Six Months after New York Spoke on Defamation Immunity for Online Service Providers, Analysis & Thoughts

by Riveles Wahab LLP
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The New York Court of Appeals, New York’s highest court, handed down an opinion this June that was a big win for online service providers in one of the Union’s most populous and critical states. The Court of Appeal’s first decision involving Section 230 of the Communications Decency Act (47 U.S.C. §230), (following nearly a decade of case law on this statutory provision in other jurisdictions) Christakis Shiamili & c., v. The Real Estate Group of New York, Inc. et al., found that The Real Estate Group of New York (“TREGNY”) was still protected from liability by Section 230, even after it had promoted a user’s comment to its own stand-alone post and added a new heading, subheading, preface, and image with caption.

Analysis:

Background

The plaintiff, Christakis Shiamili, is the CEO and founder of Ardor Realty Corp., an apartment rental and sales company operating in New York City. TREGNY, the defendant in the case, is a competitor of Ardor in the New York City rental market and hosts a blog on its website dedicated to covering the New York City real estate industry. An anonymous user, operating under the name “Ardor Realty Sucks,” posted a comment to TREGNY’s blog that suggested Shiamili mistreated his employees and was racist and anti-Semitic.

TREGNY took the lengthy comment and moved it to its own stand-alone post. To this new post, TREGNY added the heading “Ardor Realty and Those People,” 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.,” and prefaced the comment with “the following story came to us as a … comment, and we promoted it to a post.” TREGNY also added a depiction of Jesus Christ with Shiamili’s face and the caption, “Chris Shiamili: King of the Token Jews.” This post sparked further anonymous comments, including ones that suggested Shiamili abused his wife and that Ardor was in financial trouble.

After commenting on the thread himself, Shiamili asked TREGNY to take down the allegedly defamatory statements. TREGNY refused, and Shiamili then sued TREGNY, its COO Daniel Baum, and the COO’s assistant Ryan McCann who was operating the website, claiming defamation and unfair competition by disparagement.

The New York Supreme Court denied TREGNY’s motion to dismiss for failure to state a claim because discovery was necessary to uncover more information to determine the “defendants’ role, if any, in authoring or developing the content of the website.” The Appellate Division unanimously reversed and dismissed the complaint on the basis that it did not allege that TREGNY authored the defamatory statements and that Section 230 of the Communications Decency Act “protects website operators from liability derived from the exercise of a publisher's traditional editorial functions.”

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