Blumenthal v. AOL Reply Brief

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

SIDNEY BLUMENTHAL, et al.,
Plaintiffs,

v.

MATT DRUDGE, et al.,
Defendants.

Civil Action No. 97-1968 (PLF)

____________________________________

 DEFENDANT AMERICA ONLINE, INC.’S REPLY MEMORANDUM 

IN FURTHER SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT

The Blumenthals’ opposition to AOL’s motion for summary judgment fails to rebut AOL’s showing that it is immune under 47 U.S.C. § 230 from liability for the allegedly defamatory statements concerning Mr. Blumenthal that appeared in the Drudge Report. The Blumenthals have not raised any genuine issue of material fact concerning the presence in this case of each of the elements necessary to support Section 230 immunity. Instead, they have devoted nearly all of their attention to inventing out of whole cloth, and then attempting to support, a legal argument that both does violence to the language of Section 230 and flies in the teeth of the undisputed facts.

As Part I of this Reply demonstrates, the Blumenthals have failed to identify any legitimate basis for questioning AOL’s immunity in this case, especially in light of the recent decision by the United States Court of Appeals for the Fourth Circuit in Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997). In particular, the Blumenthals have conceded that nearly all of the elements for Section 230 immunity exist in this case. And as for the one relevant fact that the Blumenthals ostensibly contest -- whether or not Drudge is an employee or agent of AOL -- they have failed to raise a genuine issue of material fact.

Part II of this Reply examines -- and proves meritless -- the Blumenthals’ core argument that AOL is not entitled to the protections of Section 230 because AOL, in their view, was itself an "information content provider" of the Drudge Report’s Blumenthal story. That argument is bankrupt for three reasons: First, it is based entirely on a fundamental misreading of the statute’s plain language. Second, even if the statute operated as the Blumenthals claim, the undisputed facts clearly establish that AOL was not an "information content provider" of the Blumenthal story. Third, the Blumenthals’ argument is, at every level, wholly inconsistent with the policies and intent of Section 230.^/

I. ALL OF THE ELEMENTS NECESSARY TO SUPPORT SECTION 230 IMMUNITY ARE PRESENT IN THIS CASE.

In its opening brief, AOL established that Section 230 bars the Blumenthals’ claims against AOL relating to the content of the Drudge Report because holding AOL liable would treat a "provider . . . of an interactive computer service . . . as the publisher or speaker of information provided by another information content provider." 47 U.S.C. § 230(c)(1). In particular, AOL demonstrated that: (1) AOL is a provider of an "interactive computer service" (AOL Mem. at 19); (2) holding AOL liable would treat it as the "publisher or speaker" of the Blumenthal story (id. at 22-24); and (3) the Blumenthal story was "information provided by another information content provider," namely Drudge (id. at 19-22). AOL also presented undisputed evidence showing that Drudge was neither an employee nor an agent of AOL, confirming that Drudge was "another information content provider" for purposes of Section 230. (Id. at 25-37.)

After AOL filed its opening brief, the United States Court of Appeals for the Fourth Circuit issued a decision confirming that "Section 230 . . . plainly immunizes computer service providers like AOL from liability for information that originates with third parties." Zeran, 129 F.3d at 328. The Fourth Circuit held that, with respect to third-party content, "§ 230 precludes courts from entertaining claims that would place a computer service provider in a publisher’s role. Thus, lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions -- such as deciding whether to publish, withdraw, postpone or alter content -- are barred." Id. at 330. As the Zeran court explained, Congress barred suits (such as the Blumenthals’) that seek to make interactive services liable for third-party content both because it "recognized the threat that tort-based lawsuits pose to freedom of speech in the new and burgeoning Internet medium," id., and because it understood that application of traditional tort rules to this medium would have the perverse effect of deterring interactive services from self-regulation of third-party content, id. at 331.

