Category: Law & Policy

CA Supreme Court in Hassell Reveals Sec. 230 is a Catch-22

First, a refresher. The broad immunity provision known as Section 230 of the Communications Decency Act was adopted in 1996 as an incentive to internet service providers to take affirmative steps to remove material. Congress wanted to encourage sites to take down certain types of offensive or obscene content (e.g. child porn), and the ISPs asserted, quite reasonably, that taking such action should not render them “publishers,” which would then leave their companies vulnerable to endless litigation stemming from unlawful content posted by users.

Since then, however, Section 230 immunity has been interpreted in court cases, and portrayed in the blogosphere, as a blanket protection allowing sites to take no action to mitigate harm by removing unlawful or harmful content. For the past 20 years, Section 230 has provided the statutory basis for ISP claims of universal neutrality—the “just a platform” argument—no matter what occurs on their sites. This premise was soundly rejected by both parties in Congress during hearings conducted in response to evidence that Russian agents had purchased American political ads on major platforms.

Hassell v. Bird

The facts of this case are quite simple. Ava Bird posted three reviews of Dawn Hassell’s law firm on Yelp, and these were held by a California trial court to be defamatory. No party disputes the unlawfulness of the reviews. Hassell successfully sued Bird and purposely did not name Yelp as a defendant in her litigation. The court ordered Bird to remove the reviews and also issued an order to Yelp to remove the content even though it was a non-party to the litigation.

Yelp, along with a host of amici, argued that the court order violated both Section 230 and its right to due process. A California Court of Appeals upheld the injunction, but this week, the State Supreme Court reversed, with the majority holding that the injunction indeed violates Section 230 and, thus, it was unnecessary to rule on the due process claim. Nevertheless, a concurring opinion by Justice Kruger does address the due process issue and holds that Yelp is correct in asserting that it had a right to its “day in court.”

So, as a practical matter, if you were in Hassell’s position, here’s the Catch-22 emphasized in this case: Section 230 forecloses the option of suing a web platform for harm stemming from unlawful conduct by a user. BUT, in this case, because Hassell did not name Yelp as a party, it then claimed that it was denied due process and, therefore, should not have to comply with a court order to remove Bird’s reviews. If that sounds like the platform gets to do whatever it wants, that’s because it is.

The CA Supreme Court described Hassell’s decision not to name Yelp a “litigation strategy” employed to “accomplish indirectly what Congress has clearly forbidden them to achieve directly.” If Congress chooses to address some of the the unintended consequences of Section 230, this seems like a statement worth underlining. Because Hassell’s decision not to sue Yelp—to hold them in no way liable for the harm done by Bird—appears to this reasonable observer as entirely consistent with the intent of 230 to shield platforms from costly and chronic litigation. As Justice Liu states in his dissent …

“No one has burdened Yelp with defending against liability for potentially defamatory posts. Here, the trial court ordered Yelp to remove postings that have been already adjudicated to be defamatory. Hassell sued Bird, not Yelp, and the litigation did not require Yelp to incur expenses to defend its editorial judgments or any of its business practices.”

That is the heart and soul of Section 230 at its origin, and it is consistent with recent declarations by both parties in Congress that the immunity in the CDA was never designed to obviate all platform responsibility. To the contrary, it was designed to encourage that responsibility. So, to the extent the majority opinion in this case rests on a plausible, or even reasonable, reading of the statute, this case may serve as guidance to Congress for considering revision of Section 230.

Is the language of 230 problematic?

Specifically, the majority opinion holds that Section 230(e)(3) bars this injunction against Yelp as a non-party due to the wording, “No cause of action my be brought and liability may be imposed under any State or local law that is inconsistent with this section.” Thus, if it is this court’s understanding that the order for Yelp to remove unlawful content is a prohibited “cause of action,” but that a plaintiff is simultaneously barred by the same statute from actually suing Yelp, then it may be time for Congress to reconcile exactly this discrepancy.

