356 F.3d 393
United States Court of Appeals,
REGISTER.COM, INC., PlaintiffAppellee,
VERIO, INC., DefendantAppellant.
Docket No. 009596.
Argued: Jan. 21, 2001.
Decided: Jan. 23, 2004.
Before: LEVAL, Circuit Judge, and J.F. KEENAN, District Judge.
The Honorable John F. Keenan, United States District Judge for the Southern District of New York, sitting by
designation. The Honorable Fred I. Parker was a member of the panel but died on August 12, 2003. Judge Parker
would have voted to reverse the district court's order. This appeal is being decided by the two remaining members
of the panel, who are in agreement. See Local Rule § 0.14(b).
LEVAL, Circuit Judge.
Defendant, Verio, Inc. ("Verio") appeals from an order of the United States District Court for the Southern District of New
York (Barbara S. Jones, J.) granting the motion of plaintiff Register.com, Inc. ("Register") for a preliminary injunction. The
68 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
court's order enjoined Verio from (1) using Register's trademarks; (2) representing or otherwise suggesting to third parties
that Verio's services have the sponsorship, endorsement, or approval of Register; (3) accessing Register's computers by use
of automated software programs performing multiple successive queries; and (4) using data obtained from Register's
database of contact information of registrants of Internet domain names to solicit the registrants for the sale of web site
development services by electronic mail, telephone calls, or direct mail. We affirm.
Judge Parker was not in agreement with this disposition. Deliberations have followed an unusual course. Judge
Parker initially was assigned to prepare a draft opinion affirming the district court. In the course of preparing the
draft, Judge Parker changed his mind and proposed to rule in favor of the defendant, overturning the injunction in
most respects. Judge Parker's draft opinion, however, failed to convince the other members of the panel, who
adhered to the view that the injunction should be affirmed. Judge Parker died shortly thereafter, prior to the
circulation of a draft opinion affirming the injunction, from which Judge Parker presumably would have dissented.
We attach Judge Parker's draft opinion as an Appendix. We do so for two reasons: One is to expose Judge
Parker's views, which would have been set forth in a dissenting opinion, but for his death; the second is because
his opinion contains an exceptionally thorough, detailed and useful statement of facts, including a comprehensive
description of the functioning of the domain name system. We have stated the facts more briefly, mentioning only
those points necessary to the arguments discussed, inviting the reader to consult Judge Parker's very thorough
fact statement for a more detailed account.
This plaintiff Register is one of over fifty companies serving as registrars for the issuance of domain names on the world
wide web. As a registrar, Register issues domain names to persons and entities preparing to establish web sites on the
Internet. Web sites are identified and accessed by reference to their domain names.
Register was appointed a registrar of domain names by the Internet Corporation for Assigned Names and Numbers, known
by the acronym "ICANN." ICANN is a private, nonprofit public benefit corporation which was established by agencies of
the U.S. government to administer the Internet domain name system. To become a registrar of domain names, Register
was required to enter into a standard form agreement with ICANN, designated as the ICANN Registrar Accreditation
Agreement, November 1999 version (referred to herein as the "ICANN Agreement").
Applicants to register a domain name submit to the registrar contact information, including at a minimum, the applicant's
name, postal address, telephone number, and electronic mail address. The ICANN Agreement, referring to this registrant
contact information under the rubric "WHOIS information," requires the registrar, under terms discussed in greater detail
below, to preserve it, update it daily, and provide for free public access to it through the Internet as well as through an
independent access port, called port 43. See ICANN Agreement § II.F.1.
Section II.F.5 of the ICANN Agreement (which furnishes a major basis for the appellant Verio's contentions on this appeal)
requires that the registrar "not impose terms and conditions" on the use made by others of its WHOIS data "except as
permitted by ICANNadopted policy." In specifying what restrictions may be imposed, the ICANN Agreement requires the
registrar to permit use of its WHOIS data "for any lawful purposes except to: ... support the transmission of mass
unsolicited, commercial advertising or solicitations via email (spam ); [and other listed purposes not relevant to this
appeal]." (emphasis added).
Another section of the ICANN Agreement (upon which appellee Register relies) provides as follows,
No ThirdParty Beneficiaries: This Agreement shall not be construed to create any obligation by either ICANN or
Registrar to any nonparty to this Agreement ....
ICANN Agreement § II.S.2. Third parties could nonetheless seek enforcement of a registrar's obligations set forth in the
ICANN Agreement by resort to a grievance process under ICANN's auspices.
In compliance with § II.F.1 of the ICANN Agreement, Register updated the WHOIS information on a daily basis and
established Internet and port 43 service, which allowed free public query of its WHOIS information. An entity making a
WHOIS query through Register's Internet site or port 43 would receive a reply furnishing the requested WHOIS
information, captioned by a legend devised by Register, which stated,
By submitting a WHOIS query, you agree that you will use this data only for lawful purposes and that under no
circumstances will you use this data to ... support the transmission of mass unsolicited, commercial advertising or
solicitation via email.
The terms of that legend tracked § II.F.5 of the ICANN Agreement in specifying the restrictions Register imposed on the
use of its WHOIS data. Subsequently, as explained below, Register amended the terms of this legend to impose more
stringent restrictions on the use of the information gathered through such queries.
In addition to performing the function of a registrar of domain names, Register also engages in the business of selling web
related services to entities that maintain web sites. These services cover various aspects of web site development. In order
CHAPTER 4: TORTS AND CYBER TORTS 69
to solicit business for the services it offers, Register sends out marketing communications. Among the entities it solicits for
the sale of such services are entities whose domain names it registered. However, during the registration process, Register
offers registrants the opportunity to elect whether or not they will receive marketing communications from it.
The defendant Verio, against whom the preliminary injunction was issued, is engaged in the business of selling a variety of
web site design, development and operation services. In the sale of such services, Verio competes with Register's web site
development business. To facilitate its pursuit of customers, Verio undertook to obtain daily updates of the WHOIS
information relating to newly registered domain names. To achieve this, Verio devised an automated software program, or
robot, which each day would submit multiple successive WHOIS queries through the port 43 accesses of various registrars.
Upon acquiring the WHOIS information of new registrants, Verio would send them marketing solicitations by email,
telemarketing and direct mail. To the extent that Verio's solicitations were sent by email, the practice was inconsistent
with the terms of the restrictive legend Register attached to its responses to Verio's queries.
At first, Verio's solicitations addressed to Register's registrants made explicit reference to their recent registration through
Register. This led some of the recipients of Verio's solicitations to believe the solicitation was initiated by Register (or an
affiliate), and was sent in violation of the registrant's election not to receive solicitations from Register. Register began to
receive complaints from registrants. Register in turn complained to Verio and demanded that Verio cease and desist from
this form of marketing. Register asserted that Verio was harming Register's goodwill, and that by soliciting via email, was
violating the terms to which it had agreed on submitting its queries for WHOIS information. Verio responded to the effect
that it had stopped mentioning Register in its solicitation message.
In the meantime, Register changed the restrictive legend it attached to its responses to WHOIS queries. While previously
the legend conformed to the terms of § II F.5, which authorized Register to prohibit use of the WHOIS information for
mass solicitations "via email," its new legend undertook to bar mass solicitation "via direct mail, electronic mail, or by
telephone." Section II.F.5 of Register's ICANN Agreement, as noted above, required Register to permit use of the WHOIS
data "for any lawful purpose except to ... support the transmission of mass unsolicited solicitations via email (spam)."
Thus, by undertaking to prohibit Verio from using the WHOIS information for solicitations "via direct mail ... or by
telephone," Register was acting in apparent violation of this term of its ICANN Agreement.
The new legend stated:
By submitting a WHOIS query, you agree that ... under no circumstances will you use this data to ... support the
transmission of mass unsolicited ... advertising or solicitations via direct mail, electronic mail, or by telephone.
Register wrote to Verio demanding that it cease using WHOIS information derived from Register not only for email
marketing, but also for marketing by direct mail and telephone. Verio ceased using the information in email marketing,
but refused to stop marketing by direct mail and telephone.
Register brought this suit on August 3, 2000, and moved for a temporary restraining order and a preliminary injunction.
Register asserted, among other claims, that Verio was (a) causing confusion among customers, who were led to believe
Verio was affiliated with Register; (b) accessing Register's computers without authorization, a violation of the Computer
Fraud and Abuse Act, ; and, (c) trespassing on Register's chattels in a manner likely to harm Register's computer systems
by the use of Verio's automated robot software programs. On December 8, 2000, the district court entered a preliminary
injunction. The injunction barred Verio from the following activities:
1. Using or causing to be used the "Register.com" mark or the "first step on the web" mark or any other designation
similar thereto, on or in connection with the advertising, marketing, or promotion of Verio and/or any of Verio's services;
2. Representing, or committing any act which is calculated to or is likely to cause third parties to believe that Verio
and/or Verio's services are sponsored by, or have the endorsement or approval of Register.com;
3. Accessing Register.com's computers and computer networks in any manner, including, but not limited to, by software
programs performing multiple, automated, successive queries, provided that nothing in this Order shall prohibit Verio
from accessing Register.com's WHOIS database in accordance with the terms and conditions thereof; and
4. Using any data currently in Verio's possession, custody or control, that using its best efforts, Verio can identify as
having been obtained from Register.com's computers and computer networks to enable the transmission of unsolicited
commercial electronic mail, telephone calls, or direct mail to the individuals listed in said data, provided that nothing in
this Order shall prohibit Verio from (i) communicating with any of its existing customers, (ii) responding to
communications received from any Register.com customer initially contacted before August 4, 2000, or (iii)
communicating with any Register.com customer whose contact information is obtained by Verio from any source other
than Register.com's computers and computer networks.
. Verio appeals from that order.
Standard of review and preliminary injunction standard
70 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
A grant of a preliminary injunction is reviewed on appeal for abuse of discretion, see , which will be found if the district
court "applies legal standards incorrectly or relies upon clearly erroneous findings of fact," or "proceed[s] on the basis of an
erroneous view of the applicable law," .
Verio advances a plethora of arguments why the preliminary injunction should be vacated. We find them to be without
merit. We address the most substantial of Verio's arguments.
(a) Verio's enforcement of the restrictions placed on Register by the ICANN Agreement
Verio conceded that it knew of the restrictions Register placed on the use of the WHOIS data and knew that, by using
Register's WHOIS data for direct mail and telemarketing solicitations, it was violating Register's restrictions. Verio's
principal argument is that Register was not authorized to forbid Verio from using the data for direct mail and
telemarketing solicitation because the ICANN Agreement prohibited Register from imposing any "terms and conditions" on
use of WHOIS data, "except as permitted by ICANNadopted policy," which specified that Register was required to permit
"any lawful purpose, except ... mass solicitation[ ] via email."
Register does not deny that the restrictions it imposed contravened this requirement of the ICANN Agreement. Register
contends, however, that the question whether it violated § II.F.5 of its Agreement with ICANN is a matter between itself
and ICANN, and that Verio cannot enforce the obligations placed on Register by the ICANN Agreement. Register points to
§ II.S.2 of the ICANN Agreement, captioned "No ThirdParty Beneficiaries," which, as noted, states that the agreement is
not to be construed "to create any obligation by either ICANN or Registrar to any nonparty." Register asserts that Verio, a
non party, is asking the court to construe § II.F.5 as creating an obligation owed by Register to Verio, and that the
Agreement expressly forbids such a construction.
ICANN intervened in the district court as an amicus curiae and strongly supports Register's position, opposing Verio's
right to invoke Register's contractual promises to ICANN. ICANN explained that ICANN has established a remedial
process for the resolution of such disputes through which Verio might have sought satisfaction. "If Verio had concerns
regarding Register.com's conditions for access to WHOIS data, it should have raised them within the ICANN process
rather [than] simply taking Register.com's data, violating the conditions [imposed by Register], and then seeking to justify
its violation in this Court .... [Verio's claim was] intended to be addressed only within the ICANN process."
ICANN asserted that the No ThirdParty Beneficiary provision, barring third parties from seeking to enforce promises
made by a registrar to ICANN through court proceedings, was "vital to the overall scheme of [its] various agreements."
This is because proper expression of the letter and spirit of ICANN policies is most appropriately achieved through the
ICANN process itself, and not through forums that lack the every day familiarity with the intricate technical and policy
issues that the ICANN process was designed to address.
ICANN's brief went on to state:
[E]nforcement of agreements with ICANN [was to] be informed by the judgment of the various segments of the internet
community as expressed through ICANN. In the fastpaced environment of the Internet, new issues and situations arise
quickly, and sometimes the language of contractual provisions does not perfectly match the underlying policies. For this
and other reasons, hardand fast enforcement [by courts] of the letter of every term of every agreement is not always
appropriate. An integral part of the agreements that the registrars ... entered with ICANN is the understanding that
these situations would be handled through consultation and consideration within the ICANN process .... Allowing issues
under the agreements registrars make with ICANN to be diverted from [ICANN's] carefully crafted remedial scheme to
the courts, at the behest of third parties ..., would seriously threaten the Internet community's ability, under the auspices
of ICANN, to achieve a proper balance of the competing policy values that are so frequently involved.
We are persuaded by the arguments Register and ICANN advance. It is true Register incurred a contractual obligation to
ICANN not to prevent the use of its WHOIS data for direct mail and telemarketing solicitation. But ICANN deliberately
included in the same contract that persons aggrieved by Register's violation of such a term should seek satisfaction within
the framework of ICANN's grievance policy, and should not be heard in courts of law to plead entitlement to enforce
Register's promise to ICANN. As experience develops in the fast changing world of the Internet, ICANN, informed by the
various constituencies in the Internet community, might well no longer consider it salutary to enforce a policy which it
earlier expressed in the ICANN Agreement. For courts to undertake to enforce promises made by registrars to ICANN at
the instance of third parties might therefore be harmful to ICANN's efforts to develop wellinformed and sound Internet
Verio's invocation of the ICANN Agreement necessarily depends on its entitlement to enforce Register's promises to
ICANN in the role of third party beneficiary. The ICANN Agreement specified that it should be deemed to have been made
in California, where ICANN is located. Under , a "contract, made expressly for the benefit of a third person, may be
enforced by him." . For Verio to seek to enforce Register's promises it made to ICANN in the ICANN Agreement, Verio
must show that the Agreement was made for its benefit. See . Verio did not meet this burden. To the contrary, the
CHAPTER 4: TORTS AND CYBER TORTS 71
Agreement expressly and intentionally excluded nonparties from claiming rights under it in court proceedings.
We are not persuaded by the arguments Judge Parker advanced in his draft. Although acknowledging that Verio could not
claim third party beneficiary rights to enforce Register's promises to ICANN, Judge Parker nonetheless found three
reasons for enforcing Verio's claim: (i) "public policy interests at stake," (ii) Register's "indisputable obligations to ICANN
as a registrar," and (iii) the equities, involving Register's "unclean hands" in imposing a restriction it was contractually
bound not to impose. We respectfully disagree. As for the first argument, that Register's restriction violated public policy,
it is far from clear that this is so. It is true that the ICANN Agreement at the time ICANN presented it to Register
permitted mass solicitation by means other than email. But it is not clear that at the time of this dispute, ICANN intended
to adhere to that policy. As ICANN's amicus brief suggested, the world of the Internet changes rapidly, and public policy
as to how that world should be governed may change rapidly as well. ICANN in fact has since changed the terms of its
standard agreement for the accreditation of registrars to broaden the uses of WHOIS information that registrars may
prohibit to include not only mass email solicitations but also mass telephone and fax solicitations. See ICANN Registrar
Accreditation Agreement § 3.3.5 (May 18, 2001). It is far from clear that ICANN continues to view public policy the way it
did at the time it crafted Register's agreement. In any event, if Verio wished to have the dispute resolved in accordance
with public policy, it was free to bring its grievance to ICANN. Verio declined to do so. ICANN included the "No Third
Party Beneficiary" provision precisely so that it would retain control of enforcement of policy, rather than yielding it to
We note in passing, Judge Parker's characterization of the public policythat WHOIS information should be "free
as air"is a rhetorical oversimplification; the public policy as set forth in the ICANN Agreement expressly
contemplated that the WHOIS data not be available for use in mass email solicitation. It also imposed another
restriction not pertinent to this appeal and expressly reserved the possibility that further restrictions might be
imposed if and when "ICANN adopts a different policy." ICANN Agreement § II.F.5.
As for Judge Parker's second argument, Register's "indisputable obligation to ICANN as a registrar" to permit Verio to use
the WHOIS information for mass solicitation by mail and telephone, we do not see how this argument differs from Verio's
claim of entitlement as a third party beneficiary, which § II.S.2 explicitly negates. The fact that Register owed a
contractual obligation to ICANN not to impose certain restrictions on use of WHOIS information does not mean that it
owed an obligation to Verio not to impose such restrictions. As ICANN's brief in the district court indicates, ICANN was
well aware of Register's deviation from the restrictions imposed by the ICANN Agreement, but ICANN chose not to take
steps to compel Register to adhere to its contract.
Nor are we convinced by Judge Parker's third argument of Register's "unclean hands." Judge Parker characterizes
Register's failure to honor its contractual obligation to ICANN as unethical conduct, making Register ineligible for
equitable relief. But Register owed no duty in that regard to anyone but ICANN, and ICANN has expressed no
dissatisfaction with Register's failure to adhere to that term of the contract. Verio was free to seek ICANN's intervention
on its behalf, but declined to do so, perhaps because it knew or suspected that ICANN would decline to compel Register to
adhere to the contract term. Under the circumstances, we see no reason to assume on appeal that Register's conduct
should be considered unethical, especially where the district court made no such finding.
