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Court Finds That State Law Claims Against Online Forum Operator For Misappropriation, Theft, and Tortious Interference Hinge on “Publisher” or “Speaker” Status–Stevo Design, Inc. v. SBR Marketing Ltd., 2013 WL 308996 (D. Nev. Jan. 25, 2013)

A Nevada federal court held that Communications Decency Act (CDA) immunity barred state tort claims asserted in a lawsuit involving the dissemination of sports betting information.  The court’s holding was based on a liberal interpretation of what it means to be a “publisher” or “speaker” under section 230 of the CDA.

Stevo Design, Inc. (Stevo) sells licenses for access to its sports betting reports.  SBR operates a website with a discussion forum where users may post messages relating to sports betting and handicapping and to send messages to other users.  SBR encourages activity on its website by awarding loyalty points to users for doing different things on the website, including posting original content.  The loyalty points may be redeemed for credits at offshore gambling websites.  Stevo claimed that SBR and its users published Stevo’s protected works on the SBR website without obtaining a license.

In addition to bringing claims for copyright and trademark infringement, Stevo asserted a slew of state-law claims against SBR.  SBR asked the court to dismiss these state-law claims.  The court first determined if SBR qualified for CDA immunity.  The key question was whether SBR had a hand in developing the online content at issue.  If so, then SBR does not enjoy CDA immunity.

Relying on Fair Housing Council of San Fernando Valley v. Roomates.com, 521 F.3d 1157 (9th Cir. 2008), the court concluded that SBR did not “develop” the offending online content.  SBR encouraged its users to post original content.  It did not specifically encourage its users to publish information illegally on the website.  The fact that SBR users could freely contribute loyalty points to each other further evidenced the minimal role that SBR played in monitoring the content of forum posts.  That SBR “sporadically” tried to eliminate infringing content did not persuade the court that SBR was a developer of unlawful content—the CDA allows interactive computer services to perform some editing of user-generated content without becoming liable for all unlawful messages they do not edit or delete.

Having determined that SBR qualified for CDA immunity, the court next considered the impact of immunity on the state-law claims.  CDA immunity effectively precludes the operator of the interactive computer service from being considered the “publisher or speaker” of user-generated content.  As a result, only claims requiring the defendant to be the “publisher or speaker” are barred by CDA immunity.  Applying the meaning of “publisher or speaker” status liberally, the court concluded that CDA immunity barred each of the state-law claims:

Misappropriation of trade secrets: Misappropriation involves either “acquisition” or “disclosure” of a trade secret.  The court easily found that “disclosure” of trade secrets through user posts on the SBR website to require there to have been publishing or “speaking.  The court found “acquisition” to be a closer question, but the only kind of acquisition alleged in the complaint involved user posts on the SBR website, so the CDA barred that kind of misappropriation as well.

Misappropriation of licensable commercial property:  The court is not sure such a claim exists under Florida common law, but assuming it is a form of misappropriation, the plaintiff must have suffered competitive injury due to the defendant’s taking of information.  Stevo alleged that SBR injured it giving away its copyrighted information for free.  The only way SBR could have done that was by disclosing the information, i.e., it acted as a publisher or speaker.

Contributory misappropriation of licensable commercial property:  This claim merely required that SBR induced others to speak or publish.  The court refused to allow circumvention of CDA by alleging that the defendant induced publication or speech instead of itself doing the publishing or speaking.  Since SBR did not tell users what kind of information to include in their posts or encourage infringing content, it enjoyed immunity from this claim.

Civil theft:  Common law theft is defined as obtaining or using the property of another with intent to appropriate the property to his or her unauthorized use.  The only plausible way SBR procured or used Stevo’s property was through publication.  This claim is barred.

Tortious interference with contractual relations:  This claim requires interference with a business relationship.  The only interference that could be inferred from the complaint involved SBR’s publication of Stevo’s works.  As this claim depended on SBR’s status as the publisher, it is barred.

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Facebook entitled to Communications Decency Act (CDA) immunity as an “interactive computer service” — Klayman v. Zuckerberg, 2012 WL 6725588 (D.D.C. Dec. 28, 2012)

This is one of the few (but growing) cases recognizing that Facebook qualifies as an “interactive computer service” under the Communications Decency Act (CDA).  In particular, the court finds that Facebook is an interactive computer service when acting as the publisher of a user-created Facebook page.

The plaintiff (Klayman), a Facebook user who is the chairman and general counsel of an organization called Freedom Watch, found a Facebook page titled “Third Palestinian Intifada.”  This Facebook page “called for an uprising beginning on May 15, 2011, after Muslim prayers [were] completed, announcing and threatening that ‘Judgment Day will be brought upon us only once Muslims have killed all Jews.”  This page caught the attention of the Public Diplomacy Minister of Israel, who wrote a letter to Facebook requesting that they take down this and related pages.  Klayman alleges that Facebook initially resisted removing the page, but eventually did so “begrudgingly.”  Klayman then filed an action against Facebook and its CEO, Mark Zuckerberg, in the District of Columbia, who removed the action to federal court.  The action asserted claims of negligence and assault against the defendants and sought, among other things, injunctive relief and punitive damages of over $1 billion.

Facebook argued that it had immunity under the CDA, and the court agreed.  First, the court found that Facebook meets the definition of an “interactive computer service provider” because its website gives its users the ability to create, upload, and share various types of information with multiple users.  Second, the court ruled that the allegations supporting the negligence and assault claims are based on Facebook’s status as a publisher or speaker.  Third, the court concluded that Facebook was not the “information content provider” because it did not contribute in any way to the contents of the Facebook page in question.

LegalTXTS Lesson:  The analysis of CDA immunity in this case is straightforward, but it’s noteworthy for concluding that Facebook is an “interactive service provider” for purposes of the CDA.  Not many have cases have addressed the issue.  This case joins  Fraley v. Facebook, Inc., 830 F. Supp. 2d 785 (N.D. Cal. 2011), and Young v. Facebook, Inc., 20120 WL 42690304 (N.D. Cal. Oct. 25, 2010) (both cited in Klayman), as well as Gaston v. Facebook, Inc., 2012 WL 629868 (D. Or. Feb.2, 2012).  Note, though, that the status of a social media website status as an “interactive service provider” could hinge on the functionality of the site at issue (e.g., Facebook newsfeed vs. Facebook ads).