Austin v. Crystaltech Web Hosting

• Citation: 125 P.3d 389,211 Ariz. 569
• Decision Date: 22 December 2005
• Docket Number: No. 1 CA-CV 04-0823.,1 CA-CV 04-0823.
• Parties: Mark Andrew AUSTIN, Plaintiff-Appellant, v. CRYSTALTECH WEB HOSTING, an Arizona corporation; John M. Daniels aka Jack Daniels, d/b/a, PT Bali Discovery Tours, Defendants-Appellees.
• Court: Supreme Court of Arizona

125 P.3d 389

211 Ariz. 569

Mark Andrew AUSTIN, Plaintiff-Appellant, v. CRYSTALTECH WEB HOSTING, an Arizona corporation; John M. Daniels aka Jack Daniels, d/b/a, PT Bali Discovery Tours, Defendants-Appellees.

No. 1 CA-CV 04-0823.

Court of Appeals of Arizona, Division 1, Department C.

December 22, 2005.

COPYRIGHT MATERIAL OMITTED

Britt & Bluff, P.C., By Edward H. Britt, Kathryn A. Battock, Phoenix, Attorneys for Plaintiff-Appellant.

Hopkins & Kreamer L.L.P., By Stephen M. Hopkins, Gregorio M. Garcia, Phoenix, Attorneys for Defendants-Appellees.

OPINION

PORTLEY, Judge.

¶ 1 We are asked to determine whether section 509 of the Communications Decency Act of 1996¹ (the "CDA") bars a defamation claim and related state tort claims against an interactive computer services provider.² We also examine whether the court had personal jurisdiction over John M. Daniels ("Daniels"), a resident of Bali, Indonesia. For the reasons discussed below, we affirm the superior court's rulings.

BACKGROUND

¶ 2 Mark A. Austin ("Austin") and Daniels operate separate travel-related businesses in Bali. CrystalTech Web Hosting ("CrystalTech"), an Arizona corporation, operates an internet website hosting company in Maricopa County, and provides website services for Daniels' business, Bali Discovery Tours.

¶ 3 Austin sued Daniels after an article appeared on the Bali Discovery Tours' website alleging that Bali officials were going to file criminal charges against Austin. He sued CrystalTech because it refused to remove the allegedly defamatory statements from the Bali Discovery Tours website.

¶ 4 CrystalTech moved for summary judgment, and argued that the CDA granted it immunity from Austin's state court claims. Daniels then moved to dismiss the complaint for lack of personal service and lack of personal jurisdiction.³ The superior court granted CrystalTech's motion, and dismissed the claims against Daniels because he did not have sufficient minimum contacts with Arizona to establish personal jurisdiction.⁴

¶ 5 Austin appealed the signed minute entry order. We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101(B) (2003).

DISCUSSION

I. Communications Decency Act

¶ 6 Austin challenges the superior court's determination that CrystalTech was entitled to summary judgment as a matter of law. We review the ruling de novo. Ariz. Joint Venture v. Ariz. Dep't. of Revenue, 205 Ariz. 50, 53, ¶ 14, 66 P.3d 771, 774 (App.2002).

¶ 7 CrystalTech contends that the CDA grants it immunity from state tort claims. Austin challenges that interpretation, and argues that because the federal statute only applies to claims against the primary publisher of defamatory material, CrystalTech is still liable as a distributor of defamatory material.

¶ 8 At common law, those who publicize another's libel may be treated: (1) as primary publishers (such as book or newspaper publishers); (2) as conduits (such as a telephone company); or (3) as distributors (such as a book store, library, or news dealer). Primary publishers are generally held to a standard of liability comparable to that of authors because they actively cooperate in publication. See Prosser & Keeton on Torts 810 (W. Page Keeton, ed., West Group 5th ed.1984); see also Restatement (Second) of Torts ("Restatement") § 581(1) cmt. c (1977). Conduits lack the ability to screen and control the information being communicated and are therefore ordinarily immune from liability. See Lunney v. Prodigy Services Co., 94 N.Y.2d 242, 701 N.Y.S.2d 684, 723 N.E.2d 539, 542 (1999); see also Restatement § 581(1) cmt. f. Distributors are, however, subject to an intermediate standard of responsibility, and may be held liable as publishers if they know or have reason to know of the defamatory nature of the matter they disseminate. See Restatement § 581(1) cmts. d, e.

