A new federal law, buried in the Communications Decency Act of 1996 ("CDA"), has changed all that by providing new legal protections for associations and other Web site, discussion group, and bulletin board sponsors. Most recently, two courts - one federal and one state - have upheld the validity and efficacy of these new protections. While the CDA has gained considerable prominence because of its provisions which criminalize the transmission of "indecent" material over computer networks - provisions which were struck down by the U.S. Supreme Court this June on First Amendment grounds - it is Section 230 of the CDA (47 U.S.C. Section 230) that represents, in its own right, a landmark development in the law of cyberspace. (Section 230 is unaffected by the recent Supreme Court decision.) Moreover, Section 230 will have a wide-ranging impact on the way associations monitor, screen, edit, and otherwise regulate content transmitted by members over their Web sites, bulletin boards, discussion groups, chat rooms, listservs, and other interactive computer services.
In a section entitled, "Protection for 'Good Samaritan' Blocking and Screening of Offensive Material," Section 230 provides that "No provider … of an interactive computer service (i) shall be treated as the publisher or speaker of any information provided by another …, or (ii) shall be held liable on account of any action voluntarily taken in good faith to restrict access to or availability of material that the provider … considers to be … objectionable." An "interactive computer service" is defined as "any information service [or] system … that … enables computer access by multiple users to a computer server, including … such systems operated or services offered by … educational institutions." Finally, Section 230 says that "No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section."
In short, Section 230 bars defamation and other tort lawsuits, as well as certain other types of claims, that might otherwise be brought against associations and other "interactive computer service" providers for injury caused by material transmitted by others via such services. Moreover, the CDA's conference report analysis of Section 230 states that one of its purposes is to overturn the 1995 Stratton Oakmont v. Prodigy decision, in which a New York court said that the Internet access provider Prodigy could be held liable for defamatory messages posted on its service by third parties, because of Prodigy's policy of prescreening messages for objectionable content. The Prodigy court had applied classic publisher liability in holding that if an interactive computer service provider had a policy of prescreening on-line messages, then, by definition, it "knew or had a reason to know" of any defamatory material that traveled over its service, and thus could be held responsible for "negligently distributing" any defamatory material that slipped through the screening process.
The Prodigy decision drove fear not only into the hearts of Prodigy, America Online ("AOL"), and other Internet access providers, but also associations and other sponsors of interactive computer services such as listservs, discussion groups, and bulletin boards. The decision led most associations to adopt a "hands-off" to such services because it favored on-line service providers that kept themselves totally ignorant of the third party content on their systems.
Congress recognized that this legal regime created disincentives for voluntary "good Samaritan" actions to detect and eliminate objectionable content. So it enacted Section 230, immunizing associations and other interactive computer service providers from most liability for third party content. Through this mostly unnoticed but landmark law, Congress has removed the principal disincentives for associations to monitor, screen, edit, or otherwise regulate content posted by members.
In March and again in June of this year, two courts - the U.S. District Court for the Eastern District of Virginia and the Florida Circuit Court, 15th Judicial Circuit - have invoked Section 230 in finding AOL not liable for statements transmitted by others over its service. In the federal case (Zeran v. AOL, 1997 U.S. Dist. LEXIS 3429), AOL was sued for negligently failing to delete certain defamatory statements after being notified of their malicious and fraudulent nature. In the Florida case (Doe v. AOL, No. CL97631AE, June 13, 1997), AOL was accused of negligently failing to enforce its prohibitions on the posting of obscene and illegal material. In both cases, the courts ruled in favor of AOL, pointing to Section 230's liability protections, even for state claims like defamation and other torts.
As a precautionary note, associations should be aware that Section 230, by its terms, expressly provides no liability protections in the intellectual property area, and no immunity from any federal criminal statute. For associations, this means, among other things, that contributory copyright or trademark infringement should remain a very real concern of associations. If a member posts material via an association's on-line service that infringes someone else's copyright or trademark rights, and if the association "knew or had reason to know" of the infringement, it may be held contributorily liable for the infringement - with all of the damages that can flow therefrom. In addition, the principal federal antitrust law is a criminal conspiracy statute. For their own protection, associations must remain vigilant to ensure that their on-line facilities are not used by members to fix prices, boycott suppliers, allocate markets, or otherwise breach the antitrust laws. Section 230 provides broad protections for associations in the tort realm (including defamation), and possibly other legal areas as well, but intellectual property and antitrust remain hotbeds of potential liability for associations in cyberspace.
As a further caveat, if an association is made aware of the defamatory nature of on-line material and makes a conscious decision not to remove it, it is not clear that Section 230 would immunize the association from defamation liability, because under such circumstances, the material initially placed on-line by a third party (such as a member) might be deemed to be material provided by the association itself, thereby rendering Section 230 inapplicable. The court in the Zeran case left open this possibility, despite AOL's claim that it should be immune from liability for any information appearing on its system unless that information was provided by AOL itself.
In conclusion, while the rest of the CDA has received most of the press, it is Section 230 that has tremendous beneficial implications for associations. If an association wants to moderate a discussion group, monitor its listservs, or screen bulletin board postings, it no longer has to refrain for fear of being held liable for injurious material that "slips through." At the same time, if a defamatory message sent by a member damages someone else's reputation, the injured party is not without recourse; he or she can pursue the ultimate wrongdoer - the person who created and posted the material in the first place - without punishing the intermediary (the association).
Section 230 is a landmark development in technology law which has strengthened the foundation for continued development of the new electronic medium. It has also provided much needed and deserved protections to AOL, CompuServe, and other Internet access providers. But most important for the association community, it gives associations the freedom to shape their electronic communication policies not on the basis of liability fears, but on the basis of what best suits their members and the industries and professions they represent.