Even in 1998, legal writers noted that the Internet provided a novel way to communicate and distribute ideas and that, by its amorphous nature, it created unique First Amendment challenges.
In our final module on cyberlaw, we’ll learn about different issues that arise regarding online speech. We’ll examine how the First Amendment protects online speech before looking at civil liability for defamation and defenses to a defamation claim. Finally, we’ll look at disparagement of a business on social media and via e-mail.
First Amendment Protections of Online Speech
The First Amendment to the Constitution states that “Congress shall make no law . . . abridging the freedom of speech, or of the press.” For over 200 years, this freedom has been one of the most revered protections in the Constitution.
Still, freedom of speech sometimes conflicts with the government’s need to regulate speech. This is especially true in the context of online communications. Certain forms of online speech, especially defamatory statements on websites, message boards and social media sites such as Facebook or Twitter, have become a pervasive problem raising a host of legal questions and issues.
Government regulation of online speech must run a gauntlet of First Amendment doctrines to be valid. First, courts can declare that government regulations of speech violate the First Amendment based on the vagueness doctrine. This requires a high degree of clarity in a law that restricts speech. The vagueness doctrine prevents laws that may trap the innocent by not providing fair warning of unlawful conduct, prevents arbitrary and discriminatory enforcement of laws and prevents the “chilling” of protected speech. To be enforceable, a law must give a person of ordinary intelligence fair notice of the kind of conduct that is prohibited and it can’t allow for enforcement that is arbitrary or discriminatory.
Another way that a law can be unconstitutional is if it’s overbroad, which means that it burdens substantially more speech than is necessary to advance a compelling government interest. An overbroad law, unlike a vague one, may be clear about what it prohibits, but it prohibits too much.
In Reno v. ACLU, the Supreme Court confronted the constitutionality of the Communications Decency Act of 1996, relying on both the vagueness and overbreadth doctrines to strike down parts of a law that sought to protect children from access to adult-oriented websites. The law penalized the transmission of “obscene” or “indecent” material to a recipient that the sender knew was under the age of eighteen and it made it a crime to send or post “patently offensive” material to a forum available to minors.
While Congress certainly has a compelling interest in preventing minors from receiving sexual content via the Internet, the legislation also interfered with communications that would only reach adults. The Act might have been constitutional if it could effectively limit “indecency” on the Internet only to minors, but it was unconstitutionally overbroad because it effectively criminalized all Internet “indecency.”
Civil Liability for Defamation
Online speech in the form of social media posts may give rise to civil liability for defamation, which is a false statement made to a third person that tends to injure a person’s reputation and consequently exposes the person to public hatred, contempt, ridicule, or financial injury, or where it impugns the person’s honesty, integrity, virtue, or reputation.
Defamation can be libel, which is written or disseminated to a mass audience, or slander, which includes verbal communications not disseminated to mass audiences. Defamation per se is a statement that is defamatory in and of itself and is not capable of an innocent meaning, while defamation per quod is defamation that has an injurious meaning shown by extrinsic evidence of the circumstances. The defamatory statement must be “published” to a third party and, of course, posting offending material via social media, email, or a website directed to third parties satisfies the publication requirement.
The plaintiff in a defamation action must prove that the defendant made a defamatory communication to a third person and that the plaintiff suffered harm.
In 1964, the U.S. Supreme Court decided the landmark defamation case New York Times Co. v. Sullivan. In this case, the Court established the actual malice requirement for plaintiffs who are public officials (later extended to all public figures) in a defamation case. Actual malice means knowledge of falsity or reckless disregard for the truth. If the plaintiff is not a public figure, but the statement concerns a matter of public importance (such as a public works program being exploited or the possibility of a predator on the loose), the plaintiff must show, at least, that the defendant was negligent in assuming that the statement was true, though actual malice need not be shown.
A court may order a variety of remedies in a civil action for defamation related to online speech. Plaintiffs in a defamation action can recovery compensatory damages for harm to reputation, special compensatory damages, and emotional distress damages. In exceptional cases, courts may award punitive damages to punish a person for outrageous conduct which is malicious, wanton, reckless or in willful disregard for another’s rights. In addition, a court may issue an injunction ordering a website owner to take down or even add certain content.
Online Defamation Defenses
A defendant finding himself on the wrong end of an online defamation suit may raise several defenses. Common defenses include immunity under Section 230 of the Communications Decency Act, privileges, opinion and truth. If the defendant proves one of these affirmative defenses, the court can dismiss an otherwise valid claim for defamation.
