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Calif. court limits online liability

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SAN FRANCISCO—Individuals as well as Internet service providers are immune from liability for material they reproduce on the Internet even if it is defamatory, the California Supreme Court ruled in a decision that experts say brings California back in line with most other jurisdictions.

The Nov. 20 ruling overturns a 2003 lower state appellate court decision that ran counter to prevailing state and federal court opinions across the country, experts say.

However, a defense attorney in the case, Stephen J. Barrett et al. vs. Ilena Rosenthal, said the decision leaves companies with little, if any, recourse if their reputation is damaged by disgruntled individuals.

The court acknowledged that possibility in its decision: "The prospect of blanket immunity for those who intentionally redistribute defamatory statements on the Internet has disturbing implications," the decision said.

Nevertheless, the federal Communications Decency Act of 1996 "exempts Internet intermediaries from defamation liability for republication. The statutory immunity serves to protect online freedom of expression and to encourage self-regulation, as Congress intended," the court said in its decision.

Plaintiffs are free under state law "to pursue the originator of a defamatory Internet publication. Any further expansion of liability must await congressional action," the opinion added.

Plaintiffs in the case were Dr. Barrett and Dr. Timothy Polevoy, who operated Web sites devoted to exposing health fraud.

They sued Ms. Rosenthal after she redistributed an allegedly defamatory article on the Internet that accused Dr. Polevoy of stalking a Canadian radio producer. Ms. Rosenthal is director of the San Diego-based Humantics Foundation for Women, a support group for women who have had breast implants.

Attorney Mark Goldowitz, director of the Berkeley, Calif.-based California Anti-SLAPP project, a public interest law firm, who represented Ms. Rosenthal in the case, said the decision is likely to be influential nationally.

Although it was issued by a state court, "it was a very well-written opinion, and so I think it will be significant in terms of pretty much closing the door" to the argument that that those who redistribute defamatory material have no immunity under the law, he said. Risk managers "should celebrate this," he added.

Observers say the appellate court ruling that the California Supreme Court decision overturned was an exception to opinions issued by other courts nationwide. The decision "is actually not very surprising," said Ian C. Ballon, an attorney with Greenberg Traurig in Los Angeles. "It's consistent with all of the cases that have come before it."

"It's a critical ruling," said Michael Rothberg, an attorney with Dow Lohnes in Washington. Mr. Rothberg said the decision reconfirms that under the Communications Decency Act "the only person that is responsible for false and defamatory content is the person that created the content."

Had the court ruled differently, Internet service providers would have been forced "to police tens of millions of individual communications, and that's just fundamentally at odds with the congressional purpose to encourage the development of the Internet" and protect free speech rights, said Michael G. Rhodes, an attorney with Cooley Godward Kronish L.L.P. in San Diego who submitted an amicus brief in the case on behalf of San Jose, Calif.-based eBay Inc.

However, the plaintiff attorney in the case, Christopher E. Grell, who is based in Oakland, Calif., notes the court itself acknowledged that the opinion has disturbing implications.

Disgruntled employees, for instance, can post libelous, anonymous attacks, "which can then be copied and posted and given wider circulation, and companies would be without any remedies to stop the spread of false and libelous information," said Mr. Grell, who suggested that Congress failed to consider the Communications Decency Act's full implications when it approved the legislation.

Martin H. Samson, an attorney with Phillips Nizer L.L.P. in New York, said also that while the court recognized that the prospect of blanket immunity for reproducing defamatory material is disturbing, "they felt constrained" by the CDA and left it to Congress to decide whether to move in another direction.

Stephen J. Barrett et al., plaintiffs and appellants, vs. Ilena Rosenthal, defendant and respondent, No. S122953, Supreme Court of California.