The unanimous four-judge ruling, issued by the New York State Appellate Division, Second Judicial Department, is part of a growing body of decisions relaxing the potential liability service providers face for the acts of their subscribers. While largely repeating judicial holdings from other cases, the decision went out of its way to criticize a 1995 court holding that online services can be sued for libel if the provider takes steps to control its subscribers' messages.
In the December 28, 1998, decision, the appeals panel dismissed a case filed against Prodigy for libel and harassment. Alex G. Lunney, a 15-year-old Boy Scout from New York, filed the action in 1994 after he found email and bulletin board postings claiming him as the author. It later turned out that an unknown third party had penned the messages, which threatened and insulted a scout master using vulgar language.
Relying in part upon a 1995 New York Supreme Court case that also involved Prodigy, Lunney argued that, because the service uses filtering software and other means to control the content of subscribers' posts, the company should be classified as a publisher, which is legally liable for defamation and related causes.
But the appeals court rejected Lunney's reasoning, holding that "the role played by Prodigy in connection with the offensive messages sent under the plaintiff's name is by far more analogous to that of a telephone company" than that of a publisher. The court further held that "application of any unintelligent automated word-exclusion program...cannot be equated with editorial control."
The appeals panel also criticized the Supreme Court case, saying it "discourages the very conduct which the plaintiff...argued should be encouraged." Stratton Oakmont Inc. vs. Prodigy, the appeals court argued, encourages service providers not to exercise control over the content of subscribers' postings, because doing so opens them up to liability by making them publishers.
Prodigy hailed the decision as a win for civil rights on the Net. "The case confirms that the Internet is a place where freedom of expression can flourish," said Marc Jacobson, senior vice president of corporate policy at Prodigy. "We're not responsible for transmitting allegedly libelous messages to third parties, just as the telephone company isn't liable. [The decision] equates email as telecommunications, and the same is true for bulletin boards."
An attorney for the plaintiff said he was considering whether to appeal the ruling, but otherwise declined to comment.
As the Internet has evolved from a place where relatively few hobbyists and academics held court to an international medium for hundreds of thousands, questions about who is responsible for libel and copyright violations have grown. Service providers, some of which count their subscribers in the millions, argue that they should not have to police their subscribers for potential violations. They point to a large body of common law that considers phone companies "common carriers" that passively transmit the messages of their customers.
Since the Stratton Oakmont decision, however, a number of courts have tended to find that service providers do not face the same types of liability that publishers do. Cases such as Cubby vs. CompuServe, Zeran vs. America Online, and Blumenthal vs. Drudge are three cases in point.