Sign Up
Stay current with GH&R Newsletters. Click here to sign up.
E-Commerce News
Search Engines May Reject Politically Incorrect Ads; Online Auction Does Not Create Jurisdiction In State Buyer's Home State
June 5, 2007
SEARCH ENGINES MAY REJECT POLITICALLY INCORRECT ADSAccording to a federal trial court in Delaware, search based advertising services, such as Google, are entitled to refuse any advertising they deem objectionable. In this respect, the search services are similar to newspapers, which have traditionally been permitted to make independent decisions on what advertising to carry. But in addition, computer driven search engines also enjoy immunity for such decisions provided by the federal Communications Decency Act.
The lawsuit arose when plaintiff Christopher Langdon ran into trouble placing ads for his Web sites. One Web site attacked government corruption by North Carolina officials; the other chronicled atrocities by the Chinese government. Google and Yahoo! refused to place Langdon’s ads on their sites, while Microsoft simply never responded to Langdon's inquiries. The complaint alleged that Google declined to carry the ads because they would violate it's no-carry policy on ads that advocate against an individual, group, or organization.
Langdon believed that the search services violated his First Amendment right of free speech by refusing to run the ads. Of course, the problem with that argument is that the privately run search services are not “state actors” and their actions are not subject to the First Amendment. The court rejected Langdon’s argument that the search services constituted “public forums.”
Langdon did not help his case much by comparing the search services to shopping malls. The trial court noted that the Supreme Court "has routinely rejected the assumption that people who want to express their views in a private facility, such as a shopping center, have a constitutional right to do so."
Ironically, the court found that the search services had a First Amendment right not to carry the ads. That flows from the right of any person to control their own speech. In addition, because the search services are providers of an “interactive computer service” they enjoy immunity under Section 230 of the federal Communications Decency Act for:
"any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable . . ."
Langdon argued that Section 230 did not apply because the rejected ads were neither "obscene" nor "harassing," and thus did not fall within the scope of content covered by the immunity provision. But the court noted that the immunity was broader than that. Even material that is not obscene or harassing falls within the reach of Section 230, so long as the defendants deem the content to be "otherwise objectionable."
As this court’s holding proves, politically incorrect speech qualifies for Section 230 immunity.
ONLINE AUCTION DOES NOT CREATE JURISDICTION IN STATE BUYER’S HOME STATE
Does a seller in an online auction risk submitting to the jurisdiction of the buyer if problems arise from the sale? According to a New York State trial court, the answer is “no”, so long as the seller does not engage in any other activities in that jurisdiction outside of the single sale.
The case arose when a seller in Missouri sold an allegedly defective car engine to a buyer in New York via an auction conducted on e-Bay. The buyer brought a suit against the seller in New York, obviously seeking the home court advantage. The Missouri seller sought to avoid the hassle of a New York lawsuit, and filed a motion to dismiss, contending that New York lacked personal jurisdiction over him.
In ruling on the motion, the New York court considered the following two questions: (1) is the quality of the New York contact of such a nature that a non-resident defendant can be deemed to have purposefully invoked the benefits and protections of New York, and (2) does the claim in question arise out of that purposeful New York activity?"
For the court, the biggest obstacle in finding jurisdiction was that, given the nature of the auction, the seller had no idea where the buyer would be, and therefore could not be found to have intended for the merchandise to wind up in New York. As the court noted: "The [seller] was prepared to sell his Chevrolet engine to whoever the highest bigger happened to be regardless of the state in which they happened to reside."
The court determined that here, compelling the seller to appear in New York "would contravene the notions of 'fair play' and 'substantial justice' that have become the touchstone of personal jurisdiction."
As more and more people use online services to sell merchandise, the jurisdiction question will become increasingly important. This court’s ruling was probably welcomed by e-Bay, since a contrary ruling may have discouraged sellers from engaging in an auction that could land them in a distant court.
The court was not entirely unsympathetic to the buyer’s plight. It recommended that the buyer enlist the aid of an eBay-recommended online dispute resolution service. e-Bay probably liked that too.
This Newsletter is a periodic publication of Graydon Head & Ritchey LLP and should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult your own advisor concerning your situation and any specific legal question you may have.