This article first appeared in the December 2000 issue of Cyberspace Lawyer,

and was revised for the March 2001 issue of Metropolitan Corporate Counsel

Storm Warning to Good Samaritans: Sail Clear of the Safe Harbor

by Hillel I. Parness^*

On November 7, 2000, in Stoner v. eBay, the Superior Court for San Francisco County issued what will come to be seen as a landmark Internet decision, immunizing eBay Inc., the auction website, from liability for the exchange of allegedly bootleg music over its auction website, on the theory that eBay’s activities were protected by the Good Samaritan provision of the Communications Decency Act (“CDA”). This decision is noteworthy as the first published decision to extend the CDA’s Good Samaritan protection to activity that some might not immediately classify as “speech” (as noted below, this decision has already been followed by another in eBay’s favor). It is even more noteworthy, however, in light of the fact that it was issued just months after a California federal court barred Napster from continuing to allow the exchange of allegedly-copyright-infringing MP3-format files over its peer-to-peer file exchange system. The difference seems to arise from the statutes under, and the courts in which, each case was brought.

The CDA Good Samaritan Provision

The CDA, which was passed in 1996, included the following “Good Samaritan” provision:

(1) No 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.

Under the CDA, “interactive computer service” (“ICS”) is defined as “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.” “Information content provider” (“ICP”), in turn, is defined as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.”

The Good Samaritan provision specifically states, however, that “[n]othing in this section shall be construed to limit or expand any law pertaining to intellectual property,” encompassing both federal and state intellectual property laws, and indicating that the CDA Good Samaritan provision will not immunize from liability parties defending, for example, charges of copyright infringement.

The Good Samaritan Provision Was Passed to Address Online Speech

The legislative history of the Good Samaritan provision plainly demonstrates that it was passed to overrule decisions, such as that in Stratton-Oakmont v. Prodigy, that found ISPs liable for online defamation transmitted across their systems, and to allow ISPs to block or screen pornography. And the first cases to address the Good Samaritan provision, almost all of which arose from cases brought against America Online, the preeminent Internet access provider, fit neatly with this history.

In 1997, in Zeran v. America Online, Inc., the Fourth Circuit Court of Appeals held that AOL was immunized from liability for “defamatory speech initiated by a third party” – messages posted by individuals that falsely indicated that the plaintiff was the source of offensive and tasteless merchandise relating to the Oklahoma City bombing, and provided plaintiff’s telephone number, which led, in turn, to further defamation of plaintiff on the radio. In a similar decision in 1998, Blumenthal v. Drudge, AOL was once again immunized under the Good Samaritan provision, this time by the District Court for the District of Columbia, for liability for alleged defamation by Internet journalist Matt Drudge, whose columns were published on AOL, of White House aide Sidney Blumenthal, finding that defamation is included within the statute’s reference to “otherwise objectionable” material.

That same year, AOL successfully moved to dismiss, under the Good Samaritan provision, in Doe v. America Online, a case in which the mother of a child of whom obscene photos were advertised and sold over AOL sued AOL for facilitating said advertisement and sale (the court characterized this activity as “a defamatory third party posting”). And last year, in Ben Ezra, Weinstein, and Co. v. America Online Inc., the Tenth Circuit affirmed a finding that AOL qualified for the CDA’s Good Samaritan protection for allegedly defamatory information posted on AOL by third parties regarding plaintiff’s publicly-traded stock.

But in Stoner, the court moved beyond the paradigmatic Good Samaritan cases in two important ways: (i) by extending the classification of ICSs beyond Internet access providers (such as AOL, Compuserve and Prodigy), and (ii) by immunizing those ICSs from a wider range of online liability – in this case the alleged facilitation of music bootlegging – by limiting the classification of eBay’s involvement to the republication of content from third-party ICPs.