The Blumenthals’ opposition brief concedes most of the elements of Section 230 immunity. Thus, they concede that: (1) AOL is an "interactive computer service" (Opp. at 3); (2) holding AOL liable for the Blumenthal story would treat it as the "publisher or speaker" of that content (id. at 14); and (3) Drudge is an "information content provider" of the Blumenthal story (id. at 4). Even as to the only element of immunity that the Blumenthals ostensibly contest -- whether the Blumenthal story was "provided by another information content provider" -- they do not challenge any element of AOL’s factual showing. In particular, the Blumenthals do not even attempt to controvert any of the numerous facts advanced by AOL to demonstrate that Drudge created and developed the Drudge Report as a free-standing content offering that continues to exist independently of AOL and that Drudge researched and wrote every word of the Blumenthal story without even the slightest involvement by AOL. (AOL Mem. at 4-6, 10-12; AOL Facts ¶¶ 5-20, 59-72.)

The only relevant issue as to which the Blumenthals even suggest there might be a factual dispute is whether Drudge is an employee or agent of AOL, as the Blumenthals’ Complaint conclusorily alleged (Complaint ¶¶ 160-61), or a non-agent independent contractor, as AOL’s uncontroverted declarations demonstrate (see AOL Facts ¶¶ 23-47, 78-100). But here again, the Blumenthals plainly have raised no genuine issue of material fact. Perhaps not surprisingly, their first impulse is to dismiss AOL’s factual showing on this issue as "irrelevant" and "of no importance." (Opp. at 13-15.) Their only other response to AOL’s factual showing is to assert, without citation to anything but their own Complaint and without even adverting to (much less disputing) any of the particular facts set forth in AOL’s detailed Statement of Material Facts, that "there exist . . . genuine issues as to whether defendant Drudge was an employee of AOL." (Id. at 16.) This conclusory statement is far from sufficient to raise any genuine issue of material fact.^/

The Blumenthals’ final gambit on the employee/independent contractor issue is to assert (again in the most conclusory fashion) that Drudge was an AOL employee because AOL had "extensive rights to control what it would allow defendant Drudge to send out in the Drudge Report." (Id.) But even if such "rights of control" actually existed, they would affect only the results -- not the means or manner -- of Drudge’s performance of his contractual obligations. As AOL has already demonstrated (AOL Mem. at 26-27), a party’s rights to specify and control the results that another party is to produce pursuant to a contract (as opposed to the means or manner by which those results are attained) are not evidence of an employee or agency relationship. See, e.g., Local 777, Democratic Union Org. Comm. v. NLRB, 603 F.2d 862, 873-75 (D.C. Cir. 1978); Cubby Inc. v. CompuServe, Inc., 776 F. Supp. 135, 143 (S.D.N.Y. 1991) (CompuServe’s authority to remove content "merely constitute[d] control over the result" and did not create employment relationship).^/

In sum, the Blumenthals have failed to rebut AOL’s showing that each element necessary to support immunity under Section 230 is present in this case.

II. PLAINTIFFS’ ARGUMENT AGAINST IMMUNITY IS MERITLESS.

The Blumenthals’ entire argument against Section 230 immunity ultimately hangs by a single thread: While they concede that Drudge "surely" was an "information content provider" of the Drudge Report’s Blumenthal story (Opp. at 4), they claim that AOL itself was also an "information content provider" with respect to this same information (id. at 2, 9-13). According to the Blumenthals, if AOL can be characterized as an additional "information content provider," then Section 230 must be inapplicable. (Id. at 2-4, 12.) This reasoning, however, fails for two independent reasons. First, as a matter of law, AOL would still be entitled to immunity under Section 230 even if it could be characterized as an additional "information content provider" of the Drudge Report’s Blumenthal story. Second, even if that were not so, AOL would still be immune because the undisputed evidence establishes that AOL was not an "information content provider" of the Blumenthal story.

A. AOL Would Not Lose Its Immunity Even If (Contrary to Fact) AOL Were an Additional "Information Content Provider" of the Blumenthal Story.

The Blumenthals’ argument confuses the interplay between Section 230(c)(1) and Section 230(e)(3). Section 230(c)(1), the operative immunity provision, states:

No provider of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

Section 230(e)(3), a definitional section, states:

The term "information content provider" means 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.

Stripped of its rhetoric, the Blumenthals’ argument is that, even though Drudge was an "information content provider" as defined in Section 230(e)(3), AOL also meets that definition because, according to the Blumenthals, AOL itself was also "responsible . . . in part" for the contents of the Drudge Report. The Blumenthals contend that AOL’s supposed status as an additional "information content provider" necessarily renders the content of the Drudge Report something other than "information provided by another information content provider." (Opp. at 3-4.) But this is a non sequitur.