I agree completely that Yelp should not be sued, or otherwise held liable, for any harm that may have been done to Hassell through the unlawful conduct of Bird. But in the realities of the digital market, where serious harm is both easily and cheaply effected, there is no justice in holding that a platform’s immunity from costly liability extends to an immunity from taking responsible, mitigating action which costs nothing.  In this regard, Justice Kruger’s concurring opinion also recognizes the difficult realities of the statute, stating…

“Section 230 has brought to an end to a number of lawsuits seeking remedies for a wide range of civil wrongs accomplished through Internet postings—including, but not limited to, defamation, housing discrimination, negligence, securities fraud, cyberstalking, and material support of terrorism.”

And in fairness, she further states…

“Whether to maintain the status quo is a question only Congress can decide. But at least when it comes to addressing new questions about the scope of section 230 immunity, we should proceed cautiously, lest we inadvertently forbid and even broader swath of legal action than Congress could reasonably have intended.”

Justice Cuéllar concurred with the opinion on the basis that a proper finding of fact was not made regarding Yelp’s conduct that would render it properly a subject to an injunction as a non-party. But at the same time, he had this to say about Section 230 immunity …

“To the extend the Communications Decency Act merits its name, it is because it was not meant to be—and it is not—a reckless declaration of the independence of cyberspace. Nothing in section 230 allows Yelp to ignore a properly issued court order meant to stop the spread of defamatory or otherwise harmful information on the Internet.”

Ouch. That allusion to Barlow is a pretty solid kick right in the EFFin gut. And that’s from a justice ruling in Yelp’s favor—for now. Suffice to say, there is plenty in this decision that stops short of the internet activist view that Section 230 immunity is both absolute and sacrosanct. Even the majority opinion is tempered by editorial comments acknowledging that platform irresponsibility causes tangible social harm.

As a final comment, I’ll pose the following food for thought:

Once a court has vitiated the role of the original author of some unlawful content (i.e. Bird has been found guilty and ordered under pain of contempt to remove her reviews), how is it that the platform which continues to publish the unlawful content is not then held to be the “author” of that content? If I plagiarize a work, I am guilty as the “author” of the plagiarism; and if I further use plagiarized material to defame someone, the original author is not liable for the defamation; I am.

Moreover, if Bird requests that Yelp remove her reviews and they do not, is Yelp not violating her First Amendment rights by means of coerced speech; and are they also not potentially liable for forcing her into a state of contempt of court by means of that coerced speech?

A Case for CASE in Brammer v. Violent Hues?

Following up on yesterday’s post about Brammer v. Violent Hues, it occurs to me that this narrative—at least as much as is publicly available—lends itself to a rationale for the proposed CASE Act, which would create a small-claim copyright tribunal at the U.S. Copyright Office. I won’t repeat all the particulars of the bill itself (see post here), but one of the challenges to the efficacy of CASE is that it is a voluntary alternative to federal court.

When copyright critics like EFF malign the CASE Act, they employ standard hyperbole, claiming it will create a cash-cow for every copyright troll in America. This claim obfuscates the actual mechanisms in the proposal, not the least of which is that a defendant has to voluntarily agree to the tribunal as a dispute resolution. This response is then countered by the prediction that if the small claim option is voluntary, it will never be used, thus making it a boondoggle of a proposal. Admittedly, the voluntary aspect does raise this very question, but after learning about the Brammer case, it seemed like a pretty good example as to why both parties might have opted for a small claim alternative had it existed.

A Relatively Simple Matter Complicated by Litigation

Based on the available evidence, Russell Brammer does not appear to be rabidly litigious; and Fernando Mico of Violent Hues does not appear to be ideologically determined to infringe. Mico made a mistake, perhaps an unwise mistake; but the fact that he removed Brammer’s image from his website upon receipt of a C&D letter indicates that he did not firmly believe he had a right to use the photograph. (This should have weighed against his fair use claim, but that’s another matter.)

