E-Commerce Law

Federal Court Rules that Section 230 Immunity Applies to Sex Site’s Publication of Inaccurate User Profile

The United States District Court for the Northern District of Ohio has ruled that Section 230 of the Communications Decency Act (CDA) protects SexSearch, an online adult dating website that encourages its users to meet and engage in casual sexual relationships, against liability derived from its publication of a user profile which identified a certain minor female user as an adult.

The Plaintiff in Doe v. SexSearch.com, ____ F.Supp.2d ____, 2007 WL 2388913 (2007), was a "Gold member" of SexSearch who located the user profile of "Jane Roe" in October 2005. Roe’s profile indicated that her birthday was June 15, 1987 and that she was 18 years old. Doe began chatting online with Roe through SexSearch. Eventually, Doe and Roe decided to meet for a sexual encounter.

As it turns out, Roe was not actually 18 years old, but 14. As a result of their encounter, Doe was arrested and charged with three felony counts of engaging in unlawful sexual conduct with a minor. On those charges, Doe faces a prison sentence of 15 years and the requirement that he forever register as a sex offender.

Roe sued SexSearch and its owners, alleging that upon becoming a member of SexSearch he reviewed SexSearch's warranties and agreed to SexSearch's Terms and Conditions and profile guidelines. Roe contended that the Defendants warranted that all users of the site were 18 years of age or older and was contractually bound to review, verify, and approve all user profiles published on the website. Among other claims, Roe alleged causes of action for breach of contract, fraud, negligent infliction of emotional distress, negligent misrepresentation, deceptive trade practices, and failure to warn.

Considering SexSearch’s motion to dismiss, the Court concluded that "in determining whether to apply the CDA, the Court should not ask what particular form the plaintiff's claim takes . . . but whether the claim is directed toward the defendant in its publishing, editorial, and/or screening capacities, and seeking to hold it ‘liable for its publication of third-party content or harms flowing from the dissemination of that content.’" If so, the claim is barred, whether it is based in contract or tort.

Accordingly, the Court dismissed Doe’s claims for breach of SexSearch’s terms of use, fraud, negligent infliction of emotional distress, negligent misrepresentation, deceptive trade practices, and failure to warn. In so ruling, the Court held that

[a]t the end of the day . . . Plaintiff is seeking to hold SexSearch liable for its publication of third-party content and harms flowing from the dissemination of that content. The underlying basis for Plaintiff's claim is that if SexSearch had never published Jane Roe's profile, Plaintiff and Jane Roe never would have met, and the sexual encounter never would have taken place. Plaintiff thus attempts to hold SexSearch liable for "decisions relating to the monitoring, screening, and deletion of content from its network-actions quintessentially related to a publisher's role." . . . Section 230 specifically proscribes liability in such circumstances.

Technorati Tags:  Section 230, CDA, SexSearch

E-Commerce Law Briefs: Week of August 20, 2007

Facebook is planning to deploy personalized advertising based upon the massive amounts of information that people reveal about themselves on the site. It’s too bad that many employers are restricting access to the site, citing security and productivity concerns.

(Links: Facebook Gets Personal With Ad Targeting Plan at The Wall Street Journal Online; Poll: Half of employers restrict Facebook at CNET News)

E-Commerce Law Briefs is a weekly feature appearing each Friday afternoon on E-Commerce Law. Each week, E-Commerce Law Briefs will provide a brief summary and commentary on recent legal news affecting e-commerce businesses.

Technorati Tags:  Facebook

E-Commerce Law Briefs: Week of August 13, 2007

Though Wikipedia is increasingly relied upon by the average Internet user, it is not generally deemed reliable enough to cite in court or in school. Recently, a new reason to question Wikipedia’s reliability has come to light: it’s often edited by companies, government agencies, and individuals to conform to their particular agendas.

(Link: Companies and party aides cast censorious eye over Wikipedia at Guardian Unlimited)

E-Commerce Law Briefs is a weekly feature appearing each Friday afternoon on E-Commerce Law. Each week, E-Commerce Law Briefs will provide a brief summary and commentary on recent legal news affecting e-commerce businesses.

Technorati Tags:  Wikipedia

Starting an Online Business: Licensing Requirements

About.com's Online Business blog is running a short article I wrote entitled "Starting an Online Business:  Licensing Requirements."  It's designed to answer some questions frequently raised by that blog's readers, but I thought it might also be of interest to readers of E-Commerce Law.

Technorati Tags:  license, online business

New Jersey Court Finds Personal Jurisdiction Over California Resident Who Directed Defamatory Statements to Forum

In Goldhaber v. Kohlenberg, the Appellate Division of the Superior Court of New Jersey has affirmed a trial court ruling that a New Jersey court could exercise in personam jurisdiction over a California resident who posted defamatory statements to an Internet newsgroup, where the statements were directed at the forum state.

The Court first acknowledged that traditional jurisdiction principles apply even in the context of cases based upon Internet communications; thus, "[t]he question is whether ‘the defendant’s conduct and connection with the forum State are such that he should reasonable anticipate being haled into court there.’" Blakey v. Continental Airlines, 164 N.J. 38, 67 (2000) (quoting World-Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490, 501 (1980)).  Obviously, posting a statement on the Internet that could be read in the forum state, just as it could be read virtually anywhere else in the world, is not sufficient to subject the poster to in personam jurisdiction. However, where the effects of a defamatory statement would be felt in the forum state (where the plaintiff resides or does business) and the statement is directed or targeted to that forum, the poster's contacts with the forum are sufficient to impose personal jurisdiction. See id. at 70 (citing Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 70 L.Ed.2d 804 (1984)) (adopting the "effects" test for personal jurisdiction set forth by the United States Supreme Court).

In Goldhaber, the Court found that

[t]he author not only knew that plaintiffs resided in New Jersey, he knew the municipality in which they resided and made specific disparaging references to that municipality in many of his postings. . . . He also made insulting comments about that municipality’s police department. In addition, he referred to plaintiffs’ neighbors in the apartment complex in which they resided and at one point even posted their address.

Accordingly, the Court held that defendant should reasonably have anticipated being haled into court in New Jersey.

Technorati Tags:  personal jurisdiction, defamation, Internet

E-Commerce Law Briefs: Week of August 6, 2007

Adult magazine publisher Perfect 10 has sued Microsoft for copyright infringement, claiming that the "MSN Search engine displays thumbnails of pirated versions of the company's copyrighted pictures in search results, and that those results include links to the full-size pirated versions."

(Link: Now Perfect 10 Sues Microsoft at internetnews.com)

E-Commerce Law Briefs is a weekly feature appearing each Friday afternoon on E-Commerce Law. Each week, E-Commerce Law Briefs will provide a brief summary and commentary on recent legal news affecting e-commerce businesses.

Technorati Tags:  Perfect 10, Microsoft, copyright infringement

Ninth Circuit: Without Notice Customer Not Bound by Changes in Internet Contract

The United States Court of Appeals for the Ninth Circuit has issued an opinion in Douglas v. Talk America, Inc. which vacates an order compelling arbitration pursuant to an Internet contract. The plaintiff, Joe Douglas, contracted for long distance telephone service with America Online. This business was subsequently acquired by the defendant, Talk America, who added four provisions to Douglas’s existing service contract; one of these new provisions was an arbitration clause. Though Talk America posted the revised contract on its website, it never notified Douglas that the contract had changed. Unaware of the new contract provisions, Douglas continued to use Talk America’s services for four years.

When Douglas filed a class action lawsuit in the United States District Court for the Central District of California, Talk America moved to compel arbitration based on the modified contract. The district court granted the motion and Douglas sought review of that decision.

On review, the Ninth Circuit relied upon well-settled contract law principles. No express contract can be formed without the assent of the party to be bound. It follows, then, that a party cannot unilaterally change the terms of a contract; the consent of the other party is required. Talk America could not hold Douglas to a contractual provision of which he had no actual notice, even though the revised contract was posted on Talk America’s website.

This case reinforces the fact that traditional contract principles apply even to Internet contracts. To form an enforceable Internet contract, a website user must be required to take some affirmative action indicating his assent to the terms of the contract. Whenever the terms of the contract change, the website user should be notified of the change and be required to take an additional affirmative action indicating his assent to the revised terms. Otherwise, the party seeking to enforce the Internet contract may have difficulty demonstrating which version of the contract, if any, governs the rights and obligations of the parties.

See Ninth Circuit Strikes Down Contract Amendment Without Notice--Douglas v. Talk America and New provisions in online terms of service of no effect without notice to customer for additional commentary.

Update (9/3/2007):  Eric Goldman suggests that the ruling in this case may have been influenced by the Court's view that the agreement at issue was overly oppressive to users.

Technorati Tags:  Internet contracts, Talk America

E-Commerce Law Briefs: Week of July 30, 2007

"Google's YouTube hopes recognition technology will be in place in September to stop the posting of copyrighted videos on the popular Web site, a lawyer Friday told a judge presiding over copyright lawsuits."

(Link: YouTube responds to copyright suit at SilliconValley.com)

Progressing well in its quest to become the new MySpace, Facebook now faces criticism that it does not do enough to protect minors from sex offenders.

(Link: New scrutiny for Facebook over predators at CNET News)

E-Commerce Law Briefs is a weekly feature appearing each Friday afternoon on E-Commerce Law. Each week, E-Commerce Law Briefs will provide a brief summary and commentary on recent legal news affecting e-commerce businesses.

Technorati Tags:  YouTube, Facebook, MySpace