United States: Section 230 Survives To Fight Another Day Following California Supreme Court Decision

Last Updated: August 31 2018
Article by Aaron P. Rubin

As we have noted previously, the California Court of Appeal's Hassell v. Bird decision in 2016 upholding an injunction requiring Yelp to remove certain user reviews was discouraging to social media companies and other online intermediaries, as well as to fans of Section 230 of the Communications Decency Act and proponents of Internet free speech generally. The recent California Supreme Court decision reversing the Court of Appeal was, therefore, met with considerable relief by many in the Internet community.

But while the California Supreme Court's decision is undoubtedly a significant development, it would be premature for Section 230 fans to break out the champagne; the "most important law protecting Internet speech" remains under attack from many directions, and this recent decision is far from definitive. But before getting into the details of the Hassell v. Bird opinion, let's step back and consider the context in which the case arose.

Before Section 230: A Wild, Wild Web

A fundamental issue for social media platforms and other online intermediaries, including review sites like Yelp, is whether a company may be held liable when its customers engage in bad behavior, such as posting defamatory content or content that infringes the IP rights of third parties. Imagine if Facebook, Twitter, YouTube, and Yelp were potentially liable for defamation every time one of their users said something nasty (and untrue) about another user on their platforms. It would be hard to imagine the Internet as we currently know it existing if that were the case.

But that is where we were in the mid-1990s, based on some case law from that period. Think back to the early days of the interactive Web. Online services, like Prodigy and CompuServe were the first large-scale attempts to bring an interactive "social" online experience to the public. These services hosted online news forums and offered a safe moderated environment for social networking and discussions. But, of course, users did not always behave well on these platforms.

For example, in a New York state case from 1995, Stratton Oakmont v. Prodigy Services, a user of Prodigy's Money Talk bulletin board created a post that claimed that Stratton Oakmont (a Long Island securities investment banking firm) and its president committed criminal and fraudulent acts in connection with an IPO. Stratton Oakmont sued Prodigy and the anonymous poster for defamation. The Stratton court held that Prodigy was liable as the publisher of the content created by its users because it exercised editorial control over the messages on its bulletin boards.

As you can imagine, this result—that an online service provider is liable as the publisher of defamatory content posted by its users—was alarming to the companies that provided such services. This led to the enactment of the Communications Decency Act, specifically Section 230, a statute that was at the heart of Hassell v. Bird.

Section 230 immunizes online service providers from liability stemming from the publication and filtering of content created by a third party. Section 230(c)(1) states that an "interactive computer service provider" (which covers essentially any online service provider) cannot be treated as a publisher or speaker of content provided by a separate "information content provider" (which is often a user). Many Section 230 cases involve defamation allegations against websites based on publication of user-generated content. Courts have generally held that Section 230 immunity applies in these cases and Section 230 is often interpreted broadly.

Section 230: The Early Days

The first major case to interpret Section 230 was a Fourth Circuit case, Zeran v. America Online in 1997. In Zeran, an anonymous post on an AOL bulletin board advertised the sale of t-shirts with slogans glorifying the Oklahoma City bombing (for those too young to remember, this was the domestic terrorist truck bombing of a federal office building in Oklahoma City that killed 168 people, including many children in a day care center).

The t-shirts displayed highly offensive slogans such as "Finally a day care center that keeps the kids quiet—Oklahoma 1995." The post instructed readers to contact plaintiff Kenneth Zeran and listed his home phone number.

Zeran, in fact, had nothing to do with the post and was apparently randomly targeted as part of a prank. Zeran began receiving threatening calls. AOL removed the post at Zeran's request, but similar posts appeared. Less than a week after the initial post, Zeran was receiving threatening calls every two minutes and his house was put under protective surveillance.

Zeran sued AOL, alleging that the company was negligent in failing to adequately respond to the posts after becoming aware that they were fraudulent. AOL claimed that it was protected by Section 230. Zeran, however, argued that AOL was not protected by Section 230 because it was a distributor of information, rather than a publisher.

The court rejected this distinction between distributors and publishers, holding that Section 230 provided immunity for both the distribution and publication of content and finding that AOL was immune from liability. Today, twenty years later, the Fourth Circuit's holding in Zeran is still good law. It is not an overstatement to say that, at least from a legal point of view, the Fourth Circuit's broad interpretation of Section 230 in this case was instrumental in the development of the commercial Internet in its early days.

