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Online Ticket Resellers Immune Under the Communication Decency Act

Posted in Web/Tech

By: Jeffrey Pietsch

A New Jersey Superior Court recently granted summary judgment in favor of online ticket resellers who were sued by the New Jersey Attorney General’s Office for violating New Jersey’s Consumer Fraud Act and Advertising Regulations. The summary judgment was granted by the court based on the immunity provided by Section 230 of the Communication Decency Act of 1996 (CDA).

The CDA was initially proposed in 1996 to regulate indecency and obscenity on the internet. Major parts of the bill were eventually eliminated because they were deemed to violate the first amendment. Section 230 of the bill, however, increased the scope of free speech on the internet by limiting the liability of online service providers for speech made by their customers. Section 230 was enacted as a direct result of the ruling issued by the New York State Supreme Court in Stratton Oakmont, Inc. v. Prodigy Services Co. In that case, the court ruled that Prodigy was essentially a publisher of the words of its customers and therefore could be liable for acts of its customers. Without Section 230 overturning this ruling, the internet landscape would be quite different than it is today.

Section 230 states that, “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.” An information content provider is defined as anyone responsible for the development or creation of information provided through the internet. Courts have generally used a three prong test to see if immunity is available. A defendant must (1) be a provider or user of an interactive computer service, (2) must be accused as being the publisher of the information, and (3) the information must be provided by another information content provider. If the defendant meets these criteria, they will be immune to liability under Section 230.

In this case, Milgram v. Orbitz Worldwide, LLC, TicketNetwork operated a website that was branded by Orbitz. Orbitz controlled the look and feel of the website as well as specified the tickets advertised for sale. TicketNetwork hosted the website and processed all orders received. TicketNetwork also worked with the third party ticket brokers who offered their tickets on the website. The ticket brokers, working through the website, were able to post for sale and update their inventory of tickets for each event.

 

The New Jersey Attorney General sued Orbitz and TicketNetwork for advertising the sale of tickets to a Bruce Springsteen concert prior to the official on-sale date of the tickets. The suit was brought because the tickets were not in the seller’s control at the time of sale and because some tickets were offered for seats that did not exist at the venue. These conditions violated certain sections of New Jersey’s Consumer Fraud Act and Advertising Regulations. Orbitz and TicketNetwork claimed immunity under the CDA because they were not the “information content provider” for the tickets.

 

The court reviewed the facts of the case under the three prong test stated above. The central element in question was whether or not the defendants were information content providers as defined under the CDA. If the defendants were information content providers, they would be liable under the New Jersey act. The court found that the defendants were not responsible, in whole or in part, for the creation or development of the inaccurate or misleading ticket listings. The information originated, not from the defendants, but from another information content provider, namely the third-party ticket brokers using the defendants’ website. The defendants served as a conduit for information provided by another information content provider and, therefore, are afforded the broad immunity under the CDA.. In Roommates, a website was not immune under the CDA because of the website’s involvement in creating the objectionable content in question. In that case, the website required posters to provide information regarding sex, sexual orientation and family status which violated the California Fair Housing Act. Because of this, the website was actively participating in the creation of the objectionable content. On the other hand, in this case, the court found that the defendants did not supply any of the content that was objectionable. The defendants simply provided the vehicle in which the ticket brokers could communicate which clearly falls under the protections of the CDA.

 

The court distinguished this case with Fair Housing Council of San Fernando Valley v. Roommates.com.

 

Finally, the court reiterated that the result of this case was what was intended by Congress when they adopted the CDA. Congress sought to encourage commerce over the internet by making interactive computer services (such as the defendants’ services in this case) immune from liability for third parties uses of their services. Without such protection, such sites would cease to operate for fear of liability and the internet landscape would change drastically.