Home > News > Internet Defamation Case Goes to Calif. High Court • Bookmark   • Newsletters   • Register Search Options


Internet Defamation Case Goes to Calif. High Court

Internet Defamation Case Goes to Calif. High Court
Get XBIZ News
XBIZ Research
Will virtual reality boost the paysite market?
Yes, it will soon
Yes, but in a few years
Out of 179 votes. Results based on votes submitted by members of XBIZ.net social network.
Oct 14, 2004 2:30 PM PDT    Text size: 
SAN FRANCISCO — California’s highest court on Wednesday unanimously accepted a case that will determine whether Internet businesses can be held liable for defamatory website postings.

The state Supreme Court said it will hear a civil suit filed by Roger M. Grace, an eBay seller who sued a buyer and eBay after the buyer had posted negative comments about him.

Earlier this year, the state’s Court of Appeal said that website operators who knowingly repeat a defamatory remark are not immune from liability under the federal Communications Decency Act because it does not immunize distributors.

The appellate court did, however, uphold the dismissal of eBay Inc. from a suit by Grace. His claim against eBay is within the scope of a release that is part of the eBay user agreement, the appeal court said in its ruling.

The libel claim against eBay was initiated after Tim Neeley, who sells Hollywood memorabilia on the site, posted on eBay a feedback comment about Grace, who purchased several items from the seller: “Complaint: SHOULD BE BANNED FROM EBAY!!!! DISHONEST ALL THE WAY!!!!”

Grace, publisher of the Los Angeles Bulletin and the Metropolitan News-Enterprise, notified eBay that the seller’s comments were defamatory, but eBay refused to remove them.

Grace sued eBay and the seller, alleging counts against eBay for libel, specific performance of eBay’s user agreement with the seller, and violation of the unfair competition law. Grace withdrew the second count after eBay removed the challenged comments from its website.

The appellate court concluded that eBay could not avail itself of CDA immunity because it was a distributor.

“Although a distributor can be held liable for libel in certain circumstances, a distributor is subject to a different standard of liability from that of a primary publisher, and liability as a distributor ordinarily requires a greater showing of culpability,” the court said in its ruling.

EBay also contested the complaint based on language of 1996’s CDA and a release clause in its user agreement.

EBay's website “User Agreement” contains a written release that states, "Because we are a venue, in the event that you have a dispute with one or more users, you release eBay (and our officers, directors ... ) from claims, demands and damages (actual and consequential) of every kind and nature, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way connected with such disputes."

In his appeal to the state Court of Appeal, Grace argued that the language of the release is not sufficiently precise to encompass a claim against eBay based on defamatory information provided by a third party and that his dispute is not merely a dispute with a user, but a dispute with eBay directly.

It disagreed, holding that the type of dispute referenced in the release clearly encompasses a dispute with another user relating to comments posted by the user on the website.

Grace, who is also an attorney, was told by the appeal court that he likely blundered in his legal strategy.

“The appropriate place for such a legal argument would have been in Grace’s opposition to the demurrer and in his opening brief on appeal, rather than in an amended complaint,” the court said. “In any event, in light of our conclusion that 47 U.S.C. § 230 [of the CDA] provides no immunity in these circumstances and that Grace released his claims and demands against eBay, the question of constitutionality does not arise.”

After the state Court of Appeal ruling, Grace blasted the court’s reasoning to a reporter at ZDNet, calling it “disturbing.”

"The ruling is just too sophomoric and silly not to be appealed," Grace said. “I don't think [eBay] can shrug their shoulders and stand on immunity."

The case is Roger M. Grace vs. eBay Inc., No. S127338.

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !


Expanding Your Mastermind Group Should Be a Game Plan

After a decade of selling an automation software product for managing websites, it’s been interesting to follow the trends of our customers throughout the past year. At the end of every year, we... More »

‘Anything Interactive’ Will Be in Industry’s Future

With the new year upon us, many people focus on resolutions and 92 percent of those who make them don’t succeed in keeping them. Others look towards the future. Looking back to the early years of... More »

Focusing, Again, on Tradeshow Etiquette

I’m very excited to have been asked by XBIZ World to write the third part of my ongoing series of articles on tradeshow etiquette. In Part I of the series, I discussed business cards, substance... More »
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.

Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Access the latest issues of the industry's leading trade publications in digital form. View online or download for offline viewing.


Everything To Do With Sex Show

Jan 27 - Jan 29
Halifax, Nova Scotia

The European Summit

Mar 04 - Mar 07
Barcelona-Sitges, Spain

The TEA Show

Mar 05 - Mar 06
Hollywood, CA

Phoenix Forum 2017

Mar 23 - Mar 26
Tempe, Arizona
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!