So that is where Section 230 stood for many years—with relatively few exceptions, Section 230 was held to provide website owners with a broad immunity from a variety of claims based on content and information provided by users, even where the content at issue is extremely objectionable. For example, in Jones v. Dirty World Entertainment Recordings, the Sixth Circuit held that a gossip website known as "The Dirty" was immune from liability for defamation claims based on posts about Sarah Jones, a cheerleader for the Cincinnati Bengals. The posts included Jones's picture and statements regarding her sex partners, as well as allegations that she had sexually transmitted diseases. In that case, Section 230 applied notwithstanding the distasteful nature of the content and the fact that the website operator seemingly encouraged the posting of such content.

Cracks in Section 230's Armor

In the last few years, however, we started to see cracks in Section 230's armor, with courts more often holding for plaintiffs and finding that Section 230 immunity did not apply in an increasing number of cases. We also saw earlier this year the enactment of a package of laws known as SESTA-FOSTA (known as the "Stop Enabling Sex Traffickers Act" in the Senate and the "Allow States and Victims to Fight Online Sex Trafficking Act" in the House of Representatives), which created an exception to Section 230 related to facilitation of sex trafficking. We noted this trend in a prior Socially Aware blog post and other commentators have written about it as well.

Amid that environment in 2016, the California Court of Appeal's Hassell v. Bird opinion landed with a thud. Decided in the wake of a series of cases that had already eroded Section 230's protections, Hassell v. Bird was seen by the Internet law community not merely as a problematic outlier, but rather as the culmination of a disturbing trend already well underway. But now we are getting ahead of ourselves, so let's go back and look at the details of Hassell v. Bird.

Back to Hassell v. Bird

In 2012, a San Francisco attorney named Dawn Hassell took on a client named Ava Bird in a personal injury case. At some point, the relationship went sour and Hassell withdrew from representing Bird. Bird then posted a review of Hassell's firm on Yelp.com in January 2013, under the name "Birdzeye B. Los Angeles, CA." She gave Hassell one star and included various complaints about Hassell's work in her review. Upon seeing these reviews, Hassell contacted Bird and asked her to remove the reviews from Yelp. Bird refused.

Another negative one-star review of Hassell's firm was posted the next month, this time under the name "J.D. Alameda, C.A." Hassell had never represented a client with the initials J.D. and she suspected Bird had written this review as well based on similarities in the two reviews' writing styles.

Hassell filed a complaint against Bird in April 2013, alleging that Bird's negative reviews were defamatory and injurious to Hassell's business reputation. Bird defaulted and the trial court awarded Hassell more than $500,000 in damages and issued an injunction ordering Bird to remove the Yelp reviews and refrain from posting any additional reviews of Hassell's firm.

So far so good, but here is where the trouble started: The trial court's injunction also ordered Yelp to remove Bird's reviews, even though Yelp was not a party in the defamation case.

And why didn't Bird name Yelp as a party? Think back to the Section 230 cases discussed above—Yelp would almost certainly have been able to get a defamation claim against it based on Bird's reviews dismissed under Section 230. By not naming Yelp and getting a default judgment against Bird, however, Hassell managed to get the court to issue an injunction not only against Bird but also against Yelp, something Hassell would not likely have been able to achieve if she had sued Yelp directly.

In any event, when Yelp refused to remove the reviews, the case ended up in the Court of Appeal and, in June 2016, the court upheld the injunction requiring Yelp to remove the existing reviews. (The court did hold that the portion of the injunction that ordered Yelp to remove future reviews was an unconstitutional prior restraint.)

The Court of Appeal's decision includes a lot of procedural detail about whether Yelp has standing to challenge the trial court's judgment and whether a non-party may be bound by an injunction. The court also spends considerable time analyzing Yelp's due process and First Amendment claims. I am not going to address most of the court's discussion of those claims because, in this article, I'm focusing on the Section 230 issues. It is worth noting, however, that the Court of Appeal is very dismissive of Yelp's First Amendment arguments because this dismissiveness seems to color the court's approach to the Section 230 issues.

The Court of Appeal first disregards Yelp's argument that it has a First Amendment interest in disseminating Bird's speech as curator of content, similar to a publisher or a distributor of books or newspapers. The court says, in a conclusory fashion, that the injunction "does not treat Yelp as a publisher of Bird's speech, but rather as the administrator of the forum that Bird utilized to publish her defamatory reviews." This is a confusing statement because the court does not clearly explain either the difference between a publisher and an administrator of a forum, or why that should matter for First Amendment purposes.