(b) Verio's assent to Register's contract terms
Verio's next contention assumes that Register was legally authorized to demand that takers of WHOIS data from its
systems refrain from using it for mass solicitation by mail and telephone, as well as by email. Verio contends that it
nonetheless never became contractually bound to the conditions imposed by Register's restrictive legend because, in the
case of each query Verio made, the legend did not appear until after Verio had submitted the query and received the
WHOIS data. Accordingly, Verio contends that in no instance did it receive legally enforceable notice of the conditions
Register intended to impose. Verio therefore argues it should not be deemed to have taken WHOIS data from Register's
systems subject to Register's conditions.
Verio's argument might well be persuasive if its queries addressed to Register's computers had been sporadic and
infrequent. If Verio had submitted only one query, or even if it had submitted only a few sporadic queries, that would give
considerable force to its contention that it obtained the WHOIS data without being conscious that Register intended to
impose conditions, and without being deemed to have accepted Register's conditions. But Verio was daily submitting
numerous queries, each of which resulted in its receiving notice of the terms Register exacted. Furthermore, Verio admits
that it knew perfectly well what terms Register demanded. Verio's argument fails.
The situation might be compared to one in which plaintiff P maintains a roadside fruit stand displaying bins of apples. A
visitor, defendant D, takes an apple and bites into it. As D turns to leave, D sees a sign, visible only as one turns to exit,
which says "Apples50 cents apiece." D does not pay for the apple. D believes he has no obligation to pay because he had
no notice when he bit into the apple that 50 cents was expected in return. D's view is that he never agreed to pay for the
72 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
apple. Thereafter, each day, several times a day, D revisits the stand, takes an apple, and eats it. D never leaves money.
P sues D in contract for the price of the apples taken. D defends on the ground that on no occasion did he see P's price
notice until after he had bitten into the apples. D may well prevail as to the first apple taken. D had no reason to
understand upon taking it that P was demanding the payment. In our view, however, D cannot continue on a daily basis to
take apples for free, knowing full well that P is offering them only in exchange for 50 cents in compensation, merely
because the sign demanding payment is so placed that on each occasion D does not see it until he has bitten into the apple.
Verio's circumstance is effectively the same. Each day Verio repeatedly enters Register's computers and takes that day's
new WHOIS data. Each day upon receiving the requested data, Verio receives Register's notice of the terms on which it
makes the data availablethat the data not be used for mass solicitation via direct mail, email, or telephone. Verio
acknowledges that it continued drawing the data from Register's computers with full knowledge that Register offered
access subject to these restrictions. Verio is no more free to take Register's data without being bound by the terms on which
Register offers it, than D was free, in the example, once he became aware of the terms of P's offer, to take P's apples
without obligation to pay the 50 cent price at which P offered them.
Verio seeks support for its position from cases that have dealt with the formation of contracts on the Internet. An excellent
example, although decided subsequent to the submission of this case, is . The dispute was whether users of Netscape's
software, who downloaded it from Netscape's web site, were bound by an agreement to arbitrate disputes with Netscape,
where Netscape had posted the terms of its offer of the software (including the obligation to arbitrate disputes) on the web
site from which they downloaded the software. We ruled against Netscape and in favor of the users of its software because
the users would not have seen the terms Netscape exacted without scrolling down their computer screens, and there was no
reason for them to do so. The evidence did not demonstrate that one who had downloaded Netscape's software had
necessarily seen the terms of its offer.
Verio, however, cannot avail itself of the reasoning of In the users in whose favor we decided visited Netscape's web site
one time to download its software. Netscape's posting of its terms did not compel the conclusion that its downloaders took
the software subject to those terms because there was no way to determine that any downloader had seen the terms of the
offer. There was no basis for imputing to the downloaders of Netscape's software knowledge of the terms on which the
software was offered. This case is crucially different. Verio visited Register's computers daily to access WHOIS data and
each day saw the terms of Register's offer; Verio admitted that, in entering Register's computers to get the data, it was
fully aware of the terms on which Register offered the access.
Verio's next argument is that it was not bound by Register's terms because it rejected them. Even assuming Register is
entitled to demand compliance with its terms in exchange for Verio's entry into its systems to take WHOIS data, and even
acknowledging that Verio was fully aware of Register's terms, Verio contends that it still is not bound by Register's terms
because it did not agree to be bound. In support of its claim, Verio cites a district court case from the Central District of
California, , in which the court rejected Ticketmaster's application for a preliminary injunction to enforce posted terms of
use of data available on its website against a regular user. Noting that the user of Ticketmaster's web site is not required
to check an "I agree" box before proceeding, the court concluded that there was insufficient proof of agreement to support a
We acknowledge that the decision gives Verio some support, but not enough. In the first place, the Ticketmaster court was
not making a definitive ruling rejecting Ticketmaster's contract claim. It was rather exercising a district court's discretion
to deny a preliminary injunction because of a doubt whether the movant had adequately shown likelihood of success on the
But more importantly, we are not inclined to agree with the court's analysis. There is a crucial difference between the
circumstances of where we declined to enforce Netscape's specified terms against a user of its software because of
inadequate evidence that the user had seen the terms when downloading the software, and those of where the taker of
information from Ticketmaster's site knew full well the terms on which the information was offered but was not offered an
icon marked, "I agree," on which to click. Under the circumstances of we see no reason why the enforceability of the
offeror's terms should depend on whether the taker states (or clicks), "I agree."
We recognize that contract offers on the Internet often require the offeree to click on an "I agree" icon. And no doubt, in
many circumstances, such a statement of agreement by the offeree is essential to the formation of a contract. But not in all
circumstances. While new commerce on the Internet has exposed courts to many new situations, it has not fundamentally
changed the principles of contract. It is standard contract doctrine that when a benefit is offered subject to stated
conditions, and the offeree makes a decision to take the benefit with knowledge of the terms of the offer, the taking
constitutes an acceptance of the terms, which accordingly become binding on the offeree. See, e.g., ( "[S]ilence and inaction
operate as an acceptance ... [w]here an offeree takes the benefit of offered services with reasonable opportunity to reject
them and reason to know that they were offered with the expectation of compensation."); 2 Richard A. Lord, Williston on
CHAPTER 4: TORTS AND CYBER TORTS 73
Contracts § 6:9 (4th ed. 1991) ("[T]he acceptance of the benefit of services may well be held to imply a promise to pay for
them if at the time of acceptance the offeree has a reasonable opportunity to reject the service and knows or has reason to
know that compensation is expected."); Arthur Linton Corbin, Corbin on Contracts § 71 (West 1 vol. ed. 1952) ("The
acceptance of the benefit of the services is a promise to pay for them, if at the time of accepting the benefit the offeree has a
reasonable opportunity to reject it and knows that compensation is expected."); ( "Where a person, with reasonable
opportunity to reject offered services, takes the benefit of them under circumstances which would indicate, to a reasonable
man, that they were offered with the expectation of compensation, a contract, complete with mutual assent, results.");
(buyer of hats was bound to pay for hats when buyer failed to return them to seller within five days of inspection as seller
requested in clear and obvious notice statement).
Returning to the apple stand, the visitor, who sees apples offered for 50 cents apiece and takes an apple, owes 50 cents,
regardless whether he did or did not say, "I agree." The choice offered in such circumstances is to take the apple on the
known terms of the offer or not to take the apple. As we see it, the defendant in and Verio in this case had a similar
choice. Each was offered access to information subject to terms of which they were well aware. Their choice was either to
accept the offer of contract, taking the information subject to the terms of the offer, or, if the terms were not acceptable, to
decline to take the benefits.
We find that the district court was within its discretion in concluding that Register showed likelihood of success on the
merits of its contract claim.
(c) Irreparable harm
Verio contends that an injunction is not appropriate to enforce the terms of a contract. It is true that specific relief is not
the conventional remedy for breach of contract, but there is certainly no ironclad rule against its use. Specific relief may be
awarded in certain circumstances.
If an injury can be appropriately compensated by an award of monetary damages, then an adequate remedy at law exists,
and no irreparable injury may be found to justify specific relief. . But, irreparable harm may be found where damages are
difficult to establish and measure. . We have found, for example, that injunctive relief is appropriate where it would be
"very difficult to calculate monetary damages that would successfully redress the loss of a relationship with a client that
would produce an indeterminate amount of business in years to come."
The district court found it impossible to estimate "with any precision the amount of the monetary loss which has resulted
and which would result in the future from the loss of Register.com's relationships with customers and co brand partners,"
by reason of Verio's actions. In our view, the district court did not abuse its discretion in finding that, unless specific relief
were granted, Verio's actions would cause Register irreparable harm through loss of reputation, good will, and business
(d) Trespass to chattels
Verio also attacks the grant of the preliminary injunction against its accessing Register's computers by automated software
programs performing multiple successive queries. This prong of the injunction was premised on Register's claim of
trespass to chattels. Verio contends the ruling was in error because Register failed to establish that Verio's conduct
resulted in harm to Register's servers and because Verio's robot access to the WHOIS database through Register was "not
unauthorized." We believe the district court's findings were within the range of its permissible discretion.
"A trespass to a chattel may be committed by intentionally ... using or intermeddling with a chattel in the possession of
another," , where "the chattel is impaired as to its condition, quality, or value," id. ; see also (citing the Restatement
definition as New York law).
The district court found that Verio's use of search robots, consisting of software programs performing multiple automated
successive queries, consumed a significant portion of the capacity of Register's computer systems. While Verio's robots
alone would not incapacitate Register's systems, the court found that if Verio were permitted to continue to access
Register's computers through such robots, it was "highly probable" that other Internet service providers would devise
similar programs to access Register's data, and that the system would be overtaxed and would crash. We cannot say these
findings were unreasonable.
Nor is there merit to Verio's contention that it cannot be engaged in trespass when Register had never instructed it not to
use its robot programs. As the district court noted, Register's complaint sufficiently advised Verio that its use of robots was
not authorized and, according to Register's contentions, would cause harm to Register's systems.
(e) Lanham Act
On Register's claim for trademark infringement and unfair competition under the Lanham Act, the district court enjoined
Verio from using Register's marks, including "Register.com" and "first step on the web," as well as from committing acts
"calculated to or ... likely to cause third parties to believe that Verio" is sponsored, endorsed or approved by Register. By
letter submitted after oral argument, Register agreed to the deletion of the prohibition concerning use of "first step on the
74 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
web." See Letter from William Patry, Counsel for Register, to the U.S. Court of Appeals for the Second Circuit (May 22,
2001). We accordingly direct the district court to modify the preliminary injunction by deleting the prohibition of use of
"first step on the web."
Verio contends there was no adequate basis for the portion of the injunction based on the Lanham Act. We disagree. In our
view, the injunction was within the scope of the court's permitted discretion.
The district court found two bases for the injunction. The first was that in its early calls to recent registrants to solicit the
sale of web site development services, Verio explicitly referred to the registrant's registration with Register. The evidence
showed that a number of registrants believed the caller was affiliated with Register. The evidence further showed that
Verio's marketers, calling registrants almost immediately following their registration, left messages saying they were
calling "regarding your recently registered domain name," and asked to be called back. The district court found that the
script was misleading. It noted that Verio in fact was not calling "regarding the recently registered domain name," but was
rather calling regarding the registrant's establishment of a web site for which Verio wanted to offer services. Evidence
presented to the district court showed that registrants who received such calls were prompted to call back immediately
because the message led them to believe the call indicated some problem with Register's registration of the domain name,
and that they assumed from the nature of the message that the entity calling was affiliated with Register.
We believe Register has shown an adequate basis to support the district court's exercise of discretion in issuing the
injunction. Verio's use of Register's name alone was sufficient basis for the injunction. Notwithstanding that Verio had
agreed, prior to the initiation of the suit, to cease using Register's name, Verio had previously used Register's mark in its
solicitation calls. The fact that it had agreed to cease doing so was a factor that might have led the court to decline to issue
the injunction, but it did not prevent the court from considering Verio's previous infringing behavior as a justification for
The district court was also within its discretion in concluding that Verio's script for the solicitation calls was misleading.
Verio's calls, while prompted by the recent registration of the domain name, were not "regarding your recently registered
domain name." Verio's interest was not in the domain name but in the opportunity to offer web services to the owner of a
new site. The district court was within its discretion in finding that the reference to the recently registered domain name
misleadingly induced registrants to call back, believing the registration of their domain name had encountered a problem,
and that the calling party was affiliated with the registration. Verio could easily change the text of its message so as to
avoid the misleading implication, without detriment to its legitimate efforts to solicit business. We conclude that there was
adequate basis for the issuance of the injunction.
Nor does the mere fact that Verio's representatives identified themselves as "calling from Verio" preclude a finding of
misleading practice. The statement that the solicitor was "calling from Verio" did not prevent customers from assuming
that Verio was connected with the registrar of their domain names. Compare (presentation of a mark in conjunction with a
house mark may lessen the likelihood of confusion); (same), limited on other grounds by ; (same), superseded by rule on
other grounds as stated in , with (citing ) (the addition of a house mark or trade name may aggravate the likelihood of
confusion if "a purchaser could well think [one party] had licensed [the other] as a second user").
We reject Verio's contention that the district court had no adequate basis for the Lanham Act injunction.
(f) Other claims
The rulings outlined above justify the affirmance of the preliminary injunction, without need to discuss the other
The ruling of the district court is hereby AFFIRMED, with the exception that the court is directed to delete the reference to
"first step on the web" from paragraph one of its order.
(Cite as: 183 F.3d 770)
Harold MARTIN, Appellee,
CHAPTER 4: TORTS AND CYBER TORTS 75
WALMART STORES, INC., Appellant.
United States Court of Appeals,
Submitted: April 21, 1999.
Filed: July 7, 1999.
Rehearing and Rehearing En Banc Denied Aug. 17, 1999.
BEAM, Circuit Judge.
WalMart appeals the district court's denial of its motion for a directed verdict, or in the alternative, motion for a new
trial, following a jury trial on Harold Martin's slip and fall action. WalMart asserts that Martin failed to establish that
WalMart had either actual or constructive notice of the hazard on the floor; that the jury instructions failed to accurately
state Missouri law; and that the jury was prejudiced by improper comments by Martin's counsel during closing arguments.
We present the facts in a light most favorable to the verdict. Harold Martin was shopping in the sporting goods
department of WalMart on the afternoon of September 16, 1993. In front of the sporting goods section, in the store's main
aisle, called the "action alley," there was a large display consisting of several pallets stacked with cases of shotgun shells.
On top of the cases were individual boxes of shells. As Martin walked past the display with his shopping cart, he slipped
on some loose shotgun shell pellets [FN2] and fell to the floor. Martin lost both feeling and control of his legs. Sensation
and control soon returned. However, during the following week, he lost the use of his legs several times, and the paralysis
would last for ten to fifteen minutes. Following the last paralytic episode, sensation and control did not return to the front
half of his left foot. Martin's doctors have diagnosed the condition as permanent and can offer no treatment.
FN2. Shotgun shells fire a quantity of pellets, or "shot," that resemble small BB's.
Just prior to Martin's fall, a WalMart employee walked past the display in the same area where Martin fell. At the time,
the sporting goods department should have been staffed with two people, however, only one was in the department. Martin
had been in the sporting goods department for ten to fifteen minutes prior to his fall and did not notice anyone handling or
tampering with the shotgun shells.
After Martin's fall, the sporting goods clerk searched for the source of the pellets and found a box of shells with one shell
missing, and a single shell sitting on top of the display with some of the pellets missing. *772 These were given to his
manager. However, WalMart lost the shell and it was unavailable as an exhibit at trial.
 A United States District Court sitting in diversity jurisdiction applies the substantive law of the forum state, in this
case, Missouri. See First Bank of Marietta v. Hogge, 161 F.3d 506, 510 (8th Cir.1998). The parties dispute the proper
interpretation and application of Missouri law pertaining to slip and fall cases. Prior to 1989, Missouri followed the
traditional rule that required a plaintiff in a slip and fall case to establish that the defendant store had either actual or
constructive notice of the dangerous condition. See, e.g., Ward v. Temple Stephens Co., 418 S.W.2d 935, 938 (Mo.1967).
The defendant store is deemed to have actual notice if it is shown that an employee created or was aware of the hazard.
See id. Constructive notice could be established by showing that the dangerous condition had existed for a sufficient length
of time that the defendant should reasonably have known about it. See id.
In 1989, the Missouri Supreme Court decided Sheil v. T.G. & Y. Stores Co., 781 S.W.2d 778 (Mo.1989) (en banc). In Sheil,
the court followed the example of Ciminski v. Finn Corp., 13 Wash.App. 815, 537 P.2d 850 (1975), and carved out an
exception for slip and fall cases in selfservice stores. See Sheil, 781 S.W.2d at 780. In Sheil, a customer was injured when
he tripped over a box left in an aisle. There was no evidence regarding what was in the box (other than it seemed heavy for
its size), who left the box there, or how long it had been in the aisle. The defendant store asserted that the plaintiff had not
made a submissible case because the plaintiff could not establish that an employee placed the box in the aisle (actual
notice), or that the box had been there long enough so that the store should have been aware of it (constructive notice). See
id. at 77980. The court held that the plaintiff, because of the nature of the selfservice method of operations used by the
store, had made a submissible case.
The Sheil court noted that retail store operations have evolved since the traditional liability rules were established. In
modern selfservice stores, customers are invited to traverse the same aisles used by the clerks to replenish stock, they are
invited to retrieve merchandise from displays for inspection, and to place it back in the display if the item is not selected for
purchase. Further, a customer is enticed to look at the displays, thus reducing the chance that the customer will be
76 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
watchful of hazards on the floor. See id. at 78081. "The storeowner (sic) necessarily knows that customers may take
merchandise into their hands and may then lay articles that no longer interest them down in the aisle.... The storeowner,
therefore, must anticipate and must exercise due care to guard against dangers from articles left in the aisle." Id. at 780.
