                 Volume Four, Issue Thirty-Seven, File 9 of 14

                              THE COMPUSERVE CASE
        A STEP FORWARD IN FIRST AMENDMENT PROTECTION FOR ONLINE SERVICES

                  Presented by Electronic Frontier Foundation


 Introduction
 ~~~~~~~~~~~~
 by Mike Godwin (mnemonic@eff.org) in EFFector Online 3.03

By now you may have heard about the summary-judgment decision in Cubby, Inc. v.
CompuServe, a libel case.  What you may not know is why the decision is such an
important one. By holding that CompuServe should not be liable for defamation
posted by a third-party user, the court in this case correctly analyzed the
First Amendment needs of most online services.  And because it's the first
decision to deal directly with these issues, this case may turn out to be a
model for future decisionsin other courts.

The full name of the case, which was decided in the Southern District of New
York, is Cubby Inc. v. CompuServe. Basically, CompuServe contracted with a
third party for that user to conduct a special-interest forum on CompuServe.
The plaintiff claimed that defamatory material about its business was posted a
user in that forum, and sued both the forum host and CompuServe.  CompuServe
moved for, and received, summary judgment in its favor.

Judge Leisure held in his opinion that CompuServe is less like a publisher than like a bookstore owner or book distributor.  First Amendment law allows
publishers to be liable for defamation, but not bookstore owners, because
holding the latter liable would create a burden on bookstore owners to review
every book they carry for defamatory material.  This burden would "chill" the
distribution of books (not to mention causing some people to get out of the
bookstore business) and thus would come into serious conflict with the First
Amendment.

So, although we often talk about BBSs as having the rights of publishers and
publications, this case hits on an important distinction.  How are publishers
different from bookstore owners?  Because we expect a publisher (or its agents)
to review everything prior to publication.  But we *don't* expect bookstore
owners to review everything prior to sale.  Similarly, in the CompuServe case,
as in any case involving an online service in which users freely post messages
for the public (this excludes Prodigy), we wouldn't expect the online-
communications service provider to read everything posted *before* allowing it
to appear.

It is worth noting that the Supreme Court case on which Judge Leisure relies is
Smith v. California -- an obscenity case, not a defamation case.  Smith is the
Supreme Court case in which the notion first appears that it is generally
unconstitutional to hold bookstore owners liable for content.  So, if Smith v.
California applies in a online-service or BBS defamation case, it certainly
ought to apply in an obscenity case as well.

Thus, Cubby, Inc. v. CompuServe sheds light not only on defamation law as
applied in this new medium but on obscenity law as well.  This decision should
do much to clarify to concerned sysops what their obligations and liabilities
are under the law.

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 Highlights of the CompuServe Decision
 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
 by Danny Weitzner (djw@eff.org) in EFFector Online 3.03

"CompuServe's CIS [CS Information Service] product is in essence an electronic,
for-profit library that carries a vast number of publications and collects
usage and membership fees from its subscribers in return for access to the
publications.  CompuServe and companies like it are at the forefront of the
information industry revolution.  High technology has markedly increased the
speed with which information is gathered and processed; it is now possible for
an individual with a personal computer, modem, and telephone line to have
instantaneous access to thousands of news publications from across the United
States and around the world.  While CompuServe may decline to carry a given
publication altogether, in reality, once it does decide to carry a given
publication, it will have little or no editorial control over that
publication's contents.  This is especially so when CompuServe carries the
publication as part of a forum that is managed by a company unrelated to
CompuServe.  "... CompuServe has no more editorial control over ... [the
publication in question] ... than does a public library, book store, or
newsstand, and it would be no more feasible for CompuServe to examine every
publication it carries for potentially defamatory statements than it would for
any other distributor to do so."

"...Given the relevant First Amendment considerations, the appropriate standard
of liability to be applied to CompuServe is whether it knew or had reason to
know of the allegedly defamatory Rumorville statements."

Cubby, Inc. v. CompuServe, Inc. (90 Civ. 6571, SDNY)

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For the full opinion, please see:


           CUBBY, INC., a Corporation d/b/a SKUTTLEBUT, and ROBERT G.
          BLANCHARD, Plaintiffs, v. COMPUSERVE INC., d/b/a RUMORVILLE,
                 and DON FITZPATRICK, individually, Defendants

                            No.  90 Civ. 6571  (PKL)

           UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
                                    NEW YORK


                           October 29, 1991, Decided
                            October 29, 1991, Filed