The court then goes on to say that, even if Yelp is a publisher, it has no First Amendment interest in publishing Bird's reviews because the reviews have already been determined to be defamatory and defamatory speech is not protected by the First Amendment. This ignores the fact that, due to the default judgment against Bird, the trial court never determined on the merits that the reviews were defamatory. And, in any event, certainly Yelp never had a chance to challenge that determination.

Despite the court's determinations against Yelp on these issues, however, Section 230 could still save the day for Yelp. But, of course, it doesn't. Instead, the Court of Appeal says that "[t]he removal order does not violate section 230 because it does not impose any liability on Yelp" and "[i]f an injunction is itself a form of liability, that liability was imposed on Bird, not Yelp." Of course, Yelp could be subject to liability if it fails to comply with the injunction but, according to the court, "sanctioning Yelp for violating a court order would not implicate section 230 at all; it would not impose liability on Yelp as a publisher or distributor of third party content."

There appears to be a bit of Section 230 sleight of hand going on here. Recall that Section 230 provides immunity against any claim that treats an online service provider as a publisher or speaker of content provided by someone else. Here, the court says, Yelp's potential liability is not based on treating Yelp as a publisher or speaker of Bird's reviews; rather the potential liability to Yelp is from being in contempt of court for failing to comply with the injunction. And Section 230, says the court, does not provide immunity from that liability.

The trouble with this reasoning, as many commentators noted, is that it opens up a huge loophole in Section 230. If an aggrieved person doesn't like user content on a website, that person can sue the user. If the user does not appear—which is a pretty good bet, particularly if the suit is filed far from the user's home—the plaintiff will get a default judgment, just as Hassell did. Then the plaintiff can take the default judgment to the website operator and force it to remove the content, thereby conveniently avoiding Section 230.

Yelp appealed to the California Supreme Court. In support of Yelp's request, amici submitted 14 letters representing more than 40 organizations, including companies such as Google, Facebook, and Twitter, as well as various public interest groups and law professors.

The Supreme Court accepted the case and issued its decision on July 2, 2018, reversing the Court of Appeal's judgment requiring Yelp to comply with the injunction. The Supreme Court voted 3-1-3, with a plurality opinion written by the Chief Justice and joined by Justices Chin and Corrigan, a concurring option written by Justice Kruger, and the remaining Justices dissenting in two separate opinions.

Because this article is already quite long, I won't address all of the points that the writers of the plurality, concurring, and dissenting opinions discussed. Suffice it to say that the plurality opinion turned primarily on Section 230 issues, and did not reach some of the First Amendment, procedural, and due process issues that the lower courts addressed.

Essentially, the Supreme Court recognized that the injunction was a way to end-run Section 230. The Court noted specifically that "Yelp could have promptly sought and received section 230 immunity had plaintiffs originally named it as a defendant in this case." The Court goes on to say, "The question here is whether a different result should obtain because plaintiffs made the tactical decision not to name Yelp as a defendant. Put another way, we must decide whether plaintiffs' litigation strategy allows them to accomplish indirectly what Congress has clearly forbidden them to achieve directly. We believe the answer is no.... an order that treats an Internet intermediary 'as the publisher or speaker of any information provided by another information content provider' nevertheless falls within the parameters of section 230(c)(1)."

The Court then makes the key point that an injunction against Yelp does, in fact, treat Yelp as a publisher for purposes of Section 230, noting that the injunction sought to overrule Yelp's decision to publish Bird's reviews. The Court goes on to say, "In substance, Yelp is being held to account for nothing more than its ongoing decision to publish the challenged reviews, and that "the duty that plaintiffs would impose on Yelp, in all material respects, wholly owes to and coincides with the company's continuing role as a publisher of third party online content." Because this is exactly what Section 230 prohibits, the injunction cannot stand.

This result was a relief for many, as noted above, and the plurality opinion has a lot of good language for supporters of Section 230. But given the fractured Supreme Court decision and the fact that Section 230 remains under attack from many other directions, it seems likely that the trend toward reining in the historically broad scope of Section 230 immunity will continue. In any event, we will be keeping a close eye on further Section 230 developments.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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Aaron P. Rubin
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