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Christakis Shiamili, &C v. the Real Estate Group of New York

June 14, 2011

CHRISTAKIS SHIAMILI, &C., APPELLANT,
v.
THE REAL ESTATE GROUP OF NEW YORK, INC., ET AL., RESPONDENTS.



The opinion of the court was delivered by: Ciparick, J.

This opinion is uncorrected and subject to revision before publication in the New York Reports.

On this appeal, we consider for the first time whether a plaintiff's claim against a website operator arising out of allegedly defamatory comments posted to the website is barred by the Communications Decency Act (CDA), codified as 47 USC § 230. We conclude that it is, and that the defendants' motion to dismiss the complaint was properly granted.

As stated in the complaint, plaintiff Christakis Shiamili is the founder and CEO of Ardor Realty Corp. (Ardor), a New York apartment rental and sales company. In March 2008, Shiamili filed this action for defamation and unfair competition by disparagement against defendants the Real Estate Group of New York, Inc. (TREGNY), Daniel Baum, and Ryan McCann. TREGNY is a competitor of Ardor's, also engaged in selling and renting New York City apartments; Baum is TREGNY's principal and Chief Operating Officer; and McCann is Baum's assistant.

These defendants allegedly "administer and choose content for" a publicly accessible website -- a "blog" --dedicated to the New York City real estate industry.*fn1 In February 2008, defendants allegedly published defamatory statements about Shiamili on the website. Specifically, a lengthy comment was added to a discussion thread by a user operating under the pseudonym "Ardor Realty Sucks." The comment made several allegedly defamatory statements suggesting that Shiamili mistreated his employees and was racist and anti-Semetic, referring to one of the company's agents as "his token Jew." McCann, in his role as website administrator, moved the comment to a stand-alone post, prefacing it with the statement that, "the following story came to us as a . . . comment, and we promoted it to a post." The post was given the heading, "Ardor Realty and Those People," and the sub-heading, "and now it's time for your weekly dose of hate, brought to you unedited, once again, by 'Ardor Realty Sucks'. and for the record, we are so. not. afraid." The post was accompanied by a traditional image of Jesus Christ with Shiamili's face and the words, "Chris Shiamili: King of the Token Jews."

Several of the comments posted by anonymous users in the ensuing discussion thread contained further allegedly defamatory statements, including suggestions that Ardor was in financial trouble and that Shiamili abused and cheated on his wife. One of the commentators ended by saying "call me a liar and I'll come back here and get REALLY specific." The complaint alleges that McCann, under a pseudonym, responded, "liar" in an attempt to encourage the user to say more, but that commentator did not post further. Shiamili responded by drafting a lengthy comment, which was added to the discussion thread. Shiamili also contacted McCann and requested that he remove the defamatory statements, but McCann refused to do so.

Shiamili brought this action, alleging in his complaint that the defamatory statements were made with the intent to injure his reputation, and that defendants either "made" or published the statements. In addition to damages, the complaint requests injunctive relief requiring defendants to stop "publication of any and all defamatory statements concerning Shiamili and Ardor" and "any further disparagement."

Defendants moved to dismiss the complaint for failure to state a cause of action (CPLR 3211 [a] [7]). In support of the motion, McCann submitted an affidavit acknowledging that he was the "administrator and moderator" of the website, which "functioned as a virtual bulletin board, or open discussion forum" to which anyone could add content in the form of a comment on an existing post. Only McCann, in his role as moderator, could create stand-alone posts capable of generating their own discussion threads.

Supreme Court denied the motion to dismiss. As relevant here, it found that section 230 (c) (1) of the CDA (47 USC § 230 [c] [1]), did not require dismissal of plaintiff's claims, since "information as to defendants' role, if any, in authoring or developing the content of the website is exclusively within their possession" and discovery had not yet occurred.

The Appellate Division unanimously reversed, granted the motion to dismiss, and dismissed the complaint. The court explained that the CDA protects website operators from liability derived from the exercise of a publisher's traditional editorial functions (see Shiamili v Real Estate Group of New York, Inc., 68 AD3d 581, 583 [1st Dept 2010]). Because the complaint here does not allege that defendants authored the defamatory content, but only that they published and edited it, the court concluded that the CDA bars Shiamili's claim and that further discovery is unnecessary (see id.). We granted Shiamili leave to appeal (15 NY3d 705 [2010]) and now affirm.

Although a publisher of defamatory material authored by a third-party is generally subject to tort liability, Congress has carved out an exception for internet publication by enacting section 230 of the CDA, passed as part of the Telecommunications Act of 1996 (Pub L 104-104, 110 Stat 56 [104th Cong, 2d Sess, Feb. 8, 1996]). Section 230 establishes that, "[n]o 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" (47 USC § 230 [c] [1]), and it preempts any state law -- including imposition of tort liability -- inconsistent with its protections (see 47 USC § 230 [e] [3]). A defendant is therefore immune from state law liability if it is

(1) a "provider or user of an interactive computer service"; (2) the complaint seeks to hold the defendant liable as a "publisher or speaker"; and (3) the action is based on "information provided by another information content provider" (47 USC § 230 [c] [1]; see also Fed. Trade Commn. v Accusearch, Inc., 570 F3d 1187, 1196 [10th Cir 2009]; Barnes v Yahoo!, Inc., 570 F3d 1096, 1100-1101 [9th Cir 2009]; Universal Communications Sys., Inc. v Lycos, Inc., 478 F3d 413, 418 [1st Cir 2007]). The statute defines an "information content provider" as "any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service" (47 USC § 230 [f] [3]).*fn2

In passing section 230, Congress acknowledged that, "[t]he Internet . . . offer[s] a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity" (47 USC § 230 [a] [3]), and that it has "flourished, to the benefit of all Americans, with a minimum of government regulation" (47 USC § 230 [a] [4]). Further, "it is the policy of the United States . . . to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation" (47 USC § 230 [b] [2]). As the Fourth Circuit explained in the seminal case of Zeran v Am. Online, Inc. (129 F3d 327, 330 [4th Cir 1997]):

"Congress recognized the threat that tort-based lawsuits pose to freedom of speech in the new and burgeoning Internet medium.

The imposition of tort liability on service providers for the communications of others represented, for Congress, simply another form of intrusive government regulation of speech. Section 230 was enacted, in part, to maintain the robust nature of Internet communication and, ...


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