The Blumenthals’ argument erroneously accords Section 230(e)(3) a function and precedence that exceeds its limited definitional role. Under the operative immunity provision, the test for immunity is not whether the interactive service provider was or was not "responsible . . . in part, for the creation or development of" the content in question. Rather, the governing test is whether the information at issue was "provided by another information content provider." Id. § 230(c)(1). Giving these words their plain meaning, this test is met when three elements are satisfied: the information was (1) "provided" by a person (2) who was, in relation to the interactive service provider, "another" person, and (3) this other person was an "information content provider." The definitional provision of Section 230(e)(3) informs and determines the third element of this test. But it has no bearing on the first two elements. Accordingly, an interactive service’s entitlement to immunity does not depend on the service itself falling outside the definition of "information content provider."

The Blumenthals draw exactly the wrong conclusion from the fact that Section 230(e)(3) -- by using the phrase "in whole or in part" -- explicitly contemplates that any given item of information may be provided by more than one "information content provider." The Blumenthals readily acknowledge that this phrase contemplates the possibility of multiple "information content providers" for the same information. (Opp. at 4.) Paradoxically, they argue that this means that Section 230 immunity applies only to "the transmission of information provided entirely by others." (Id. at 4, 12 (emphasis added).) In fact, just the opposite is true. Because the statute does not presume that each piece of information can have only one "information content provider," there is nothing inconsistent between the interactive service provider being an "information content provider" with respect to particular information and the same information also having been "provided by another information content provider."^/

It would be anomalous for Congress’s explicitly broad and inclusive definition of the term "information content provider" to be given the effect, advocated by the Blumenthals, of narrowing the scope of an interactive service’s immunity. Congress gave the term "information content provider" a broad scope to ensure that the operative immunity provision, Section 230(c)(1), would have broad application. The most obvious function of the phrase "in part or in whole" in Section 230(e)(3) is to clarify that immunity for third-party information is not lost where the information originated from multiple parties, each of whom was responsible only "in part" for its creation or development. Nothing in the language, policies, or legislative history of Section 230 suggests that Congress simultaneously intended the broad definition of "information content provider" to serve as a basis for restricting the immunity created by the statute.^/

Thus, the applicability of immunity under Section 230(c)(1) simply does not depend on whether or not the interactive service provider can be shoe-horned within the definition of "information content provider." Instead, immunity depends only on whether the three statutory criteria are met -- i.e., the information was (1) "provided" (2) by "another," who was (3) an "information content provider." The undisputed facts set out in support of AOL’s motion plainly meet these criteria. (AOL Mem. at 19-22; AOL Facts ¶¶ 5-20, 23-72, 78-100.)

AOL’s analysis of the relationship between Section 230(c)(1) and Section 230(e)(3) does not, as the Blumenthals erroneously contend, amount to an assertion that AOL "may not be held liable as a publisher under any circumstances." (Opp. at 1-2.) Section 230(c)(1) does not immunize AOL from liability arising from information that is not "provided by another information content provider." Thus, Section 230(c)(1) does not immunize AOL with respect to any information that AOL develops and creates entirely by itself.

The Blumenthals erroneously argue that AOL’s construction of Section 230 produces a scope of immunity that is, in their view, simply "too sweeping."^/ (Opp. at 6.) This Court’s task, of course, is to construe a statute, not to make a normative judgment about Congress’s policy choice. In any event, it is evident from both the language and express policies of Section 230 that Congress saw imposition of tort liability on providers of interactive services as a grave threat to the new electronic medium. Congress therefore created a broad immunity and defined its scope with a bright line: whenever the information at issue was provided by "another information content provider" -- that is, an independent third party who was "responsible" even "in part" for the creation or development of the information -- the interactive service provider is immune.

B. In Any Event, the Undisputed Facts Establish That AOL Was Not an Additional "Information Content Provider" of the Drudge Report’s Blumenthal Story.

Even if, contrary to the foregoing, the Blumenthals were right as a matter of law that AOL would not be immune if AOL (in addition to Drudge) were an "information content provider" of the Blumenthal story, their argument would still fail because the uncontroverted evidence before this Court establishes that AOL was not an "information content provider" of that story.

