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

by Lee Gesmer on April 24, 2009

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.

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