The risk of items creating dangerous conditions on the floor, previously created by employees, is now created by other
customers as a result of the store's decision to employ the selfservice mode of operation. Therefore, " '[a]n owner of a self
service operation has actual notice of these problems. In choosing a selfservice method of providing items, he is charged
with the knowledge of the foreseeable risks inherent in such a mode of operation.' " Id. at 781 (quoting Ciminski, 537 P.2d
at 853.) Thus, in slip and fall cases in selfservice stores, the inquiry of whether the danger existed long enough that the
store should have reasonably known of it (constructive notice) is made in light of the fact that the store has notice that
certain dangers arising through customer involvement are likely to occur, and the store has a duty to anticipate them.
Because of this selfservice exception, the court held that, contrary to previous cases, "the precise [amount of] time [a
dangerous substance has been on the floor] will not be so important a factor. More *773 important will be the method of
merchandising and the nature of the article causing the injury." Id. at 780. The amount of time is even less important if
there is evidence that employees of the store were regularly in the area where the accident occurred. See Georgescu v. K
Mart Corp., 813 S.W.2d 298, 302 (Mo.1991) (en banc).
 Based upon Missouri law as stated in Sheil, the district court charged the jury in instruction ten that it could find for
the plaintiff only if it found that:
First, there were shotgun pellets on the floor of defendant's store and, as a result, the floor was not reasonably safe, and
Second, defendant knew or by using ordinary care could have known of this condition, and
Third, defendant failed to use ordinary care to remove the shotgun pellets or warn of them, and
Fourth, as a direct result of such failure, plaintiff sustained damage.
The court further instructed the jury that:
In a "self service store" [FN3] as that phrase is used in these instructions, the "self service store" is deemed to have actual
notice of foreseeable risks of dangers created by merchandise and other foreign substances on the floor whether those
dangers are created by store employees or customers.
FN3. It was conceded that WalMart is a selfservice store for purposes of Missouri law.
 WalMart argues that the jury instructions did not accurately reflect Missouri law regarding slip and fall cases. "We
review the district court's jury instructions for abuse of discretion and on review must determine simply whether the
instructions, taken as a whole and viewed in light of the evidence and applicable law, fairly and adequately submitted the
issues in the case to the jury." Kramer v. Logan County Sch. Dist., 157 F.3d 620, 625 (8th Cir.1998) We will reverse only if
we find that the error affected the substantial rights of the parties. See id.
WalMart argues that the selfservice instruction essentially eliminated the second paragraph of instruction tenthat Wal
Mart knew or by using ordinary care could have known of the pellets on the floorand directed a verdict for Martin because
it allowed the jury to find that WalMart had actual notice of the shot shell pellets on the floor as a matter of law. Martin
on the other hand, claims that Sheil does in fact charge store owners with actual notice of dangerous conditions on the floor
created by customers or employees as long as the condition was foreseeable. Neither is correct.
 A closer review of Sheil is required to resolve this issue. The court in Sheil stated that in a selfservice type of store:
It is much more likely that items for sale and other foreign substances will fall to the floor. Clerks replenish supplies by
carrying them through the area the customer is required to traverse when selecting items. Customers are naturally not as
careful in handling the merchandise as clerks would be. They may pick up and put back several items before ultimately
selecting one. Not unreasonably they are concentrating on the items displayed, which are usually arranged specifically to
attract their attention. Such conditions are equally typical of selfservice restaurants and the most common selfservice
operation, the modern supermarket. An owner of a selfservice operation has actual notice of these problems. In choosing
a selfservice method of providing items, he is charged with the knowledge of the foreseeable risks inherent in such a mode
Sheil, 781 S.W.2d at 781 (emphasis added). Sheil does not state that the store, as a matter of law, has actual notice of a
particular dangerous condition simply because it is caused by merchandise on the floor. Rather, the store has the more
general *774 actual notice that dangerous conditions are often created by both customers and employees in foreseeable
ways. Actual notice of a particular existing hazard creates an immediate duty to protect or warn customers of that hazard.
See Hayes v. National Super Markets, Inc., 612 S.W.2d 819, 822 (Mo.App.1981). In contrast, the actual notice imposed by
Sheil, creates an affirmative duty to anticipate and, exercising due care, prevent or seek out those dangerous conditions,
then protect or warn customers once the particular danger is found. See Sheil, 781 S.W.2d at 780.
Though the selfservice store instruction may not be a model of clarity, we find that the instructions, taken as a whole,
adequately charged the jury under Missouri law. The instructions do not state that the store has actual notice of a
CHAPTER 4: TORTS AND CYBER TORTS 77
particular danger, or even dangers in general. Rather, it states that the store "is deemed to have actual notice of
foreseeable risks of dangers." Although this phrase could be read to mean "risks caused by foreseeable dangers," a less
strained reading is "foreseeable risks that can give rise to dangerous conditions," that is to say the store knows that
merchandise is likely to wind up on the floor and constitute a danger. This second reading is entirely consistent with Sheil.
This "knowledge of foreseeable risks" imposed by Sheil does not impact whether the store has actual notice of the shotgun
pellets on the floor. This knowledge instead informs the degree of vigilance or effort necessary to constitute the due care
described in the second paragraph of instruction ten whether or not WalMart exercised ordinary care when, knowing
that that type of danger was likely to occur, it failed to detect a dangerous condition. Thus a store's liability, absent actual
notice of a specific danger, "is predicated on the foreseeability of the risk and the reasonableness of the care extended
toward business invitees, which, in Missouri, is now a question of fact to be determined by the totality of the
circumstances." Spencer v. Kroger Co., 941 F.2d 699, 703 (8th Cir.1991).
Viewing the instructions together, the jury had to find that: it was foreseeable that the contents of a shot shell could wind
up on the floor; that the pellets created an unsafe condition; that WalMart knew of the pellets or, using ordinary care,
and knowing that that type of danger is likely to occur, should have discovered them; that WalMart did not remove them
or warn Martin of the danger; and that Martin suffered injury as a result. This is an accurate statement of Missouri law
and we find no error in the jury instructions.
 WalMart next claims that Martin failed to present a submissible case because he failed to establish that WalMart had
actual or constructive notice of the pellets in the action aisle. We disagree. We find there is substantial evidence of
constructive notice in the record. Martin slipped on shotgun shell pellets on the floor which were next to a large display of
shotgun shells immediately abutting the sporting goods department. The chance that merchandise will wind up on the
floor (or merchandise will be spilled on the floor) in the department in which that merchandise is sold or displayed is
exactly the type of foreseeable risk described in Sheil. Under Sheil, WalMart has notice that merchandise is likely to find
its way to the floor and create a dangerous condition, and it must exercise due care to discover this hazard and warn
customers or protect them from the danger. Watching for hazards on the floor is part of the job duties of every WalMart
employee. They are trained to anticipate and protect customers from these hazards. The sporting goods department was
understaffed at the time. Five minutes before Martin fell, the sporting goods clerk had walked through the same part of
the aisle where the fall occurred. Just before Martin fell, a WalMart employee walked through the same area and did not
notice the hazard, or did nothing about it. The sporting goods clerk testified that the pellets could have been *775 on the
floor for up to an hour. The department was not extremely busy, and though the clerk had inspected and straightened up
the exercise equipment area, he had not inspected the display in the action aisle. The black pellets were scattered on a
white tile floor with gray stripes. The display and the pellets were in the action alley, the highest traffic area of the store,
where the risk was presumably greatest, thus calling for greater vigilance in order to meet the standard of ordinary care.
Even assuming that the hazard was created by a customer, a jury could easily find, given that it had notice that
merchandise is often mishandled or mislaid by customers in a manner that can create dangerous conditions, that, had Wal
Mart exercised due care under the circumstances, it would have discovered the shotgun pellets on the floor. [FN4] See
Georgescu, 813 S.W.2d at 302.
FN4. Although WalMart presented evidence that the halfempty shell that was found appeared to be pried open,
presumably by a customer, Martin demonstrated that a shell could also have been cut open by an employee when cutting
open cases to build the display. If that were the case, the traditional rule would apply and WalMart would have actual
notice of that particular dangerous condition because it was created by one of its agents. See Ward, 418 S.W.2d at 938;
Prier v. Smitty's Supermarkets, Inc., 715 S.W.2d 579, 580 (Mo.App.1986).
WalMart also claims the district court committed reversible error by allowing allegedly improper examination of two
witnesses, and inflammatory and improper argument by Martin's counsel during closing arguments. We have carefully
reviewed the record and find any error to be harmless.
For the foregoing reasons, the judgment of the district court is affirmed.
78 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
9 Cal.Rptr.3d 142
Cal.App. 1 Dist.,2004.
Court of Appeal, First District, Division 2, California.
Stephen J. BARRETT et al., Plaintiffs and Appellants,
Ilena ROSENTHAL, Defendant and Respondent.
Jan. 21, 2004.
Appellants Barrett and Polevoy are physicians primarily engaged in combating the promotion and use of "alternative" or
"nonstandard" healthcare practices and products. Appellants have allegedly achieved national renown as consumer
advocates; each maintains Web sites that expose "health frauds and quackery" and provide guides for consumers to make
intelligent health care decisions. In their writings, appellants attack "products, services and theories that are marketed
with claims that [are] false, unsubstantiated, and/or illegal," and their work has assertedly "aroused great concern among
promoters of such methods," many of whom believe that destroying appellants' reputations "would increase [the promoters']
success in the marketplace." Although he is an American citizen, appellant Polevoy resides and practices medicine in
Respondent Rosenthal directs the Humantics Foundation for Women, and participates in two Usenet "newsgroups," which
focus on "alternative medicine." According to appellants, Rosenthal is a particularly active distributor of information via
the Internet. During a two year period ending on May 21, 2001, she assertedly "posted 10,900 messages to newsgroups
an average of 15 per calendar day." Appellants contend that one or both of them were mentioned in more than 200 of these
messages, all of which were intended to injure their reputations.
"The Usenet has been described as a worldwide community of electronic BBSs [bulletin board servers] that is
closely associated with the Internet and with the Internet community. [¶ ] The messages in Usenet are organized
into thousands of topical groups, or 'Newsgroups'.... [¶ ] As a Usenet user, you read and contribute ('post') to your
local Usenet site. Each Usenet site distributes its users' postings to other Usenet sites based on various implicit
and explicit configuration settings, and in turn receives postings from other sites. Usenet traffic typically consists
of as much as 30 to 50 Mbytes of messages per day. [¶ ] Usenet is read and contributed to on a daily basis by a
total population of millions of people.... [¶ ] There is no specific network that is the Usenet. Usenet traffic flows
over a wide range of networks, including the Internet and dialup phone links." quoting Dern, The Internet Guide
for New Users (1994) at pp. 196197; see also discussion, post, at p. 163, fn. 16.)
"Newsgroups," like automatic mailing list service ("mail exploders" or "listservs"), chat rooms, and Web sites, are
among the various communication and information retrieval methods that can be used by anyone with access to
the Internet. "Newsgroups also serve groups of regular participants, but these postings may be read by others as
well. There are thousands of such groups, each serving to foster an exchange of information or opinion on a
particular topic running the gamut from, say, the music of Wagner to Balkan politics to AIDS prevention to the
Chicago Bulls. About 100,000 new messages are posted every day. In most newsgroups, postings are
automatically purged at regular intervals." The communication that takes place via newsgroups is similar to that
which takes place in "chat rooms," in which two or more individuals engage in realtime dialogue, and on the
World Wide Web.
Appellants commenced this civil action for damages action against Rosenthal and others, claiming libel, libel per se, and
conspiracy. Christopher E. Grell, appellants' attorney at trial and in this court, was also a named plaintiff. On May 31,
2001, Grell moved to dismiss his action as against Rosenthal only, and this dismissal was entered on June 4, 2001.
The other defendants, who are not parties to this appeal, are Hulda Clark, described in the complaint as "an
unlicensed naturopath who resides in California and operates a clinic in California and Mexico .... [who] claims
that all cancers and many other diseases are caused by 'parasites, toxins, and pollutants' and can be cured within
a few days by administering a lowvoltage electric current, herbs and other nonstandard modalities"; the Dr.
Clark Research Association, a corporation which allegedly "[p]rovides news and other information about Hulda
Clark and her activities, ... [d]escribes and promotes Dr. Clark's theories and methods," and promotes and sells her
products and instructional materials; David P. Amrein, the founder and president of the Dr. Clark Research
Association; and Tim and Jan Bolen, who allegedly "do business as JURIMED, an entity whose purpose is to assist
'alternative' health practitioners faced with regulatory action, criminal prosecution, or other matters that threaten
CHAPTER 4: TORTS AND CYBER TORTS 79
their financial wellbeing and/or license to practice."
As the trial court noted, the complaint does not specify which of the several defendants posted the many allegedly libelous
online statements it describes, and specifically identifies Rosenthal as the poster of only five such statements, which are
(1) On or about August 14, 2000, Rosenthal commenced distributing on two Usenet newsgroups an email message she
received from another defendant, Timothy Bolen. According to the complaint, the message accused Dr. Polevoy of "stalking
women" and urged " 'health activists ... from around the world' to file complaints to government officials, media
organizations, and regulatory agencies." Bolen described "THE FACTS" as follows: "Polevoy, police reports show,
STALKED Canadian Radio Personality Christine McPhee, until, terrified, she called in police. He followed her around,
affecting disguises, for monthsthen further terrified her by emailing her the details of his stalking actions. Police
agencies felt it necessary to assign armed uniformed officers to protect McPhee from Polevoy. Reports show that McPhee
was not the only female Polevoy stalked." Bolen described Polevoy's conduct as part of a "criminal conspiracy" and urged
readers to bring this and other unspecified "criminal" acts to the attention of various governmental agencies and officials,
urging them to use their influence to see that "a criminal investigation" of Polevoy's "subversive" activities "begins
The proceedings below were completed before the recent opinion of the Ninth Circuit in which held that the
federal statutory immunity available to Internet intermediaries under applies only when "a reasonable person in
the position of the service provider or user would conclude that the information was provided for publication on the
Internet or other 'interactive computer service.' " Neither the parties nor the trial court addressed the question
whether a reasonable person in Rosenthal's position would conclude that Bolen's statement was provided for
publication on the Internet, and we think it inappropriate for us to do so. Moreover, as will be seen, our analysis of
the federal immunity differs from that of the court. (See discussion, post, at pp. 150167.)
(2) Shortly after she first republished Bolen's message, appellants informed Rosenthal it was false and defamatory, asked
that it be withdrawn, and threatened suit if it was not. Rosenthal refused to withdraw the message and, on unspecified
dates, posted 32 additional messages on specified Internet newsgroups describing appellants' threat accompanied by a copy
of Bolen's allegedly defamatory message or a reference back to that message and referring to appellants as, among other
things, "quacks." The title of these messages contained the words: "Slea[z]y 'Quackbuster' Scam."
(3) On June 28, 2000, Rosenthal posted to a specified Internet newsgroup a message referring to Dr. Barrett and "falsely
stating that 'there are bunches of coming to him to run that PROAMA anti alt.med website. PR pays well, and surely he
takes in more than $25K per year.' "
(4) On August 18, 2000, Rosenthal posted to a specified newsgroup "a message falsely stating that 'Quackwatch appears to
be a powerhungry, misguided bunch of pseudoscientific socialist bigots'; is an 'industry funded organization'; and is being
sued by many doctors and health organizations."
(5) On October 9, 2000, Rosenthal posted to a specified newsgroup a message entitled "Re: Quackbuster Barrett *is* a
quackby his own definition," which repeatedly referred to Drs. Barrett and Polevoy as "quacks."
After she answered the complaint, Rosenthal filed a special motion to strike the complaint as to her, claiming it was a
"strategic lawsuit against public participation" under . In a 27page written order, the trial court granted Rosenthal's
motion to strike finding that her publications of the foregoing statements were acts "in furtherance of [her] right of petition
or free speech under the United States or California Constitution in connection with a public issue" (, subd. (b)(1)), and
therefore covered by the antiSLAPP statute. The court also determined appellants could not establish a probability of
prevailing on their claims, as the statute requires. This latter determination rested on the conclusions that, with one
exceptionthe statements alleging that appellant Polevoy had engaged in criminal conduct Rosenthal's alleged libels were
not demonstrably false statements of facts. The trial court also found Rosenthal immune from liability for the reposting of
Bolen's statements under of the Communications Decency Act (CDA) of 1996 ( (, viewing the statute as protecting her from
liability even if the republished charge that Polevoy had engaged in criminal conduct was false and defamatory.
Additionally, the court found that appellants could not make a prima facie showing that Rosenthal reposted Bolen's
statements with "actual malice," as they would need to do in order to establish a probability of prevailing on the merits of
their defamation claims, because they were both public figures. Finally, the court found that appellants' claims failed
because appellants had not produced competent evidence they suffered any actual monetary damage as a result of
Rosenthal's publications. The court denied appellants' request to conduct discovery for the purpose of producing such
In the published portion of this opinion we discuss the standard of review (part I), find that the trial court correctly
concluded that the anti SLAPP statute applies to this case (part II), and that appellant Barrett failed to make out a case of
defamation, but that the court erred in finding appellant Polevoy could not do so due to application of the federal immunity
80 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
(parts III and III.A). In the unpublished portion we further conclude that the trial court also erred in finding that Polevoy
could not prevail because he could not show "actual malice" or actual monetary loss. The court should not have decided the
question of malice without allowing discovery as to that issue; and, because the defamatory language is libelous on its face,
Polevoy need not allege and prove special damages (parts III.B and III.C). For these reasons we vacate the order granting
the special motion to strike pursuant to insofar as it relates to appellant Polevoy and remand the matter for further
proceedings. In the unpublished portion we also affirm the ruling that appellants' counsel was subject to an order
requiring payment of attorney fees (part IV), and direct the trial court to recalculate the amount of fees respondent is
entitled to receive (part V).
Burden of Proof and Standard of Review
provides, as material, that "[a] cause of action against a person arising from any act of that person in furtherance of the
person's right of petition or free speech under the United States or California Constitution in connection with a public issue
shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a
probability that the plaintiff will prevail on the claim." (, subd. (b)(1).) This language necessitates a twostep process for
determining whether an action is a SLAPP.
