Canadian firm Global Royalties, a broker in gemstone
investments, sued Xcentric Ventures, an Arizona company that runs a
website called RipoffReport.com. The site invites consumers to post
complaints about companies. Site user Spencer Sullivan posted three
statements about Global, one of which included a reference to its
business as a "scam".
Global's lawyers approached Sullivan and Sullivan
subsequently asked Xcentric to remove his entries. Xcentric
refused. Global sued Sullivan and Xcentric in a court in Ontario.
Xcentric did not appear and the Ontario court issued an order
requiring Xcentric to remove the offending statements from its
site.
Global Royalties sought enforcement of that order in the US
District Court for the District of Arizona and asserted a
defamation claim against Xcentric.
But US District Judge Frederick Martone ruled last week that
under US law, foreign judgments granting injunctions are not
generally entitled to enforcement. He dismissed Global's claim for
enforcement of the order.
The defamation claim was also rejected. Judge Martone referred
to the Communications Decency Act (CDA), noting that it "broadly
immunizes website operators from liability for third-party
content".
Global had argued that Xcentric "adopted" Sullivan's statements
by failing to remove them after Sullivan disavowed their contents
and asked that they be taken down. This adoption, said Globla, is
tantamount to creation or development.
Judge Martone disagreed. It is well established, he said, that
notice of the unlawful nature of content is not enough to make it
the website operator's own speech.
"Defendant's failure to remove the three statements was an
'exercise of a publisher's traditional editorial functions' and
does not defeat CDA immunity," he wrote.
Judge Martone concluded: "If it was an unintended consequence of
the CDA to render plaintiffs helpless against website operators who
refuse to remove allegedly defamatory content, the remedy lies with
Congress through amendment to the CDA."
He dismissed the case though gave leave to Global to file an
amended complaint, "[because] we do not know whether plaintiff can
state a claim".
In the UK, there is no such protection for website hosts.
Websites have a duty to remove or block access to defamatory user
comments once they are made aware of them. They risk becoming
responsible for those comments if they fail to do so
'expeditiously'.
David Woods, a litigation specialist with Pinsent Masons, the
law firm behind OUT-LAW.COM, said the case highlights an
inconsistency in US law.
"US law takes the same notice-and-takedown approach as Europe to
copyright-protected content. Once a host is made aware of
copyright-infringing images or songs, they must be removed
quickly," he said. "But the US doesn't apply that same approach to
libellous comment."
"It's inconsistent, because US law does recognise defamation as
a necessary limitation on the right of free speech. You can sue a
person who defames you in the US. But for some reason, the CDA
deems defamatory content worthy of protection on the web and there
seems to be no way to force the deletion of that content. The CDA
is a strange law indeed," said Woods.
