I. INTRODUCTION

This paper will identify some developments respecting the application of defamation law to the Internet.

Defamation law is an area of significant complexity.  Every aspect has nuances.  Defamation law will be described here in very broad strokes.  These are not intended to guide the reader in respect of any specific defamation case; that would be extremely dangerous.  For any particular case, the reader is directed to Gatley on Libel and Slander and The Law of Defamation in Canada, as starting points.  As will be discussed below, the worldwide nature of the Web has led to jurisdictional issues.  Historically, there have been important differences between US defamation law, on the one hand, and English and Canadian law, on the other.  Until recently, many of these differences have stemmed from decisions based on the first amendment to the US Constitution.  The contrast became stark with the 1964 US Supreme Court decision in New York Times v. Sullivan.  Recently, enactment of the Communications Decency Act of 1996 has made US cyber law even more permissive.  That Act gives commercial interactive computer service providers immunity from liability for material posted by third parties.

Stark differences between the laws of different countries have focused attention on the issue of when the court of a given country will assert jurisdiction over Worldwide Web content.  Which court will seize the case is one issue; but which law will be applied is another.  We’re in Marshall McLuhan’s “Global Village” and we’re inventing the roadmap.

II. DEFAMATION DESCRIBED IN BROAD STROKES

A. CAUSE OF ACTION

In Canadian law, if a person (individual, corporation, society, etc.) says (slander) or writes (libel) something damaging (not trivial) to the reputation of another person (individual, corporation, society, etc.) then the words are said to be defamatory.  To be actionable, the words must be communicated to a third person.  There are time-worn definitions employed by judges, using words such as “communications which bring the plaintiff into disrepute, odium and contempt in the minds of right-thinking Canadians”.  There are many variations on those words.  Substantial damage to reputation is the test.

Care must be taken not to confuse defamation with some closely related causes of action.  Defamation concerns the reputation of a person.  Criticism of a company’s products may be so scathing and wholesale that it reflects badly on the character of the company, and therefore can be defamatory.  However, ordinary criticism of a product may not qualify as actionable defamation but, rather, may more properly lead to a claim in a related cause of action – Slander of Goods or Injurious Falsehood, torts with quite different rules, presumptions and often quite different results at trial.  Intentional Infliction of Nervous Distress is another separate tort, as are Invasion of Privacy (only recognized in Canadian law if another law is broken), Infringement of Copyright, Negligent Misrepresentation, etc.  In each tort, an extreme case may also be defamatory, but each tort has its own rules.

B. REVERSE ONUS

In Canada (but seldom in the US), once words are communicated to a third party in writing or broadcast, and if they are damaging to a person’s reputation, the law makes three rebuttable presumptions:

(a) the words are false;

(b) the words are malicious (in the sense that the writer and publisher had no honest belief in the words and wrote them to achieve an undisclosed ulterior purpose or from grudge); and

(c) the words caused damage (that is, at least what lawyers call “general damages”).

C. DEFENCES

As a result of the presumptions, many libel cases turn on the defence(s).  There are five defences available.  They are:
 

(a) Truth (a complete defence) – this defence often requires calling eye witnesses.  It is expensive and risky.  It goes without saying that the plaintiff has been offended by what has been published.  He or she has sued.  To respond by pleading and publicly proving that the offending statements are true is the defence of last resort for many well-advised defendants.

(b) Fair comment on a matter of public interest (applies to opinion only) – this defence distinguishes between opinion, on the one hand, and the facts on which it is based, on the other.  The defendant must prove the facts on which the opinion is based.  If challenged, the defendant must establish that the opinion is honestly held (tautologically called “honest belief” in the cases).

(c) Privilege (usually qualified, but possibly absolute, on certain specifically defined occasions) – the courts protect all communication where the speaker or writer has a duty or interest (social, moral, or financial) to communicate on a given occasion to specific persons.  In Canadian law, it is doubtful that there is any privilege for publication or broadcast “to all the world.”  This rule may be vulnerable because both England and New Zealand have recently extended a (qualified) privilege to widespread publication based on a journalist’s perception of public interest.  A privilege is also accorded to specific types of reports (such as a fair and accurate summary of a court decision or other similar public document, a fair and accurate summary of a public meeting, parliamentary debates, etc.).

(d) Consent – defamation claimants rarely agree that they have consented to publication of material that they find offensive.  Hope of recourse to this defence explains all the “declined to comment” statements you read in your morning newspaper.

(e) Innocent dissemination – in some contexts, a party who has no knowledge of the content of a defamation may employ this defence.  Mailmen and couriers who deliver a sealed envelope, and arguably ISPs, would be candidates.

(f) Mitigation – this is a defence that is very seldom successful.  The defendant seeks to mitigate by proving that the plaintiff didn’t have a good reputation to begin with.  A previously unblemished reputation is presumed and the defendant who employs the defence of mitigation must prove that the plaintiff, previous to the publication, had a poor reputation generally, not by calling eye-witnesses to specific prior deeds but, rather, by calling witnesses with knowledge of the plaintiff’s prior general reputation.  This defence turns a trial into a horrendous mud-slinging match, often best avoided.
 

Libel law has been applied by BC courts to electronic transmission without explicit discussion.  Application of libel law to the Internet is simply assumed.  See Southam and Baines v. Chelekis and others (1998), which you can find on the Net.  This law may be derived from now obsolete telegraph technology.  As early as 1882, libel law was applied in Dominion Telegraph Co. v. Silver by the Supreme Court of Canada.  See discussion of both Canadian and American cases on this point in Brown, at 7-48 to 7-49.  Cases have also assumed liability for transmission by fax in the 1996 Alberta case of Simons v. Carr & Co.

A. WHO IS LIABLE FOR LIBEL ON THE INTERNET?

In traditional libel law, generally speaking, every participant in the communication is liable (subject to the defence of innocent dissemination).  So, for example, if a person “A” composes a defamatory letter, and a person “B” types and mails it, they are both liable for its consequences.