In the first step, "the court decides whether the defendant has made a threshold showing that the challenged cause of
action is one arising from protected activity. The moving defendant's burden is to demonstrate that the act or acts of which
the plaintiff complains were taken 'in furtherance of the [defendant]'s right of petition or free speech under the United
States of California Constitution in connection with a public issue'...." If the defendant meets this burden, the burden
shifts to the plaintiff to demonstrate a probability he or she will prevail on the claim. "[I]n order to establish the requisite
probability of prevailing [citation], the plaintiff need only have ' "stated and substantiated a legally sufficient claim." '
[Citations.] 'Put another way, the plaintiff "must demonstrate that the complaint is both legally sufficient and supported
by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is
credited." ' [Citations.]"
"Whether applies and whether the plaintiff has shown a probability of prevailing are both reviewed independently on
appeal. disapproved on another point in "
Applies to This Case
The trial court's conclusion that respondent's statements were protected by the antiSLAPP statute explicitly rested on
subdivisions (e)(3) and (e)(4) of , which declare that " 'an act in furtherance of a person's right of petition or free speech
under the United States or California Constitution in connection with a public issue' includes ... (3) any written or oral
statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4)
or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free
speech in connection with a public issue or an issue of public interest." The order granting the motion to strike focused
upon the public nature of the issue the parties disputed and to which Rosenthal's allegedly libelous statements related:
"the validity or invalidity of alternative medicine." The court determined that this was "a highly controversial matter
which is of significant public importance and interest, affecting the health of millions of people involving billions of dollars."
Appellants do not challenge this determination. Implicitly conceding Rosenthal's statements relate to "an issue of public
interest," they instead contend that the Internet sites on which Rosenthal posted her statements were not "a place open to
the public or a public forum," as the trial court assumed, and Rosenthal therefore did not post the statements allegedly
defaming appellants in furtherance of her right of free speech. This novel contention is difficult to take seriously.
Appellants' argument rests entirely on the recent opinion in The plurality opinion in that case, which has nothing to do
with , reads a state action requirement into the free speech clause of the California Constitution. The court held that the
actions of a private property owner constitute state action under the free speech clause only if the property is freely and
openly accessible to the public. involved a privately owned apartment complex whose owner carefully limited access to the
complex to residential tenants and their invitees. Since the owner's refusal to permit the tenants' association to distribute
its newsletter in the private hallways of the complex did not constitute state action, the association did not have a right
under California's free speech clause to distribute its newsletter in the complex.
So far as the record shows, neither Usenet nor any other interactive computer service on which Rosenthal posted her
allegedly defamatory statements ever sought to enjoin her from doing so or to impose any material restriction on her use of
the site or that of the public. Moreover, the Internet is not a separate physical place, like a hallway in an apartment
building, but "a decentralized, global medium of communicationsor 'cyberspace'that links people, institutions,
corporations and governments around the world." affd. sub nom. The Internet "provides relatively unlimited, lowcost
CHAPTER 4: TORTS AND CYBER TORTS 81
capacity for communication of all kinds.... This dynamic, multifaceted category of communication includes not only
traditional print and news services, but also audio, video, and still images, as well as interactive, realtime dialogue.
Through the use of chat rooms, any person with a phone line can become a town crier with a voice that resonates farther
than it could from any soapbox. Through the use of Web pages, mail exploders, and newsgroups, the same individual can
become a pamphleteer."
Nor, for plaintiffs' purposes, would it matter much if Rosenthal had violated a valid use restriction. One who
drives a car bearing a political message on a bumper sticker is not constitutionally unprotected merely because the
private agency from which the vehicle was rented barred the use of bumper stickers. The rental agency might
have a remedy for breach of the rental agreement, but those who viewed the message while traveling on the public
streets and found it objectionable could not complain on that basis.
Considering that the Internet provides "the most participatory form of mass speech yet developed" it is not surprising that
courts have uniformly held or, deeming the proposition obvious, simply assumed that Internet venues to which members of
the public have relatively easy access constitute a "public forum" or a place "open to the public" within the meaning of .
(See, e.g., provides no reason to ignore this selfevident truth.
The trial court correctly determined that Rosenthal made the necessary threshold showing that the act or acts of which
appellants complain were taken "in furtherance of [her] right of petition or free speech under the United States or
California Constitution in connection with a public issue" (, subd. (b)(1)), and were therefore within the ambit of the
protection afforded by . Thus we turn to the question whether appellants established a probability they will prevail on
their defamation claims.
The Trial Court Erroneously Concluded Appellant Polevoy Could Not Establish a
Probability He Will Prevail on His Defamation Claim
With respect to all but one of the publications attributed to Rosenthal, the trial court's finding that appellants failed to
establish a probability they will prevail rested on the conclusion that the statements contained therein could not
reasonably be interpreted as stating actual facts, and thus could not support any of appellants' claims for libel. Rosenthal's
statements that appellants are "quacks," that appellant Barrett is "arrogant" and a "bully," and that Barrett tried to
"extort" her "are not actionable," the court stated, "because they do not contain provably false assertions of fact, but rather
are expressions of subjective judgment." Insofar as it relates to Barrett, appellants do not seriously refute this
determination, which we find to have been correct. Accordingly, we shall affirm the ruling granting the motion to strike
the complaint as to appellant Barrett.
The single statement the court determined was a provably false statement of fact was that originated by codefendant Bolen
"accusing Dr. Polevoy of stalking women and urging 'health activists ... from around the world' to file complaints to
government officials, media organizations, and regulatory agencies." This statement specifically asserted that Polevoy
stalked Christine McPhee, a "Canadian radio personality" whose program supported "alternative medicine," as part of a
"criminal conspiracy" designed to intimidate McPhee. According to the republished statement, "police reports show" that
Polevoy "terrified" McPhee by stalking her "for months" and that he also stalked other unidentified females. The
statement urged readers to bring this information to the attention of various governmental authorities, as well as the
medical association that regulated Polevoy's practice of medicine, and to ask that they initiate a "criminal investigation" or
professional disciplinary proceedings.
The trial court found that although the assertion that Polevoy was guilty of criminal conduct was a provably false
statement of fact, Rosenthal's republication was not actionable for three independent reasons: first, because Rosenthal did
not originate but merely republished the defamatory statement, she was immune from suit under of the CDA; second,
because appellants, who are public figures, failed to produce sufficient prima facie evidence of "actual malice"; and, third,
because appellants could not establish that they suffered monetary damage of any kind.
We find that the immunity available under does not bar the imposition of liability in this case, that the trial court's denial
of Polevoy's request for discovery of evidence pertaining to "actual malice" was an abuse of judicial discretion requiring us
to set aside the determination that he cannot show such malice, and that Polevoy was not required to plead special
damages, as the republished statement was libelous per se. (
The Federal Immunity Does Not Apply
was incorporated by Congress into the final version of the CDA, which amended Title V of the Telecommunications Act of
1996 ( (Feb. 8, 1996) 110 Stat. 56). The central question in this case is the extent to which this statute abrogated the
common law of defamation.
Under the common law, those who publicize another's libel may be treated in one of three ways: as primary publishers
82 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
(such as book or newspaper publishers); as conduits (such as a telephone company); or as distributors (such as a book
store, library, or news dealer). Because "they cooperate actively in the publication," primary publishers, also known as
"original publishers," are generally held to a strict standard of liability comparable to that of authors. (, com. c, pp. 232233;
Prosser & Keeton, The Law of Torts (5th ed.1984) § 113 at p. 810.) Conduits, which lack the ability to screen and control
defamatory speech that may occur over their systems, and are therefore least culpable, are ordinarily immune from
liability. (See see also [in transmitting email, "an ISP [Internet service provider], like a telephone company, is merely a
conduit"].) Distributors (sometimes known as "secondary publishers"), whose ability to control defamatory speech lies
somewhere between that of primary publishers and conduits, are subject to an intermediate standard of responsibility and
may only be held liable as publishers if they know or have reason to know of the defamatory nature of matter they
disseminate. (, coms. d and e, pp. 233234; see also on the constitutional dimension of the scienter requirement.) Absent
such knowledge or reason to know, distributors are entitled to the same freedom from liability enjoyed by mere conduits of
, entitled "Protection for 'Good Samaritan' blocking and screening of offensive material," consists of two operative
provisions, paragraphs (1) and (2).
Paragraph (1) states in material part that "[n]o 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." ( "Interactive computer
service" is elsewhere defined as "any information service, system, or access software provider that provides or enables
computer access by multiple users to a computer server, including specifically a service or system that provides access to
the Internet and such systems operated or services offered by libraries or educational institutions." ( An "information
content provider," who is not an intermediary and is therefore not protected by , is defined as "any person or entity that is
responsible, in whole or in part, for the creation or development of information provided through the Internet or any other
interactive computer service." (
Paragraph (2) of states that "[n]o provider or user of an interactive computer service shall be held liable on account of[¶ ]
(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user
considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not
such material is constitutionally protected; or [¶ ] (B) any action taken to enable or make available to information content
providers or others the technical means to restrict access to material described in paragraph (1)." Elsewhere, provides that
"[n]o cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with
this section." (
The parties agree Rosenthal acted as the "user of an interactive computer service" within the meaning of the statute, as did
the trial court, and we are not called upon to address that question. Appellants acknowledge that a user is entitled to the
same protection available under the statute to providers.
Appellants concede that bars treatment of providers or users of interactive computer services as primary publishers
subject to strict liability, but maintain it does not bar treating them as distributors and subjecting them to knowledge
based liability. Appellants argue that the trial court's interpretation of protects Internet intermediaries who intentionally
distribute injurious third party content, and that this is contrary to the very purpose of the statute. If the trial court's
interpretation is upheld, appellants maintain, "a 'clever libeler' could easily escape liability by having some other Internet
user who is not subject to the jurisdiction of the Court, or who is anonymous, or who is judgment proof, publish libelous
statements which another 'Internet user' is free to republish." In appellants' view, such an interpretation would convert an
act designed to promote "decency" into a shield for "indecency," which Congress could not have intended.
Relying on the federal district court opinion in appellants also argue that a provider or user who, like Rosenthal,
intentionally republishes libelous third party content is in part responsible for the creation and development of
that information, and is therefore an "information content provider." ( Since only restricts the liability of
intermediaries, appellants maintain that Rosenthal's conduct is unprotected. Though we are aware the Ninth
Circuit has rejected this theory we decline to address the issue. Not only did appellants raise it for the first time
in a reply brief, but resolution of the issue is unnecessary to the disposition of this appeal.
We agree with appellants that the statute cannot be deemed to abrogate the common law principle that one who
republishes defamatory matter originated by a third person is subject to liability if he or she knows or has reason to know of
its defamatory character. ( By construing as conferring an absolute immunity, the trial court erred.
Like Rosenthal, the trial court relied heavily on cert. den. which is now the leading case interpreting and applying . In
an unidentified person maliciously posted messages on an America Online (AOL) bulletin board advertising tshirts
featuring offensive slogans relating to the 1995 bombing of the Murrah Federal Building in Oklahoma City. Persons
interested in purchasing the shirts were instructed to call "Ken" at Zeran's home phone number in Seattle. As a result,
CHAPTER 4: TORTS AND CYBER TORTS 83
Zeran received a high volume of angry calls, including death threats. Zeran immediately contacted AOL and informed a
company representative of his predicament. The next day an unknown person posted a similar message, again identifying
Zeran as the purveyor of the tasteless shirts and providing his home phone number. Over the next four days similar
messages were posted on the bulletin board relating to other items bearing still more offensive slogans. During this five
day period Zeran was receiving an abusive phone call every two minutes. After the messages were described on an
Oklahoma City radio station by an announcer who urged listeners to phone Zeran, he was inundated with death threats.
When Zeran filed suit against AOL, it interposed as an affirmative defense and moved for summary relief. The trial court
granted AOL's motion for judgment on the pleadings, holding that the statutory immunity shielded AOL from suits based
on both publisher and distributor liability.
Affirming the ruling, the Fourth Circuit stated as follows: "Congress recognized the threat that tortbased lawsuits pose to
freedom of speech in the new and burgeoning Internet medium. The imposition of tort liability on service providers for the
communications of others represented, for Congress, simply another form of intrusive government regulation of speech.
was enacted, in part, to maintain the robust nature of Internet communication and, accordingly, to keep government
interference in the medium to a minimum. In specific statutory findings, Congress recognized the Internet and interactive
computer services as offering 'a forum for a true diversity of political discourse, unique opportunities for cultural
development, and myriad avenues for intellectual activity.' Id. . It also found that the Internet and interactive computer
services 'have flourished, to the benefit of all Americans, with a minimum of government regulation.' Id. (emphasis added).
Congress further stated that it is 'the policy of the United States ... to preserve the vibrant and competitive free market
that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.'
Id. (emphasis added). [¶ ] None of this means, of course, that the original culpable party who posts defamatory messages
would escape accountability. While Congress acted to keep government regulation of the Internet to a minimum, it also
found it to be the policy of the United States 'to ensure vigorous enforcement of Federal criminal laws to deter and punish
trafficking in obscenity, stalking, and harassment by means of computer.' Id. . Congress made a policy choice, however, not
to deter harmful online speech through the separate route of imposing tort liability on companies that serve as
intermediaries for other parties' potentially injurious messages." see also As will be seen, we believe this
characterization of is misleading insofar as it suggests that reflects a superseding congressional "desire to promote
unfettered speech on the Internet."
The most consequential aspect of the Fourth Circuit's opinion in is its conclusion that immunized providers and users of
interactive computer services from liability not only as primary publishers but also as distributors. Focusing solely on
["Publication of defamatory matter is its communication intentionally or by a negligent act to one other than the person
defamed"], the court ignored the complementary common law rule described in of the Restatement, which is that "one
who ... transmits defamatory matter published by a third person is subject to liability if, but only if, he knows or has reason
to know of its defamatory character." (, italics added; see
The effect of is to confer on providers and users of interactive computer services complete immunity from liability for
transmitting the defamation of a third party. The protection is available despite the fact that the provider or user
knowingly distributes defamatory materials, even if the provider or user profits from such conduct. (See, e.g., Since the
decision in no court has subjected a provider or user of an interactive computer service to notice liability for disseminating
thirdparty defamatory statements over the Internet, though a threejudge minority of the Florida Supreme Court would
have done so dis. opn. of Lewis, J.), and at least one trial judge has gagged on the unfairness that resulted from application
of such a broad immunity.
In the "Drudge Report," an Internet gossip column maintained by AOL, falsely reported that Sidney Blumenthal,
then a White House aide, had a history of spousal abuse. Blumenthal sued AOL, which moved for summary
judgment on the ground of immunity. Federal District Judge Paul L. Friedman granted the motion though not
without questioning the result he felt compelled to reach: "If it were writing on a clean slate, this Court would
agree with plaintiffs. AOL has certain editorial rights with respect to the content provided by Drudge and
disseminated by AOL, including the right to require changes in content and to remove it; and it has affirmatively
promoted Drudge as a new source of unverified instant gossip on AOL. Yet it takes no responsibility for any
damage he may cause. AOL is not a passive conduit like the telephone company, a common carrier with no control
and therefore no responsibility for what is said over the telephone wires. Because it has the right to exercise
editorial control over those with whom it contracts and whose words it disseminates, it would seem only fair to
hold AOL to the liability standards applied to a publisher or, at least, like a book store owner or library, to the
liability standards applied to a distributor. But Congress has made a different policy choice by providing
immunity even where the interactive service provider has an active, even aggressive role in making available
content provided by others. In some sort of tacit quid pro quo arrangement with the service provider community,
84 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
Congress has conferred immunity from tort liability as an incentive to Internet service providers to selfpolice the
Internet for obscenity and other offensive material, even where the selfpolicing is unsuccessful or not even
The view of most scholars who have addressed the issue is that analysis of is flawed, in that the court ascribed to
Congress an intent to create a far broader immunity than that body actually had in mind or is necessary to achieve its
purposes. We share that view. Cognizant that, "while federal circuit court precedence on issues of federal law is certainly
entitled to substantial deference, it is not binding" affd. accord, , we decline to accept construction of the statute.
See, e.g., Patel, Freiwald, (hereafter Intermediary Liability for Defamation ); McManus, Goldstein, Spencer,
Davidson et al, The Law of Cyberspace Liability of Information Service Providers (2000) 574 Prac.L.Inst. 143;
Cordero, Damnum Absque Injuria: Zeran v. AOL and Cyberspace Defamation Law (1999) 9 Fordham
Intell.Prop.Media & Ent.L.J. 775, 778; Pantazis, ; Kane, Internet Service Providers' Liability: Blumenthal v.
Drudge (1999) 14 Berk. Tech.L.J. 437,452453; Wiener, Ballon, Zeran v. AOL: Why the Fourth Circuit is Wrong
(1998) J.Internet L.; Sheridan, (hereafter Zeran v. AOL and the Effect of Section 230 ); Langdon, The Wiener,
(but see Schruers, The and Friedman & Buono,
We do not believe this conflicts with the reliance on by another division of our District in and by a panel of the
Fourth District in Neither of those opinions needed to address, and neither addresses, the question whether the
immunity accorded under applies to distributor, as well as primary publisher, liability. Under the common law,
the defendants in those cases would not have been liable as distributors.
states that has "dual purposes": First, "not to deter harmful online speech through the separate route of imposing tort
liability on companies that serve as intermediaries for other parties' potentially injurious messages" in order "to maintain
the robust nature of Internet communication" and, second, "to encourage service providers to selfregulate the
dissemination of offensive material over their services." According to the court, leaving distributor liability in effect
"would defeat the two primary purposes of the statute and would certainly 'lessen the scope plainly intended' by Congress'
use of the term 'publisher.' " relying on We believe the court conferred a much more expansive immunity than is
necessary to achieve the first purpose and thereby completely defeated the second.
is posited on two critical determinations: first, that the word "publisher" in refers not just to primary or original
publishers of a thirdparty defamation but also to distributors and, second, that confining the immunity to primary
publishers would not accomplish the policies was designed to effectuate. We believe neither determination is justified.
