Utah Court Rejects Section 230 Immunity for RipOff Reports

Section 230 of the Communications Decency Act (“CDA”) protects online service providers of interactive websites against liability that can arise from third party content.[1] Section 230(c)(1) provides “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”[2] While section 230(c)(1) does not itself explicitly mention ‘immunity’, the Sixth Circuit and other Circuits have recognized this provision as protecting internet service providers and leaving them ‘immune’ when displaying content that has been created by a third party.[3] As a result, lawsuits which seek “to hold a service provider liable for its exercise of a publisher’s traditional editorial functions—such as deciding whether to publish, withdraw, postpone or alter content—are barred.[4]

The grant of immunity provided by section 230(c)(1) is not without limitations though. The CDA will only apply to the extent that a service provider is not also providing the content at issue.[5] It is possible for a service provider to simultaneously act as a content provider – when the website only displays content created by third parties it is only a service provider, however, when the operator is in whole or part responsible for the creation and/or development of the content at issue then it is acting in both roles and not immune from claims against it.[6] As a result of this exception to immunity under section 230, courts recognize that section 230 will bar a claim if – (1) the defendant asserting immunity is an interactive online service provider, (2) the particular content at issue was provided by another content provider, and (3) the claim seeks to treat the defendant as a publisher or speaker of that information.[7] On the opposite end of the spectrum, a defendant is not entitled to this protection when they are responsible for the creation and/or development of the content.[8]

It should be noted that none of this means that the original poster of the content at issue would escape liability. While Congress has acted to keep government regulation of the Internet to a minimum, it has found it to be American public policy that it ensures there is strong enforcement of federal laws that deter and punish obscenity, stalking and harassment through the use of a computer.[9]

Vision Security, LLC v Xcentric Ventures, LLC, comes from the District of Utah where the controlling authority for interpreting the CDA is the 10^th Circuit Court decision in FTC v Accusearch, Inc.[10] In FTC the court concluded that a service provider is responsible for the development of offensive content only when it specifically encourages development of the offensive element of the content.[11] In Vision Securities the defendant was asking the court to reconsider an earlier order, dated September 11, 2014 denying their motion to dismiss for failure to state a claim.[12] The Court found that the defendant failed to meet their burden and provide new facts that would demonstrate a need for reconsideration of the Court’s prior ruling.[13]

The plaintiff maintains from the initial hearing that the defendant, operator of Ripoff Report, encourages negative content on their site, thus potentially eliminating the ‘neutral party’ element that service providers are expected to take. The tagline on Ripoff Report is “By Consumers, for consumers” and “Don’t let them get away with it. Let the truth be known.” However, contrary to what the tagline says, Ripoff Report allows not just consumers, but competitors as well to post comments and reviews regarding other companies.[14] Allegedly the defendant’s webmaster told the plaintiff that positive posts regarding companies are not allowed and that under no circumstances would posts be removed from the website. But, to balance this out, the defendant allows companies with negative postings to join their advocacy program, for a large fee, where they will be taught how to make negative postings look positive.[15]

In the end, after reviewing the facts submitted by the plaintiff and recognizing that the defendant had no new facts to submit, the Court ordered that the defendant’s motion for reconsideration be denied. The Court elaborated by saying that there was “no basis to certify this issue for appeal without further development of the facts.”[16]

The moral of the story – when a service provider’s terms of use, general actions taken, or advertising methods (i.e. the tagline) demonstrate that the provider is not acting as a neutral party, their immunity under section 230 of the CDA disappears and these providers can be held accountable as a result.

[1] Jones v Dirty World Entertainment Recordings LLC, 755 F.3d 398, 406 (6th Cir 2014).

[2] 47 USC §230(c)(1).

[3] See Seaton v Trip Advisor LLC, 728 F.3d 592, 599 n8 (6th Cir 2013); Almeida v Amazon.com, Inc, 456 F.3d 1316, 1321 (11th Cir 2006); Doe v MySpace, Inc, 528 F.3d 413, 418 (5th Cir 2008); Chicago Lawyers’ Comm for Civil Rights Under Law, Inc v Craigslist, Inc, 519 F.3d 666, 671 (7th Cir 2008).

[4] Zeran v America Online, Inc, 129 F.3d 327, 330 (4th Cir 1997).

[5] Jones, 755 F.3d at 408.

[6] Id.

[7] Id. at 409.

[8] 47 USC §230(f)(3).

[9] Zeran citing 47 USC §230(b)(5).

[10] 570 F.3d 1187 (2009).

[11] Vision Security, LLC v Xcentric Ventures, LLC, No 2:13-CV-00926, slip op at 4 (D Utah, August 27, 2015) citing FTC, 570 F.3d at 1199.

[12] Id. at 1.

[13] Id. at 3.

[14] Id. at 4.

[15] Id. at 5.

[16] Id. at 6.