Section 230 of the Communications Decency Act provides immunity from defamation lawsuits for Internet service providers and other website owners and operators where their functions are merely to publish information provided by third-party information content providers. The Act protects interactive website operators from being subjected to publisher liability for defamation. The immunity provision protects website owners and operators from a variety of defamatory comments posted on sites like Yelp, Facebook, Twitter, TripAdvisor and thousands of comparable sites.
The immunity afforded by the Act is limited and not absolute. The U.S. Court of Appeals for the Ninth Circuit recognized that the Communications Decency Act was not meant to create a “lawless no-man’s-land on the Internet,” and refused to extend protection of the Act to a website whose questionnaire facilitated racial discrimination.
Defendants in defamation actions may also raise absolute privilege or qualified privilege as a defense. Absolute privilege immunizes an actor from suit, no matter how wrongful the action might be, and even though it is done with an improper motive. Absolute privilege applies to legislative proceedings, judicial rulings and statements made between spouses.
In one case, a Maryland court had to determine whether absolute privilege applied to allegedly defamatory statements made during judicial proceedings. There, a law firm represented a number of people who were victims of a “mortgage rescue” scam and filed a class action lawsuit against a group of real estate professionals. In its complaint, the law firm wrote that the real estate professionals were “out stealing the equity in people’s homes and on top of that, getting it tax free.” The law firm then published that statement on the Internet.
The defendants in the original lawsuit countersued, alleging defamation. The court disagreed found absolute privilege protected the law firm and dismissed the defamation suit. It reasoned that the complaint was a public document and republication of the complaint served the judicially-cognizable purpose of notifying potential class members of ongoing litigation.
Qualified privilege immunizes an actor from suit only when the privilege is properly exercised in the performance of a legal or moral duty. It includes cases such as statements made by government officials during government functions, statements made by former employers when asked for job recommendations, “fair criticism” of artistic works and similar cases. Where qualified privilege applies, the plaintiff must show that the statement was false, and that the defendant abused the privilege by publishing the false material intentionally or with reckless disregard for the truth.
Statements that are opinions are not defamation and are not actionable, even if the statement is offensive or unreasonable. Whether a statement is one of facts or opinion depends on whether the average person hearing or reading the communication would take it as an assertion of fact. Innuendo and opinions that use loose, figurative or hyperbolic language are not defamation. For example, a Massachusetts federal court held that a Tweet calling another person “f—ing crazy” was an opinion, and thus was not defamatory, where the statement was made as part of heated online debate. The statement was reasonably viewed as criticism, rather than as statement of fact regarding the owner’s mental state.
Truth is an absolute defense to a defamation action. The defense of truth can be successfully asserted even if the publication is not technically true in all respects. A statement may be substantially truthful even if it contains minor inaccuracies if it would have the same effect on the reader that the truth would have produced. In Tannerit Sports v. NBC, the manufacturer of exploding rifle targets brought a defamation action against NBC after the network had aired an exposé accused the plaintiff of selling exploding rifle targets that amounted to “bombs on a shelf” and of selling “ingredients” that are comparable to those that cause explosions that have “been used by terrorists to kill Americans.”
While conceding that the targets were not “bombs” in the ordinary sense of the word and that they “are inert as sold in stores” and therefore not dangerous in that setting, the court ruled that NBC’s statements were substantially true. The court even went so far as to wryly note that the defendant’s targets were more analogous to other exploding items like champagne bottles and “potatoes in microwaves” because the targets were designed to explode. As such, the Second Circuit Court of Appeals dismissed the defamation action.
Many states have enacted laws discouraging the “SLAPP,” which stands for strategic lawsuit against public participation. The purpose of an anti-SLAPP law is to stop targets of free speech from using the legal system to silence an opponent and chill free speech.
A strategic lawsuit against public participation may be brought by a developer, corporate executive or elected official to stifle those who protest some type of high-dollar initiative or who take an adverse position on a public-interest issue. Anti-SLAPP laws are designed to bar meritless lawsuits filed with the intent to chill the exercise of First Amendment rights on a matter of public interest. Anti-SLAPP laws allow courts to award damages and other sanctions against those who bring these meritless lawsuits against people exercising their freedom of speech.