The plaintiff in argued that should be construed so as to suspend only those aspects of the common law of defamation
whose application would genuinely conflict with the purpose of the statutory immunity, the maintenance of robust Internet
communications and the encouragement of self regulation. The plaintiff conceded the common law liability of a primary
publisher of a third party's defamatory statements was incompatible with those purposes, but maintained distributor
liability was not, or at least that Congress never indicated it thought so. In making this argument, the plaintiff relied on
the settled principle "that 'statutes which invade the common law ... are to be read with a presumption favoring the
retention of longestablished and familiar principles, except when a statutory purpose to the contrary is evident.'
[Citations.] In such cases, Congress does not write upon a clean slate. [Citation.] In order to abrogate a commonlaw
principle, the statute must 'speak directly' to the question addressed by the common law. [Citations.]" italics added; accord,
["it should not 'be presumed that the Legislature in the enactment of statutes intends to overthrow longestablished
principles of law unless such intention is made clearly to appear either by express declaration or by necessary implication'
The court concluded that in "Congress has indeed spoken directly to the issue by employing the legally significant term
'publisher,' which has traditionally encompassed distributors and original publishers alike." According to the theory of
distributor liability "is merely a subset, or a species, of publisher liability" and therefore the use of the word "publisher" in
(1) ["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"] makes clear that the statute forecloses intermediate or notice liability,
not just the stricter level of liability applicable to primary publishers. On this reasoning the court maintained that
foreclosure of distributor liability was not merely implicit in the structure and purpose of the statute, but was "explicitly
stated" therein. We cannot agree.
It is true that defamation requires a publication, and that every repetition is a publication, whether it is effectuated by a
primary publisher or by a distributor; this is why distributors are sometimes referred to as "secondary publishers."
However, as earlier explained, the common law subjects the two types of publishers to distinctly different standards of
liability for the transmission of the defamation of a third person. Because primary publishers ordinarily exercise control
over content, they have a duty to monitor content; distributors, who have no such control, therefore have no such duty. It
CHAPTER 4: TORTS AND CYBER TORTS 85
is entirely reasonable to assume Congress was aware of this significant and very wellestablished distinction, and that if it
intended to immunize providers and users not merely from primary publisher liability but also from distributor liability it
would have made this clear, as, for example, by adding the word "distributor," and not merely barring liability "as the
publisher or speaker" of information provided by another. does not explicitly absolve providers or users from all liability.
The statement that they "shall not incur liability as publishers or speakers of information provided by other content
providers" (, italics added) does not expressly or even by necessary implication foreclose the possibility of holding them
liable as distributors. "Indeed, one could argue from the enumeration of publisher and speaker in that distributor was
deliberately omitted." (Sheridan,
The statement in that distributor liability conflicts with the "explicitly stated" command of Congress rests not
only on the idea that distributor liability is merely a subset of publisher liability but also the statement in that
"[n]o cause of action may be brought and no liability may be imposed under any State or local law that is
inconsistent with this section." This language cannot be deemed an explicit statement that Congress abrogated
distributor liability under the common law because it begs the question whether survival of distributor liability is
inconsistent with .
The constitutional implications of granting publishers an absolute immunity or privilege as a disincentive to excessive self
censorship has for decades been the subject of an intense debate, barely alluded to in As the United States Supreme Court
has stated, "[t]he need to avoid self censorship by the news media is ... not the only societal value at issue. If it were, this
Court would have embraced long ago the view that publishers and broadcasters enjoy an unconditional and indefeasible
immunity from liability for defamation. [Citations.] Such a rule would, indeed, obviate the fear that the prospect of civil
liability for injurious falsehood might dissuade a timorous press from the effective exercise of First Amendment freedoms.
Yet absolute protection for the communications media requires a total sacrifice of the competing value served by the law of
defamation. [¶ ] The legitimate state interest underlying the law of libel is the compensation of individuals for the harm
inflicted on them by defamatory falsehood. We would not lightly require the State to abandon this purpose, for, as Mr.
Justice Stewart has reminded us, the individual's right to the protection of his own good name 'reflects no more than our
basic concept of the essential dignity and worth of every human beinga concept at the root of any decent system of ordered
liberty. The protection of private personality, like the protection of life itself, is left primarily to the individual States
under the Ninth and Tenth Amendments. But this does not mean that the right is entitled to any less recognition by this
Court as a basic of our constitutional system.' (conc.opn.).)' " ) analysis flies in the face of this admonition.
Legislative use of the legally uncertain word "publisher" is simply too flimsy a basis upon which to grant providers and
users of interactive computer services what amounts to an "absolute protection" requiring the "total sacrifice of the
competing value served by the law of defamation" and the subordination of "a concept at the root of any decent system of
ordered liberty." When distinguishing the liability of publishers and distributors, eminent law professors writing
scholarly articles in learned journals commonly use the word "publisher" to refer only to a primary publisher, even when
their subject is the transmission of speech in cyberspace. (See, e.g., Sunstein, The and other articles cited in Sheridan,
So too do courts commonly use the word "publisher" to refer only to an original or primary publisher. For example, in a
well known preCDA libel case that, as we later discuss (post, at pp. 158161), was of particular interest to Congress during
debate on the measure that became the court observed that "[a] finding that Prodigy is a publisher is the first hurdle for
Plaintiffs to overcome in pursuit of their defamation claims, because one who repeats or otherwise republishes a libel is
subject to liability as if he had originally published it." italics added.) It is impossible to say with confidence that
Congress did not also use the word "publisher" in this conventional manner. In any case, in law and as it appears in , the
word "publisher" is at least capable of two reasonable constructions and therefore ambiguous, which is enough to justify
application of the interpretive canon favoring retention of common law principles. "Where there is a limitation by statute
which is capable of more than one construction the statute must be given that construction which is consistent with
common law." (Singer,Statutes and Statutory Construction (6th ed.2000) § 50.01, pp. 137139, fn. omitted.)
Resting on the use of the ambiguous word "publisher" in , the court felt it unnecessary to examine anything else in the
text of the statute to determine whether it "speaks directly" to the question addressed by the common law principle of
distributor liability. But the rest of the text deserves examination, for it sheds light on the breadth of the immunity
Congress intended to create.
The findings and declarations set forth in applaud the "true diversity of political discourse," the "opportunities for cultural
development," and the "myriad avenues for intellectual activity" provided by "the vibrant and competitive free market that
presently exists for the Internet and other interactive computer services" (, but nowhere in the findings and declarations is
there any indication that Congress considered online speech in need of protection. Nor is a general concern for the
promotion of speech evident in , entitled "Protection for 'Good Samaritan' blocking and screening of offensive material,"
which we think particularly revealing. immunizes providers and users against liability on account of action "to restrict
86 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
access to or availability of material that the provider or user considers to be ... objectionable, whether or not such material
is constitutionally protected," or to provide others "the technical means to restrict access to [such] material ...." (, italics
If, as says, Congress's use of the word "publisher" covers distributors as well as original publishers, and therefore reflects
an intent to create an absolute immunity, it would not have been necessary for Congress to specifically protect providers
and users who monitor content; would be mere surplusage.
The only thing unambiguously communicated by the entire text of is a prohibition on the imposition of primary publisher
liability on providers and users who act to restrict access to offensive or injurious materials. Because the statute does not
clearly indicate an intention to abrogate the common law principle of distributor liability, it is appropriate to inquire
whether the legislative history demonstrates such an intention.
's lack of clarity as to the boundary of the immunity it creates contrasts with the specificity of the immunity
granted under the Digital Millennium Copyright Act ( (DMCA). Like the CDA, the DMCA protects Internet service
providers from liability for content provided by third parties. The DMCA immunizes providers who transmit
material that infringes the rights of the holder of a copyright if the provider did not originate the infringing
content, has no editorial control over the material, does not know the material is infringing or have reason to
know, acts expeditiously to remove the material after learning of the infringement, and receives no financial
benefit from the infringing activity. ( While the level of intermediary liability allowed under the DMCA is similar
to distributor liability under the common law and may therefore indicate Congress does not feel this level of
liability will unduly chill Internet communication, the greater significance of the DMCA for our purposes is its
particularity as to the conditions and limits of the immunity it creates. Unlike the CDA, the DMCA "speaks
directly" to this issue.
The measure that eventually became was originally presented by Congressmen Cox and Wyden as a direct amendment to
the Telecommunications Act of 1996 (P.L. No. 104 104, § 509 (Feb. 8, 1996) 110 Stats. 56; see 141 Cong. Rec. H8468 (daily
ed. Aug. 4, 1995)). The CDA was also offered as an amendment to the Telecommunications Act, by Senators Exon and
Coats. After the CoxWyden measure and the CDA both passed, the former was incorporated into the latter. The
incorporation made sense. The overarching purpose of the CDA was to protect minors from harmful material on the
Internet. One of the main ways in which Congress sought to achieve this goal was to criminalize "the 'knowing'
transmission of 'obscene or indecent' messages to any recipient under 18 years of age." The CoxWyden measure, now ,
was germane because it immunizes providers or users who take action to restrict access to such material. Immunizing
providers or users from primary publisher liability advances this shared purpose because such liability would punish
providers or users who tried to identify and remove offensive material but failed. But immunizing them as well from
distributor liability would be inconsistent with that purpose, because it would protect providers or users who not only made
no independent effort to identify and remove offensive material, but who failed or refused to remove it even when placed on
notice of the injurious character of the thirdparty content they were distributing.
held that the provisions of the CDA calculated to achieve that purpose (, were contentbased restrictions on speech
and facially overbroad in violation of the First Amendment.
As acknowledges the committee report pertaining to indicates only that the statute was designed to overrule (, U.S.Code
Cong. & Admin.News 1996, 124, 207.) "There, the plaintiffs sued Prodigyan interactive computer service like AOLfor
defamatory comments made by an unidentified party on one of Prodigy's bulletin boards. The court held Prodigy to the
strict liability standard normally applied to original publishers of defamatory statements, rejecting Prodigy's claims that it
should be held only to the lower 'knowledge' standard usually reserved for distributors. The court reasoned that Prodigy
acted more like an original publisher than a distributor both because it advertised its practice of controlling content on its
service and because it actively screened and edited messages posted on its bulletin boards."
Congress overruled because it wanted "to remove the disincentives to selfregulation" created by the decision. Under
"computer service providers who regulated the dissemination of offensive material on their services risked subjecting
themselves to liability, because such regulation cast the service provider in the role of a publisher. Fearing that the specter
of liability would therefore deter service providers from blocking and screening offensive material, Congress enacted 's
broad immunity 'to remove disincentives for the development and utilization of blocking and filtering technologies that
empower parents to restrict their children's access to objectionable or inappropriate online material.' . In line with this
purpose, forbids the imposition of publisher liability on a service provider for the exercise of its editorial and self
It is noteworthy that in holding Prodigy to be a primary publisher the court distinguished which was then the leading
authority on the liability of Internet service providers for thirdparty defamation. In the defendant service provider was
CHAPTER 4: TORTS AND CYBER TORTS 87
held to the standard of liability applicable to a distributor, not a primary publisher. The authors of knew this and did not
object, as they did to the different and higher standard of liability imposed in "Representative Cox, one of two sponsors of
the immunity provision, characterized the imposition of distributor liability in as holding that CompuServe 'was not the
publisher or editor' of the material. He clearly used the term 'publisher' to exclude parties held to the distributor liability
standard applied to CompuServe in that case. 141 Cong. Rec. H8469 (daily ed. Aug. 4, 1995) (statement of Rep. Cox). The
provision's sponsors summarized both the and decisions, and then repeatedly discussed the need to overrule without
again mentioning ..." (Freiwald, (italics in original); see also Cannon, The
In a journalist claimed he was defamed by material posted on a CompuServe newsgroup for journalists.
CompuServe had contracted with CCI requiring the latter to "manage, review, create, delete, edit, and otherwise
control the contents" of the newsgroup. Another company, DFA, which had no direct relationship with
CompuServe, agreed in a contract with CCI to provide part of the content, a publication called "Rumorville." In an
issue of Rumorville posted on the CompuServe newsgroup site, DFA allegedly made defamatory comments about
the plaintiff's competing newsgroup. Before the action was filed, CompuServe received no complaints about the
Rumorville publication or about DFA. The court found that CompuServe "has no more editorial control over such
a publication than does a public library, bookstore or newsstand, and it would be no more feasible for CompuServe
to examine every publication it carries for potentially defamatory statements than it would be for any other
distributor to do so." Determining that CompuServe was in effect a distributor, and that the appropriate
standard of liability was "whether it knew or had reason to know of the allegedly defamatory Rumorville
statements," the court held that liability was barred by the absence of notice.
The expressed desire to overrule the absence of any apparent intent to disturb the effect of the decision in and the
statements of Representative Cox, the author of , are consistent with exclusion of distributor liability from the statutory
Survival of distributor liability is also consistent with the views expressed by Senator Coats, one of the two chief authors of
the CDA. During the legislative debate, Senator Coats made it clear that the intention was to prevent Internet
intermediaries, which try to keep offensive material off the Internet, "from being held liable as a publisher for defamatory
materials for which they would not otherwise have been liable." (141 Cong. Rec. S8345 (daily ed. Jun. 14, 1995).)
According to Senator Coats, "we don't intend that a court could hold that this is assertion of editorial content control, such
that a company must be treated under the high standard of a publisher for the purposes of offenses such as libel." (Ibid.,
italics added.) This statement indicates that, because they do not exercise "editorial content control," distributors are not
subjected by the statute to the "high standard" of liability applicable to publishers, but rather remain subject to the
intermediate standard applicable to distributors under the common law.
In short, as one commentator sums up, "both the text of the CDA and its meager legislative history support the conclusion
that when Congress said 'publisher,' it meant 'publisher,' and not distributor. The publisher and distributor terminology
have been used in cases and commentary on the subject of defamation in interactive networks. It would be reasonable to
surmise that Congress would say 'distributor' in addition to 'publisher' if it meant 'distributor' in addition to 'publisher.'
The statement in the Conference Report that is intended to overrule supports this conclusion.... Since did not impose
distributor liability, it was not necessary for Congress to obviate distributor liability in order to overrule the case."
"The stated policy objectives in the plain language and the legislative history of the CDA actually compel the conclusion
that Congress intended for ISPs to remain subject to distributor liability in certain contexts. states that '[i]t is the policy of
the United States' to: (1) 'encourage the development of technologies that maximize user control over what information is
received' over the Internet, and (2) 'remove disincentives [for ISPs to] develop[ ] and utiliz[e] ... blocking and filtering
technologies' in order to facilitate the screening of 'objectionable' material displayed over the Internet. In other words, in
enacting the CDA, Congress intended to create incentives for ISPs to screen and edit the content of information displayed
over the Internet. If ISPs were immune from both publisher and distributor liability in thirdparty defamation claims, they
would essentially be given blanket immunity from liability. This interpretation of the 'Good Samaritan' immunity, which is
advocated in would frustrate, rather than follow, the purpose of the CDA. Congress intended to encourage ISPs to monitor
the content on the Internet, but if ISPs are granted absolute immunity for disseminating thirdparty defamatory material,
then ISPs will not bother to screen their content at all because they will never be subject to liability. If, on the other hand,
ISPs could be held liable as a distributor for neglecting to monitor information or failing to remove objectionable content
that is brought to their knowledge, then ISPs would have a greater incentive to screen content. Common sense dictates
that an ISP will not waste its time and money monitoring content over the Internet when it will suffer no repercussions
from failing to do so. Thus, immunizing ISPs from distributor liability would frustrate Congress's objectives under the
CDA much more than would subjecting ISPs to distributor liability." (Patel, fns. omitted; see also Erlich,
88 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
Communications Decency Act § 230 (2002) 17 Berk. Tech. L.J. 401, 411 ["Congress tried to take the middle road between
full liability, a disincentive to filter, and zero liability, a lack of incentive to filter. Courts, on the other hand, have
dismissed this balance and clearly favor the latter"].) Ironically, has had precisely the same effect as the decision was
designed to overrule: "[n]either decision creates any incentive for ISPs to prevent the dissemination of defamatory
Although conclusion that Congress "explicitly" commanded the abrogation of distributor liability rendered it unnecessary
to inquire whether the command was implied by the statute, the court went on to find that immunity from distributor
liability was also mandated by "the practical implications of notice liability in the interactive computer service context."
Maintaining that "it would be impossible for service providers to screen each of their millions of postings for possible
problems" the court concluded that "[l]ike the strict liability imposed by the court, liability upon notice [would] reinforce[ ]
service providers' incentives to restrict speech and abstain from selfregulation" which the court felt inconsistent with one
of the chief purposes of .
In essence, concludes that was designed "to promote unfettered speech on the Internet" and notice liability would negate
that purpose because, "like strict liability, liability upon notice has a chilling effect on speech." We question whether a
statute that encourages the restriction of certain types of online material "whether or not such material is constitutionally
protected" ( can fairly be said to reflect a desire "to promote unfettered speech." But that issue aside we also think it
debatable whether notice liability would actually have an unduly chilling effect on cyberspeech. Neither the record before
us nor any other information brought to our attention provides an answer to that question. Moreover, the speculative
conclusion of the court that exposing Internet intermediaries to knowledgebased liability would significantly chill online
speech is disputed by the speculations of other authorities. We set forth the views of some of the commentators who
disagree with on this point solely to illustrate the nature of the ongoing debate.
