Internet Legal Issues (Mgmt 447)

1. Internet Legal Issues (Mgmt 447) Professor Charles H. Smith Defamation (Chapter 11) Spring 2006

2. Common Law Elements of Defamation • Defendant’s false statement of fact about plaintiff. • Publication of this statement to a third party. • This publication causes damage to plaintiff.

3. Examples of Defamation • False statement – compare “our company made $1,000,000 last year” (fact) vs. “we project that our company will make $1,000,000 over the next year” (opinion-speculation); be very careful in making statements of fact to customers as well as evaluating statements of opinion-speculation. • Publication – compare statement made to person who is not the subject of the statement (3rd party) vs. statement made only to subject of the statement (no 3rd party); publication can occur through Internet, print media, TV or radio broadcast, correspondence, telephone or in-person conversation, etc.

4. Examples of Defamation cont. • Damage – defamation deals primarily with plaintiff’s loss of business or personal reputation. • Damage can be shown in a number of ways – emotional distress, shame, embarrassment, humiliation, loss of income due to lost business or job, etc. • Examples – L.A. Law episode re competing breweries; false accusation of wrongdoing (job-related or not) leads to termination of employment.

5. Libel – Written Defamation • Cal. Civil Code § 45 – “Libel is a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation.” (Cal. Civil Code § 45a defines “libel on its face” – also called “libel per se” – as “defamatory . . . without the necessity of explanatory material.”) • Since material published on the Internet (e.g., e-mail, chat room, website, etc.) is often written, defamation on the Internet is usually considered to be libel.

6. Slander – Oral Defamation • Cal. Civil Code § 46 – "Slander is a false and unprivileged publication, orally uttered, and also communications by radio or any mechanical or other means which: "1. Charges any person with crime, or with having been indicted, convicted, or punished for crime; "2. Imputes in him the present existence of an infectious, contagious, or loathsome disease; "3. Tends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits;"4. Imputes to him impotence or a want of chastity; or"5. Which, by natural consequence, causes actual damage." • While not common, it is possible for defamation on the Internet to be slander if it is audio broadcast from website.

7. Defenses to Defamation • Truth – since a defamatory statement must be false, a statement that is true cannot be defamatory since we have a right to make truthful statement based on the Free Speech Clause of the 1st Amendment. • Absolute privilege – examples include statements made in a legislative proceeding or made in a judicial or arbitration proceeding. (Cal. Civil Code § 47(b).) • Qualified privilege – examples include statements made in response to request for information (Cal. Civil Code § 47(c)(3)) or made about a public figure (common law); to overcome the qualified privilege, plaintiff must prove defendant made the statement with knowledge or reckless disregard of falsity, or with malice.

8. Defamation on the Internet • What is the location of publication of a defamatory statement? Does publication occur at the computer used to enter the statement? Or does publication occur at the computer(s) where the statement is viewed? • Resolution of this issue is crucial to decisions re personal jurisdiction and choice of law, which are procedural matters that can decide who will prevail in court.

9. Immunity for Service Providers • 47 U.S.C. § 230(c) states: "(1) No 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) No provider or user of an interactive computer service shall be held liable on account of--"(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or"(B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1)(a)." • § 230(c) does not impact potential criminal liability for matters such as obscenity. • Case Studies – Zeran v. America Online (pp. 350-52); Blumenthal v. Drudge (pp. 352-54); Ben Ezra, Weinstein & Co. v. America Online, Inc., 206 F.3d 980 (10th Cir. 2000) (ISP immunity for content provided by 3rd party).

10. Frivolous Defamation Cases • Defamation cause of action can be basis of SLAPP (Strategic Lawsuit Against Public Policy) because sometimes used to attack person critical of plaintiff; attack often has little or no legal merit; public policy violated since intent is to discourage free speech, not assert any legitimate legal right. • Cal. Code of Civil Procedure §§ 425.16-.17 provide procedures and guidelines for seeking dismissal of SLAPP at pleading stage before time and expense of litigation incurred; purpose is to quickly dispose of frivolous lawsuits. • Motion to strike cause of action per § 425.16 (enacted in 1992) – plaintiff must establish that there is a probability that plaintiff will prevail in the action; this puts the burden on plaintiff at the beginning of the lawsuit to prove the probability that plaintiff will win; this burden can be very difficult because all of the facts may not be known and no discovery is allowed before the motion is heard; attorney’s fees available for successful motion. • New § 425.17 tempers the impact of § 425.16 since the legislature recognized a “disturbing abuse” of § 425.16.