Under California’s anti-SLAPP law, for example, Internet message boards are places open to the public or a public forum for purposes of the anti-SLAPP statute. A California court held that comments posted by a bank employee on an Internet message board disparaging the bank’s management decisions and financial stability related to an issue of public interest. Therefore, the comments fell within protection of the anti-SLAPP statute.
Business Disparagement on Social Media Websites
Consumers often rely on fellow consumer reviews in making decisions whether to purchase products or services. Social media websites such as Yelp and Google are forums for such reviews and reviewers can identify themselves or remain anonymous. Companies, shops and restaurants don’t always find these reviews beneficial and sometimes consider negative online reviews to be business disparagement, or “trade libel.” Business disparagement allows recovery when the defendant criticizes a business, good or services with a remark that is false or misleading but not necessarily defamatory. To succeed in a business disparagement case, the plaintiff must prove that the defendant made the disparaging remark intending for the statement to result in harm (or recognizes or should recognize that the statement is likely to do so), the defendant knew the statement was false or recklessly disregarded whether it was true, and that the statement resulted in damages to the plaintiff. A business may recover lost profits and expenses necessary to counteract the disparagement, such as corrective advertising.
To avoid being subject to trade libel actions, many reviewers seek to remain anonymous. The Supreme Court has recognized that a speaker’s decision to remain anonymous is “an aspect of the freedom of speech protected by the First Amendment.” In 2016, Congress passed the Consumer Review Freedom Act to prohibit companies from forcing their customers to agree to non-disparagement clauses in their contracts or terms of service.
A 2016 case from Texas involving a couple sued by a Dallas pet-sitting business demonstrates how courts are hesitant to allow negatively-reviewed companies to sue a customer for disparagement. There, a couple hired Prestigious Pets to watch their pets while they were on vacation. After being dissatisfied with their experience with the company, they wrote a one-star review on Yelp explaining that they didn’t like the fact that they could not reach the pet sitter directly when problems arose and wrote that their pet fish were overfed.
Prestigious Pets brought a $1 million lawsuit, alleging that the review was defamatory and that the posting and subsequent statements to media violated a non-disparagement clause in the fine print of its standard contract. The court dismissed the lawsuit, ruling that the non-disparagement clause was unenforceable.
Thank you for participating in our program on cyberlaw. While this course covered a variety of areas of law as they relate to e-commerce and online activity, we encourage you to take our other video courses in areas that are most relevant or interesting to you.
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 U.S. Const. amend I.
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 47 U.S.C.223(a)(1)(B) (1997).
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 RENO, 521 U.S. at 874–81.
 50 Am. Jur. 2d Libel and Slander § 1.
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 Brunner v.Holloway, 235 So.3d 1153, 1159 (La. Ct. App. 2017).
 Restatement (Second) of Torts § 621.
 New York TimesCo. v. Sullivan, 376 U.S. 254 (1964).
 Id. at 279-80.
 Restatement (Second) of Torts § 580B.
 Restatement (Second) of Torts § 620-623
 47U.S.C. § 230(c)(1).
 Fair Hous. Council of San Fernando Valley v.Roommates.Com, LLC, 521 F.3d 1157, 1164 (9th Cir. 2008).
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 Id. at 663.
 Black’s Law Dictionary (10th ed. 2014).
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 Tannerite Sports, LLC v. NBCUniversal NewsGrp., a division of NBCUniversal Media, LLC, 864 F.3d 236 (2d Cir. 2017).
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 Restatement (Second) of Torts § 623A.
 Hagar Global Network, LL v. Believe Industries Group, Inc., 2017 WL 2321174 at *3 (D. Nev. April 20, 2017) (noting damages for business disparagement protect the business’s economic losses).
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 Herb Weisbaum, Yes, You Can Post That Negative Online Review, Says Congress, NBC News (Dec. 7, 2016), https://www.nbcnews.com/business/consumer/yes-you-can-post-negative-online-review-says-congress-n693001
 Judge Finds Yelp Non-Disparagement Clause Unenforceable, Corporate Crime Reporter (Aug. 30, 2016) https://www.corporatecrimereporter.com/news/200/judge-finds-yelp-non-disparagement-clause-unenforceable/.
 Eugene Volokh, Texas Court Throws Out Prestigious Pets’ ‘nondisparagement’ Lawsuit, The Washington Post. (Aug. 31, 2016), https://www.washingtonpost.com/news/volokh-conspiracy/wp/2016/08/31/texas-court-throws-out-prestigious-pets-nondisparagement-lawsuit-against-customer/?utm_term=.1d180707e28b.