And at least one commentator who agrees that intermediary liability may chill online speech does not believe an
absolute immunity is the appropriate response, because such a complete protection not only "ignores the power
that the Internet gives irresponsible speakers to damage the reputations of their targets," but also
"underestimates the benefits that defamation law may bring to Internet discourse." (Lidsky, Emphasizing that
defamation law exerts a "civilizing influence" that makes meaningful public discourse possible citing Post, The
and Post, Constitutional Domains (1995)), Professor Lidsky maintains that completely protecting Internet
intermediaries who disseminate injurious speech deters citizens fearful of injury from engaging in Internet
discourse and exacerbates "the largest single threat to meaningful discourse in cyberspace: incoherence." (Id. at
p. 886) In her view, the better judicial approach would be to remedy the defects in defamation jurisprudence
through a nuanced and more rigorous application of the constitutional privilege for nonfactual expression; that is,
by adapting the "opinion privilege" to "the unique social context of cyberspace." (Id. at pp. 919946.)
To begin with, critics emphasize that market forces exert enormous influence on the character of information transmitted
over the Internet, and the excessive removal of Internet postings, or a type of postings, without any inquiry as to whether
they are actually defamatory would not likely be tolerated by the market. "[N]ews travels fast over interactive computer
services, and a service that removes members' postings without any investigation is likely to get a bad reputation in a
community whose first value is the free flow of information." (Sheridan, accord, Freiwald, Butler,
It is also asserted that by ignoring how difficult it is for a plaintiff to prevail on a defamation claim or receive significant
money damages, the court overstated the danger such claims present to Internet intermediaries, and therefore also
exaggerated the danger they would engage in excessive selfcensorship. In fact, the critics maintain, "[i]t is not at all clear
that being exposed to distributor liability would be a disaster for online services." (Sheridan, First of all, it must be shown
that an alleged defamation is not an opinion or satire or mere hyperbole but an assertion of actual fact, and even then
knowledge and the requisite degree of fault must be shown. Furthermore, if the defamation relates to a public official or
public figure, as will often be the case, the intermediary would also have to be shown to have acted with "actual malice,"
which is usually extremely difficult. Even if the defamation relates to a private figure it ordinarily would not be
actionable without proof of special damage (, and the defendant might have the advantage of one or more of the many
common law privileges for types of speech deemed worthy of extra protection. For these and other reasons, as empirical
studies confirm, it is very hardindeed, "almost impossible"for plaintiffs to succeed in defamation actions. (Lidsky, citing
Bezanson et al., Libel Law and the Press (1987).) Finally, in California and other jurisdictions that have an antiSLAPP
statute such as ours, defendants in unmeritorious defamation actions need not even answer the complaint and can obtain
quick dismissal and their attorney fees. The foregoing factors explain why "[t]he researcher of California libel law is struck
by the paucity of cases holding distributors liable for the distribution of defamatory material."
is also criticized for suggesting that distributor liability would require service providers to screen "each of their millions of
CHAPTER 4: TORTS AND CYBER TORTS 89
postings for possible problems." ( Distributor liability would not require a service provider to review communications in
advance of posting them (see, e.g., but only to act reasonably after being placed on notice that the communication is
defamatory. It is said that Internet intermediaries would not likely learn of the defamatory character of the message at
issue until some time after it was posted. "Since the service would be liable only for damages caused by its tortious
conduct, and since most of the damages would occur before the service committed a tort, even a service that was found
liable would not face a large damage award." (Sheridan,
A distributor is obliged to review messages from a particular source in advance of posting only when informed that
a specified source is likely to communicate actionable messages.
indifference to the many different ways in which defamation may be transmitted over the Internet, and the different levels
of control over injurious communications an intermediary may possess, is also criticized. (See, e.g., McManus, In some
contextssuch as e mailservice providers are not only unaware of the nature of the information they distribute but, as a
practical matter, cannot control transmissions. But in other contextsnewsgroups and bulletin boards, for example
providers and users can and do control the messages they distribute. It is one thing to grant an Internet intermediary
immunity on the basis of a factual analysis of the degree of control, if any, it exerts over content (see, e.g., ["No purpose
would be served by holding liable those who have no ability to control the information to which their subscribers have
access"] ), but quite another to grant immunity without regard to that critical factor.
"A person who wants to publish a message on an electronic bulletin board logs onto the bulletin board on his
computer. The bulletin board or forum is actually a server accessible to persons logging on. The connection
between the computers may be by direct telephone link, through a proprietary network, or through the Internet.
The user either composes the message while he is connected to the service or uploads a previously composed
message. The message may be immediately posted, i.e., made available on the server to persons with access to the
bulletin board, or it may be delayed briefly to prevent the bulletin board from becoming a chat room, or it may be
edited or refused publication. Nothing in the technology prevents the operator of an electronic bulletin board from
reading every message before it is posted on the board; in fact in a moderated USENET newsgroup or listserv this
is what happens." (Sheridan, fns. omitted; see also Luftman,
Due to such control, one commentator has opined that "the sysop [system operator] of a BBS [bulletin board
system] could be held liable for torts committed within the BBS itself. If a defamatory message is posted thorough
USENET to the much wider Internet newsgroup audience, the sysop could be liable for that as well. [¶ ] One of
the important differences between commercial online services and BBSs is that the activity on the BBSs is often
moderated by the sysop, who receives the messages and decides which ones to post to a given newsgroup. The
sysop screens off messages that are not topical or otherwise unacceptable. This distinction is crucial, since the
amount of editorial control exercised by the sysop becomes the key factor in ascertaining the sysop's liability for
users' torts." (Bovenzi, Liabilities of System Operators on the Internet (1996) 11 Berk. Tech. L.J. 93, 99, fns.
The overarching theme of critics is that the court's analysis is unbalanced. "Grounding arguments for complete
intermediary immunity in First Amendment concerns does not make them any more persuasive. Rather, advocates of a
rule that would accord little or no weight to defamation victims' interest should bear a heavy burden of persuasion. Claims
that cyberspace technologies create unique opportunities for free social discourse must be balanced against the reality that
those technologies can also encourage defamation, exacerbate its harm, and insulate its original author from suit."
(Freiwald, fn. omitted) "In sum, a distributor liability rule that encouraged some response by intermediaries would be
socially efficient: the benefits from reduced defamation injury would likely greatly exceed the cost of response by
intermediaries. Such liability seems particularly critical in online defamation cases, given those factors of cyberspace
communication that both encourage production of serious defamation and limit a victim's ability to bring original authors
to account. Not surprisingly, many commentators have agreed that an intermediate form of liability for intermediaries
would make the most sense. In fact, almost all of those who commented on viewed its imposition of distributor liability as
the correct legal rule choice." (Id. at p. 620, fns. omitted; see also Butler, [explaining why exposure to distributor liability
"would do the least harm to the forum for free speech over the Internet"]; Bovenzi, Liability of Systems Operators on the
Internet, supra, 11 Berk. Tech. L.J. 93, 139 [knowledgebased liability "would preserve freedom of expression on computer
We reemphasize that we take no position on whether distributor liability would unduly chill online speech. Like our
Supreme Court, which has also felt it appropriate to acknowledge the views of informed "academic writers" as to the
application of law to evolving Internet technologies, we discuss the debate whether exposing Internet intermediaries to
distributor liability would chill online speech "only to note its existence and contours, not to attempt its resolution."
Resolution of the controversy requires information this court (which, like the court, is asked to review a pretrial ruling)
90 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
does not now possess: whether a provider or user of an interactive computer service could, at relatively low expense,
determine whether challenged material is defamatory and remove it, or whether, on the contrary, the imposition of notice
liability would place a burden on providers and users they could not sustain without automatically removing all material
claimed to be defamatory, thereby eliminating some and perhaps much information that is constitutionally protected. The
answer to this question depends on the state of Internet technology, a matter never addressed by the parties in this case or
by the trial court. "Given the extraordinarily rapid growth of this technology and its developments, it is plainly unwise to
lurch prematurely into emerging issues, given a record that does not at all lend itself to their determination." accord,
Lessig, The [urging courts to "follow the meandering development of the common law" before "venturing too boldly" into
the regulation of cyberspace]; Hadley, The ["while the Internet is in its infancy, fundamentally altering the balance in
favor of shielding defamatory statements against private persons is both premature and dangerous"].)
American courts, and above all the Supreme Court, have struggled to define the proper accommodation between the
common law of defamation and the constitutional freedom of speech. Under the present regime, the burdens that must be
borne by a plaintiff claiming defamation depend upon whether he or she is a public official or public figure and whether the
speech at issue relates to a matter of private or public concern. Where the libel is claimed by a private figure, the burdens
the plaintiff must bear are largely those of the common law. At the other extreme, where defamation is claimed by a public
official or public figure, the constitution places on the plaintiff the burden of showing both falsity and fault, which are
forbidding requirements. (See In short, as to defamation, our jurisprudence establishes a nuanced legal regime: "[L]ibel
can claim no talismanic immunity from constitutional limitations." Proposals to create an unfettered right to libel, as by
the creation of a categorical immunity or privilege, have been controversial and strongly contested. Thus, resisting an effort
to create a "special immunity" different from the one at issue here, the California Supreme Court recently expressed its
unwillingness to hold "that messages transmitted through the Internet are exempt from the ordinary rules of tort liability."
For example, proposals to give the press a privilege to repeat defamatory remarks, even when the publisher or
broadcaster suspects or is convinced of their falsity (see, e.g., Sowle, Defamation and the First Amendment: The
Case for a Constitutional Privilege of Fair Report (1979) 54 N.Y.U. L.Rev. 469), have been resisted on the ground of
the immense potential for abuse of such a doctrine: "The pretexts for its exercise are bound to be trivialized. The
occasion for its first judicial endorsement [in which, in dicta, suggested a 'right of neutral reportage'] was itself
questionable. Should such a privilege to republish known or suspected falsehoods be generally recognized, the
limitations on its exercise that initially served to justify it can be expected to be progressively eroded, as false
exposes of only slightly different degrees of irresponsibility become increasingly difficult to be distinguished from
each other. The ultimate contribution of such a privilege to the encouragement of yellow journalism is very likely
to outweigh its contribution to democratic liberty. In the absence of a compelling need for it, the adoption of such a
general privilege should be considered only with the utmost caution." (2 Harper et al., The Law of Torts (2d
ed.1986) § 5.18, pp. 153155, fns. omitted.)
" '[R]epeals by implication are not favored, and ... a statute will not be construed as taking away a common law right
existing at the date of its enactment, unless that result is imperatively required; that is to say, unless it be found that the
preexisting right is so repugnant to the statute that the survival of such right would in effect deprive the subsequent
statute of its efficacy; in other words, render its provisions nugatory.' " quoting (italics added), opn. amended, cert.
granted, and ordered affd., Survival of knowledgebased liability under the common law would not render nugatory.
Moreover, without suggesting that the statute was designed to promote unfettered online speech or that we need to decide
the question, we do not think it can now be confidently determined by a court of law whether intermediary liability would
have a more chilling effect on online speech than it does on other forms of speech.
In these circumstances courts should not "take it upon themselves to set out novel rules for the protection of speech that
deviate sharply and consciously from common law rules...." (Epstein, Whether Internet intermediaries should be
absolutely immune for the transmission of defamatory materials online is a matter we think best left to the Legislature,
which has yet to squarely address the issue.
Because does not " 'speak directly' to the question addressed by the common law" and is capable of more than one
construction, we conclude that the statute should not be interpreted as having abrogated the common law principle of
distributor or knowledgebased liability.
Rosenthal has not alleged any fact that would prevent her from being subjected to distributor liability under the common
law. Appellants allege they notified her that Bolen's statement contained false and defamatory information and asked that
the statement be removed from the newsgroups on which Rosenthal posted it, that she refused these requests and
thereafter repeatedly reposted the allegedly defamatory statements on Internet newsgroups. Rosenthal's answer denies
the statements were false but admits all of the other allegations. However, her special motion to strike under the anti
CHAPTER 4: TORTS AND CYBER TORTS 91
SLAPP statute was not based on the truth of the statements that Polevoy engaged in criminal conduct nor did it deny she
knew or had reason to know of the defamatory character of these statements. The motion was based solely on the grounds
of the federal immunity, appellants' inability to show "actual malice," and their failure to plead special damages.
Furthermore, Rosenthal has never asserted that, due to the technology or for any other reason, she could not easily have
withdrawn and/or corrected the allegedly defamatory materials she posted.
Because does not restrict distributor liability under the common law and at this preliminary stage of the litigation no
reason appears why Rosenthal cannot be subjected to such liability, the trial court erred in finding that appellant Polevoy's
defamation claim was barred by the statute.
See footnote *, ante.
The order granting the special motion to strike pursuant to is vacated insofar as it applies to appellant Polevoy; in all
other respects the order is affirmed. The matter is remanded to the trial court for further proceedings consistent with this
Supplemental Case Printout
for: Landmark in the Law:
Palsgraf v. Long Island
Railroad Co. (1928)
162 N.E. 99
59 A.L.R. 1253
(Cite as: 248 N.Y. 339, 162 N.E. 99)
LONG ISLAND R. CO. [FN*]
FN* Reargument denied 164 N. E. 564.
Court of Appeals of New York.
May 29, 1928.
Action by Helen Palsgraf against the Long Island Railroad Company. Judgment entered on the verdict of a jury in favor of
the plaintiff was affirmed by the Appellate Division by a divided court (222 App. Div. 166, 225 N. Y. S. 412), and defendant
Reversed, anily security is neither greater nor less because the act resulting in the invasion is a wrong to another far
removed. In this case, the rights that are said to have been violated, are not even of the same order. The man was not
injured in his person nor even put in danger. The purpose of the act, as well as its effect, was to make his person safe. It
there was a wrong to him at all, which may very well be doubted it was a wrong to a property interest only, the safety of his
package. Out of this wrong to property, which threatened injury to nothing else, there has passed, we are told, to the
plaintiff by derivation or succession a right of action for the invasion of an interest of another order, the right to bodily
security. The diversity of interests emphasizes the futility of the effort to build the plaintiff's right upon the basis of a
92 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
wrong to some one else. The gain is one of emphasis, for a like result would follow if the interests were the same. Even
then, the orbit of the danger as disclosed to the eye of reasonable vigilance would be the orbit of the duty. One who jostles
one's neighbor in a crowd does not invade the rights of others standing at the outer fringe when the unintended contact
casts a bomb upon the ground. The wrongdoer as to them is the man who carries the bomb, not the one who explodes it
without suspicion of the danger. Life will have to be made over, and human nature transformed, before prevision so
extravagant can be accepted as the norm of conduct, the customary standard to which behavior must conform.
The argument for the plaintiff is built upon the shifting meanings of such words as 'wrong' and 'wrongful,' and shares their
instability. What the plaintiff must *344 show is 'a wrong' to herself; i. e., a violation of her own right, and not merely a
wrong to some one else, nor conduct 'wrongful' because unsocial, but not 'a wrong' to any one. We are told that one who
drives at reckless speed through a crowded city street is guilty of a negligent act and therefore of a wrongful one,
irrespective of the consequences. Negligent the act is, and wrongful in the sense that it is unsocial, but wrongful and
unsocial in relation to other travelers, only because the eye of vigilance perceives the risk of damage. If the same act were
to be committed on a speedway or a race course, it would lose its wrongful quality. The risk reasonably to be perceived
defines the duty to be obeyed, and risk imports relation; it is risk to another or to others within the range of apprehension.
Seavey, Negligence, Subjective or Objective, 41 H. L. Rv. 6; Boronkay v. Robinson & Carpenter, 247 N. Y. 365, 160 N. E.
400. This does not mean, of course, that one who launches a destructive force is always relieved of liability, if the force,
though known to be destructive, pursues an unexpected path. 'It was not necessary that the defendant should have had
notice of the particular method in which an accident would occur, if the possibility of an accident was clear to the ordinarily
prudent eye.' Munsey v. Webb, 231 U. S. 150, 156, 34 S. Ct. 44, 45 (58 L. Ed. 162); Condran v. Park & Tilford, 213 N. Y.
341, 345, 107 N. E. 565; Robert v. United States Shipping Board Emergency Fleet Corp., 240 N. Y. 474, 477, 148 N. E. 650.
Some acts, such as shooting are so imminently dangerous to any one who may come within reach of the missile however
unexpectedly, as to impose a duty of prevision not far from that of an insurer. Even today, and much oftener in earlier
stages of the law, one acts **101 sometimes at one's peril. Jeremiah Smith, Tort and Absolute Liability, 30 H. L. Rv. 328;
Street, Foundations of Legal Liability, vol. 1, pp. 77, 78. Under this head, it may be, fall certain cases of what is known as
transferred intent, an act willfully dangerous to A resulting by misadventure in injury to B. Talmage v. Smith, 101 Mich.
370, 374, 59 N. W. 656, 45 Am. St. Rep. 414. *345 These cases aside, wrong is defined in terms of the natural or probable,
at least when unintentional. Parrot v. WellsFargo Co. (The NitroGlycerine Case) 15 Wall. 524, 21 L. Ed. 206. The range
of reasonable apprehension is at times a question for the court, and at times, if varying inferences are possible, a question
for the jury. Here, by concession, there was nothing in the situation to suggest to the most cautious mind that the parcel
wrapped in newspaper would spread wreckage through the station. If the guard had thrown it down knowingly and
willfully, he would not have threatened the plaintiff's safety, so far as appearances could warn him. His conduct would not
have involved, even then, an unreasonable probability of invasion of her bodily security. Liability can be no greater where
the act is inadvertent.
 Negligence, like risk, is thus a term of relation. Negligence in the abstract, apart from things related, is surely not a
tort, if indeed it is understandable at all. Bowen, L. J., in Thomas v. Quartermaine, 18 Q. B. D. 685, 694. Negligence is not
a tort unless it results in the commission of a wrong, and the commission of a wrong imports the violation of a right, in this
case, we are told, the right to be protected against interference with one's bodily security. But bodily security is protected,
not against all forms of interference or aggression, but only against some. One who seeks redress at law does not make out
a cause of action by showing without more that there has been damage to his person. If the harm was not willful, he must
show that the act as to him had possibilities of danger so many and apparent as to entitle him to be protected against the
doing of it though the harm was unintended. Affront to personality is still the keynote of the wrong. Confirmation of this
view will be found in the history and development of the action on the case. Negligence as a basis of civil liability was
unknown to mediaeval law. 8 Holdsworth, History of English Law, p. 449; Street, Foundations of Legal Liability, vol. 1,
*346 pp. 189, 190. For damage to the person, the sole remedy was trespass, and trespass did not lie in the absence of
aggression, and that direct and personal. Holdsworth, op. cit. p. 453; Street, op. cit. vol. 3, pp. 258, 260, vol. 1, pp. 71, 74.