Stoner v. eBay

In 1999, Randall Stoner, acting as a “private attorney general on behalf of any and all affected members of the general public,” sued eBay Inc., the preeminent Internet auction site, under the California Business and Professions Code, on the basis of alleged violations of the California Penal Code relating to the sale of bootleg sound recordings over the Internet. eBay moved for summary judgment, arguing that it was immunized from liability by the Good Samaritan provision of the CDA. The court granted eBay’s motion, relying on Zeran, Blumenthal and Doe for support. First, the court noted that the parties did not dispute that eBay is an ICS, and not an ICP, because “the descriptions of the goods and services auctioned over the eBay service are created entirely by the sellers.” Next, the court wrote that: “Plaintiff is seeking to hold eBay responsible for informing prospective purchasers that illegal recordings may be purchased – information that originates with the third party sellers who use the computer service.”

On this basis, the court made the following analogy: “eBay provides interactive computer services for a fee, just as America Online provides interactive computer services, for which it charges a fee.” Stoner argued – and the court rejected the argument – that the Good Samaritan provision was designed only to apply to “bulletin board models” (such as AOL), but not to “sales models” (such as eBay). Instead, wrote the court, Good Samaritan “immunity extends beyond the publication of harmful materials over the Internet, and encompasses the distribution of such material in transactions effected over the Internet.” To overcome the Good Samaritan protection, the court explained, a plaintiff has to demonstrate the ICS’s “actual, rather than constructive, knowledge of illegal sales,” and “some affirmative action” on the ICS’s part, “beyond making its facilities available in the normal manner.” Without reference to the statement in the statute that the Good Samaritan provision shall not “be construed to limit or expand any law pertaining to intellectual property,” the court exonerated eBay for liability for what could reasonably be classified as contributory or vicarious copyright infringement.

Napster and the DMCA Safe Harbors

Meanwhile, in May 2000, the District Court for the Northern District of California, in the Recording Industry Association of America’s federal copyright suit against Napster, denied Napster’s motion for summary judgment, finding that it could not rely on the “transitory digital network communications” safe harbor provision of the Digital Millennium Copyright Act (“DMCA”), which immunizes “service providers” from copyright liability “by reason of the provider's transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections.” Because, the court found, Napster could not qualify as a “system or network controlled or operated by or for the service provider,” the safe harbor was inaccessible to it. In July 2000 the court issued an injunction against Napster, finding it liable for copyright infringement, and on February 12, 2001, the Ninth Circuit Court of Appeals issued a decision in which it agreed with all of the District Court’s legal determinations (the Appeals court returned the case to the District Court with instructions to narrow the scope of that injunction). These results in Napster stand in stark contrast to that of Stoner. According to both Napster and eBay, neither system is designed to facilitate illegal musical recordings. Yet, while both allegedly do make such transfers possible, only Napster is faced with legal decisions that, if upheld, spell the end of its basic business model.

There are those who would argue that Napster and eBay are easily distinguished, as Napster’s software transfers the files from one user to another, while eBay simply posts information regarding goods available for purchase, leaving it up to the buyers and sellers to contact each other. While true, their services are also distinguishable – as Stoner tried to argue – because eBay, and not Napster, makes money off each transaction. And there are other services, such as MP3Board.com (which has also been sued by the recording industry), whose involvement in the transmission of digital music files is even more passive than that of Napster, but who are nevertheless unlikely to find immunity in the DMCA safe harbors.

After Stoner

On January 18, 2001, in another decision by a California state court, eBay was handed another victory in a case alleging liability for the auction of allegedly counterfeit sports memorabilia. In Gentry v. eBay, the California Superior Court for San Diego County accepted eBay’s argument that it is entitled to immunity under the Good Samaritan provision, on the theory that posting third-party information about items available for purchase, despite the fact that eBay purportedly makes a commission on each sale, constitutes “speech” for purposes of CDA immunity, and dismissed the plaintiffs’ claims against eBay.

These cases demonstrate the still-unpredictable nature of engaging in activities on the Internet. The few courts to consider the CDA have tended to give its definition of “Interactive Computer Service” a broad reading, while the even fewer courts to look at the DMCA have narrowly interpreted “service provider.” The eBay decisions, on the one hand, and the Napster decisions, on the other, remind us of the unpredictable nature of courts interpreting relatively new statutes, and how similar activity (in this case the facilitation of the exchange of digital music recordings) can be characterized differently, and lead to vastly different results.