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Time Warner, ISPs face libel suit

A Los Angeles banker files a $15 million libel lawsuit against Time Warner that also names America Online, Prodigy, and ISP EarthLink as codefendants.

    A Los Angeles banker has filed a $15 million lawsuit against Time Warner that also named online services America Online and Prodigy as well as ISP EarthLink as codefendants for carrying an allegedly libelous story online.

    At issue is a story about First Los Angeles Bank's Thomas Kempf that ran last February in Fortune magazine, a Time Warner publication. In the report, Kempf was accused of receiving bribes from a Los Angeles businessman later convicted of bank fraud.

    Martha Stewart living dangerously The article, which detailed gifts Kempf allegedly received and characterized him as a "drunken [bank] president," was then published on Fortune's Web site. Kempf, who filed his suit January 23, has denied all of the charges raised in the article.

    The case raises difficult questions about who bears responsibility for information published online--an issue that is arising with increasing frequency as the Internet continues to grow at phenomal rates. Robert Wilson, the attorney representing Kempf, said Time New Media, AOL, Prodigy, and EarthLink were named in the suit because "they were the online carriers of an article that was put out by Fortune" magazine.

    A spokesman for Time Warner said the corporation had not been served with a suit by Kempf but added: "We are aware that there is supposedly a lawsuit." A spokesperson for subsidiary Time New Media, which oversees the online versions of its parent company's publications, said it does not comment on pending litigation.

    EarthLink confirmed that it was a codefendant in the suit filed by Kempf. The national ISP features a link to Fortune's Web site off its front page under the heading, "Business and finance publications."

    AOL and Prodigy representatives said they had no knowledge of the suit.

    Regardless of the merits of Kempf's libel case against Time Warner, lawyers are skeptical that the Internet providers named in the suit will be held liable for the content that they link to on their sites.

    "They don't need to take this terribly seriously," said Neil Shapiro, a First Amendment attorney. "The plaintiff is going to have a hard time demonstrating that any ISP is guilty of fault simply because it is the link between an individual and libelous content."

    According to Shapiro, an ISP who links to libelous content is protected under the Telecommunications Reform Act, just like a phone company that would not be held liable for any slanderous information transmitted over its wires.

    AOL has been the target of similar suits in the past. Last year, a Florida woman claimed AOL was responsible for pornography marketed to her son via the online service, and White House adviser Sidney Blumenthal named the online service in a $30 million libel suit against Matt Drudge, who publishes an online gossip column on the Web and AOL.

    This week, Blumenthal reiterated that AOL should be held liable because Drudge was paid for the reports that the online service published, according to the Associated Press.

    For Shapiro, the liability of an online publisher for the material posted on its site depends on whether they had "knowledge or control" over the information. "The ISPs aren't responsible for the publication of the story," he said.