At the same time, although Brammer is obviously willing and able to litigate, he cannot be expecting a very high damage award in this particular case. I have no idea whether he requested a settlement fee before proceeding to litigation, which would be normal in this kind of circumstance; but whether he took that step or skipped it, both he and Mico could, theoretically, avoid the up-front cost of litigation by mutually agreeing to move the venue to the proposed USCO tribunal. (Note that I make no judgment about Brammer’s motives or whether I think he should have sued. I’m only looking at the legal process based on his right to make a claim and Mico’s right to a defense.)

The Small Claim Tribunal Would Make Short Work of This Case

The fact that the Virginia Court mucked up the ruling so badly—straining against legal doctrine—emphasizes the value of the small claim option for plaintiffs and defendants in this kind of dispute. Not only is Brammer now forced either to drop his claim or appeal at greater legal cost, but Mico is likewise required to defend himself as the case moves up to the appellate court. And this appeal is only necessary because the district court made egregious errors of law—mistakes the USCO would be unlikely to make—on a relatively straightforward case.

One advantage of the small claim tribunal is that the proposed panel is only expert in copyright law, which is not at all true of federal judges. This can be beneficial to defendants as well as claimants, as there will naturally be cases that favor defendants just as plainly as Brammer favors the plaintiff.  So, yes, I would expect that the USCO tribunal to readily find that Violent Hues had infringed, but I also predict the appeals court will come to the same conclusion, only much later and for legal costs that will exceed the amount of an award the USCO tribunal would likely allow in this instance.

So, looking at the available facts, if Brammer had offered Mico the option of resolution via the small claim tribunal, while making clear that he was able to pursue federal litigation, it seems not unreasonable that Mico might voluntarily choose the small claim venue. Since the alternative would be to opt out and wind up exactly where this case is now, why not take a shot at a simpler and cheaper resolution?

I do not presume to truly know the motives or mindsets of other people. And I also admit to interpolating a bit from the data. But at the same time, this kind of infringement—one creator improperly using the work of another creator—is exemplary of “garden variety” copyright cases. And the whole purpose of the CASE Act is to provide one option—in addition to out-of-court settlements, and other resolutions—to more affordably and efficiently address these low-level conflicts.

For sure, the EFF is wrong to claim that the CASE Act will conjure all manner of copyright mischief, which is simply not possible within the provisions of the bill. At worst, the small claim tribunal won’t work; not enough people will use it, and it will be scrapped as a good intention. But even the known particulars of this Brammer case are so familiar to thousands of rights holders and defendants, that it suggests to me the CASE proposal is likely to be more widely applicable than many critics might assume.

Considering Jessica Litman’s Call to Rethink Copyright Doctrine

One of the more popular talking points among copyright critics is that copyright only works for corporations but not for individuals. Thus, debate about copyright’s purpose and legal contours is often an extension of the broader condemnation of corporate power in our democracy, or even capitalism itself. For this reason, when activist groups like EFF or Public Knowledge declare that “only corporations benefit from copyrights,” it’s a dog whistle that triggers a generalized, sympathetic response but which offers little serious thought about the premise itself.

In fact, the policies advocated by these organizations are so consistently and so broadly anti-copyright that they could never honestly claim to care how much or how little copyright does serve individual authors. For instance, recent assertions that the proposed CLASSICS Act is a “handout to labels” may be an easy pitch to sell in this climate, but it isn’t remotely true based on any sensible understanding of what the bill actually does.

Setting a New Tone?

A recent paper by law professor Jessica Litman, at the University of Michigan, recommends that copyright scholars take what she considers a fresh approach to understanding copyright’s benefit to individual authors by first extricating themselves—both personally and professionally—from the macro-debate being waged by very large corporations. She suggests that she and her fellow scholars are too caught up in the business fight between legacy intermediaries (publishers, labels, studios) and new intermediaries (online platforms). “Copyright scholars can safely leave them to work it out without our help,” she writes. “If the core question in that dispute is whether the law ought to favor publishers over platforms or vice versa, the answer is unlikely to significantly change the copyright ecosystem. Neither side has much of a claim to the moral high ground.”