¶ 9 The internet, however, has challenged the conventional analysis, and courts have attempted to apply common law principles to the new medium. See Jay M. Zitter, Annotation, Liability of Internet Service Provider for Internet or E-Mail Defamation, 84 A.L.R. 5th 169 (2000). Congress intervened and enacted Title V of the Telecommunications Act of 1996, the CDA. Although its "primary goal . . . was to control the exposure of minors to indecent material," Batzel v. Smith, 333 F.3d 1018, 1026 (9th Cir.2003), Congress wanted to "remove disincentives for the development and utilization of blocking and filtering technologies" and to encourage the development of technologies that allow users to control the information they receive. 47 U.S.C. § 230(b)(3)-(4). To effectuate its goals, Congress chose to "override[] the traditional treatment of publishers, distributors, and speakers under statutory and common law." Batzel, 333 F.3d at 1026.

¶ 10 Section 230(c) of the CDA provides:

(1) Treatment of publisher or speaker

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

(2) Civil liability

No provider or user of an interactive computer service shall be held liable on account of —

(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or

(B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in [subparagraph (A)].

47 U.S.C. § 230(c). Thus, Congress sought to remove disincentives to self-regulation and "encourage service providers to self-regulate the dissemination of offensive material over their services" without fear they would incur liability as a result of their trouble. Zeran v. Am. Online, Inc., 129 F.3d 327, 331 (4th Cir.1997).

¶ 11 Austin contends, however, that the immunity in § 230(c) is limited by the plain language of the statute to publishers, and does not apply to distributors. We disagree.

¶ 12 The Fourth Circuit Court of Appeals was the first appellate court to consider this issue, and concluded that Congress intended § 230(c) to immunize both publishers and distributors (as a subset of publishers) from liability for defamatory content provided by others. Zeran, 129 F.3d 327. Zeran brought an action against America Online, Inc. ("AOL"), an interactive computer service provider, alleging that AOL had failed to timely remove defamatory messages posted by a third party. Id. at 328. Zeran argued that § 230 does not preclude liability for internet intermediaries who have notice of defamatory material posted through their services. Id. The Fourth Circuit ruled that § 230 "creates a federal immunity to any cause of action that would make [internet] service providers liable for information originating with a third-party user of the service. Specifically, § 230 precludes courts from entertaining claims that would place a computer service provider in a publisher's role." Id. at 330. The court found that § 230 was enacted, in part, to "maintain the robust nature of internet communication" and limit government interference with the medium. Id.; see also 47 U.S.C. § 230(b)(1)-(2). The court determined that Congress had made a policy choice not to deter harmful online speech by imposing tort liability on internet intermediaries for third parties' potentially injurious speech. Zeran, 129 F.3d at 330-31.

¶ 13 Zeran argued, as Austin does now, that § 230 immunity eliminates only publisher, and not distributor, liability. Id. at 331. The court noted that everyone who takes part in a publication is considered to be a publisher and, accordingly, "distributors are considered to be publishers for purposes of defamation law." Id. at 332. The distinction between a publisher and a distributor "signifies only that different standards of liability may be applied within the larger publisher category, depending on the specific type of publisher concerned." Id.

¶ 14 The court determined that notice alone could not transform an original publisher into a distributor, stating, "once a computer service provider receives notice of a potentially defamatory posting, it is thrust into the role of a traditional publisher," and must decide whether to publish, edit, or withdraw the material. Id. The court concluded that were it to adopt Zeran's proposed interpretation of § 230, it would lead to the incongruous result of imposing liability on AOL for "assuming the role for which § 230 specifically proscribes liability — the publisher role." Id. at 332-33. The court found that Congress had spoken directly to the issue by "employing the legally significant term `publisher,' which has traditionally encompassed distributors and original publishers alike." Id. at 334. The court held that distributor liability is a subset of publisher liability and therefore specifically foreclosed by § 230. Id. at 332.⁵

¶ 15 The Fourth Circuit's approach has been followed in two other circuits. See Green v. Am. Online, 318 F.3d 465 (3d Cir.2003) (holding that § 230 barred a tort action against AOL for its failure to remove allegedly defamatory material (erroneous stock information) from its network); Ben Ezra, Weinstein & Co., Inc. v. Am. Online, Inc., 206 F.3d 980 (10th Cir.2000) (holding that § 230 proscribed a defamation claim against AOL based on material created by a third party).⁶ We have found no published opinions to the contrary, and find the interpretation of a federal statute by federal courts to be persuasive. See First Nat'l Bank of Ariz. v. Carruth, 116 Ariz. 482, 483, 569 P.2d 1380, 1381 (App.1977). Consequently, because the CDA provides immunity to interactive computer service providers, like CrystalTech, we affirm the trial court's grant of summary judgment against Austin.

II. Personal Jurisdiction

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