Shielding the Messengers: StubHub Un-Snubbed in Court Victory for Online Speech and Innovation

This post is part of our ‘Shielding the Messengers’ series, which examines issues related to intermediary liability protections, both in the U.S. and globally. Without these protections, the Internet as we know it today–a platform where diverse content and free expression thrive–would simply not exist.

Owners of online marketplaces can breathe a little easier this week: on Tuesday, a state-level appeals court issued a decision flatly rejecting a dangerous court precedent that threatened not only online auction sites but social networks, message boards, and every other platform for online expression.

The decision, in the case of Hill v. StubHub, Inc., overturned a trial court order that ignored the strong protection that federal law gives to online intermediaries and held online ticket site StubHub responsible for a user’s violation of a North Carolina law that prohibits predatory ticket reselling. CDT and its allies had filed a brief with the appeals court urging reversal.

The new decision is a solid win for every online platform that relies on Section 230 and the principle for which that federal law stands: that when it comes to illegal speech online, the law should punish the wrongdoer, not the messenger. The court rightly concluded that if anyone broke the law, it wasn’t StubHub but rather the StubHub user who was charging 260% of face value for Hannah Montana tickets.

The trial court had mistakenly refused to grant Section 230 immunity to StubHub based on a broad misreading of the 2009 Fair Housing Council v. Roomates.com decision. In Roommates, the 9th Circuit federal court of appeals carved out a narrow exception to Section 230 immunity for sites that require purportedly illegal content from users. The trial court wrongly expanded the Roommates carve-out to include StubHub by virtue of its business model, which encourages high prices, even though the site’s design did not dictate what prices a ticket seller could set.

However, the appeals court got it right and recognized that the Roommates exception is quite narrow. A business model that encourages the posting of content that might be unlawful – in this case, exorbitant ticket prices – is not enough to nullify the immunity. For example, if a site requires users to fill out a form using drop-down menus, and each possible menu item would be unlawful, as in Roommates, Section 230 may not protect the site with respect to that content. However, a site offering a free-text box in which users might post illegal content is and should be protected against liability for what users choose to post. Otherwise, user-generated content sites would have the impossible task of reviewing every single submission for potential illegality. The cost of that task alone would crush innovation and lead to unnecessary and overbroad censorship by risk-averse companies.

Putting aside how one might feel about predatory ticket pricing, this ruling is a win for all online marketplaces and platforms for speech and their users. It is directly in line with Section 230’s stated policy to “preserve the vibrant and competitive free market . . . for interactive computer services,” including e-commerce, and sites like Amazon, craigslist, eBay, and their fledgling competitors should be celebrating the result.

Up Next

CDT is tracking another worrisome case, Jones v. Dirty World Entertainment Recordings, LLC, that is currently being appealed to the 6th Circuit. There, in a ruling plainly out of step with existing readings of Section 230, the district court held the operator of the admittedly distasteful thedirty.com liable for defamatory statements about a Cincinnati BenGal cheerleader submitted by a user. Like in StubHub, the trial court vastly overstated the scope of the Roommates exception in wrongly denying Section 230 immunity to the site, and CDT is hoping to participate in that case as well.

One of Many

The StubHub case joins a series of Section 230 cases in which CDT has filed amicus (friend-of-the-court) briefs stressing the statute’s importance for online innovation and free expression. Among the others:

Barnes v. Yahoo, 2009

CDT filed this brief with Public Citizen, asking that the 9th Circuit reconsider a sloppy initial ruling that could have been read to narrow Section 230’s coverage. The court adopted our proposed reasoning and issued a revised opinion.

Zango v. Kaspersky Lab, 2008

Zango sued anti-spyware maker Kaspersky Lab for including Zango’s adware on block-lists.  The district court dismissed, finding Kaspersky’s actions covered by Section 230(c)(2), which covers voluntary screening actions and tools that enable voluntary screening.  CDT wrote a brief defending this result, stressing these less familiar but equally important aspects of the law.  The 9th circuit agreed, and upheld judgment in favor of Kaspersky.

Doe v. Sexsearch.com, 2008

A man who unwittingly had sex with a minor who had lied about her age on her SexSearch profile sued the website for a host of tort and contract claims.  The district court ruled that SexSearch was protected by Section 230, since the false age was user-provided.  CDT’s brief described the benefits of Section 230 and Congress’s intent in passing it, and urged affirmance.  The 6th circuit affirmed the dismissal, but declined to address the scope of Section 230, opting instead to dissect all fourteen claims and dismiss each in turn.

Doe v. MySpace, 2008

An underage user sued MySpace for fraud and negligence after she was sexually assaulted by someone she met through the site.  She alleged that MySpace had a duty to take security measures to protect users.  CDT joined a brief arguing that any such duty would treat MySpace as the speaker of publisher of third-party content in violation of Section 230.  The 5th Circuit upheld the dismissal of charges against MySpace.

Fair Housing Council of San Fernando Valley v. Roomates.com, LLC, 2008

Roommates.com was alleged to have violated the Fair Housing Act by requiring users to post racial and sex preferences in ads for roommates.  The original 9th circuit opinion ruled that because the website categorized user’s content, 230 protection did not apply.   CDT joined a coalition brief urging the 9th Circuit to reconsider such a broad exception when rehearing the case en banc.  The revised opinion affirmed the prior ruling, but significantly narrowed the exception as described above.

Chicago Lawyers’ Committee for Civil Rights under the Law, Inc. v. Craigslist, Inc., 2007

The plaintiffs alleged that Craigslist’s housing postings violated the Fair Housing Act, and sought to hold the online classified site responsible.  The district court rightly dismissed claims under section 230, but in a way that would have dramatically narrowed the immunity.  CDT joined coalition brief urging the 7th Circuit to clarify the breadth of Section 230’s immunity provisions.  The 7th Circuit did just that, concluding that CLC “cannot sue the messenger just because the message reveals a third party’s plan to engage in unlawful discrimination.”

For more on Section 230, see this Policy Post, which accompanied a group of these briefs.