1. AOL Was Not "Responsible" for the "Creation or Development" of the Drudge Report’s Blumenthal Story.

For AOL to have been an "information content provider" with respect to the Blumenthal story, it would have to have been "responsible, in whole or in part, for the creation or development of information" contained in the story. 47 U.S.C. § 230(e)(3) (emphasis added). By its plain terms, this definition requires that the purported "information content provider" have had a role in the actual "creation or development" of the particular information at issue. The Blumenthals repeatedly gloss over this point, treating Section 230(e)(3) as demanding only a highly generalized "responsibility" for information, rather than any specific involvement in or connection to its actual "creation or development."^/ The Blumenthals’ temptation to read the words "creation or development" out of the statute is unsurprising, for the undisputed facts clearly demonstrate that AOL had no role whatsoever in the "creation or development" of the Blumenthal story.

It is undisputed that the Blumenthal story was researched, written, and edited exclusively by Drudge, without any supervision, knowledge, or any other involvement by AOL.^/ (See AOL Mem. at 11, 21; AOL Facts ¶¶ 59-72.) Indeed, it is undisputed that AOL did not even know that Drudge was working on a story having anything to do with the Blumenthals until after Drudge had posted it on the AOL service and elsewhere -- which obviously was after Drudge had completed the processes of "creat[ing]" and "develop[ing]" the information contained in the story. (AOL Mem. at 11; AOL Facts ¶¶ 68-70.) More generally, it is also undisputed that AOL had no role whatsoever in Drudge’s selection of topics for stories in the Drudge Report or even in determining whether or when Drudge would publish at all. (AOL Mem. at 10, 28; AOL Facts ¶¶ 40-42, 45-46.) Accordingly, AOL was not "responsible . . . for the creation or development" of the Blumenthal story any more than it is responsible for the creation or development of the content of the New York Times or Compton’s Encyclopedia, both of which are also third parties whose content appears on the AOL service under a licensing agreement. (AOL Facts ¶ 4; Jennings Decl. ¶ 18.)

2. All the Reasons That the Blumenthals Offer for Treating AOL as "Responsible" for the "Creation or Development" of the Blumenthal Story Are Meritless.

In support of their argument that AOL was "responsible . . . in part" for the "creation or development" of the Blumenthal story, plaintiffs rely entirely on the following: First, AOL and Drudge entered in a contract under which AOL set minimum standards for the content that Drudge may transmit over the network; retained a right to delete content that AOL deems in violation of its Terms of Service and other standard policies; and provided a forum for Drudge to reach AOL’s millions of subscribers.^/ (Opp. at 9-13.) Second, AOL pays Drudge a monthly royalty fee, which is his only regular source of cash income, in return for Drudge’s posting on the AOL service the same information that he posts on his website and sends to his

e-mail subscribers. (Id. at 7, 9, 12-13.) Third, AOL hoped to "derive[] a monetary benefit" or "gain commercial success" from having the Drudge Report available on its service because that availability would encourage people to subscribe to and use the service. (Id. at 2, 12.) Fourth, AOL issued a press release "tout[ing]" the general availability of the Drudge Report on the AOL service. (Id. at 2, 8-9, 12.)

The most notable feature of this list is that none of the items on it have anything at all to do with the story pertaining to Mr. Blumenthal that is the subject of this litigation, much less its "creation or development." Unable to controvert AOL’s showing that it had no role in the "creation or development" of (and did not even have advance knowledge about) the Blumenthal story, plaintiffs seize on selected attributes of the business relationship between AOL and Drudge generally and argue that those attributes somehow make AOL partly "responsible" for all information that Drudge originates, including the Blumenthal story. This effort to assign "responsibility" to AOL should be rejected out of hand.

