guilty of “passive acquiescence in the misconduct of its users,” and, even under Roommates.com, Playlist is entitled to immunity under Section 230(c)(1).

Yet more evidence that courts aren’t embracing a broad reading of Roommates.com.

More on this ruling from Law Wire and MS&K.