Accordingly, there is a rule in Canadian libel law exposing “everyone involved in a communication” to liability for that communication, subject to the “innocent dissemination” defence (see Brown, at 7-60 and following).  It would be ridiculous to suggest that the mailperson who delivers snail mail, or sorts it, should be liable for the unread contents of an envelope.  Canada Post is not usually sued for the consequences of poison pen letters, unread by them, but delivered through their facilities.  Couriers are not usually sued either.  There are a number of explanations for this.  Firstly, if sued, they would have recourse to the “innocent dissemination” defence, provided the envelope was sealed and they have no knowledge of its contents.  Secondly, they could have recourse to the defence of qualified privilege, since they have a duty and an interest in delivery of the envelope.  Once there is a duty or interest which is recognized by the law, the activity arises “on an occasion of qualified privilege.”  The duty or interest can be “moral, social, or financial,” as noted above.  A courier company probably has a moral and social duty to deliver your poison pen letters but it certainly has a financial interest in those deliveries.  As a result, deliveries probably qualify (as it were) for the defence of qualified privilege.  Once a defendant’s acts and omissions arise on an occasion of qualified privilege, the second adverse presumption (malice) evaporates and the plaintiff must prove malice or the defence is successful.

B. FAILING TO REMOVE AFTER NOTICE – US AND ENGLISH APPROACHES

In the 1997 US Court of Appeal case of Zeran v. America OnLine, Inc., the plaintiff sued the defendant internet service provider (“ISP”) for unreasonable delay in removing defamatory messages posted by an unidentified third party, refusing to post retractions, and failing to screen for similar postings thereafter.  The Court held that the Communications Decency Act barred such claims by immunizing commercial interactive computer service providers from liability for defamatory information posted by third parties.  In reaching its decision the Court noted the following [at p. 333]:

If computer service providers were subject to distributor liability, they would face potential liability each time they receive notice of a potentially defamatory statement - from any party, concerning any message.  Each notification would require a careful yet rapid investigation of the circumstances surrounding the posted information, a legal judgment concerning the information’s defamatory character, and an on-the-spot editorial decision whether to risk liability by allowing the continued publication of that information.  Although this might be feasible for the traditional print publisher, the sheer number of postings on interactive computer services would create an impossible burden in the internet context.

1(1) In defamation proceedings a person has a defence if he shows that -

(a) he was not the author, editor or publisher of the statement complained of,
(b) he took reasonable care in relation to its publication, and
(c) he did not know, and had no reason to believe, that what he did caused or contributed to the publication of a defamatory statement.

C. THE DRUDGE CASE – AN ILLUSTRATION

Late at night on the evening of Sunday, August 10, 1997, Matt Drudge wrote and transmitted his “Drudge Report” and in it he alleged that a new White House recruit, Sidney Blumenthal, had a history of spousal abuse.  Drudge transmitted the report from Los Angeles, California, by e-mail to his direct subscribers and posted both his headline and the full text on his Worldwide Website.  He then transmitted the text but not the headline to America OnLine, which, in turn, made it available to AOL subscribers.

The next day, after receiving a letter from Mr. Blumenthal’s lawyer, Drudge retracted the story through a special edition of his report posted on his Website and e-mailed to his subscribers.  Mr. Drudge e-mailed the retraction to AOL, which immediately posted it on its service.  Drudge later publicly apologized to the Blumenthals but, nonetheless, the Blumenthals sued both Drudge and AOL.  Regarding AOL’s liability, the judge said:

While Congress could have made a different policy choice, it opted not to hold interactive computer services liable for their failure to edit, withhold or restrict access to offensive material disseminated through their medium s. 230(c) [of the Communications Decency Act of 1996] provides:

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.

. . .

AOL was nothing more than a provider of an interactive computer service on which the Drudge Report was carried, and Congress has said quite clearly that such a provider shall not be treated as a “publisher or speaker” and therefore may not be held liable in tort.
. . .

Why should AOL be permitted to tout someone as a gossip columnist or rumor monger who will make such rumors and gossip “instantly accessible” to AOL subscribers, and then claim immunity when that person, as might be anticipated, defames another?

If it were writing on a clean slate, this Court would agree with plaintiffs.  AOL has certain editorial rights with respect to the content provided by Drudge and disseminated by AOL, including the right to require changes in content and to remove it; and it has affirmatively promoted Drudge as a new source of unverified instant gossip on AOL.  Yet it takes no responsibility for any damage he may cause.  AL is not a passive conduit like the telephone company, a common carrier with no control and therefore no responsibility for what is said over the telephone wires.  Because it has the right to exercise editorial control over those with whom it contracts and whose words it disseminates, it would seem only fair to hold AOL to the liability standards applied to a publisher or, at least, like a book store owner or library, to the liability standards applied to a distributor.  But Congress has made a different policy choice by providing immunity even where the interactive service provider has an active, even aggressive role in making available content prepared by others.  In some sort of tacit quid pro quo arrangement with the service provider community, Congress has conferred immunity from tort liability as an incentive to Internet service providers to self-police the Internet for obscenity and other offensive material, even where the self-policing is unsuccessful or not even attempted.
. . .

While it appears to this Court that AOL in this case has taken advantage of all the benefits conferred by Congress in the Communications Decency Act, and then some, without accepting any of the burdens that Congress intended, the statutory language is clear:  AOL is immune from suit, and the Court therefore must grant its motion for summary judgment.

The legal questions surrounding the exercise of personal jurisdiction in “cyberspace” are relatively new, and different courts have reached different conclusions as to how far their jurisdiction extends in cases involving the Internet.  Generally, the debate over jurisdiction in cyberspace has revolved around two issues:  passive web sites versus interactive web sites, and whether a defendant’s Internet-related contacts with the forum combined with other non-Internet related contracts are sufficient to establish a persistent course of conduct.  As one court has explained:

At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper. At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. A passive Web site that does little more than make information available to those who are interested in it, is not grounds for the exercise [of] personal jurisdiction.  The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer.  In these cases , the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.
Zippo Mfg. Co. v. Zippo Dot Com. Inc., 1997.
. . .