Although this is her preface and not her thesis, it is necessary to interject that while I think the spirit of what she proposes has merit—that academics might look through the fog of big companies battling over turf—that she errs in a very significant way when she portrays traditional publishers and digital platforms as equals from the perspective of authors and their copyrights.

From the authors’ point of view, even the most predatory practices of legacy intermediaries still cannot compare to the outright theft of their rights—to say nothing of evangelizing that theft—by the internet platforms. This is why so many professional creators have offered variations on the theme that it’s their choice to negotiate licensing terms with traditional intermediaries, while the kind of piracy that enriches online platforms gives them no choice whatsoever. I’ll return to that topic, but Litman’s thesis is summed up thus:

“If a legal regime purportedly designed for the benefit of authors systematically short-changes them, why does that happen, and what options might we have to respond? The answer, I’ll suggest, lies in the ways that we, as lawyers, think about property rights.”

At the risk of being kicked out of the pro-copyright club, I think any scholarship that proposes to consider how copyright might better serve individual authors is worth analyzing at face value. Litman’s point deserves consideration inasmuch as she has not produced yet another paper, replete with overtones of collectivist whimsy, about the evils of copyright and the greed of artists. And to me, her paper does not read like thinly-veiled policy proposals designed to benefit Silicon Valley. Instead, she at least appears to ask a perfectly valid question as to why more authors don’t reap more benefit from the system.

The History of a Con Game?

The fulcrum of Litman’s thesis is that the first law to vest copyright in the author, the Statute of Anne ratified by England’s Parliament in 1710, was a maneuver by the publishers of the time to retain a monopoly they were about to lose. By royal charter between 1557 and 1709, the guild known as the Stationers Company, which comprised the trades necessary to book printing, had the exclusive right to publish all books throughout England and her domains. But, faced with the prospect that the charter would not be renewed, the Stationers were at least partly responsible for advocating the Statute of Anne, which, for the first time, vested copyright in authors.

Litman subscribes to the narrative that this was a tactic employed by the Stationers designed to temporarily grant a property-like right to authors, which could then be easily and cheaply acquired by publishers, thus restoring their effective monopoly. To emphasize her point, she compares the Statute of Anne to the U.S. Dawes Act of 1891, which granted tracts of land to native tribes so that they could be easily bought by speculators in transactions that look fair and legal but were really just a mass swindle. “If you are looking to get your hands on some arable land or to regain control of the printing texts, creating new property rights turns out to be an excellent strategy. Sometimes the original recipient of the property benefits, but not always,” Litman writes.

Thus, Litman asserts that the doctrinal practice of treating copyrights as property may be a root cause of the law’s failure to benefit authors relative to the way in which it benefits intermediaries. She writes, “The rest of the world followed that model. In almost every country, authors receive copyright protection as an initial matter, but those copyrights are transferred to and then owned and controlled by publishers and other intermediaries.”

Without writing a five-thousand-word post, it’s worth keeping in mind that the story of the Stationers Company is more complicated than Litman states; that copyrights are not exclusively transferred to intermediaries in ways that are disadvantageous to authors; and that American copyright practice, especially after 1909, diverges substantially from England in 1710.  So, while Litman presents an interesting historic parallel, I would caution against giving it too much weight if her purpose is indeed to examine 20th and 21st century copyright doctrine to the benefit of individual authors.

If Not Property What Then?

With that in mind, my first response to Litman’s proposal that copyright’s weakness lies in the legal doctrine binding copyright to property law, is that perhaps copyright shares more natural rights qualities than many of her colleagues may be willing to admit. If the problem, as she states, begins with the fact that property is alienable and, therefore, designed to be sold, then does this mean scholars are willing to entertain the possibility that copyright is also inalienable? That it functions like a labor right as well as a property right?