Over (literally) several hundred years, the common law has yielded sophisticated and well-entrenched doctrines requiring a special type of relationship -- i.e., an employee-employer or principal-agent relationship -- before one party can be held generally liable (or responsible) for specific acts of another party in which the first party had no direct role.^/ As already noted, AOL has presented uncontroverted proof that Drudge was not AOL’s employee or agent, and the Blumenthals have failed to raise any genuine issue of fact on these points. (See AOL Facts ¶¶ 23-47, 78-100.) Plaintiffs provide no support, legal or logical, for their entirely new (and entirely undefined) theory of vicarious responsibility. Moreover, as we explain below, many of plaintiffs’ supposed indicia of responsibility are not unique to third-party license relationships, and depriving AOL of Section 230 immunity on the basis of these indicia would be fundamentally inconsistent with the basic policies and objectives of the statute.

a. Similarity of the AOL-Drudge and AOL-Subscriber Relationships.

It is settled (and the Blumenthals apparently do not dispute) that Section 230 makes AOL immune from liability for content that its subscribers originate. See Zeran, 129 F.3d at 328; Doe v. America Online, Inc., No. CIV. CL 97-631 AE, 1997 WL 374223, at *2 (Fla. Cir. Ct. June 26, 1997); Aquino v. Electriciti Inc., 26 Media L. Rep. 1032, 1032 (Cal. Super. Ct. 1997).^/ Yet most of the features of the AOL-Drudge relationship that the Blumenthals claim as a basis for negating Section 230 immunity are equally present in the standard relationship between AOL and each of its millions of subscribers.

Although the Blumenthals go to considerable lengths to try to distinguish the AOL-Drudge relationship from the typical AOL-subscriber relationship (see, e.g., Opp. at 9-14), most of the distinctions that they try to draw are illusory.^/ For example, the Blumenthals rely heavily on the fact that the contract between Drudge and AOL requires that the content Drudge posts onto the AOL service comply with AOL’s Terms of Service and not violate third-party rights. (Id. at 9-10, 13.) But these very same requirements are set forth in the contracts that AOL has with each of its subscribers. (See Terms of Service § 4.C.) Likewise, the provisions in the AOL-Drudge contract that entitle AOL to remove material that Drudge posts on the AOL service are also replicated in the AOL-subscriber contract.^/ (See Terms of Service § 4.A.) Indeed, the principal claim in the Zeran case was that AOL had "unreasonably delayed in removing defamatory messages" posted by a subscriber. See 129 F.3d at 328 (emphasis added).

Other facts that the Blumenthals choose to highlight similarly fail to distinguish AOL’s relationship with Drudge from its relationship with its subscribers. Although AOL does provide Drudge a means for communicating to the millions of AOL subscribers (Opp. at 9, 12), the same is true of all AOL subscribers, each of whom may at any time post information on AOL message boards that may be accessed by all other AOL subscribers. Indeed, the content for which AOL was held immune in Zeran was, like the Drudge Report, accessible by all of AOL’s subscribers. See 129 F.3d at 329. Similarly, even assuming that AOL "derives a monetary benefit" from having the Drudge Report available on its service (see Opp. at 2, 12), AOL undoubtedly derives a similar economic benefit from the huge quantities of information that its subscribers post on AOL message boards and in AOL chat rooms, because availability of that information also creates demand for the AOL service.

None of the foregoing attributes of the AOL-subscriber relationship makes AOL "responsible" for the "creation or development" of subscriber-posted content or disqualify AOL from the protections of Section 230(c)(1). The presence of these same attributes in the AOL-Drudge relationship should not yield a different outcome.

b. Invalidity of AOL’s "Editorial Discretion" as a Basis for Denying Immunity.

The Blumenthals’ argument that AOL should be deemed "responsible" for "creation or development" of the information in the Drudge Report rests perhaps most heavily on the fact that AOL has, through its contract with Drudge, set minimum standards for the content that Drudge may transmit over its network and retained a right to remove content that AOL deems inappropriate. (See, e.g., Opp. at 9-10, 13.) But the mere retention of such rights -- which indisputably were not even exercised by AOL with respect to any content provided by Drudge, including the Blumenthal story (see AOL Facts ¶¶ 60-63, 67-70) -- cannot make an interactive service responsible (even in part) for the "creation or development" of any such content. It is undisputed that Drudge was the sole creator, developer, and author of the Drudge Report in general and the Blumenthal story in particular (see, e.g., AOL Facts ¶¶ 35-47, 59-72), and that AOL’s rights to control content were limited to removal of content that Drudge had already posted (see id. ¶¶ 26-27). Having the post hoc right to remove another person’s content after it has been written and published (in multiple fora) does not amount to responsibility for the creation or development of the content.

Moreover, depriving AOL of immunity because its contract with Drudge sets minimum standards for content that Drudge may post and gives AOL the right to remove non-compliant content is directly contrary to one of the most basic purposes of Section 230. The Conference Report on Section 230 explicitly states that the statute was designed to overrule Stratton-Oakmont v. Prodigy, No. 31063194, 1995 WL 323710 (N.Y. Sup. Ct. May 24, 1995), which had held an interactive service subject to liability for third-party content precisely because it had sought to retain and exercise editorial control over such content.^/ As the Fourth Circuit explained in Zeran, "Congress enacted § 230 to remove . . . disincentives to self[-]regulation" and expressly sought to avoid a regime in which "computer service providers who regulated the dissemination of offensive material on their services risked subjecting themselves to liability." 129 F.3d at 331. Thus, the Blumenthals’ argument that AOL should lose its immunity because it has set minimum standards and retained the right to remove non-compliant content turns Section 230 on its head.

c. Invalidity of Royalty Payments as a Basis for Denying Immunity.

The Blumenthals also rely heavily on the fact that AOL pays Drudge a monthly royalty fee in exchange for Drudge posting onto the AOL service the same information that he posts on his website and sends to his own e-mail subscribers. (Opp. at 7, 12-13.) While this fact distinguishes Drudge from AOL subscribers, who pay a fee to send and receive information and do not receive royalties, it is a distinction without a difference.

No logical reason supports the Blumenthals’ notion that AOL’s royalty payments to Drudge -- flat monthly payments that bear no relationship to the nature or volume of the information that Drudge provides -- make AOL "responsible, in whole or in part, for the creation or development" of the particular information at issue in this case.^/ The absence of a linkage between payment of a royalty fee and being "responsible" for the "creation or development" of information is especially clear in the world of cyberspace, where market participants are not bound by fixed economic rules or guided by long-established models for determining whether money will be paid for the carriage of information and, if so, whether the payer will be the sender, the receiver, the conduit, or some combination thereof. Congress gave no indication that it intended to single out one of these potential economic paradigms -- i.e., payment by the conduit to the information provider -- for exclusion from the protections of Section 230. To the contrary, Congress expressly sought "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." 47 U.S.C. § 230(b)(2) (emphasis added). A Congress intent on accomplishing this goal could not have intended to selectively deprive an interactive service of immunity because the economics of a particular situation were such that the interactive service was willing to pay for the right to carry particular third-party content. Such federal regulation would fetter, not preserve, "the vibrant and competitive free market." Indeed, it would perversely discourage interactive services from carrying precisely those categories of third-party content that the "competitive free market" has determined are most valuable, that is, the content that commands an economic value instead of being provided at no cost.

The Blumenthals’ variation on their payment argument -- that AOL should be deemed "responsible" for the "creation or development" of the Blumenthal story because AOL is Drudge’s sole source of income (Opp. at 13) -- is equally unavailing. First, the undisputed factual record before this Court demonstrates that, even though Drudge has no significant cash income besides the monthly AOL royalty payments, the Drudge Report does not owe its present existence to those payments. It is undisputed that (1) Drudge developed the Drudge Report and an elaborate system for distributing it long before his relationship with AOL (AOL Mem. at 4-6); (2) the Drudge Report today remains a freestanding entity that is independent from AOL (id. at 9-10); and (3) the vast majority of people who access the Drudge Report do so through channels other than the AOL service (id. at 20-21). Moreover, it is also undisputed that Drudge had a revenue-producing license agreement with a separate electronic publication prior to his agreement with AOL (id. at 6), further demonstrating that the existence of the Drudge Report is not in any sense dependent on payments from AOL.

In any event, it simply makes no sense to suggest that the presence or absence of independent cash income to a third party should determine whether or not an interactive service is "responsible" in any sense for the third party’s "creation or development" of information. AOL would be no more or less "responsible" for the "creation or development" of the Blumenthal story if Drudge happened to be independently wealthy or if, as he is perfectly free to do under his arrangement with AOL, Drudge charged a fee to the tens of thousands of people who visit his web site and subscribe to his e-mail service. Deeming AOL "responsible" for the "creation or development" of the Drudge Report on this basis would also create the anomalous result that AOL is potentially liable for content in the Drudge Report but immune for content provided by the New York Times, Newsweek, and other third-party content providers who have other income, even though the nature of AOL’s relationship -- including the extent of its editorial involvement -- is identical. The Blumenthals’ proposed regime would suggest that a prudent interactive service provider allow the transmission of content created only by those third parties with substantial incomes. Such a result would imperil the new electronic medium’s unique capacity to give voice to speakers who cannot be heard in other media and thereby contravene Congress’ explicit objective to promote "[t]he Internet and other interactive computer services [as] a forum for a true diversity" of content. 47 U.S.C. § 230(a)(3) (emphasis added).

d. Invalidity of Press Release as a Basis for Denying Immunity.

The Blumenthals also contend that AOL somehow acquired "responsibility" for "creation or development" of the Drudge Report’s Blumenthal story by making a public statement touting the general availability of the Drudge Report on the AOL service. (Opp. at 7-8, 12.) They vigorously press this argument even though the public announcement in question said nothing whatsoever about the Blumenthal story, which Drudge apparently did not even begin to "create or develop" until weeks later.

As with all of the Blumenthals’ other arguments for attributing "responsibility" to AOL, this one is also totally divorced from the language and purposes of Section 230. Simply put, an interactive service does not become "responsible," even in part, for the "creation or development" of all information subsequently generated by a third party merely by announcing and promoting the fact that unspecified content from the third party will be available on the service. As elsewhere, the Blumenthals’ argument on this point actually runs directly counter to the policies of Section 230. Congress enacted Section 230 to promote interactive services as a "forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues of intellectual activity." 47 U.S.C. § 230(a)(3). The capacity for services to play this role would be significantly diminished if service providers were inhibited from informing users about the sources and types of information that are available on their services. This is especially true given the huge, and often undifferentiated, amount of ever-changing information that is available in cyberspace.

Thus, even under the Blumenthals’ incorrect reading of Section 230, AOL still would be immune because it was not responsible -- in whole or in part -- for the creation or development of the Blumenthal story.

3. The Rule of Law That the Blumenthals Advocate Defies the Overarching Policy Objectives of Section 230.

As demonstrated above, each of the individual rationales that the Blumenthals advance for claiming that Section 230 is inapplicable in this case runs directly counter to the basic purposes and structure of the statute. Perhaps not surprisingly, then, the ultimate legal rule that the Blumenthals apparently seek to devise from these rationales -- that interactive services are subject to liability for all information provided by third parties pursuant to royalty-based licenses -- is itself fundamentally contrary to the basic, overarching policies of the statute.

As the Court of Appeals for the Fourth Circuit recognized in Zeran, the first of Section 230's two overarching purposes is to promote "freedom of speech in the new and burgeoning Internet medium" by eliminating the "threat [of] tort-based lawsuits" against interactive services for injury caused by "the communications of others." 129 F.3d at 330. As the Zeran court stated:

The amount of information communicated via interactive computer services is . . . staggering. The specter of tort liability in an area of such prolific speech would have an obvious chilling effect. It would be impossible for service providers to screen each of their millions of postings for possible problems. Faced with potential liability for each message republished by their services, interactive computer service providers might choose to severely restrict the number and type of messages posted. Congress considered the weight of the speech interests implicated and chose to immunize service providers to avoid any such restrictive effect.

Id. at 331.

The legal regime advocated by the Blumenthals would make one of the most important and valuable categories of speech available on interactive services -- namely speech created by third parties who are in the business of providing information and who can demand a royalty for that speech -- subject to the very "chilling effect" that Congress sought to avoid. This chilling effect would be especially great because of the massive, ever-changing, and constantly updated quantities of information that services like AOL carry from such speakers each and every day.^/ And the chilling effect would be especially pernicious in this context, because it would inevitably create strong incentives for online services to carry only the voices of established information organs with long-standing track records such as the New York Times and Newsweek, and to forego carriage of more obscure content sources, such as the Drudge Report, which likely would have no significant audience outside the new electronic medium.