Despite the attempts of Drudge and his counsel to label the Drudge Report as a “passive” web site, the Court finds this characterization inapt. The Drudge Report’s web site allows browsers, including District of Columbia residents, to directly e-mail defendant Drudge, thus allowing an exchange of information between the browser’s computer and Drudge’s host computer.  . . . The constant exchange of information and direct communication that District of Columbia Internet users are able to have with Drudge’s host computer via his web site is the epitome of web site interactivity.
. . .

Even though Drudge may not advertise in . . . local newspapers in Washington, D.C., the subject matter of the Drudge Report is directly related to the political world of the Nation’s capital and is quintessentially “inside the Beltway” gossip and rumor.  . . .

Drudge’s motion to dismiss or transfer for want of personal jurisdiction therefore will be denied.

1. Conflict of Laws in Broad Strokes

Many e-mails and all Websites are interjurisdictional.  Conflicts of Law is the branch of law that addresses which state’s or province’s courts may be used by an aggrieved victim and the separate question of which system of law will be applied.  Nuances of the Law of Conflicts are beyond the scope of this paper.  The reader is referred to Dicey and Morris, The Conflict of Laws.  Suffice it to say that, under the law of most jurisdictions, the plaintiff can usually choose to sue in any among the jurisdictions wherein the defendant is domiciled or carries on business, or in which the tort was committed (see, for example, Rule 13 of the BC Supreme Court Rules).

Once the plaintiff has chosen a court system, the procedural rules of that jurisdiction are applied to the case.  Procedural rules are separate from the substantive rules of law to be applied to the case.  The substantive rules of the jurisdiction chosen will be presumed to be applicable unless some party establishes that the law of a different province or state ought to be applied to the case.  If the application of the law of that jurisdiction is challenged as inappropriate, courts will usually apply the law of the jurisdiction which has “a real and substantial connection” with the defamation at issue.  In Canada, the law of defamation is largely a provincial matter, being “property and civil rights”, and therefore is governed by the legislation of the applicable Canadian province or territory.  For the most part (outside Quebec), provincial and territorial legislatures have simply encoded the pre-existing judge-made commonlaw, making apparently minor, but sometimes critical, adjustments.  As a result, at any given time, there are differences between the law of defamation in BC and that in other Canadian jurisdictions.  International differences are potentially far more significant to any given case.

In broad strokes:

(a) the plaintiff will often be able to choose the jurisdiction in which to sue (the “Forum”);

(b) the procedural law of the Forum will be applied to the case;

(c) unless someone (plaintiff or defendant) argues otherwise, the substantive law of the Forum will also be applied to the case;

(d) if someone does argue that a foreign system of substantive law should be applied, the court will determine which system ought to be applied and, if it is decided that a foreign system of substantive law “has a real and substantial connection to the tort”, then the dictates of that law must be proved as a fact (usually through testimony of an expert licensed practitioner (a lawyer) from that jurisdiction, although, in some instances, a Canadian judge in one province or a US judge in one state or district will interpret the dictates of another province’s or state’s legislation without the need of an expert).

2. Agreement on Jurisdiction

Defamation is not usually predicted by the parties, particularly the plaintiff.  As a result, there is almost never a pre-existing agreement between a plaintiff and a defendant, in advance of any given defamation, as to where a lawsuit will be launched, if one becomes necessary, nor is there an agreement as to which system of law will apply.  The parties could come to an agreement on these points after the fact, but they seldom do.  In my experience, there is almost never an agreement to arbitrate privately a defamation claim, perhaps because plaintiffs seek a public vindication.

3. Which Substantive Law Applies?

As noted above, it is always open to any party to argue that substantive law ought to be that of the state (or province) with a real and substantial connection to the tort at issue.  What law, one may ask, is that?  Obviously, it matters which substantive regime will be applied.  For some defamations, the viability of an action may be very suspect in British Columbia, but hale and hearty in Alberta, simply because of the assimilation of slander into the law of libel in Alberta and the outdated legislation in BC.  If the substantive law of the Forum is always applied, the cases would be more efficient (since foreign law need not be proved), but Forum-shopping will lead to inefficiencies, since claims will be brought in otherwise inconvenient locations, simply because the law is thought by plaintiffs to be more favourable in that jurisdiction.  If, as an alternative, the substantive law of the jurisdiction in which the plaintiff is domiciled and carries on business (the location of at least some of the damage) is deemed to be the appropriate law to be applied, then multinationals and itinerant businessmen would have an advantage, i.e., choice of jurisdictions, while the less-traveled, typical individual person would be restricted to the law of his or her local jurisdiction.  It is submitted that applying the law of the location of the Website or the domicile of its sponsor could give rise to a phenomenon not unlike pirate radio stations and therefore would be an inappropriate means of resolving the Conflict of Laws question, undermining the very law sought to be enforced.  These problems are more properly the subject of Conflict of Laws consideration beyond the scope of this paper.  Similar problems arise and are addressed by a number of doctrines.  Courts tend to support each other’s laws across borders.  It is this writer’s view that a libel plaintiff will have a wide choice of procedural systems in which to sue.  For practical reasons, most jurisdictions will be inclined to apply their domestic (or homemade) law unless there is another jurisdiction with a manifestly strong connection to the tort and the damage.

For a thoughtful review of Canadian caselaw, see Catherine Walsh’s article:  “Territoriality and Choice of Law in the Supreme Court of Canada.”

