Date: Tue, 14 Jan 92 17:44:09 EST
From: Eff@org
Subject: File 8--The Compuserve Case (Reprint from EFF Vol 2, #3)

          THE COMPUSERVE CASE:
  A STEP FORWARD IN FIRST AMENDMENT PROTECTION FOR ONLINE SERVICES.
        By Mike Godwin ([email protected])

By now you may have heard about the summary-judgment decision in
Cubby, Inc. v. CompuServe, a libel case. What you may not know is why
the decision is such an important one. By holding that CompuServe
should not be liable for defamation posted by a third-party user, the
court in this case correctly analyzed the First Amendment needs of
most online services. And because it's the first decision to deal
directly with these issues, this case may turn out to be a model for
future decisions in other courts.

The full name of the case, which was decided in the Southern District
of New York, is Cubby Inc. v. CompuServe. Basically, CompuServe
contracted with a third party for that user to conduct a
special-interest forum on CompuServe. The plaintiff claimed that
defamatory material about its business was posted a user in that
forum, and sued both the forum host and CompuServe. CompuServe moved
for, and received, summary judgment in its favor.

Judge Leisure held in his opinion that CompuServe is less like a
publisher than like a bookstore owner or book distributor. First
Amendment law allows publishers to be liable for defamation, but not
bookstore owners, because holding the latter liable would create a
burden on bookstore owners to review every book they carry for
defamatory material. This burden would "chill" the distribution of
books (not to mention causing some people to get out of the bookstore
business) and thus would come into serious conflict with the First
Amendment.

So, although we often talk about BBSs as having the rights of
publishers and publications, this case hits on an important
distinction. How are publishers different from bookstore owners?
Because we expect a publisher (or its agents) to review everything
prior to publication. But we *don't* expect bookstore owners to review
everything prior to sale.  Similarly, in the CompuServe case, as in
any case involving an online service in which users freely post
messages for the public (this excludes Prodigy), we wouldn't expect
the online-communications service provider to read everything posted
*before* allowing it to appear.

It is worth noting that the Supreme Court case on which Judge Leisure
relies is Smith v. California--an obscenity case, not a defamation
case.  Smith is the Supreme Court case in which the notion first
appears that it is generally unconstitutional to hold bookstore owners
liable for content. So, if Smith v. California applies in a
online-service or BBS defamation case, it certainly ought to apply in
an obscenity case as well.

Thus, Cubby, Inc. v. CompuServe sheds light not only on defamation law
as applied in this new medium but on obscenity law as well. This
decision should do much to clarify to concerned sysops what their
obligations and liabilities are under the law.

                  +++++++++++++++++++++++++++++++

Highlights of the CompuServe decision (selected by Danny Weitzner):

"CompuServe's CIS [CS Information Service] product is in essence an
electronic, for-profit library that carries a vast number of
publications and collects usage and membership fees from its subscribers
in return for access to the publications. CompuServe and companies like
it are at the forefront of the information industry revolution. High
technology has markedly increased the speed with which information is
gathered and processed; it is now possible for an individual with a
personal computer, modem, and telephone line to have instantaneous
access to thousands of news publications from across the United States
and around the world.  While CompuServe may decline to carry a given
publication altogether, in reality, once it does decide to carry a given
publication, it will have little or no editorial control over that
publication's contents.  This is especially so when CompuServe carries
the publication as part of a forum that is managed by a company
unrelated to CompuServe.  "... CompuServe has no more editorial control
over ... [the publication in question] ... than does a public library,
book store, or newsstand, and it would be no more feasible for
CompuServe to examine every publication it carries for potentially
defamatory statements than it would for any other distributor to do so."
"...Given the relevant First Amendment considerations, the appropriate
standard of liability to be applied to CompuServe is whether it knew or
had reason to know of the allegedly defamatory Rumorville statements."

Cubby, Inc. v. CompuServe, Inc. (90 Civ. 6571, SDNY)

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