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Bad Words and Good Samaritans: Defamatory Speech in Cyberspace
Unformatted Document Text:  5 Prodigy in 1991, denied authorship of the postings. Since the messages were posted anonymously through a valid account, Prodigy found itself party to one of the first legal actions brought against a provider for defamatory speech posted on a computer bulletin board. In an effort to expedite settlement on a $200 million claim for damages, counsel for Stratton Oakmont hastily moved for partial summary judgment on the question of whether Prodigy was a publisher, and thus liable for defamatory speech. If Prodigy was a publisher, Stratton Oakmont reasoned they would have a strong claim for damages. Conversely, if Prodigy was merely a distributor, Stratton Oakmont knew it would have a weak case since Prodigy could persuasively argue that it had no prior knowledge of the defamatory postings. Much to the surprise of many legal commentators (see, for example, Haddad, 1995; Walker, 1995, Zitner, 1995), acting New York State Supreme Court Justice Stuart Ain decided that Prodigy was not a distributor. Since Prodigy used software to prescreen postings for obscenities and racial slurs, and because Prodigy had previously claimed to be a “family-oriented computer network,” Ain held that Prodigy was exercising editorial control and could, therefore, be sued as the publisher of a defamatory posting. In the months following Ain’s ruling, Prodigy successfully negotiated a settlement with Stratton Oakmont based largely on the following public apology: “Prodigy is sorry if the offensive statements concerning Stratton and Mr. Porush, which were posted on Prodigy’s Money Talk bulletin board by an unauthorized and unidentified individual, in any way caused injury to their reputation” (Lewis, 1995). As part of the settlement that produced the apology, Stratton Oakmont did not contest Prodigy’s appeal of Judge Ain’s earlier decision. Having settled the defamation claim, Prodigy then asked Judge Ain to reconsider his holding that Prodigy was a publisher. The judge refused, reasoning his original holding was especially compelling as “this is a developing area of the law (in which it appears that the law has thus far

Authors: Herbeck, Dale.
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Prodigy in 1991, denied authorship of the postings. Since the messages were posted
anonymously through a valid account, Prodigy found itself party to one of the first legal actions
brought against a provider for defamatory speech posted on a computer bulletin board.
In an effort to expedite settlement on a $200 million claim for damages, counsel for
Stratton Oakmont hastily moved for partial summary judgment on the question of whether
Prodigy was a publisher, and thus liable for defamatory speech. If Prodigy was a publisher,
Stratton Oakmont reasoned they would have a strong claim for damages. Conversely, if Prodigy
was merely a distributor, Stratton Oakmont knew it would have a weak case since Prodigy could
persuasively argue that it had no prior knowledge of the defamatory postings. Much to the
surprise of many legal commentators (see, for example, Haddad, 1995; Walker, 1995, Zitner,
1995), acting New York State Supreme Court Justice Stuart Ain decided that Prodigy was not a
distributor. Since Prodigy used software to prescreen postings for obscenities and racial slurs,
and because Prodigy had previously claimed to be a “family-oriented computer network,” Ain
held that Prodigy was exercising editorial control and could, therefore, be sued as the publisher
of a defamatory posting.
In the months following Ain’s ruling, Prodigy successfully negotiated a settlement with
Stratton Oakmont based largely on the following public apology: “Prodigy is sorry if the
offensive statements concerning Stratton and Mr. Porush, which were posted on Prodigy’s
Money Talk bulletin board by an unauthorized and unidentified individual, in any way caused
injury to their reputation” (Lewis, 1995). As part of the settlement that produced the apology,
Stratton Oakmont did not contest Prodigy’s appeal of Judge Ain’s earlier decision. Having
settled the defamation claim, Prodigy then asked Judge Ain to reconsider his holding that
Prodigy was a publisher. The judge refused, reasoning his original holding was especially
compelling as “this is a developing area of the law (in which it appears that the law has thus far


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