However, all issues of jurisdiction are not entirely rosy, from a plaintiff’s point of view.  While a libel plaintiff might reasonably choose England to sue the operator of an interactive Web page, that choice may not always work out.  He or she might decide that England has suitable procedural law and favourable substantive law, particularly after the Godfrey v. Demon Internet case.  But, nevertheless, a plaintiff may encounter difficulty with enforcement or collecting the damages.  If defendants don’t have English assets or a steady income from English sources, the plaintiff may be forced to pursue the defendants where they are domiciled.  American courts, for example, may be reluctant to enforce an English judgment in a case where the judgment would not be available in US courts (perhaps because of the Communications Decency Act).  US courts’ reluctance is more pronounced where there would be a constitutional or first amendment argument available to the defendants on the facts.

4. Some Issues Concerning Websites

It is probable that every conceivable type or variety of person and institution has created a Website for every conceivable purpose.  These will inevitably involve all of the problematic issues for free speech, such as hate and obscenity, at the low end of the usual scale of social utility, all the way to significant educational, scientific and democratic public purposes, at the other end of the scale.  If, when, and as the courts consider application of defamation law to Websites, the following issues may arise.

(a) Is a Website Publication?

A Website is electronic bits and bytes controlled and stored by or on behalf of its sponsor and available to be browsed by a surfer on the Net.

By analogy to the physical, as opposed to the cyber, world, the Website sponsor is a little like an exhibitor at a fair or show who may lease a booth or space from an organizer.

In traditional libel law, an exhibitor is exposed to liability for damage to the reputation of others.  Furthermore, the traditional law of libel makes no distinction as to whether the communication occurs on private or public property.  So there is the potential for liability, whether the communication occurs in the author’s private home, commercial premises, or in all but very few institutional contexts (court testimony and parliamentary debate are cloaked with absolute privilege).

One might wonder if the author of a Website “publishes.”  As a practical matter, the author of the Website does not initiate the communication.  Rather, the surfer decides to browse the site.  Can this be considered publication?  It is submitted the answer is “yes”.  Defamatory material may be “published” by simply being displayed.  There are plenty of cases involving picketing, display exhibitors, posters, signs, cartoons, pantomime, symbols, etc., and all of these activities are found to be publication.  It is generally trite law that communication may be by any means whatsoever.

(b) Libel or Slander

Whether a given defamation will be treated as a libel or a slander can be problematic in respect of some aspects of Websites.  The traditional distinction between libel (in written form) and slander (spoken words) does not translate readily to all aspects of Websites.  There are a number of problems.

Firstly, we should note that the distinction between the law of libel and slander is important.  In a case of libel, once it is determined that the communication is defamatory, there are presumptions against the author or publisher.  These presumptions are often critical to the viability of the lawsuit.  In slander, there is often a requirement of proof of special damages or actual damages.  As a result, the distinction is significant.  It can be critical to establish that the law of libel applies, as opposed to the law of slander.

Secondly, Websites may, and indeed do, communicate by means of the spoken word.  CBC and commercial outlets transmit, via the Internet, what is, for many purposes, very similar to the experience afforded by a radio broadcast.  However, such “Internet radio” will probably not qualify as “broadcast” in BC because of the definitions in the Libel and Slander Act.  Section 2 of the BC Act deems words in a broadcast “to be published and to constitute libel”.  Under s. 1 of the Act:

“broadcasting” means the dissemination of writing, signs, signals, pictures, sounds or intelligence of any nature intended for direct reception by, or which is available on subscription to, the general public

(a) by means of a device utilizing electromagnetic waves of frequencies lower than 3 000 GHz propagated in space without artificial guide, or

(b) through a community antenna television system operated by a person licensed under the Broadcasting Act (Canada) to carry on a broadcasting receiving undertaking,

and “broadcast” has a corresponding meaning;

As a result, one may wonder if the courts will apply libel law or slander law to given content which may be a combination of visual and spoken information transmitted by “Internet radio”.  It is submitted that British Columbia’s Libel and Slander Act is out-of-date.

Courts in Canada, the United States and Britain have ruled that television broadcast, in the absence of deeming legislation, is slander on some authorities and libel on others.  On some authorities, the spoken word is treated as libel if the words are apparently read from a script.  On others, the courts rule that televised speech is slander and point to the impermanence or transitory character shared by both broadcast, on the one hand, and the personally spoken word, on the other.  In these situations in British Columbia, the deeming sections of the Act prevail.  But what happens where the deeming does not apply, as with Internet Radio or TV?  This issue makes a very big difference to outcomes.

The legislation of other provinces (Alberta, Manitoba, New Brunswick, Newfoundland, PEI and the two or three of the territories) assimilates the law of slander into the law of libel.  Accordingly, if the case is governed by the substantive law of those jurisdictions, restrictions applicable to slander would not be available as defences.  (See Brown, pp. 8-6 to 8-13 for a listing of the contradictory cases and reference to numerous academic articles on the application of law of libel and slander, respectively, to a variety of technologies and means of communication.)  Suffice it to say, for the present purposes, that the most enlightened trend is toward application of the law of libel to any technology tending to permit or facilitate permanence and widespread dissemination.

5. US Cases on Jurisdiction

In the 1996 Arizona District Court case of Edias Software Intern. v. Basis Intern. Ltd. the plaintiff brought an action against the defendant for breach of contract, libel, defamation, tortious interference with contract and prospective advantage, and violation of the US Lanham Act.  The defendant sought an order dismissing the action for lack of jurisdiction.  The defamation portion of the claim revolved around allegations that the defendant posted defamatory e-mail messages to its customers about its contract dispute with the plaintiff, and issued a “press release” on its CompuServe WebPage and in a computer forum.  Citing the US Supreme Court case of Calder v. Jones the Arizona Court confirmed that libelous statements by a non-resident can form the basis for jurisdiction in the plaintiff’s forum.  The Court concluded that the e-mail, WebPage and forum message were directed at Arizona and allegedly caused foreseeable harm to the plaintiff.  The defendant’s application was dismissed.

