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California Court of Appeal Rules eBay Not Liable for Comments Posted by User
In Roger M. Grace v. eBay Inc., the California Court of Appeal ruled that both the Communications Decency Act of 1996 (the Act) (which is part of the Telecommunications Act of 1996) and the User Agreement on eBay's website relieve eBay of liability for libel and violation of the unfair competition law with respect to comments posted by a seller on the website. The plaintiff, Roger Grace, sued the buyer and eBay after the buyer had posted comments on the website claiming that Grace was dishonest and should be banned from eBay. The Superior Court of Los Angeles County held that s. 230 of the Act immunizes eBay against liability for libel and violation of the unfair competition law as a publisher of information provided by another person. Grace appealed the decision to the California Court of Appeal, which upheld the lower court's judgment on the basis of eBay's User Agreement rather than the Act.
With respect to s. 230 of the Act, the Court of Appeal stated that the common law of libel distinguishes between liability as a primary publisher, who is presumed to know the content of the published material, and a distributor, who may or may not know the content of the published matter. A distributor is subject to a different standard of liability, which requires a greater showing of culpability. The Court held that this section, which states that "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," does not provide immunity against liability as a distributor. Therefore, a distributor can be held liable for libel if it knew or had reason to know that the material was defamatory.
However, eBay's website User Agreement contained a written release that stated, "Because we are a venue, in the event that you have a dispute with one or more users, you release eBay (and our officers, directors, .) from claims, demands and damages (actual and consequential) of every kind and nature, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way connected with such disputes." In his appeal, Grace argued that the language of the release is not sufficiently precise to encompass a claim against eBay based on defamatory information provided by a third party and that his dispute is not merely a dispute with a user, but a dispute with eBay directly. The Court of Appeal disagreed, holding that the type of dispute referenced in the release clearly encompasses a dispute with another user relating to comments posted by the user on the website. The court also held that broad language of the release encompasses a claim or demand against eBay based on its displaying of or failure to remove objectionable comments by another user posted on the website, as such claim or demand arises out of or is connected with a dispute with another user.
For more information, visit:
http://www.law.com/jsp/article.jsp?id=1090180161293
For a copy of the decision, visit: