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Judge Gants Holds StubHub Not Protected by CDA Section 230 (relying on Roommates.com Decision)

Judge Gants Holds StubHub Not Protected by CDA Section 230 (relying on Roommates.com Decision)

On January 26, 2009, in what may have been Judge Ralph Gants’ last opinion before departing Suffolk Superior Court for the Supreme Judicial Court on January 29, 2009, Judge Gants ruled on a number of issues in the New England Patriots lawsuit against StubHub.com. The claims are based on the fact that StubHub provides an online marketplace for the scalping of Patriot’s tickets, something that really pisses off the Patriots’ owners, who attempt to exercise a high degree of control over their ticket sales.  The Patriots’ various causes of action arise out of their claim that the tickets are a “revocable license” with printed terms, and civil claims related to the Massachusetts anti-scalping statute, G. L. c. 140, Section 185A.

The discussion on 47 USC Section 230 is only a small part of the decision (which addresses a number of defensive theories set forth by StubHub on summary judgment, rejecting most of them) is as follows:

CDA immunity “applies only if the interactive computer service provider is not also an ‘information content provider,’ which is defined as someone who is ‘responsible, in whole or in part,’ for the creation or development of the offending content.” Roommates, 521 F.3d at 1162;47 U.S.C. § 230(f)(3). The Ninth Circuit has interpreted the term “development” as “referring not merely to augmenting the content generally, but to materially contributing to its alleged unlawfulness. In other words, a website helps to develop unlawful content, and thus falls within the exception to section 230, if it contributes materially to the alleged illegality of the conduct.” Roommates, 521 F.3d at 1167-1168. Here, as discussed earlier, there is evidence in the record that StubHub materially contributed to the illegal “ticket scalping” of its sellers. In effect, the same evidence of knowing participation in illegal “ticket scalping” that is sufficient, if proven, to establish improper means is also sufficient to place StubHub outside the immunity provided by the CDA.

The Ninth Circuit Roommates.com decision is, itself, debatable (and the dissent debates it quite credibly).  In that case the 9th Circuit (en banc) held that because Roommates.com provided drop down menus that provided choices that violated the Fair Housing Act (children, sexual orientation), Roommates.com had lost immunity under Section 230.  The drop down menus, the Ninth Circuit held, turned the web site into the “developer . . . at least in part” of the illegal information.

Although it’s not clear from Judge Gants’ decision, a look at the StubHub site shows that that StubHub fell directly into the Section 230 exception created by the Ninth Circuit.  StubHub guides ticket sellers through a series of menu choices (sport/team/date), much in the manner that Rommates.com does.  Assuming that the presence of the Patriots in this menu structure induces sellers to engage in illegal conduct by selling the tickets (Judge Gants used the Supreme Court’s copyright infringement decision in Grokster decision to argue inducement), StubHub fell directly under Roommates.com.

One must wonder whether StubHub could obtain immunity under 47 USC Section 230, going forward, by simply eliminating references to the Patriots and allowing sellers to fill in the Patriot’s name in free text. This would be analogous to the “open text box” (as opposed to the drop down menus) that the Ninth Circuit held was protected by Section 230 immunity in Roommates.com. The Patriots would have a difficult time getting past Section 230 if StubHub was purely passive.  However, this would be a significant deviation from the system of identifying tickets to sell or buy created by StubHub, and I’m sure would result in fewer sales of Patriot’s tickets.

Here is a link to the full opinion, NPS LLC (New England Patriots) v. StubHub.

"Sign This Contract. By the Way, We Can Modify It At Any Time." Is This Enforceable?

Here’s an interesting case out of the U.S. District Court, Northern District of Texas.  In Harris v. Blockbuster the court refused to enforce an arbitration provision in Blockbuster’s online click-wrap agreement. The reason was that Blockbuster’s click-wrap contract was unilaterally modifiable by Blockbuster.  Here is the key paragraph, which is still on the Blockbuster Online site as of today:

These Online Rental Terms and Conditions are subject to change by Blockbuster at any time, in its sole discretion, with or without advance notice. The most current version of the Online Rental Terms and Conditions, which will supersede all earlier versions, can be accessed through the hyperlink at the bottom of the blockbuster.com site. You should review the Online Rental Terms and Conditions regularly, to determine if there have been changes. Continued use of your BLOCKBUSTER Online membership constitutes acceptance of the most recent version of the Online Rental Terms and Conditions.

Yep, I’m sure many Blockbuster subscribers check Blockbuster’s online T&Cs regularly to see if they’ve changed.  Shame on you if you don’t!

The court wrote:

The Court concludes that the Blockbuster arbitration provision is illusory . . . .  There is nothing in the terms and conditions that prevents Blockbuster from unilaterally changing any part of the contract other than providing that such changes will not take effect until posted on the website. The Court concludes that the Blockbuster arbitration provision is illusory . . . .

There are a lot of online contracts like this, and if the N.D. TX decision is good law (which is questionable), their enforceability it in question.

First Circuit: Judge Gertner, You Do Not Have the Authority to Permit Webcasting in Your Courtroom

The First Circuit’s decision upholding the RIAA’s challenge to Judge Gertner’s decision to permit webcasting of a motion hearing in the RIAA v. Tenenbaum case was issued on April 16, 2009, very shortly after oral argument.

The First Circuit, interpreting a D. Mass. Local Rule, held that U.S. District Judge Nancy Gertner’s interpretation of the local rule concerning photographing recording and broadcasting of courtroom proceedings was “palpably incorrect”.

This result is quite disappointing for many people who had hoped that the First Circuit would hold that Massachusetts District Court Judges have have the discretion to webcast court proceedings in their courtrooms, and that this would be a first step toward allowing the public to view federal district court civil proceedings. The decision will, many hope, lead to a change in the pre-Internet Age Rule that was found to prohibit the webcast.

First Circuit Affirms Preliminary Injunction in Copyright Case

Here is the First Circuit’s recent decision upholding a preliminary injunction in a copyright case  out of D. Puerto Rico.  The sole issue on appeal was the holding on substantial similarity.  The products were stuffed animals, specifically, frogs.  Or, more specifically, the Puerto Rican tree frog, the Coqui.   I’ve tried to find a picture of the defendant’s stuffed animal frog  with no luck.

Link: Coquico, Inc. v. Rodriguez-Miranda.