In the 1996 decision in Heroes, Inc. v. Heroes Foundation, the District Court for the District of Columbia found jurisdiction in circumstances where the defendant had an Internet homepage that solicited donations and provided a toll-free telephone number for donors.

In the 1996 case of Inset Systems, Inc. v. Instruction Set, Inc. the plaintiff, a Connecticut company, brought a trademark infringement action against the defendant, a Massachusetts company, in Connecticut.  The defendant applied for a order dismissing the action for lack of personal jurisdiction and improper venue.  The Court dismissed the motion, holding that the defendant’s advertising via the Internet was solicitation of sufficient repetitive nature to satisfy the “solicitation of business” provision of the Connecticut long-arm statute.  Although it appears that the decision found jurisdiction solely on the basis of the defendant’s Internet presence the court may have been influenced by the fact the defendant also had a toll-free number included in its website.  In finding jurisdiction the Court said [at p. 165]:

In the present case, Instruction has directed its advertising activities via the Internet and its toll-free number toward not only the state of Connecticut, but to all states.  The Internet as well as toll-free numbers are designed to communicate with people and their businesses in every state.  Advertisement on the Internet can reach as many as 10,000 Internet users within Connecticut alone.  Further, once posted on the Internet, unlike television and radio advertising, the advertisement is available continuously to any Internet user.  ISI has therefore, purposefully availed itself of the privilege of doing business within Connecticut.

In the 1997 New Jersey District Court case of Weber v. Jolly Hotels the Court held that an Italian Corporation’s use of an Internet computer network to advertise its hotels in Italy did not amount, on its own, to a purposeful availment of New Jersey law for the purposes of determining jurisdiction.  The plaintiff, a New Jersey resident, was injured while vacationing at one of the defendant’s hotels in Italy.  The Court concluded [at p. 334] that “advertising on the Internet is not tantamount to directing activity at or to purposefully availing oneself of a particular forum.”

In CompuServe, Inc. v. Patterson the plaintiff company sought a declaration that it had not infringed the defendant’s common-law trademarks or otherwise engaged in unfair competition in respect of computer software developed by the defendant.  The Sixth Circuit Court of Appeals reversed a lower court decision which had dismissed the action for lack of personal jurisdiction.  In reaching its conclusions the Court found that the defendant had purposely availed himself of benefits of doing business in the plaintiff’s home state and that the action arose from the defendant’s contacts with the state in question, in this case Ohio.  The defendant had placed software exclusively on the plaintiff’s website, had used the website to sell and advertise his software, and had threatened, via e-mail messages sent to Ohio, to seek an injunction and damages against the plaintiff regarding its sales of his software if the plaintiff failed to comply with his demands.  The Court said [at p. 1264]:

There is no question that Patterson himself took actions that created a connection with Ohio in the instant case.  He subscribed to CompuServe, and then he entered into the Shareware Registration Agreement when he loaded his software onto the CompuServe system for others to use and, perhaps, purchase.  Once Patterson had done those two things, he was on notice that he had made contracts, to be governed by Ohio law, with an Ohio-based company.  Then, he repeatedly sent his computer software, via electronic links, to the CompuServe system in Ohio, and he advertised that software on the CompuServe system.  Moreover, he initiated the events that led to the filing of this suit by making demands of CompuServe via electronic and regular mail messages.

. . . obtained the website for the purpose of, and in anticipation that, internet users, searching the internet for websites, will access CyberGold’s website and eventually sign up on CyberGold’s mailing list.  Although CyberGold characterizes its activity as merely maintaining a ‘passive website,’ its intent is to reach all internet users, regardless of geographic location. [p. 1333]

Like the Inset Systems case, Maritz suggests that merely having a website presence accessible in a particular state may result in jurisdiction being found.

In contrast, the New York District Court in the 1996 case of Bensusan Restaurant Corp. v. King held that the mere fact that Internet users can gain information about a person or company from an Internet site is not necessarily the equivalent of that person or company advertising, promoting, selling or otherwise making an effort to do business in a particular state.  The Court concluded that there must be something more to establish that a party is directing activities towards that particular jurisdiction.  In Bensusan the Court found that the defendant, a Missouri company, had set up a website with a Missouri telephone number posted so that people could order tickets to attend shows at the defendant’s nightclub in Missouri.  The nightclub had the same name as a New York nightclub owned by the plaintiff.  The plaintiff sued, but the Court dismissed the action on the basis of lack of jurisdiction.  The Court said that the mere setting up of the website with a Missouri telephone number did not amount to an offer by the defendant to sell products in New York.  In this case, there was no allegation that any infringing products (i.e., tickets) were shipped to New York or that any other infringing activity was directed at New York.

An often-cited case regarding jurisdiction is the 1997 Pennsylvania District Court case of Zippo Mfg. Co. v. Zippo Dot Com, Inc. [see for example the BC case, Braintech].  In Zippo the Court established a sliding scale for determining jurisdiction in cases involving the Internet.  The Court said [at pp. 1123-1124] that

. . . (t)he Internet makes it possible to conduct business throughout the world entirely from a desktop.  With this global revolution looming on the horizon, the development of the law concerning the permissible scope of personal jurisdiction based on Internet use is in its infant stages.  The cases are scant.  Nevertheless, our review of the available cases and materials reveals that the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet.  This sliding scale is consistent with well developed personal jurisdiction principles.  At one end of the spectrum are situations where a defendant clearly does business over the Internet.  If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper.  E.g. CompuServe, Inc. v. Patterson. 89 F. 3d 1257 (6th Cir. 1996).  At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions.  A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise (of) personal jurisdiction.  E.g. Bensusan Restaurant Corp. v. King 937 F. Supp. 295 (S.D.N.Y. 1996).  The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer.  In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.  E.g. Maritz, Inc. v. Cybergold Inc., 947 F. Supp. 1328 (E.D. Mo. 1996).

