Second Circuit Issues Its First Opinion Applying § 230 of the Communications Decency Act

On March 18, 2015, the Court of Appeals of the Second Circuit held that the Communications Decency Act of 1996 shields defendant GoDaddy.com, LLC from defamation liability based upon allegations that false statements about the plaintiffs in a Union newsletter were published on a website hosted on GoDaddy’s servers. The Court affirmed the judgment of the United States District Court for the Southern District of New York in favor of GoDaddy on its Federal Rule 12(b)(6) motion to dismiss, which also dismissed labor law claims against the Teamsters Union Local 456. In pertinent part, the Court held:

Accepting as true all of the allegations in the complaint, GoDaddy is immune from the Riccis’ defamation claims under a provision of the Communications Decency Act of 1996: “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” 47 U.S.C. § 230(c)(1). Preemption is express: “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.”

Ricci v. Teamsters Union Local 456, 2015 WL 1214476, at *5.

The Court noted that it has “never construed the immunity provisions of the Communications Decency Act, but other courts have applied the statute to a growing list of internet-based service providers” including GoDaddy. Id. at *7 (citing, e.g., Klayman v. Zuckerberg, 753 F.3d 1354 (D.C. Cir. 2014); Doe v. MySpace, Inc., 528 F.3d 413 (5th Cir. 2008); Chi. Lawyers’ Comm. for Civil Rights Under Law, Inc. v. Craigslist, Inc., 519 F.3d 666, 672 (7th Cir. 2008)). Specifically, the Court held:

“None of this means, of course, that the original culpable party who posts defamatory messages would escape accountability. . . . Congress made a policy choice, however, not to deter harmful online speech through the separate route of imposing tort liability on companies that serve as intermediaries for other parties’ potentially injurious messages.” … In short, a plaintiff defamed on the internet can sue the original speaker, but typically “cannot sue the messenger.”

Id. at *6-7 (quoting Zeran v. Am. Online, Inc., 129 F.3d 327, 330-31 (4th Cir. 1997) and Craigslist 519 F.3d at 672).

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    FTC Videos Provide Advice to Victims of Email Hacking and Malware Attacks

    On March 18, 2015, the Federal Trade Commission (“FTC”) released two videos advising consumers what to do if their email has been hacked or their computer has been hijacked by malware. The FTC advises victims of email hacking to: (i) update or install security software, (ii) change passwords if the account can be accessed, (iii) check with the email provider to find out how to restore the account if it is not accessible, and (iv) let family and friends know the email account was hacked. It advises victims of malware hijacking to: (i) stop shopping, banking, and entering passwords online until the computer is cleaned and restored, (ii) update security software, (iii) change passwords used for bank accounts, email accounts, and all other important accounts, and (iv) make sure the operating system and Internet browser are set to update automatically.

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      LivingSocial Not Entitled to Immunity Under § 230 of the Communications Decency Act Where It Creates, Develops Content Available On Its Site

      On March 16, 2015, the U.S. District Court for the Southern District of California held that LivingSocial may be liable to a former vendor-partner for state trademark, false advertising, and unlawful business practice claims stemming from its participatory role in creating a confusing marketing promotion that harmed its former vendor-partner. The campaign caused consumers to erroneously believe that poor performance by a third party was actually attributable to plaintiffs’ business. This led to unwarranted, disparaging reviews about plaintiffs’ business online. LivingSocial moved to dismiss plaintiffs’ state trademark, false advertising, and unlawful business practice claims on the ground that it was entitled to immunity under the Communications Decency Act of 1996 (“CDA”), 47 U.S.C. § 230(c)(1) as a provider of interactive computer services. CDA § 230 affords interactive computer service providers immunity from liability for allegedly improper and illegal content created by third parties. The Court rejected this argument, drawing a “reasonable inference” that LivingSocial was responsible for creating or developing content on its website – thus jeopardizing CDA § 230 immunity. LivingSocial also moved to dismiss plaintiffs’ federal trademark and false advertising claims on the ground that it was entitled to the Lanham Act’s safe harbor provision for online advertisers, which protects innocent infringers. However, the Court found no indication LivingSocial was entitled to the innocent infringer defense, since LivingSocial was aware of plaintiffs’ existence from a prior business relationship with plaintiffs. The Court dismissed the federal trademark claim, without prejudice, on procedural grounds.

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        FCC Votes to Adopt Order Preserving “Net Neutrality”

        On February 26, 2015, the Federal Communications Commission (“FCC”) voted by a 3-2 margin to adopt the FCC’s Open Internet Order, which sets rules forbidding Internet Service Providers (“ISPs”) from: (i) blocking legal content, applications, services, or non-harmful devices, (ii) throttling lawful Internet traffic on the basis of content, applications, services, or non-harmful devices, or (iii) allowing paid prioritization that favors some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind (i.e. no “fast lanes”). The rules preserve the concept of “net neutrality”, which is the idea that ISPs should be required to provide neutral and open access to all Internet users, rather than manage different types of Internet traffic in different ways and for different rates.