Property is alienable, can be sold, transferred, bequeathed, etc. But a labor right is inalienable and does not last beyond the life and physical being of the individual. When an author agrees to a licensing contract with an intermediary, she shares a kinship with any other worker signing a labor contract, but for the fact that the author has sometimes already performed the labor while other workers agree to terms for labor yet to be done. Or, conversely, a musician who signs a multi-album contract is negotiating both property and labor at the same time, and his bargaining position is founded on the copyrights in the creative works yet to be produced.

Individuals are vested with the natural right to negotiate terms for their labor throughout their lifetimes, and this right is never diminished, no matter how many works an author creates or how many jobs another kind of worker holds. Of course, possession of this right does not guarantee that the market will be fair or that intermediaries or employers will not be predatory. But this is comparable to the fact that non-discrimination laws do not eradicate discriminatory feelings or behaviors. In other words, human flaws like bigotry or greed do not mean the rights codified into law are doctrinally flawed, and I am concerned Litman may be straying into this logical fallacy.

At a very basic level, negotiating a licensing contract is not that different from any other contract for the exchange of labor. The more perceived value the laborer or rightholder possess, the better her bargaining position (e.g. an author with a money-making track record is like a job applicant with a great resume). To the extent that an author needs an intermediary—and Litman states that this is necessary—I don’t see how this fundamental rule of investment (i.e. that more perceived value equals greater negotiating power) is going to be altered whether attorneys are trained to think of copyright as property or not.

Economic Forces Are Independent of Copyright

As alluded to above, legacy intermediaries are just one sector within a worldwide consolidation of corporate power in liberal democracies. The forces that continue to fuel this trend—and presumably any potential remedies to these forces—are almost certainly independent from copyright doctrine. So, if a copyright scholar were to examine negotiations among authors and intermediaries across various decades, I would hypothesize that copyright is a universal constant relative to other factors that lead to either more predatory or more symbiotic contractual arrangements.

As a simple example, Hollywood in the late 1980s was marked by a climate of spec-script mania. Writers benefited from a commodities-exchange-like feeding frenzy, with studios paying huge prices for specs. It wasn’t necessarily rational, but this screenplay bazaar had little to do with copyright doctrine and everything to do with various market forces driving studios to behave in this manner. Today, a spec writer is in a much weaker bargaining position than that period, but is simultaneously bolstered by the fact that entities like Netflix are currently spending huge volumes of capital in order to bulk up their programming as quickly as possible. This trend will shift at some point, and, again, will have little to do with copyright doctrine.

Putting Their Own Theories to the Test

In the same way that academics should be mindful of non-copyright-related forces in this context, I think they should also consider some of the non-measurable benefits that authors—correctly or not—perceive when they enter into deals with intermediaries. I am currently writing a non-fiction book and have signed a publishing contract with a university press. As Litman and her colleagues know very well, such an arrangement is basically writing on spec under contract for nothing that anyone would consider real money.

Most academics who publish books do not make much money from the books themselves, yet I suspect the reasons they sign deals with publishers like university presses is that, like me, they recognize various benefits that transcend money. Among these benefits is that writing a book is hard enough without being entirely alone in the editing, production, and marketing of the book; and the imprimatur of a known press is not without value.

So, because many copyright scholars have full-time jobs with tenure, benefits, and PhD after their names (i.e. financial security most authors do not have), I would suggest that any academics who might heed Litman’s call and eventually propose alternative models to distribution should be among the first to test their theories with their own works. (Kinda like the mad scientist with the new drug who injects himself first to see if he’ll turn into Mr. Hyde.)

Many of these scholars can look to their own careers as authors and ask themselves why they enter into contracts with publishers when these deals are not expected to yield a substantial portion of their incomes. The answers to those questions may provide an opportunity to step out of the ivory towers and into the authors’ shoes; and if Litman and colleagues truly want to understand how copyright can better serve individual creators, thinking like creators might be a good place to start.