Articles Posted in Internet Law

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What is personal jurisdiction? It is the court’s authority to determine a claim affecting a specific person. Generally, providing any type of data or information on the world-wide-web (i.e., Internet) is insufficient to subject a person to personal jurisdiction in each state wherein the date or information is accessed. However, a nonresident’s online activity, must be expressly targeted at, or directed to, the forum state in order to establish minimum contacts necessary to support the exercise of personal jurisdiction. In general, personal jurisdiction may not be exercised against a nonresident whose website was not directed toward any state.

If a non-resident defendant publishes statements that fall under the category of defamatory comments concerning the plaintiff on a website, the effects of which were clearly directed at the forum state, result in sufficient contact with the forum to warrant the assertion of jurisdiction over the nonresident defendant. On the other hand, the publication of defamatory comments concerning the plaintiff on a website is not, by itself enough to support the exercise of jurisdiction over a nonresident defendant (e.g., when an article was not specifically directed to residents in the forum state, or was not primarily directed at the plaintiff in that state).

Our readers must keep in mind that the tort of defamation can be committed in the jurisdiction (i.e., the state), even if the message was not directed there, if it has effects in that state.

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In the recent years, numerous Internet forums (aka “online message boards”) have provided a place for Internet users to discuss issues, entities/companies, and persons or individuals, who are often disguised in some form of anonymity. Sometimes, the targets of disparaging comments react by filing lawsuits in state or federal courts against unidentified (“John Doe”) defendants for claims such as violation of securities laws, breach of confidentiality agreement, and libel. Generally, in such disputes subpoenas are submitted to the message board hosts so to identify the authors. Notwithstanding the various challenges, the courts differ in their treatment of such subpoenas.

For example, see Jon Hart & Michael Rothberg, Anonymous Internet Postings Pit Free Speech Against Accountability, WSJ.com (March 6, 2002).

In Mobilisa, Inc. v. Doe, 170 P.3d 712 (Ariz. Ct. App. 2007) Mobilisa, a communications company, filed a complaint against numerous “John Doe” defendants who had submitted an anonymous e-mail to Mobilisa’s management team about the company’s founder and CFO’s conducts. Thereafter, Mobilisa attempted to compel The Suggestion Box, which was the service provider through which the e-mail was submitted, so to obtain the person’s identity who had submitted the e-mail. The trial court granted Mobilisa’s request and ordered The Suggestion Box to reveal the identities of the anonymous senders. Thereafter, The Suggestion Box and the senders of the e-mail appealed the trial court’s decision.

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Pursuant to Section 230 of the Communications Decency Act, no provider of an interactive computer service may be treated as the publisher of information provided by another information content provider. See 47 U.S.C. § 230(c)(1). The term “interactive computer service” means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions.

Generally, holding a website operator as the publisher of an allegedly libelous statement by a third party violates the Act. See Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997), cert. denied, 524 U.S. 937 (1998). Accordingly, the standard pursuant to Zeran is that when an online service provider receives a retraction demand regarding statements the service provider did not write, the demanding party should be re-directed to the third-party originator (i.e., the person who originally wrote the defamatory statement).

California’s Retraction Statute under Cal. Civ. Code § 48a states that:

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A defamatory statement is one that injures the reputation of another. The common-law torts of libel and slander punish the publication of statements that are both defamatory and false. Generally, a libelous statement is a false and defamatory statement published in writing. A slanderous statement is a false and defamatory statement expressed orally. False and defamatory oral statements broadcasted over the radio or television are now widely considered libel, rather than slander. In some cases, money damages may be awarded to compensate the victim of libel or slander for the reputational injury caused by publication of the false and defamatory statement.

However, in recent years there has been significant tension between the common-law protections of reputation and the mandate of the First Amendment to the Constitution that “Congress shall make no law . . . abridging the freedom of speech, or of the press. . . .”

To ensure that debate on public issues remains “uninhibited, robust and wide-open,” New York Times v. Sullivan, 376 U.S. 254, 270 (1964), the United States Supreme Court has found that the First Amendment limits the circumstances under which a speaker or publisher may be punished for making false and defamatory statements: “Neither lies nor false communications serve the ends of the First Amendment . . . [b]ut to insure the ascertainment and publication of the truth about public affairs, it is essential that the First Amendment protect some erroneous publications as well as true ones.” St. Amant v. Thompson, 390 U.S. 727, 732 (1968).

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The issue of online service provider liability comes up often in today’s high-tech world. In order to promote free discussion and private investment in the Internet, the United States Congress immunized providers of “interactive computer service[s]” against liability arising out of content provided for publication by any other “information content provider.” See Section 230 of the Communications Decency Act of 1996, 47 U.S.C. § 230. This section does not limit the application of intellectual property laws or criminal laws, but it protects Internet service providers and website operators against a broad range of tort, contract, and other claims arising out of content created by third parties.

Section 230(c)(2)(A) states that “[n]o provider or user of an interactive computer service shall be held liable on account of…any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.”

Section 230(c)(2)(B), provides immunity for “any action taken to enable or make available to information content providers or others the technical means to restrict access to [such material].” The immunity offered under Section 230(c)(2) is also referred to as the “Good Samaritan” protection.

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In New York Times Co. v. Sullivan, 376 U.S. 254 (1964), the United States Supreme Court ruled that the First Amendment limits common-law defamation claims brought by public officials. The Court held that to recover for publication of a defamatory falsehood, a public official must prove that the challenged statement was “of and concerning” the public official plaintiff, that the statement was false, and that the defendant acted with “actual malice.” The Court defined “actual malice” as publication with knowledge that the statement was false or with reckless disregard of whether the statement was false or not.

Later, the Supreme Court extended the standard announced in New York Times Co. v. Sullivan to defamation cases brought by “public figures.” Public figures include individuals who voluntarily inject themselves into public controversy, as well as those who are involuntarily thrust into the limelight, even if only with respect to a particular activity or incident.

A private-figure defamation plaintiff can recover damages based on the defendant’s negligence (or a more speech-protective standard, under the law of some states). In no instance, however, can a private-figure plaintiff recover damages for defamation without a showing of fault amounting to, at least, negligence. Any lesser standard, the Supreme Court concluded, would unduly burden free speech. Gertz v. Robert Welch, Inc., 418 U.S. 323, 347 (1974). And, at least when the speech relates to an issue of public concern, a private-figure plaintiff must bear the burden of proving falsity; the defendant speaker is not obligated to prove the truth of the challenged statements. Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 768 (1986).

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The Securities and Exchange Commission stated that publicly-traded companies should disclose the threat and potential impact of cyber attacks that pose a risk to their investors.

The commission made its comments in a letter to Senator Jay Rockefeller, chairman of the Senate Commerce Committee, that was released on June 8, 2011. Last month, Senator Rockefeller and four other Democratic senators wrote a letter to SEC Chairman Mary Schapiro, urging the agency to issue guidance on disclosure of data- security risk, including “material network breaches,” attacks that may result in the theft of intellectual property or trade secrets.