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          Facebook Allows Users to Appoint Posthumous “Legacy Contact”

          On February 12, 2015, Facebook implemented a new policy that provides users the option to designate a “legacy contact” to manage their accounts after death. The legacy contact will be able to write a post to be displayed at the top of the decedent’s memorialized Timeline, respond to new friend requests, and update the account’s profile picture and cover photo. However, the contact will not be able to see the decedent’s private messages.

           

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            Man Enjoined from Facebook for Creating Numerous Fake Accounts and Related Misconduct

            On January 8, 2015, the U.S. District Court for the Northern District of California entered a default judgment and a permanent injunction against an individual accused of creating more than seventy accounts after Facebook sent cease and desist letters to him. Facebook, Inc. v. Grunin, 2015 BL 3625, N.D. Cal., No. 3:14-cv-02323-WHA, 1/8/15.

            The Court found that defendant:

            (1) “breached Facebook’s Terms [of Use] by placing ads containing sexually provocative content, running deceptive ads, transferring accounts without Facebook’s permission, providing false information to Facebook, continuing to access Facebook after revocation, and failing to pay for advertisements” (Id. at *5);

            (2) fraudulently “provided Facebook false information so that he could obtain advertising accounts” causing “Facebook to provide at least $340,000 in unpaid ads” (Id. at *6); and

            (3) violated the Computer Fraud and Abuse Act, Act, 18 U.S.C. 1030, et seq. and the California Comprehensive Computer Data Access and Fraud Act, California Penal Code Section 502, by intentionally circumventing Facebook’s technical measures to disable his access “by impersonating others to obtain Facebook accounts to run ads” (Id. at *8).

            The defendant was enjoined from accessing or using any Facebook website or service. The Court ordered further briefing on claimed damages and fees, and that a copy of its order be forwarded to the United States Attorney for possible investigation.

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              Mugshot Publishers Cannot Charge to Take Down Images

              Senate Bill 1027 came into effect on January 1, 2015. The bill adds Section 1798.91.1 to the Civil Code, and makes it unlawful for a publisher of a booking photograph to request, require, or accept a fee or other consideration from a photographed individual to remove, correct, change, or refrain from publishing or otherwise disseminating the photograph. An aggrieved party may bring a civil action against the violator for damages in an amount equal to the greater of $1,000 per violation or the actual damages suffered from the harm, as well as any other legal or equitable relief available. It also allows for recovery of costs and attorneys’ fees.

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                California Revenge Porn Law Amended to Include Selfies

                Senate Bill 1255 came into effect on January 1, 2015. The bill amended Section 647 of the Penal Code, which provided that a person who caused emotional distress by distributing an image of another identifiable person’s intimate body parts, where the parties understood the image was to remain private, was guilty of disorderly conduct – a misdemeanor. The amended provision provides that a person who causes emotional distress by intentionally distributing an image of another identifiable person’s intimate body parts, or an image of the person depicted engaging in sexual acts (i.e. a “selfie”), where the parties understood the image was to remain private, is guilty of disorderly conduct. As of July 1, 2015, a related assembly bill will add Section 1708.85 to the Civil Code, which creates a private right of action that permits an aggrieved party to bring a civil suit against the violator for harm related to invasion of privacy, as well as any other legal or equitable relief available, including an injunction. It also allows for recovery of costs and attorneys’ fees, and permits a plaintiff to proceed using a pseudonym rather than his or her true name.

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                  Snapchat Settles Federal Trade Commission Charges

                  On December 23, 2014, the Federal Trade Commission (“FTC”) approved a final order settling charges against Snapchat that it misled consumers in telling them messages sent over the service would disappear. The FTC’s initial complaint, first announced in May of 2014, further alleged that Snapchat misrepresented the extent of its data collection practices and did not adequately protect consumers’ data. As part of the settlement, Snapchat is required to implement a privacy program that will be monitored for the next 20 years.

                   

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                    Defamation Statute’s “Retraction Demand” Provision Does Not Apply to Online Yelp Review

                    In Pham v. Lee et al., Case No. 1-12-CV-228332 (Cal. Ct. App., 6th Dist., order entered December 11, 2014), the California Court of Appeal held that the retraction demand provision of California’s defamation statute did not apply to an online review. Cal. Civ. Code section 48a states: “[i]n any action for damages for the publication of a libel in a newspaper, or of a slander by radio broadcast, plaintiff shall recover no more than special damages unless a correction be demanded and be not published or broadcast…” The court held this language expressly limited the provision to libel published in newspapers or slander by radio broadcast. The case involved an ophthalmologist, Dr. Randal Pham, who filed a defamation action against Jenny and Alvin Lee (“Lees”) for reviews they published about him online. The Lees moved to strike the suit under California’s anti-SLAPP statute, and the trial court denied the motion. On appeal, the Lees contended that Dr. Pham’s action must be stricken because he failed to demand a retraction under Cal. Civ. Code section 48a. The appeal court found this argument meritless, citing the provision’s limiting language and the fact it provides no grounds for a motion to strike. The appeal court affirmed the trial court’s judgment, concluding Dr. Pham had shown a probability of prevailing on the merits, and that the trial court didn’t err in denying the motion to strike.

                     

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