In the 1997 case of Cybersell, Inc. v. Cybersell, Inc. (decided after Zippo) an Arizona corporation that advertised for commercial services over the Internet (the plaintiff) brought an infringement action against a Florida corporation (the defendant).  The defendant sought to dismiss for lack of jurisdiction.  The Court of Appeal upheld a lower court’s dismissal of the action on the grounds that the defendant’s use of the name “Cybersell” in a passive home page on the world wide web was not enough to support the conclusion that it had purposefully availed itself of the privilege of doing business in Arizona and thus was not subject to personal jurisdiction in Arizona.

In Telco Communications v. An Apple A Day (1997), the Virginia District Court had to deal with an defamation action brought by a seller of long-distance services against a telemarketer.  The defendant telemarketer had posted allegedly defamatory press releases regarding the plaintiff company on a passive Internet site.  The defendant had also provided a telephone number at which he could be contacted.  The press release also included a solicitation for business.  The Court dismissed the defendant’s application to dismiss for lack of personal jurisdiction on the grounds that the defendant knew the press releases would be disseminated in Virginia.  In reaching its decision the Court referred to Inset Systems for the proposition that a continuous Website constituted the purposeful doing of business in the state [p. 406].  The Court also referred to Bensusan and Zippo.

In the 1998 United States District Court, District of Columbia, case of Mallinckrodt Medical v. Sonus Pharmaceuticals the plaintiff sought a declaration that patents relating to a certain product were invalid and, further, that one of the defendants had made false and defamatory statements regarding the plaintiff.  Several of the defendants moved to dismiss, including the defendant alleged to have made the defamatory statements.  In dismissing the plaintiff’s action in respect of the defamation allegation, the Court concluded there is no nationwide jurisdiction for defamation actions.  It stated [at p. 272]:

The AOL transmission from Seattle to Virginia, which was subsequently posted on an AOL electronic bulletin board and may have been accessed by AOL subscribers in the District of Columbia, cannot be construed as ‘transacting business’ in the District of Columbia.  The message was not sent to or from the District of Columbia, the subject matter of the message had nothing to do with the District of Columbia, and neither plaintiffs nor Sonus reside in, have their headquarters in or are incorporated in the District. Other than the fact that some people may have visited the electronic bulletin board and read the message from here, the AOL posting has no connection to this jurisdiction.  The act of posting a message on an AOL electronic bulletin board - which certain AOL subscribers may or may not choose to access, according to each individual’s tastes and interests - is not an act purposefully or foreseeably aimed at the District of Columbia.

In Braintech, Inc. v. Kostiuk the defendant was alleged to have used the Internet to transmit and publish defamatory information about the plaintiff company on an Internet bulletin board established to facilitate the exchange of information about technology stocks and investments.  The plaintiff company had maintained an office in Texas and its research and development activities were carried on in Texas.  At one time, its head office was in Texas.  The defendant was a British Columbia resident.  The plaintiff company commenced an action in Texas and obtained default judgment.  The defendant subsequently sought an order in BC Supreme Court declaring, among other things, that the Texas court had acted without jurisdiction.  The matter eventually made its way to the Court of Appeal, where it was held that the Texas default judgment should be set aside.  The Court of Appeal concluded that the bulletin board was a “passive” site accessible only “to users who have the means of gaining access and who exercise that means [para. 61].”  It went on to say that in the circumstances the complainant had to offer “better proof that the defendant (had) entered Texas than the mere possibility that someone in that jurisdiction might have reached out to cyberspace to bring the defamatory material to a screen in Texas [para. 62].”  It added that it

. . . would create a crippling effect on freedom of expression of, in every jurisdiction the world over in which access to Internet could be achieved, a person who posts fair comment on a bulletin board could be hauled before the courts of each of those countries where access to this bulletin could be obtained.

In 1996, the publisher of the Vancouver Sun faced a claim in District Court in California in Naxos Resources (USA) Ltd. v. Southam Inc.  The Vancouver Sun article was available to be accessed on the Internet.  The California court applied its two-prong “long arm” legislation.  The first branch of the test was satisfied that the Vancouver Sun and Southam had made a “purposeful availment” of the jurisdiction of California by posting its article.  However, the California court declined jurisdiction on the basis there was not a real and substantial connection between the alleged defamation and California.

E. BULLETIN BOARDS, INFORMATION SERVICES, CHAT ROOMS

Before enactment of the American Communications Decency Act there were two key “judge-made” American decisions addressing the liability of Website sponsors for bulletin boards, information services and chat rooms which may contain defamatory content.  These two seminal American cases were:  Cubby, Inc. v. CompuServe Inc. (hereinafter the “CompuServe case”) and Stratton Oakmont, Inc. v. Prodigy Services Co. (hereinafter the “Prodigy case”).  The cases have now been overtaken in American law by the Communications Decency Act but they remain significant for other jurisdictions not governed by that Act.

In the first of these cases, CompuServe subscribers could access a newsletter with the unfortunate name “Rumorville”.  The defendant CompuServe did not review the content of this newsletter prior to making it available to CompuServe subscribers.  The court ruled in favour of the defendant, in effect deciding that CompuServe could avail itself of the “innocent dissemination” defence discussed above with reference to e-mail.  Although an American case, the decision does not appear to turn on the First Amendment but, rather, on the bounds of defamation law.  The trial judge found that CompuServe had no more editorial control over the content at issue than would a public library, a bookstore or a newsstand.  In effect, CompuServe prevailed because it was able to disprove any negligence on its part, that is, any circumstance which ought to have put them on notice that Rumorville contained potentially defamatory material.  (See discussion of the case at Brown, p. 7-62 and Gatley, p. 147, note 74.)  It is submitted that the “innocent dissemination” defence is an unsatisfactory basis to exonerate an information service, bulletin board, chat line, etc.  If the plaintiff had put CompuServe on notice of the allegation that the content was defamatory, then CompuServe’s innocent status would evaporate and it would find itself with the choice of suppressing the content based on unsubstantiated allegations, on the one hand, or performing the function of an editor, on the other hand, a task for which it might be badly unsuited.

