Internet Law Focus
Copyright © 1996, Albert J. Velarde (All Rights Reserved).
September, 1996 - - Volume 1, No. 1


Internet users have been "flaming" others on Internet e-mail, news groups and in Chat lines for years. For those of you who are new to the Internet, "flaming" [as defined in Eric Raymond's Hacker's Dictionary] means posting messages "intended to insult and provoke". In other words, someone posts a message for others to read which insults and/or provokes readers against another person or company.

People and companies are now suing these "flame" posters and/or the Internet site host for Libel. Before we look at some of these lawsuits, let me explain what is legally defined as Libel.

DEFINITION: Libel is the publication of a false statement, (and is not a privileged communication) which injures one's business or personal reputation.

A plaintiff who sues for Libel must prove all of the above and be able to demonstrate some type of resulting damage. This could include being shunned by friends and associates, inability to obtain work because potential employers believed the false accusations. Some states allow for a jury to assess damages based generally on reputational harm.

Privileged communication means statements made during judicial proceedings, legislative proceedings, and those made between spouses (in most states). You can lie all you want under these circumstances and not be able to be successfully sued for Libel.

The U.S. Supreme Court also created a defense based on the First Amendment's Freedom of Speech to allow the media to freely report on the affairs of "public" persons unless the statements are made with "Malice". NY Times v. Sullivan, 376 U.S. 254 (1964). Malice means either knowledge of the falsity or reckless disregard for the truth. A "Public" person is one who has special prominence in the affairs of society. Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974). A politician, movie actor, and other "famous" people are "public figures". Other limitations and/or defenses to being able to successfully sue for Libel are:

1. It's the truth. If you have facts and evidence supporting your statement as being true, the plaintiff will not be able to prove that it is false.

2. The group being defamed is too large so as not to be defamatory to any individual. Let's say you write "Lawyers are crooks". John Lawyer will not be able to hold you liable for Libel because it does not specifically say "John Lawyer is a crook".

3. Statements of Opinion and not fact are generally immune from Libel. That's because an opinion can never be proven false. However, if your opinion implies your knowledge of an underlying set of facts which your opinion is based upon, Libel might exist. For instance, stating that a certain business in your opinion "is a fraud" implies that you know of some facts indicating the business has committed fraud. On the other hand, stating "I don't like that business' product" is merely expressing your individual tastes which is not Libel.

Now, let's look at some cases which have dealt with Libel on the Internet.

In 1991, CompuServe was sued in New York federal court for Libel (Cubby, Inc. v. CompuServe, Inc., 776 F. Supp. 135 S.D.N.Y). CompuServe was sued because it hosted a daily newsletter called "Rumorville" (which was also a defendant) in its Journalism Forum. Plaintiff published an electronic news and gossip column for the TV news and radio industries called "Skuttlebut". Defendant "Rumorville" published articles which claimed that Skuttlebut was a "new start-up scam" and it's owner had been "bounced" by his previous employer. The court dismissed CompuServe as a defendant by Summary Judgment because CompuServe had no contractual, employment, or other relationship with Rumorville which allowed them to edit or even read what was going to be published in Rumorville. Ii other words, CompuServe was merely acting like a newsstand which displayed other publications and cannot be held responsible for their content.

In 1994, an Australian anthropologist named Gil Hardwick was ordered by the Australian Supreme Court to pay David Rindos $40,000 because he libeled Mr. Rindos on the Internet. Mr. Hardwick claimed that Rindos had lost his job teaching at the University of Western Australia because he was a bully and had sexually molested a boy. These were false statements which hurt Rindo's chances at finding a job and harmed his reputation to the public.

In 1994, Suarez Corporation sued Brock Meeks for publishing an article in his electronic newsletter called the CyberWire Dispatch for Libel. Suarez Corp. v. Meeks, Civil Action No. 267513 (Ct. of Common Pleas, Cuyahoga County, Ohio). Meeks had written that Benjamin Suarez, the owner of Suarez Corp., was "infamous for his questionable direct marketing scams" and that "he (Suarez) has a mean streak". The lawsuit was settled for only $64 in court costs, but Mr. Meeks spent a lot in lawyer's fees defending himself.

In 1995, Prodigy was held potentially liable by the New York Supreme Court for damaging statements made by an anonymous subscriber to Prodigy's "Money Talk" board (Stratton Oakmont, Inc. v. Prodigy Services Co.). Because Prodigy exercises some control over content, it acts as a publisher rather than a mere newsstand like host (as CompuServe had been). The court held that a jury could find Prodigy liable for failing to exercise its control to weed out Libelous statements by its subscribers.

Currently, there is a $200 Million Libel lawsuit pending (Medphone v. DeNigis). Medphone is a Fortune 500 company which makes medical instruments. Prodigy subscriber Peter DeNigis lost $9,000 when he sold off his Medphone stocks and is alleged to have published negative posts stating that the Medphone company "appears to be a fraud".


Truth is always a defense. That's because one of the things a plaintiff must prove is that it was a false statement. So, check the veracity of any information you publish on the Internet which may be damaging to the reputation of others.

Quote testimony from judicial or legislative proceedings.

Express your opinions pertaining to ongoing debates or public issues without resorting to undisclosed defamatory facts. If you disagree with someone, don't attack him/her personally. Simply disagree without becoming personally vicious and avoid ridiculing one personally.

If you criticize or poke fun at a public figure make sure that it is not done with Malice. That means you do not have knowledge of the falsity of what you are writing and you didn't totally disregard the truth.

Don't relay damaging information created by others without verifying the facts supporting it. It's not a defense that you are simply relaying someone else's Libelous statement because merely publishing a third party's Libel will make you guilty of Libel too.

If you are in the business of relaying information from others which could be Libelous, consider getting insurance coverage for Libel or setting up an asset protection entity such as a corporation or Limited Liability Company to publish your newsletter or bulletin board.

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Copyright © 1996, Albert J. Velarde (All Rights Reserved).
Revised 20-September-1996

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