Cubby, Inc. v. CompuServe Inc.
1991 U.S. Dist. LEXIS 15545, 19 Media L. Rep. (BNA) 1525, 776 F. Supp. 135 (1991)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An online information service provider that provides access to third-party content without exercising editorial control is properly characterized as a distributor, not a publisher, and is therefore not liable for defamatory statements unless it knew or had reason to know of the defamation.
Facts:
- CompuServe Inc. operated the CompuServe Information Service (CIS), an online service that provided subscribers with access to information sources and special interest forums.
- The Journalism Forum on CIS was managed by an independent company, Cameron Communications, Inc. (CCI), under a contract with CompuServe.
- CCI, in turn, contracted with Don Fitzpatrick Associates (DFA) to publish a daily newsletter called Rumorville USA within the Journalism Forum.
- The contract between CCI and DFA stipulated that DFA accepted "total responsibility for the contents" of Rumorville.
- CompuServe had no opportunity to review Rumorville's contents before DFA uploaded it into its system, where it became immediately available to subscribers.
- Cubby, Inc. and Robert Blanchard developed a competing electronic newsletter called Skuttlebut.
- In April 1990, Rumorville published allegedly false and defamatory statements about Skuttlebut and Blanchard, including calling Skuttlebut a "new start-up scam" and stating that Blanchard was "bounced" from a previous job.
- These statements were accessible to subscribers of CompuServe's CIS service through the Journalism Forum.
Procedural Posture:
- Cubby, Inc. and Robert Blanchard (plaintiffs) filed a diversity action in the United States District Court for the Southern District of New York against CompuServe Inc. and Don Fitzpatrick.
- The complaint alleged libel, business disparagement, and unfair competition.
- Defendant CompuServe Inc. moved for summary judgment on all claims against it, arguing it was a distributor, not a publisher, and lacked the requisite knowledge for liability.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an online information service provider that carries third-party publications without exercising editorial control act as a publisher, rather than a distributor, and is it therefore liable for defamatory statements contained within those publications?
Opinions:
Majority - Leisure, District Judge
No, an online information service provider that exercises no editorial control over third-party content is a distributor, not a publisher, and cannot be held liable for defamatory statements without knowledge. The court reasoned that CIS is the functional equivalent of a traditional distributor like a library, bookstore, or newsstand. Applying the stricter liability standard of a publisher would be an unreasonable burden and would inhibit the free flow of information, implicating First Amendment concerns as established in Smith v. California. Traditional distributors are only liable for defamation if they know or have reason to know of the defamatory content. It would be infeasible for CompuServe to review the vast amount of information uploaded to its service, much like it would be for a bookstore to read every book on its shelves. Because the plaintiffs failed to show that CompuServe knew or had reason to know of the allegedly defamatory statements in Rumorville, CompuServe cannot be held liable.
Analysis:
This case is a landmark decision in the early history of internet law, establishing the crucial distinction between a publisher and a distributor in the online context. By treating a passive online service provider as a distributor, the court created a liability standard that protected nascent online platforms from being held automatically liable for user-generated or third-party content. This ruling provided essential legal protection that encouraged the growth of online forums and services, laying the conceptual groundwork for the later enactment of Section 230 of the Communications Decency Act, which grants even broader immunity to internet service providers.
