Appeals Court Destroys First Sale; You Don't Own Your Software Anymore

Why Craigslist Should Be Allowed To Sue South Carolina's Attorney General

from the chilling-effects dept

Mon, Sep 13th 2010 6:19am — Mike Masnick

We've covered how various state attorneys general have used this unfortunate grandstanding process to push companies into settlements, despite a lack of any actual legal basis. Target #1 (and #2 and #3) has, of course, been Craigslist. And one of the most ridiculous of the grandstanders was South Carolina attorney general Henry McMaster, who not only threatened Craigslist over its adult services ads, but threatened to press criminal charges against Craigslist's execs. As you would hope McMaster knows, such claims are pretty ridiculous. Other courts have already made clear that Craigslist is protected by Section 230.

Craigslist got sick of McMaster's threats and sued first, with a few rather interesting legal theories. First, the company claimed that since Craigslist was protected by Section 230, the mere threat of criminal prosecution violated Section 230. That's an interesting -- and as far as I know, untested -- theory around Section 230. It's quite clear that the safe harbors do protect you from a lawsuit, but does it also protect you from threats of a lawsuit? If so, that could make for some rather interesting cases. On top of that, Craigslist claimed that the threats were unlawful prior restraint on protected speech and an unreasonable burden on interstate commerce. The prior restraint argument is also quite an interesting one, and, if it worked, suggests that these grandstanding attorneys general could face serious pushback if they keep running these grandstanding schemes.

Unfortunately, however, the court tossed out the lawsuit last month, with the really bizarre reasoning that since Craigslist no longer faced the likelihood of a lawsuit from McMaster, the lawsuit was meaningless. But, of course, that reasoning was shown to be ridiculous when, almost immediately after the ruling was announced, McMaster announced he was continuing his investigation (pdf) into Craigslist.

As Thomas O'Toole notes, the court really seems to have ignored some compelling arguments from Craigslist:

I personally thought that the court gave short shrift to craigslist's arguments that McMaster's high-profile railing against it created a chilling effect on protected speech. If a state attorney general, in South Carolina, is repeatedly threatening in the news media to prosecute me and my company for crimes that carry hefty prison terms, associating my company and my good name with prostitution, and hauling my company officials into negotiations over what can and can't appear on my website, then yes I am going to feel more than a little bit inhibited in what I do and don't publish on my website. Color me chilled.

The good news is that Craigslist is trying to push this case forward, and has filed an amended complaint and a motion to reconsider, and hopefully, after another look, the court will realize that there are some serious problems with the way this sort of grandstanding chills free speech with little legal basis. If the court favors Craigslist, it could provide a useful tool for companies targeted in these political media campaigns.

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Filed Under: chilling effects, harry mcmaster, section 230, south carolina
Companies: craigslist

14 Comments

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average_joe (profile), 13 Sep 2010 @ 6:50am

First: We've covered how various state attorneys general have used this unfortunate grandstanding process to push companies into settlements, despite a lack of any actual legal basis.

And then: hopefully, after another look, the court will realize that there are some serious problems with the way this sort of grandstanding chills free speech with little legal basis.

The second statement makes more sense than the first. I guarantee that if you asked these people what the legal basis was of their claim, they would be able give you one.

Nothing like a little exaggeration to disparage those you despise. Standard operating procedure.
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out_of_the_blue, 13 Sep 2010 @ 6:58am

Courts are good at ignoring compelling arguments against gov't power.
You no longer have the right to redress even if they kidnap and torture you, totally outside the law and without cause:
http://www.salon.com/news/opinion/glenn_greenwald/2010/09/08/obama/index.html

Don't expect Craiglist to prevail.
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Stuart, 13 Sep 2010 @ 7:00am

Re:
If I were to sue you in court "Quoting things in bold". I am sure that I could give you a legal basis for the suit. That of course dose not mean that there would be an "Actual" legal basis for the suit.
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Anonymous Coward, 13 Sep 2010 @ 7:02am

Re:
Just because someone says that they have a legal basis doesn't mean that they *actually* do. They just *believe* that they do.

That's what the court system is supposed to decide in these types of cases. Which side actually has legal basis.
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Anonymous Coward, 13 Sep 2010 @ 7:21am

You can't count on a single Judge. The Single Judge system leaves it wide open for bias and outright abuse of the position. The AG's need to be restrained because they operate entirely outside of their own state government and totally bypass and ignore their people, their Governor and their legislature. A good example of this were the recent lawsuits against Health Care Reform by AG's that Governor's had to distance themselves from because they did not represent their state. The AG's have become rogues and need to be dealt with harshly.
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Anonymous Coward, 13 Sep 2010 @ 7:23am

Re:
Feel free to point out the legal basis.