The regime advocated by the Blumenthals also would result in a pernicious chilling of free speech at yet another level. Because interactive service providers would face potential liability whenever they received notice of a potentially defamatory statement in a licensed publication, every such notification "would require a careful yet rapid investigation of the circumstances surrounding the posted information, a legal judgment concerning the information’s defamatory character, and an on-the-spot editorial decision whether to risk liability by allowing the continued publication of the information." Zeran, 129 F.3d at 333. This task would impose "an impossible burden" on a service such as AOL, which continuously acts as a conduit for successive, ever-changing editions of hundreds electronic publications that are carried pursuant to license agreements. Id. Moreover, "[b]ecause service providers would be subject to liability only for the publication of information, and not for its removal, they would have a natural incentive simply to remove" content if there were even any question as to whether it might be tortious. Id. This is precisely the sort of "chilling effect" that Congress sought to avoid by enacting Section 230.

The Blumenthals’ proposed regime would also fundamentally disserve the second overarching policy objective of Section 230, which was to eliminate disincentives to self-regulation of third-party content by interactive service providers. See id. at 331. First, as noted above, under the Blumenthals’ approach, interactive service providers would sacrifice Section 230 immunity merely by including in their licensing agreements provisions permitting them to exercise editorial judgment about whether particular content should be carried on their systems. (See supra at 16-17.) Second, and more fundamentally, the Blumenthals’ regime would subject service providers to notice-based liability for third-party speech. See, e.g., Cubby, Inc. v. CompuServe Inc., 776 F. Supp. 135, 139-40 (S.D.N.Y. 1991) (interactive service provider liable as "publisher" of third-party information if it knew or should have known of the defamation). As the Fourth Circuit recognized in Zeran, application of notice-based liability to the new electronic medium would discourage self-regulation:

[N]otice-based liability would deter service providers from regulating the dissemination of offensive material over their own services. Any efforts by a service provider to investigate and screen material posted on its service would only lead to notice of potentially defamatory material more frequently and thereby create a stronger basis for liability. Instead of subjecting themselves to further possible lawsuits, service providers would likely eschew any attempts at self-regulation.

Zeran, 129 F.3d at 333.

To be sure, the Fourth Circuit in Zeran discussed and analyzed the policy objectives of Section 230 in the context of assessing AOL’s liability for defamatory speech of a subscriber, not for the licensed speech of a third party to whom a royalty was paid. But the Blumenthals have not suggested any valid basis for concluding either that Congress sought to promote vibrant discourse and to eliminate disincentives to self-policing only when it came to subscriber speech and not when it came to licensed speech, or that Congress viewed licensed speech as less valuable or less in need of self-regulation than subscriber speech. Indeed, given the fact that licensed speech commands an economic value in the free marketplace that Congress was trying to promote, there is every reason to conclude that Congress intended Section 230 to apply especially to licensed speech.

CONCLUSION

For the foregoing reasons, and for all the reasons set forth in AOL’s opening brief, AOL’s motion for summary judgment should be granted.

Respectfully submitted,

___________________________________

Of counsel

George Vradenburg, III
Randall J. Boe (D.C. Bar No. 415425)
AMERICA ONLINE, INC.
22000 AOL Way
Dulles, Virginia 20166-9323

Patrick J. Carome (D.C. Bar No. 385676)
John Payton (D.C. Bar No. 282699)
Lawrence A. Kasten (D.C. Bar No. 443307)
Samir Jain (D.C. Bar No. 456090)
WILMER, CUTLER & PICKERING
2445 M Street, N.W.
Washington, D.C. 20037-1420
(202) 663-6000

February 27, 1998

Attorneys for Defendant America Online, Inc.

CERTIFICATE OF SERVICE

I hereby certify that, on February 27, 1998, I caused a copy of the foregoing Defendant America Online, Inc.’s Reply Memorandum in Further Support of its Motion for Summary Judgment to be served by hand on

William Alden McDaniel, Jr., Esq.
118 West Mulberry Street
Baltimore, Maryland 21201-3600

and by first-class mail, postage-prepaid on

Manuel S. Klausner, Esq.
One Bunker Hill, 8th Floor
601 West Fifth

Los Angeles, California 90071

Jonathan W. Emord, Esq.
Emord & Associates, P.C.
5282 Lyngate Court
Burke, VA 22015

_________________________

Samir Jain