The Prodigy case also arose in the United States and involved a bulletin board.  Prodigy operated a bulletin board called “Money Talk”, which permitted subscribers to post statements regarding markets and investments.  A user repeatedly posted an accusation on the bulletin board that the plaintiff had been fraudulent in connection with a stock offering.  Prodigy had stipulated guidelines for users and had reserved the right to edit postings.  It had not only installed software to screen postings, but also supplied a monitor who supervised bulletin board postings.  Users were notified of both the software screening and the ability of the monitor to edit or remove postings.  On these facts, on preliminary interlocutory motions, the court ruled that Prodigy was, in fact, performing the role of a “publisher” and not that of an innocent disseminator.

The Prodigy case, following, as it did, the CompuServe case, led critics to conclude that the operator of a bulletin board or information service would not be liable if there was no editorial control attempted, but would be liable if the attempt was made and failed, no matter how reasonable the attempt.

F. PRIVACY IN BULLETIN BOARDS/CHAT ROOMS

In the summer of 1998, a case involving chat room privacy arose in the Ontario Court (General Division).  Yahoo was operating a discussion group and a number of anonymous participants posted allegedly defamatory messages through Yahoo’s facility.  Phillips Services Corp., a Canadian public company, applied to the court ex parte (without giving any advance notice to anyone of the court hearing) and the court was persuaded to order that a number of ISPs identify the names, addressed and other particulars of the persons who had posted the messages.  At the time, commentators opined that the orders “illustrate that the judicial system is not about to let the Internet operate in a legal vacuum.  They confirm – if in fact there was any doubt – that the general laws apply in cyberspace as well.”  (Lawyers Weekly, October 30, 1998.)  Unlike other forms of discussion like a newspaper’s letter-to-the-editor section, the instantaneous nature of cyberspace does not typically involve ISPs editing content for, among other things, defamatory statements.  But it appears, based on the Phillips Services Corp. case, that the author will, nonetheless, be held accountable by Canadian courts.

G. EMPLOYMENT CONTEXT

Ironically, it was at Canada Post that a recent controversy erupted when employees discovered that their e-mail had been read by the employer.  What was surprising, in this instance, was the surprise.  Our concept of employment involves:

(a) the employer supplying the tools and services necessary for the job;

(b) the employee employing the tools and services for the purposes of the employer’s enterprise;

(c) the employee’s time while on the job being dedicated to the employer’s enterprise;

(d) the employee’s product on the job being the property of the employer (so, for instance, in copyright law, the employer, prima facie, owns the copyright in an employee’s original work).

The ISP who serves the workplace undoubtedly does so on the basis of a contract with the employer as an enterprise.  Surprised employees have probably performed an important public function by bringing the issue to widespread attention. It is ironic that these employees at Canada Post, who are deemed, by the old libel law applicable to snail mail, to have read the postcards they handle are as surprised as they are that the employer can read their e-mails.  Encryption or a protocol parallel to the handling of envelopes marked “Personal and Confidential” may resolve the difficulty.  Many employers tolerate receipt of such envelopes by employees at the workplace.  Few would tolerate frequent time-consuming composition of such missives.

In the Nova Scotia Supreme Court case of Russell v. Nova Scotia Power Inc., the plaintiff sued his former employer for wrongful dismissal and defamation.  The defamation portion of his action related to the circulation by the company’s comptroller of an e-mail transmission to company employees advising them that the plaintiff had been terminated for incompetence.  The court found in favour of the plaintiff.  Regarding the e-mail, the court said that the defendant company “knew full well that Mr. Russell would be embarrassed by this message and that his reputation in front of his co-workers who had previously respected him would be tarnished [para. 36].”

In the Ontario case of Egerton v. Finucan, the plaintiff sued the defendant, who was his supervisor, for defamation after the supervisor caused a letter to be sent via e-mail to others at their place of employment detailing concerns about the plaintiff’s job performance.  The plaintiff also filed a grievance under the collective bargaining agreement in place at the time.  The defendant sought to strike out the statement of claim on the grounds the defamation issue should have been included in the grievance procedure, rather than a separate action.  The court dismissed the application, concluding that the matter was one between the plaintiff and defendant and not part of the employment dispute.  In reaching its decision the court stated that the “manner in which the allegations against Mr. Egerton were published to other persons rather than being communicated to Mr. Egerton on a confidential basis is a different and separate issue [para. 16].”

IV. APOLOGIES

Prompt retraction and apology can have the salutary effects of:

(a) mollifying or placating the victim of any defamation;

(b) mitigating or lessening damages at commonlaw (that is, judge-made law); and

(c) mitigating or lessening damages under legislation such as BC’s Libel and Slander Act, ss. 7 and 10.

Simply put, a steadfast refusal to apologize can aggravate damages, whereas granting an apology can reduce them, often substantially.  In a recent British Columbia decision, Brown v. Cole, damages were allowed in a total amount of $450,000 plus interest of $177,000.  Although the slander was communicated to very few people, and the plaintiff did not establish specific loss of business income, the trial judge remarked on the significance of a failure by the defendant to retract or apologize.  Damages were subsequently reduced by the BC Court of Appeal but still came to $160,000 plus interest.

There is plenty of authority that, where a defendant repeats a libel and is unrepentant and refuses an apology, damages will be larger.  The recent cases Southam and Baines v. Chelekis and Hill v. Church of Scientology would be two good examples among many such cases.

Historically, a book publisher and newspapers could recall volumes or papers and destroy or remove defaming material but nobody sought to retrieve copies which had already been distributed.