Liability for other damage, as where a servant without orders from the master does or omits something to the damage of
another, is a plant of later growth. Holdsworth, op. cit. 450, 457; Wigmore, Responsibility for Tortious Acts, vol. 3, Essays
in AngloAmerican Legal History, 520, 523, 526, 533. When it emerged out of the legal soil, it was thought of as a variant
of trespass, an offshoot of the parent stock. This appears in the form of action, which was known as trespass on the case.
Holdsworth, op. cit. p. 449; cf. Scott v. Shepard, 2 Wm. Black. 892; Green, Rationale of Proximate Cause, p. 19. The victim
does not sue derivatively, or by right of subrogation, to vindicate an interest invaded in the person of another. Thus to view
his cause of action is to ignore the fundamental difference between tort and crime. Holland, Jurisprudence (12th Ed.) p.
328. He sues for breach of a duty owing to himself.
CHAPTER 4: TORTS AND CYBER TORTS 93
The law of causation, remote or proximate, is thus foreign to the case before us. The question of liability is always anterior
to the question of the measure of the consequences that go with liability. If there is no tort to be redressed, there is no
occasion to consider what damage might be recovered if there were a finding of a tort. We may assume, without deciding,
that negligence, not at large or in the abstract, but in relation to the plaintiff, would entail liability for any and all
consequences, however novel or extraordinary. Bird v. St. Paul Fire & Marine Ins. Co., 224 N. Y. 47, 54, 120 N. E. 86, 13 A.
L. R. 875; Ehrgott v. Mayor, etc., of City of New York, 96 N. Y. 264, 48 Am. Rep. 622; Smith v. London & S. W. R. Co.,
 L. R. 6 C. P. 14; 1 Beven, Negligence, 106; Street, op. cit. vol. 1, p. 90; Green, Rationale of Proximate Cause, pp.
88, 118; cf. Matter of Polemis, L. R. 1921, 3 K. B. 560; 44 Law Quarterly Review, 142. There is room for *347 argument
that a distinction is to be drawn according to the diversity of interests invaded by the act, as where conduct negligent in
that it threatens an insignificant invasion of an interest in property results in an unforeseeable invasion of an interest of
another order, as, e. g., one of bodily security. Perhaps other distinctions may be necessary. We do not go into the question
now. The consequences to be followed must first be rooted in a wrong.
The judgment of the Appellate Division and that of the Trial Term should be reversed, and the complaint dismissed, with
costs in all courts.
Supplemental Case Printout
for: Adapting the Law to the
962 F.Supp. 1015, 65 USLW 2532, 25 Media L. Rep. 1545
United States District Court,
COMPUSERVE INCORPORATED, Plaintiff,
CYBER PROMOTIONS, INC. and Sanford Wallace, Defendants.
Feb. 3, 1997.
MEMORANDUM OPINION AND ORDER
GRAHAM, District Judge.
This case presents novel issues regarding the commercial use of the Internet, specifically the right of an online computer
service to prevent a commercial enterprise from sending unsolicited electronic mail advertising to its subscribers.
Plaintiff CompuServe Incorporated ("CompuServe") is one of the major national commercial online computer services. It
operates a computer communication service through a proprietary nationwide computer network. In addition to allowing
access to the extensive content available within its own proprietary network, CompuServe also provides its subscribers
with a link to the much larger resources of the Internet. This allows its subscribers to send and receive electronic
messages, known as "email," by the Internet. Defendants Cyber Promotions, Inc. and its president Sanford Wallace are in
the business of sending unsolicited email advertisements on behalf of themselves and their clients to hundreds of
thousands of Internet users, many of whom are CompuServe subscribers. CompuServe has notified defendants that they
94 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
are prohibited from using its computer equipment to process and store the unsolicited email and has requested that they
terminate the practice. Instead, defendants have sent an increasing volume of email solicitations to CompuServe
subscribers. CompuServe has attempted to employ technological means to block the flow of defendants' email
transmissions to its computer equipment, but to no avail.
This matter is before the Court on the application of CompuServe for a preliminary injunction which would extend the
duration of the temporary restraining order issued by this Court on October 24, 1996 and which would in addition prevent
defendants from sending unsolicited advertisements to CompuServe subscribers.
For the reasons which follow, this Court holds that where defendants engaged in a course of conduct of transmitting a
substantial volume of electronic data in the form of unsolicited email to plaintiff's proprietary computer equipment, where
defendants continued such practice after repeated demands to cease and desist, and where defendants deliberately evaded
plaintiff's affirmative efforts to protect its computer equipment from such use, plaintiff has a viable claim for trespass to
personal property and is entitled to injunctive relief to protect its property.
The Court will begin its analysis of the issues by acknowledging, for the purpose of providing a background, certain
findings of fact recently made by another district court in a case involving the Internet:
1. The Internet is not a physical or tangible entity, but rather a giant network which interconnects innumerable smaller
groups of linked computer networks. It is thus a network of networks....
2. Some networks are "closed" networks, not linked to other computers or networks. Many networks, however, are
connected to other networks, which are in turn connected to other networks in a manner which permits each computer in
any network to communicate with computers on any other network in the system. This global Web of linked networks
and computers is referred to as the Internet.
3. The nature of the Internet is such that it is very difficult, if not impossible, to determine its size at a given moment. It
is indisputable, however, that the Internet has experienced extraordinary growth in recent years.... In all, reasonable
estimates are that as many as 40 million people around the world can and do access the enormously flexible
communication Internet medium. That figure is expected to grow to 200 million Internet users by the year 1999.
4. Some of the computers and computer networks that make up the network are owned by governmental and public
institutions, some are owned by nonprofit organizations, and some are privately owned. The resulting whole is a
decentralized, global medium of communicationsor "cyberspace"that links people, institutions, corporations, and
governments around the world....
11. No single entityacademic, corporate, governmental, or nonprofit administers the Internet. It exists and
functions as a result of the fact that hundreds of thousands of separate operators of computers and computer networks
independently decided to use common data transfer protocols to exchange communications and information with other
computers (which in turn exchange communications and information with still other computers). There is no centralized
storage location, control point, or communications channel for the Internet, and it would not be technically feasible for a
single entity to control all of the information conveyed on the Internet.
. In 1994, one commentator noted that "advertisements on the current Internet computer network are not common
because of that network's not forprofit origins." Trotter Hardy, . In 1997, that statement is no longer true.
Internet users often pay a fee for Internet access. However, there is no permessage charge to send electronic messages
over the Internet and such messages usually reach their destination within minutes. Thus electronic mail provides an
opportunity to reach a wide audience quickly and at almost no cost to the sender. It is not surprising therefore that some
companies, like defendant Cyber Promotions, Inc., have begun using the Internet to distribute advertisements by sending
the same unsolicited commercial message to hundreds of thousands of Internet users at once. Defendants refer to this as
"bulk e mail," while plaintiff refers to it as "junk email." In the vernacular of the Internet, unsolicited email advertising
is sometimes referred to pejoratively as "spam."
This term is derived from a skit performed on the British television show Monty Python's Flying Circus, in which
the word "spam" is repeated to the point of absurdity in a restaurant menu.
CompuServe subscribers use CompuServe's domain name "CompuServe.com" together with their own unique alpha
numeric identifier to form a distinctive email mailing address. That address may be used by the subscriber to exchange
electronic mail with any one of tens of millions of other Internet users who have electronic mail capability. Email sent to
CompuServe subscribers is processed and stored on CompuServe's proprietary computer equipment. Thereafter, it becomes
accessible to CompuServe's subscribers, who can access CompuServe's equipment and electronically retrieve those
Over the past several months, CompuServe has received many complaints from subscribers threatening to discontinue
their subscription unless CompuServe prohibits electronic mass mailers from using its equipment to send unsolicited
CHAPTER 4: TORTS AND CYBER TORTS 95
advertisements. CompuServe asserts that the volume of messages generated by such mass mailings places a significant
burden on its equipment which has finite processing and storage capacity. CompuServe receives no payment from the
mass mailers for processing their unsolicited advertising. However, CompuServe's subscribers pay for their access to
CompuServe's services in increments of time and thus the process of accessing, reviewing and discarding unsolicited email
costs them money, which is one of the reasons for their complaints. CompuServe has notified defendants that they are
prohibited from using its proprietary computer equipment to process and store unsolicited email and has requested them
to cease and desist from sending unsolicited email to its subscribers. Nonetheless, defendants have sent an increasing
volume of email solicitations to CompuServe subscribers.
In an effort to shield its equipment from defendants' bulk email, CompuServe has implemented software programs
designed to screen out the messages and block their receipt. In response, defendants have modified their equipment and
the messages they send in such a fashion as to circumvent CompuServe's screening software. Allegedly, defendants have
been able to conceal the true origin of their messages by falsifying the pointoforigin information contained in the header
of the electronic messages. Defendants have removed the "sender" information in the header of their messages and
replaced it with another address. Also, defendants have developed the capability of configuring their computer servers to
conceal their true domain name and appear on the Internet as another computer, further concealing the true origin of the
messages. By manipulating this data, defendants have been able to continue sending messages to CompuServe's
equipment in spite of CompuServe's protests and protective efforts.
Defendants assert that they possess the right to continue to send these communications to CompuServe subscribers.
CompuServe contends that, in doing so, the defendants are trespassing upon its personal property.
The grant or denial of a motion for preliminary injunction rests within the discretion of the trial court. . In determining
whether a motion for preliminary injunction should be granted, a court must consider and balance four factors: (1) the
likelihood that the party seeking the preliminary injunction will succeed on the merits of the claim; (2) whether the party
seeking the injunction will suffer irreparable harm without the grant of the extraordinary relief; (3) the probability that
granting the injunction will cause substantial harm to others; and (4) whether the public interest is advanced by the
issuance of the injunction. ; . None of these individual factors constitute prerequisites that must be met for the issuance
of a preliminary injunction, they are instead factors that are to be balanced. . A preliminary injunction is customarily
granted on the basis of procedures that are less formal and evidence that is less complete than in a full trial on the merits.
Indeed, "[a] party ... is not required to prove his case in full at a preliminary injunction hearing." .
This Court shall first address plaintiff's motion as it relates to perpetuating the temporary restraining order filed on
October 24, 1996. That order enjoins defendants from:
(i) Using CompuServe accounts or CompuServe's equipment or support services to send or receive electronic mail or
messages or in connection with the sending or receiving of electronic mail or messages;
(ii) Inserting any false reference to a CompuServe account or CompuServe equipment in any electronic message sent by
(iii) Falsely representing or causing their electronic mail or messages to bear the representation that any electronic mail
or message sent by Defendants was sent by or originated from CompuServe or a CompuServe account.
(Temporary Restraining Order at 4).
As a general matter, the findings of this Court enunciated in its temporary restraining order are applicable to the request
for preliminary injunction now at issue. The behavior described in subsections (ii) and (iii) of the temporary restraining
order would be actionable as false representations or descriptions under § 43(a) of the Lanham Act, . Also, the same
behavior is actionable under the Ohio Deceptive Trade Practices Act, Ohio Rev.Code § 4165(B) and (D).
Defendants argue that the restrictions in the temporary restraining order are no longer necessary because defendants no
longer have a CompuServe account. That being the case, a preliminary injunction perpetuating the proscribed activity
articulated in subsection (i) of the temporary restraining order will present no hardship at all to defendants. Next, it does
not appear that defendants would need to have a CompuServe account to perpetrate the proscribed acts articulated in
subsections (ii) and (iii) of the temporary restraining order. Therefore, the fact that defendants no longer have an account
with plaintiff does not vitiate the need which CompuServe has demonstrated for an injunction proscribing the acts set forth
in those subsections.
For the foregoing reasons and the reasons articulated in the temporary restraining order issued by this Court, defendants
Cyber Promotions, Inc. and its president Sanford Wallace are hereby enjoined from performing any of the acts therein
described during the pendency of this litigation.
96 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
This Court will now address the second aspect of plaintiff's motion in which it seeks to enjoin defendants Cyber
Promotions, Inc. and its president Sanford Wallace from sending any unsolicited advertisements to any electronic mail
address maintained by CompuServe.
CompuServe predicates this aspect of its motion for a preliminary injunction on the common law theory of trespass to
personal property or to chattels, asserting that defendants' continued transmission of electronic messages to its computer
equipment constitutes an actionable tort.
Trespass to chattels has evolved from its original common law application, concerning primarily the asportation of
another's tangible property, to include the unauthorized use of personal property:
Its chief importance now, is that there may be recovery ... for interferences with the possession of chattels which are not
sufficiently important to be classed as conversion, and so to compel the defendant to pay the full value of the thing with
which he has interfered. Trespass to chattels survives today, in other words, largely as a little brother of conversion.
Prosser & Keeton, Prosser and Keeton on Torts, § 14, 8586 (1984).
The scope of an action for conversion recognized in Ohio may embrace the facts in the instant case. The Supreme Court of
Ohio established the definition of conversion under Ohio law in by stating that:
[I]n order to constitute a conversion, it was not necessary that there should have been an actual appropriation of the
property by the defendant to its own use and benefit. It might arise from the exercise of a dominion over it in exclusion
of the rights of the owner, or withholding it from his possession under a claim inconsistent with his rights. If one take
the property of another, for a temporary purpose only, in disregard of the owner's right, it is a conversion. Either a
wrongful taking, an assumption of ownership, an illegal use or misuse, or a wrongful detention of chattels will constitute
see also ; ; 18 . While authority under Ohio law respecting an action for trespass to chattels is extremely meager, it
appears to be an actionable tort. See (dissenting opinion) ("any workable cause of action would appear to be trespass to
chattels"); see also (trespass on the rights of plaintiff in personal property is a precursor to an act in conversion); (the
court of appeals acknowledged that trespass to chattel claims were barred because those claims were dependent upon
claimant's ownership of the subject personal property); (where the court of appeals let stand a jury award on a "trespass
against personal property" claim); (common law principles of trespass to chattels in Am.Jur.2d applied as controlling
under Ohio law).
Both plaintiff and defendants cite the Restatement (Second) of Torts to support their respective positions. In determining
a question unanswered by state law, it is appropriate for this Court to consider such sources as the restatement of the law
and decisions of other jurisdictions. (where court considered positions expressed in the Restatement (Second) of Torts in
interpreting Ohio's principles of comparative negligence) ; see also .
The Restatement states that a trespass to chattel may be committed by intentionally using or intermeddling with the
chattel in possession of another. Restatement , Comment e defines physical "intermeddling" as follows:
... intentionally bringing about a physical contact with the chattel. The actor may commit a trespass by an act which
brings him into an intended physical contact with a chattel in the possession of another[.]
Electronic signals generated and sent by computer have been held to be sufficiently physically tangible to support a
trespass cause of action. ; (Indiana Supreme Court recognizing in dicta that a hacker's unauthorized access to a computer
was more in the nature of trespass than criminal conversion); and (computer hacking as the criminal offense of "computer
trespass" under Washington law). It is undisputed that plaintiff has a possessory interest in its computer systems.
Further, defendants' contact with plaintiff's computers is clearly intentional. Although electronic messages may travel
through the Internet over various routes, the messages are affirmatively directed to their destination.
Defendants, citing , which defines "dispossession", assert that not every interference with the personal property of another
is actionable and that physical dispossession or substantial interference with the chattel is required. Defendants then
argue that they did not, in this case, physically dispossess plaintiff of its equipment or substantially interfere with it.
However, the defines the circumstances under which a trespass to chattels may be actionable:
One who commits a trespass to a chattel is subject to liability to the possessor of the chattel if, but only if,
(a) he dispossesses the other of the chattel, or
(b) the chattel is impaired as to its condition, quality, or value, or
(c) the possessor is deprived of the use of the chattel for a substantial time, or
(d) bodily harm is caused to the possessor, or harm is caused to some person or thing in which the possessor has a legally
Therefore, an interference resulting in physical dispossession is just one circumstance under which a defendant can be
found liable. Defendants suggest that "[u]nless an alleged trespasser actually takes physical custody of the property or
physically damages it, courts will not find the 'substantial interference' required to maintain a trespass to chattel claim."
CHAPTER 4: TORTS AND CYBER TORTS 97
(Defendant's Memorandum at 13). To support this rather broad proposition, defendants cite only two cases which make
any reference to the Restatement. In , the court simply indicated that an action for trespass to chattels could not be
maintained in the absence of some form of damage. The court held that where plaintiff did not contend that defendant's
pulling on her pet dog's ears caused any injury, an action in tort could not be maintained. In contrast, plaintiff in the
present action has alleged that it has suffered several types if injury as a result of defendants' conduct. In the court held
that a twominute search of an individual's truck did not amount to a "dispossession" of the truck as defined in
Restatement or a deprivation of the use of the truck for a substantial time. It is clear from a reading of Restatement that
an interference or intermeddling that does not fit the definition of "dispossession" can nonetheless result in defendants'
liability for trespass. The court did not discuss any of the other grounds for liability under Restatement .
A plaintiff can sustain an action for trespass to chattels, as opposed to an action for conversion, without showing a
substantial interference with its right to possession of that chattel. (quoting ). Harm to the personal property or
diminution of its quality, condition, or value as a result of defendants' use can also be the predicate for liability.
