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The recent decision in Stratton Oakmonth, Inc. v. Prodigy Services Co. (Index No. 31063/94, N.Y. Sup. Ct. May 24, 1995) has helped clarify a computer information service provider's liability for content available on the service.

At issue in Stratton was a partial motion for summary judgment to determine whether Prodigy could be held liable for defamatory messages posted to one of Prodigy's bulletin boards. Prodigy claimed that it was only a conduit for the postings, and therefore should not be held liable for the content of messages. Prodigy used for support of its claim the decision in Cubby v. CompuServe 766 F. Supp. 135 (S.D.N.Y. 1991), which held that CompuServe could not be held liable for certain defamatory messages which appeared on its information service. In Cubby, the Court applied the same standard of liability to CompuServe as has been applied by the U.S. Supreme Court to libraries and booksellers.

In Stratton, Prodigy hoped to convince the Court to follow the reasoning in Cubby.

Cubby followed the U.S. Supreme Court's reasoning in Smith v. California, a suit involving a conviction for selling pornographic books. The Supreme Court held that the Constitution does not allow a bookseller to be held strictly liable for the contents of the books being sold. 361 U.S. 147, 153 (1959).

"For if the bookseller is criminally liable without knowledge of the contents. . . he will tend to restrict the books he sells to the ones he has inspected; and thus the State will have imposed a restriction upon the distribution of constitutionally protected as well as obscene literature." Justice Brennan reasoned. "It has been well observed of a statute construed as dispensing with any requirement of scienter that: 'Every bookseller would be placed under an obligation to make himself aware of the contents of every book in his shop. It would be unreasonable to demand so near an approach to omniscience.'" (Id.) While Smith held only that a strict liability standard was too restrictive to apply to booksellers, later courts were willing to specify a "know or have reason to know" standard of content-based liability. See, e.g., Seton v. American News Co., 133 F. Supp. 591 (N.D. Fla. 1955; cf. Manual Enters., Inc. v. Day, 370 U.S. 478 (1962)).

Smith's reasoning was used in the Cubby case to insulate the on-line service from defamatory remarks appearing in one of its forums. CompuServe contracts out the moderation of its forums, as does Prodigy. Both services require that their forum moderators follow a series of general content guidelines. However, for CompuServe, the editorial control ends at this stage. CompuServe either decides to carry a forum or not - just as a newsstand may choose to carry a periodical or not, but has no control over what a particular magazine puts within the magazine's covers. The forum moderators act as the publishers of the forum's content, and CompuServe acts only as the conduit.

The Cubby court held that this lack of control makes the on-line service just like "an electronic, for-profit library." 776 F. Supp. at 140. Recognizing that such a database is the functional equivalent to a news distributor or public library, the court applied the "know or have reason to know" standard and found no liability.

In Stratton, however, Judge Ain found that the situation was a little different from that in the CompuServe case. The judge noted that there are two points on which to distinguish the Cubby case. The first, and probably most damaging, distinguishing characteristic is that Prodigy prides itself in its level of censorship. When the service went on line, Prodigy advertised its service nationally as being "family oriented."

"We make no apology for pursuing a value system that reflects the culture of the millions of American families we aspire to serve. Certainly no responsible newspaper does less when it carries the type of advertising it published, the letters it prints, the degree of nudity and unsupported gossip its editors tolerate," Prodigy officials were quoted as sayin in Stratton. This value system is enforced by individual forum moderators who can, and do, monitor all message traffic and who are, in turn, instructed and monitored by Prodigy to insure compliance with Prodigy's content guidelines.

To ensure this "family atmosphere," Prodigy even formerly manually reviewed every message posted by its users and intended for public viewing. The court pointed out that, although Prodigy claims to have changed these policies somewhat, it has not changed its underlying policy of rigid content control enforced by its editorial staff.

The court's second point of differentiation between Prodigy and CompuServe is an extension of his first point. Although Prodigy claims no longer to manually pre-screen messages before they are publicly posted to its forums, Prodigy does automatically pre-screen messages for certain "inappropriate" words. (This practice has drawn quite a bit of attention, including a lot of recent publicity over an incident that illustrates the software's shortcomings. Prodigy recently started a service in Vietnam. When Vietnamese users tried to translate Vietnamese tonal marks into roman alphabet equivalents, they ground the service to a halt with large numbers of posts caught by the software for containing the letter combination "s-e-x." See, e.g., Wired, 3.06 at 48 (June, 1995).)

In addition, Prodigy makes other software tools available to its forum moderators for use in deleting posts and sending out form rejection letters.

Judge Ain wrote that, just because an information service has tools which allow it to pre-screen messages does not mean that the service has a duty to censor. The Stratton court cited Auvil v. 60 Minutes, 800 F. Supp. 928 (E.D. Wash. 1992), which held that a CBS television network affiliate could not be held liable for a network program which contained potentially defamatory material just because it could have pre-screened the show. Auvil, at 931.

As the Auvil court held and the Prodigy court quoted, to impose such a pre-screening requirement "would force the creation of full time editorial boards at local stations throughout the country which possess sufficient knowledge, legal acumen and access to experts to continually monitor incoming transmissions and exercise on-the-spot discretionary calls or face $75 million dollar lawsuits at every turn. That is not realistic." Id.

In Prodigy's case, a $200 million lawsuit is at stake. While use of pre-screening tools may not be required, Prodigy used such tools in its efforts to provide a family oriented service. This course of action helps distinguish Prodigy from the other major on-line services, but this choice to exert greater editorial "has opened it up to a greater liability than CompuServe and other computer networks that make no such choice."

Many Internet and Bulletin Board Forums are already a-buzz trying to interpret what this means - and whether or not this is an important case.

Stratton puts a mark near the end of a continuum, just as the Cubby case did before. Cubby stands for the proposition that, when a system operator neither knows or has reason to know, nor, in fact, could possibly monitor the entire communications system for defamatory content, liability will not be imposed on the system operator for the presence of such content. If the service acts like a library, it will be treated like a library. Stratton, on the other hand, can be said to stand for the proposition that, when a service provider holds out its service as being 'clean and wholesome,' and employs content guidelines, forum moderators, staff to guide and oversee the forum moderators, and even automated software to check for inappropriate content, then the service may be held liable for failing to do an adequate job of censoring potentially libelous content. If the service exerts the same editorial control as a publisher, it will have the same standard of liability imposed on it as any other publisher.

Cubby and Stratton show that just because communications services are digital does not mean that they will not be held to the same standards as their analog counterparts. Unfortunately for the majority of on-line services which fall in the middle of the continuum, many of which may not have the resources to move to either of the extremes, neither case presents a clear, usable indication of potential liability.