Oh, right. You can't.
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fogbugzd (profile), 13 Sep 2010 @ 7:23am

SLAPP
When the legislature fails to act on a needed issue, the judiciary often steps in to fill the vacuum. If this type of action succeeds in this court or another, then it will effectively become a national SLAPP law. In theory, it would be better if done in the legislature, but at least judicial legislation is less prone to getting a ton of special interest exceptions written into it.
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Berenerd (profile), 13 Sep 2010 @ 7:26am

Re:
So now you need to go to taking everything typed by Mike literally. I am pretty sure everyone who reads this blog knows that an AG can come up with any number of legality in anything anyone does. The point is no legal stance has any leg to stand on.
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Anonymous Coward, 13 Sep 2010 @ 7:36am

Harrasment
Plain and simple.
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Common Sense, 13 Sep 2010 @ 7:39am

Re:
I think, unfortunately, AG's are becoming rogues because they have discovered that there is more money and power in the political side of the law... This of course supports your argument that they need to be dealt with harshly, and I'd add the sooner the better.

Government officials are supposed to serve the people, not their pockets.
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Pixelation, 13 Sep 2010 @ 8:26am

I watched an interview with one of the AG's in question. He, of course, basically said "Think of the children".
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Anonymous Coward, 13 Sep 2010 @ 9:12am

Re:
someone was assaulting me so I sued them. but since they are no longer assaulting me my case was dropped. wtf?
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Anonymous Coward, 13 Sep 2010 @ 10:03am

Setting aside the question of whether it's good policy for the SC AG to engage in this sort of grandstanding, or whether it would have been better for everyone if the court had gone ahead and decided the case on the merits, 2 things about your post concern me, because I think you (and your readers) might get the wrong idea about Sec 230 and the court's decision.

Section 230 does provide broad immunity, but don't forget that it also has huge carve outs for criminal law and (sort of) for state law. That is, the text of the statute actually says this section shall have no effect on the enforcement of federal criminal law. The "carve-out" for state law actually says that it shall have no effect on the enforcement of state law so long as the state law is consistent with this section (which is not really a carve-out or exemption at all), but it clearly suggests that enforcement of state criminal law (like the enforcement of federal criminal law) isn't intended to be affected. So it's not as though things are crystal clear that 230 shields a provider from criminal prosecution. Perhaps that would be a good idea, but that's a different question.

Second, you call the court's ruling "ridiculous," because the SC AG has announced plans to continue investigating CL. But the court looked at two different theories of criminal liability, and the AG's office now swears up and down that it's not pursing a theory by which merely letting people post things would be criminal. Rather, the theory that the AG has suggested it will pursue, and which the court analyzed, is that CL could be criminally liable for letting a user post an ad when CL is specifically aware that that particular ad is for prostitution. CL has indicated that it does not plan to do that, and CL's recent defensive moves to shut down the adult services category reinforce that conclusion. So the court is basically saying that the only theory that the AG says it intends to pursue (that is, the only theory under which CL might be facing an immediate threat of prosecution) is based on conduct that CL claims it is not doing and doesn't plan to do. So there isn't yet a real case or controversy for it to decide. Yes, there's a "controversy" over whether CL would be entitled to allow posting even of specific ads that CL knew were for prostitution, but since CL claims it doesn't do that, the case would really just be a hypothetical case -- and courts aren't supposed to answer those hypotheticals.

Is this reasoning a little too cute? Perhaps. There are certainly good arguments for why the threat of prosecution is real, and perhaps not confined to the theories the AG now claims to embrace. And O'Toole makes good points about the chilling effects of the AG's threats. But the subsequent press release from the SC AG's office doesn't render the court's rationale "ridiculous."
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ofb2632 (profile), 13 Sep 2010 @ 10:23am

politics
This is exactly what happens when the law is driven by 100% political purposes. AG's have realized if they make headlines, they get money and votes. If companies/private citizens make the state pay up each and every time the AG's say/do something that is quite obviously outside their realm of jurisdiction, it will become to costly to have them as AG's. My advice, sue for 100 million for each and every comment/allegation they make.
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