An unprivileged use or other intermeddling with a chattel which results in actual impairment of its physical condition,
quality or value to the possessor makes the actor liable for the loss thus caused. In the great majority of cases, the
actor's intermeddling with the chattel impairs the value of it to the possessor, as distinguished from the mere affront to
his dignity as possessor, only by some impairment of the physical condition of the chattel. There may, however, be
situations in which the value to the owner of a particular type of chattel may be impaired by dealing with it in a manner
that does not affect its physical condition.... In such a case, the intermeddling is actionable even though the physical
condition of the chattel is not impaired.
The , comment h. In the present case, any value CompuServe realizes from its computer equipment is wholly derived from
the extent to which that equipment can serve its subscriber base. Michael Mangino, a software developer for CompuServe
who monitors its mail processing computer equipment, states by affidavit that handling the enormous volume of mass
mailings that CompuServe receives places a tremendous burden on its equipment. (Mangino Supp. Dec. at ¶ 12).
Defendants' more recent practice of evading CompuServe's filters by disguising the origin of their messages commandeers
even more computer resources because CompuServe's computers are forced to store undeliverable email messages and
labor in vain to return the messages to an address that does not exist. (Mangino Supp. Dec. at ¶ ¶ 78). To the extent that
defendants' multitudinous electronic mailings demand the disk space and drain the processing power of plaintiff's
computer equipment, those resources are not available to serve CompuServe subscribers. Therefore, the value of that
equipment to CompuServe is diminished even though it is not physically damaged by defendants' conduct.
Next, plaintiff asserts that it has suffered injury aside from the physical impact of defendants' messages on its equipment.
Restatement also indicates that recovery may be had for a trespass that causes harm to something in which the possessor
has a legally protected interest. Plaintiff asserts that defendants' messages are largely unwanted by its subscribers, who
pay incrementally to access their email, read it, and discard it. Also, the receipt of a bundle of unsolicited messages at
once can require the subscriber to sift through, at his expense, all of the messages in order to find the ones he wanted or
expected to receive. These inconveniences decrease the utility of CompuServe's email service and are the foremost subject
in recent complaints from CompuServe subscribers. Patrick Hole, a customer service manager for plaintiff, states by
affidavit that in November 1996 CompuServe received approximately 9,970 email complaints from subscribers about junk
e mail, a figure up from approximately two hundred complaints the previous year. (Hole 2d Supp. Dec. at ¶ 4).
Approximately fifty such complaints per day specifically reference defendants. (Hole Supp. Dec. at ¶ 3). Defendants
contend that CompuServe subscribers are provided with a simple procedure to remove themselves from the mailing list.
However, the removal procedure must be performed by the email recipient at his expense, and some CompuServe
subscribers complain that the procedure is inadequate and ineffectual. (See, e.g., Hole Supp. Dec. at ¶ 8).
Many subscribers have terminated their accounts specifically because of the unwanted receipt of bulk email messages.
(Hole Supp. Dec. at ¶ 9, Hole 2d Supp. Dec. at ¶ 6). Defendants' intrusions into CompuServe's computer systems, insofar
as they harm plaintiff's business reputation and goodwill with its customers, are actionable under Restatement .
The reason that the tort of trespass to chattels requires some actual damage as a prima facie element, whereas damage is
assumed where there is a trespass to real property, can be explained as follows:
The interest of a possessor of a chattel in its inviolability, unlike the similar interest of a possessor of land, is not given
legal protection by an action for nominal damages for harmless intermeddlings with the chattel. In order that an actor
who interferes with another's chattel may be liable, his conduct must affect some other and more important interest of
the possessor. Therefore, one who intentionally intermeddles with another's chattel is subject to liability only if his
intermeddling is harmful to the possessor's materially valuable interest in the physical condition, quality, or value of the
chattel, or if the possessor is deprived of the use of the chattel for a substantial time, or some other legally protected
98 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
interest of the possessor is affected as stated in Clause (c). Sufficient legal protection of the possessor's interest in the
mere inviolability of his chattel is afforded by his privilege to use reasonable force to protect his possession against even
, Comment e (emphasis added). Plaintiff CompuServe has attempted to exercise this privilege to protect its computer
systems. However, defendants' persistent affirmative efforts to evade plaintiff's security measures have circumvented any
protection those selfhelp measures might have provided. In this case CompuServe has alleged and supported by affidavit
that it has suffered several types of injury as a result of defendants' conduct. The foregoing discussion simply underscores
that the damage sustained by plaintiff is sufficient to sustain an action for trespass to chattels. However, this Court also
notes that the implementation of technological means of selfhelp, to the extent that reasonable measures are effective, is
particularly appropriate in this type of situation and should be exhausted before legal action is proper.
Under Restatement § 252, the owner of personal property can create a privilege in the wouldbe trespasser by granting
consent to use the property. A great portion of the utility of CompuServe's email service is that it allows subscribers to
receive messages from individuals and entities located anywhere on the Internet. Certainly, then, there is at least a tacit
invitation for anyone on the Internet to utilize plaintiff's computer equipment to send email to its subscribers. (whether
there is consent to community use is a material issue of fact in an action for trespass to chattels). However, in or around
October 1995, CompuServe employee Jon Schmidt specifically told Mr. Wallace that he was "prohibited from using
CompuServe's equipment to send his junk email messages." (Schmidt Dec. at ¶ 5). There is apparently some factual
dispute as to this point, but it is clear from the record that Mr. Wallace became aware at about this time that plaintiff did
not want to receive messages from Cyber Promotions and that plaintiff was taking steps to block receipt of those messages.
(Transcript of December 15, 1996 Hearing at 8186).
That consent is apparently subject to express limitations. See Kolehmainen Dec. at ¶ 2 and discussion infra.
Defendants argue that plaintiff made the business decision to connect to the Internet and that therefore it cannot now
successfully maintain an action for trespass to chattels. Their argument is analogous to the argument that because an
establishment invites the public to enter its property for business purposes, it cannot later restrict or revoke access to that
property, a proposition which is erroneous under Ohio law. See, e.g., (the law in Ohio is that a business invitee's privilege
to remain on the premises of another may be revoked upon the reasonable notification to leave by the owner or his agents);
(notice of express restriction or limitation on invitation turns business invitee into trespasser). On or around October
1995, CompuServe notified defendants that it no longer consented to the use of its proprietary computer equipment.
Defendants' continued use thereafter was a trespass. and 892A(5); see also , Comment f ("The actor may commit a new
trespass by continuing an intermeddling which he has already begun, with or without the consent of the person in
possession. Such intermeddling may persist after the other's consent, originally given, has been terminated."); , Comment
Further, CompuServe expressly limits the consent it grants to Internet users to send email to its proprietary computer
systems by denying unauthorized parties the use of CompuServe equipment to send unsolicited electronic mail messages.
(Kolehmainen Dec. at ¶ 2). This policy statement, posted by CompuServe online, states as follows:
Compuserve is a private online and communications services company. CompuServe does not permit its facilities to be
used by unauthorized parties to process and store unsolicited email. If an unauthorized party attempts to send
unsolicited messages to email addresses on a CompuServe service, Compuserve will take appropriate action to attempt
to prevent those messages from being processed by CompuServe. Violations of CompuServe's policy prohibiting
unsolicited email should be reported to....
Id. at ¶ ¶ 2 and 3. Defendants Cyber Promotions, Inc. and its president Sanford Wallace have used plaintiff's equipment
in a fashion that exceeds that consent. The use of personal property exceeding consent is a trespass. ; . It is arguable
that CompuServe's policy statement, insofar as it may serve as a limitation upon the scope of its consent to the use of its
computer equipment, may be insufficiently communicated to potential thirdparty users when it is merely posted at some
location on the network. However, in the present case the record indicates that defendants were actually notified that
they were using CompuServe's equipment in an unacceptable manner. To prove that a wouldbe trespasser acted with the
intent required to support liability in tort it is crucial that defendant be placed on notice that he is trespassing.
As a general matter, the public possesses a privilege to reasonably use the facilities of a public utility, , but Internet service
providers have been held not to be common carriers. . The definition of public utility status under Ohio law was recently
articulated in . The Ohio Supreme Court held that the determination of whether an entity is a "public utility" requires
consideration of several factors relating to the "public service" and "public concern" characteristics of a public utility. The
public service characteristic contemplates an entity which devotes an essential good or service to the general public which
the public in turn has a legal right to demand or receive. CompuServe's network, Internet access and electronic mail
services are simply not essential to society. There are many alternative forms of communication which are customarily
CHAPTER 4: TORTS AND CYBER TORTS 99
used for the same purposes. Further, only a minority of society at large has the equipment to send and receive email
messages via the Internet, and even fewer actually do. The second characteristic of a public utility contemplates an entity
which conducts its operations in such manner as to be a matter of public concern, that is, a public utility normally occupies
a monopolistic or ogopolistic position in the relevant marketplace. Defendants estimate that plaintiff serves some five
million Internet users worldwide. However, there are a number of major Internet service providers that have very large
subscriber bases, and with a relatively minor capital investment, anyone can acquire the computer equipment necessary to
provide Internet access services on a smaller scale. Furthermore, Internet users are not a "captive audience" to any single
service provider, but can transfer from one service to another until they find one that best suits their needs. Finally, the
Ohio Supreme Court made clear that a party asserting public utility status is required to support that assertion with
evidence going to the relevant aforementioned factors. Defendants have not argued that CompuServe is a public utility,
much less produced evidence tending to support such a conclusion. Therefore, CompuServe is not a public utility as that
status is defined under Ohio law and defendants can not be said to enjoy a special privilege to use CompuServe's
proprietary computer systems.
In response to the trespass claim, defendants argue that they have the right to continue to send unsolicited commercial e
mail to plaintiff's computer systems under the First Amendment to the United States Constitution. The First Amendment
states that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or
abridging the freedom of speech, or of the press." The United States Supreme Court has recognized that "the
constitutional guarantee of free speech is a guarantee only against abridgement by government, federal or state." . Indeed,
the protection of the First Amendment is not a shield against "merely private conduct." (citation omitted).
Very recently, in an action filed by Cyber Promotions, Inc. against America Online, Inc. ("AOL") the United States District
Court for the Eastern District of Pennsylvania held that AOL, a company selling services that are similar to those of
CompuServe, is private actor. . That case involved the question of whether Cyber Promotions had the First Amendment
right to send unobstructed email to AOL subscribers. The court held that Cyber Promotions had no such right and that,
inter alia, AOL was not exercising powers that are traditionally the exclusive prerogative of the state, such as where a
private company exercises municipal powers by running a company town. ; . This Court agrees with the conclusions
reached by the United States District Court for the Eastern District of Pennsylvania.
In the present action, CompuServe is a private company. Moreover, the mere judicial enforcement of neutral trespass
laws by the private owner of property does not alone render it a state actor. Rotunda & Nowak, Treatise on Constitutional
Law § 16.3, 546 (West 1992). Defendants do not argue that CompuServe is anything other than a private actor. Instead,
defendants urge that because CompuServe is so intimately involved in this new medium it might be subject to some special
form of regulation. Defendants cite , and , which stand for the proposition that when a private actor has a certain
quantum of control over a central avenue of communication, then the First Amendment might not prevent the government
from enacting legislation requiring public access to private property. No such legislation yet exists that is applicable to
CompuServe. Further, defendants' discussion concerning the extent to which the Internet may be regulated (or should be
regulated) is irrelevant because no government entity has undertaken to regulate the Internet in a manner that is
applicable to this action. Indeed, if there were some applicable statutory scheme in place this Court would not be required
to apply paradigms of common law to the case at hand.
In , protestors of the Vietnam War sought to pass out written materials in a private shopping center. Even though the
customers of the shopping center were the intended recipients of the communication, the Supreme Court held that allowing
the First Amendment to trump private property rights is unwarranted where there are adequate alternative avenues of
communication. The Supreme Court stated that:
Although ... the courts properly have shown a special solicitude for the guarantees of the First Amendment, this Court
has never held that a trespasser or an uninvited guest may exercise general rights of free speech on property privately
owned and used nondiscriminatorily for private purposes only.
(emphasis added). Defendants in the present action have adequate alternative means of communication available to
them. Not only are they free to send email advertisements to those on the Internet who do not use CompuServe accounts,
but they can communicate to CompuServe subscribers as well through online bulletin boards, web page advertisements, or
facsimile transmissions, as well as through more conventional means such as the U.S. mail or telemarketing. Defendants'
contention, referring to the low cost of the electronic mail medium, that there are no adequate alternative means of
communication is unpersuasive. There is no constitutional requirement that the incremental cost of sending massive
quantities of unsolicited advertisements must be borne by the recipients. The legal concept in that private citizens are
entitled to enforce laws of trespass against wouldbe communicators is applicable to this case.
Defendants assert that CompuServe has assumed the role of a postmaster, to whom all of the strictures of the First
Amendment apply, and that to allow it to enjoy a legally protected interest in its computer equipment in this context is to
100 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
license a form of censorship which violates the First Amendment. However, such an assertion must be accompanied by a
showing that CompuServe is a state actor. As earlier mentioned, defendants have neither specifically argued this point
nor provided any evidence to support it. CompuServe is entitled to restrict access to its private property.
"The First and Fourteenth Amendments have never been treated as absolutes. Freedom of speech or press does not mean
that one can talk or distribute where, when and how one chooses." (upholding local ordinances banning commercial
solicitations over First Amendment objections) (footnote omitted). In the United States Supreme Court held that the First
Amendment did not forbid federal legislation that allowed addressees to remove themselves from mailing lists and stop all
future mailings. The Court stated that the "mailer's right to communicate must stop at the mailbox of an unreceptive
addressee.... [t]o hold less would be to license a form of trespass [.]"
In the plaintiff complained that the defendant continued to throw newspapers on his property after being warned not to do
so. The court held that the defendant newspaper distributor had no First Amendment right to continue to throw
newspapers onto the property of the plaintiff. After discussing the Supreme Court cases of and the court pointed out
The most critical and fundamental distinction between the cases cited above, on the one hand, and the present case, on
the other, is based on the fact that here we are not dealing with a government agency which seeks to preempt in some
way the ability of a publisher to contact a potential reader; rather, we are dealing with a reader who is familiar with a
publisher's product, and who is attempting to prevent the unwanted dumping of this product on his property. None of the
cases cited by the defendants stands for the proposition that the Free Speech Clause prohibits such a landowner from
resorting to his commonlaw remedies in order to prevent such unwanted dumping. There is, in our view, nothing in
either the Federal or State Constitutions which requires a landowner to tolerate a trespass whenever the trespasser is a
speaker, or the distributor of written speech, who is unsatisfied with the fora which may be available on public property,
and who thus attempts to carry his message to private property against the will of the owner.
The court concluded, relying on that the property rights of the private owner could not be overwhelmed by the First
In the present case, plaintiff is physically the recipient of the defendants' messages and is the owner of the property upon
which the transgression is occurring. As has been discussed, plaintiff is not a government agency or state actor which
seeks to preempt defendants' ability to communicate but is instead a private actor trying to tailor the nuances of its service
to provide the maximum utility to its customers.
Defendants' intentional use of plaintiff's proprietary computer equipment exceeds plaintiff's consent and, indeed, continued
after repeated demands that defendants cease. Such use is an actionable trespass to plaintiff's chattel. The First
Amendment to the United States Constitution provides no defense for such conduct.
Plaintiff has demonstrated a likelihood of success on the merits which is sufficient to warrant the issuance of the
preliminary injunction it has requested.
As already discussed at some length, plaintiff has submitted affidavits supporting its contention that it will suffer
irreparable harm without the grant of the preliminary injunction. As an initial matter, it is important to point out that
the Court may accept affidavits as evidence of irreparable harm. ; see generally . Defendants suggest that there are other
reasons why CompuServe subscribers terminate their accounts, but do not offer any evidence which contradicts plaintiff's
Normally, a preliminary injunction is not appropriate where an ultimate award of monetary damages will suffice. .
However, money damages are only adequate if they can be reasonably computed and collected. Plaintiff has demonstrated
that defendants' intrusions into their computer systems harm plaintiff's business reputation and goodwill. This is the sort
of injury that warrants the issuance of a preliminary injunction because the actual loss is impossible to compute. ; .
Plaintiff has shown that it will suffer irreparable harm without the grant of the preliminary injunction.
It is improbable that granting the injunction will cause substantial harm to defendant. Even with the grant of this
injunction, defendants are free to disseminate their advertisements in other ways not constituting trespass to plaintiff's
computer equipment. Further, defendants may continue to send electronic mail messages to the tens of millions of
Internet users who are not connected through CompuServe's computer systems.
Finally, the public interest is advanced by the Court's protection of the common law rights of individuals and entities to
their personal property. Defendants raise First Amendment concerns and argue that an injunction will adversely impact
the public interest. High volumes of junk email devour computer processing and storage capacity, slow down data
transfer between computers over the Internet by congesting the electronic paths through which the messages travel, and
cause recipients to spend time and money wading through messages that they do not want. It is ironic that if defendants
were to prevail on their First Amendment arguments, the viability of electronic mail as an effective means of
communication for the rest of society would be put at risk. In light of the foregoing discussion, those arguments are
CHAPTER 4: TORTS AND CYBER TORTS 101
without merit. Further, those subscribing to CompuServe are not injured by the issuance of this injunction. Plaintiff has
made a business decision to forbid Cyber Promotions and Mr. Wallace from using its computers to transmit messages to
CompuServe subscribers. If CompuServe subscribers are unhappy with that decision, then they may make that known,
perhaps by terminating their accounts and transferring to an Internet service provider which accepts unsolicited e mail
advertisements. That is a business risk which plaintiff has assumed.
Having considered the relevant factors, this Court concludes that the preliminary injunction that plaintiff requests is
Based on the foregoing, plaintiff's motion for a preliminary injunction is GRANTED. The temporary restraining order
filed on October 24, 1996 by this Court is hereby extended in duration until final judgment is entered in this case.
Further, defendants Cyber Promotions, Inc. and its president Sanford Wallace are enjoined from sending any unsolicited
advertisements to any electronic mail address maintained by plaintiff CompuServe during the pendency of this action.
It is so ORDERED.