The parallel to cyberspace is imperfect.  It is not apparent (to this writer) how a publisher retracts material from electronic databases operated by independent third parties such as CompuServe, AOL or LEXUS.  Defamatory material may be permanent for practical purposes.  Some thought should be given by electronic publishers to a requirement in license contracts with those independent third parties (such as CompuServe, AOL, LEXUS, etc.) that the publisher can require elimination of the material which leads to a claim in defamation.  A search engine may not call up an apology each time the original material is accessed. As an alternative, a hypertext link to the original defamatory material, right at the offending portion of the text may be technically feasible.  Deletion from all databases is a practical problem and would pose a risk of historical revisionism.  In the pre-cyber world, libel plaintiffs don’t usually seek destruction of all copies of newspapers or magazines in libraries or newspaper morgues more and there is an issue whether it is socially desirable to delete records without leaving warning for the reader.

V. CONCLUSION

Little that is conclusive can be said.  Courts will face contests between 1) private interests in reputation, and 2) the utility of unfettered and efficient communication.

The law of defamation was largely refined by the courts at the same time as the legal system was addressing the last great technological revolution, the Industrial Revolution in the late 18th and early 19th centuries.  Movable type and the printing press was an early industrial technology.  Steam, coal, steel, railways, canals, and all the rest of the revolution led to judicial and legislative innovations such as limited-liability-companies, almost all of our current contract law, Sale of Goods legislation, the Reform Acts of 1832, and all of the intricate law necessary to permit financing.

It is submitted that the courts and governments reacted very well to the Industrial Revolution, creating doctrine which reasonably facilitated developments, but also restrained excesses.  The history has been written, of course, by the victors, but it nonetheless appears that the challenge was met.

We can expect courts to address the Cyber Revolution reasonably well, also.  They naturally understand information retrieval systems and the value of standardized protocol.  It is submitted that privilege, rather than innocence (in the sense of ignorance), should be the key pre-existing legal doctrine which deserves expansion.  Appropriate legislation is the cyber equivalent of infrastructure and it desperately needs attention here in British Columbia.

VI. LIST OF AUTHORITIES

A. CASELAW

Bensusan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996).
Blumenthal v. Drudge, 992 F. Supp. 44 (D.D.C. 1998).
Braintech, Inc. v. Kostiuk, [1999] B.C.J. No. 622 Q.L. (C.A.).
Brown v. Cole, [1996] B.C.J. No. 2046 Q.L. (S.C.), Holmes J.
Brown v. Cole, [1998] B.C.J. No. 2464 Q.L. (C.A.).
CompuServe, Inc. v. Patterson, 89 F. 3d 1257 (6th Cir. 1996).
Cubby, Inc. v. CompuServe Inc., 776 F. Supp. 135 (S.D.N.Y. 1991).
Cybersell, Inc. v. Cybersell, Inc., 130 F. 3d 414 (9th Cir. 1997).
Dominion Telegraph Co. v. Silver (1882), 10 S.C.R. 238.
Edias Software Intern. v. Basis Intern. Ltd., 947 F. Supp. 413 (D. Ariz. 1996).
Egerton v. Finucan, [1995] O.J. No. 1653 Q.L. (Ont. Gen Div.), B. Wright J.
Godfrey v. Demon Internet Ltd., Q.B. (U.K.), Strand, London 1998-G-No. 30, 26 March 1999, Morland J. (as yet unreported).
Heroes, Inc. v. Heroes Foundation, 958 F. Supp. 1 (D.D.C. 1996).
Hill v. Church of Scientology, [1995] 2 S.C.R. 1130.
Inset Systems, Inc. v. Instruction Set, Inc., 937 F. Supp. 161 (D. Conn. 1996).
Kitakufe v. Oloya, [1998] O.J. No. 2537 Q.L. (Ont. Gen. Div.), Himel J.
Mallinckrodt Medical v. Sonus Pharmaceuticals, 989 F. Supp. 265 (D.D.C. 1998).
Maritz, Inc. v. Cybergold, Inc., 947 F. Supp. 1328 (E.D. Mo. 1996).
Naxos Resources (USA) Ltd. v. Southam Inc., 1996 W.L. 662451 (C.D. Cal.)
New York Times v. Sullivan, 376 U.S. 254 (1964).
Russell v. Nova Scotia Power Inc., [1996] N.S.J. No. 178 Q.L. (S.C.), Boudreau J.
Simons v. Carr & Co. (1996), 41 Alta. L.R. (3d) 13 (Q.B.), Nash J.
Smith v. Hobby Lobby Stores, Inc., 968 F. Supp. 1356 (W.D. Ark. 1997).
Southam and Baines v. Chelekis and others, [1998] B.C.J. No. 848 Q.L. (S.C.).
Stratton Oakmont, Inc. v. Prodigy Services Co., 23 Media L. Rep. 1794 (1995).
Telco Communications v. An Apple A Day, 977 F. Supp. 404 (E.D. Va. 1997).
Weber v. Jolly Hotels, 977 F.Supp. 327 (D.N.J. 1997).
Zeran v. America OnLine, Inc., 129 F. 3d 327 (4th Cir. 1997).
Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997).

B. LEGISLATION

Telegraphs, Telephones, and Radiotelegraphs (Communications Decency Act of 1996), 47 U.S.C.S. § 230 (Law. Co-op Supp. 1997).
Defamation Act 1996, c. 31 (U.K.).
Libel and Slander Act, R.S.B.C. 1996, c. 263.

C. ARTICLES AND AUTHORITATIVE TEXTS

R. E. Brown, The Law of Defamation in Canada, 2nd ed. (Toronto: Carswell, 1994).
A.V. Dicey and J.H. Morris, The Conflict of Laws, 12th ed. (London: Sweet & Maxwell, 1993).
P. Milmo and W.V.H. Rogers, eds., Gatley on Libel and Slander, 9th ed. (London: Sweet & Maxwell, 1998).
G. Takach, "Ruling shows courts will apply current libel law to Net," Lawyers Weekly, 30 October 1998.
C. Walsh, "Territoriality and Choice of Law in the Supreme Court of Canada" (1997), 76 Canadian Bar Review 91.
 

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