Memorandum Subject: MIT's liability for alleged defamatory statements made by the SCIPB on the "Beaver's Teeth" website. I. Legal Background A. What is Libel? Libel is the publishing or broadcasting of false and defamatory information about an identifiable individual to a third party. In this context, defamation involves causing harm to an individual's reputation or standing in the community. B. Defenses against libel 1. The ultimate defense against accusations of libel is the truth. No utterance or publication can be libelous if it is factually true. 2. In addition to the truth defense, the supreme court has repeatedly held that the press is shielded from libel law under the first amendment even for statements that are not in fact true, if they have acted "in good faith" and the false statements are about a public figure or public official. In cases involving a public official (New York Times v. Sullivan) and cases involving a public figure (extended three years later in Curtis Publishing Co. v. Butts and Associated Press v. Walker), the supreme court ruled that the essential test for defamation by false statements is whether the publisher acted with "actual malice". The court defined "actual malice" in New York Times v. Sullivan as making a statement with knowledge of its falsity or with reckless disregard of whether it was true or false. Furthermore, the court ruled that since neither factual error nor defamatory statements alone are sufficient to avert first amendment protection, their combination leaves first amendment protection intact. In other words, information about a public official or figure that is not factually correct is still constitutionally protected, provided the publisher acted "without malice" and in "good faith." This begs the question, "Who is a public official and who is a public figure?". The court has been delibritely vague on the question of what constitutes a public official. Footnote 23 of New York Times v. Sullivan explains that an elected commisionar is clearly a public official and leaves it at that. In the same case, The court does hint, however, that anyone in government service who is protected from libel suits by private citizens unless the petitioner can prove "actual malice" should analagously have to prove "actual malice" in bringing forth a libel suit against a private citizen. The issue of what constitutes a public figure is even more uncertain. In Gertz v. Robert Welch Inc., the supreme court held that "clear evidence of general fame or notoriety in the community and pervasive involvement in ordering the affairs of society" is what defines a public figure. Lacking such evidence, an individual can still be considered a public figure by the court if his "participation in the events giving rise to the defamation" merit it. 3. Certain professionals have limited liability protection under a privelage defense. Furthermore, statements phrased as opinions and not as facts have limited liable protection. However, the privelage defense does not apply at all in this case and the opinion defense is too weakly regarded to rely on. 4. Finally, publishers of "interactive communication services" are given special protection under the Communications Decency Act. II. The Case at Hand 1. Background The SCIPB, an MIT funded student organization, recently published a negative product review of software produced by the startup eHack Inc. The review criticized the quality of the software, the president and CEO of eHack Alyssa Hacker, and suggested that eHack obtained a lucrative government contract by bribing the governor of Massachussetts with $50,000. In addition, the associated bulletin board has several anonymous postings disparaging Ms. Hacker's personal life and academic record. The governor's office has threatened to sue for libel and eHack's attorney's are preparing to file suit against MIT and the members of the SCIPB. 2. Issues A. The anonymous bulletin board postings Under Cubby Inc. v. Compuserve, an anonymous bulletin board service is subject to the lesser form of distributor liability rather than the stricter standard of publisher liability. Because a publisher is expected to edit every item it publishes, it is held to a stricter standard. As a distributer, MIT would only be liable for libelous statements that it knew about or had reason to know about. This suggests that MIT should remove all defamatory statements that have been brought to its attention. However, under the good samaritan clause of the Communications Decency Act, congress declared a blanket immunity from lible prosecution for material that did not originate at but is merely published by an interactive computer service, such as SCIPB's bulletin board. Paradoxically, by willfully accepting a higher standard of liability, MIT and the SCIPB can reduce their risk of being prosecuted for liable to zero. The CDA specifically states "No provider or user of an interactive computer service shall be treated as publisher or speaker of any information provided by another information content provider." In Zeran v. AOL, AOL made exactly that claim and the district court agreed with them. As long as the identity of the individuals who mailed the anonymous comments is not known to be any of the members of the SCIPB or of the MIT administration, then, under the Communications Decency Act, neither MIT nor the SCIPB memebers can be held liable for the contents of those messages. Indeed, the district court in Zeran argued that "distributor liability is merely a subset, or species of publisher liability, and is therefore foreclosed by [the Communications Decency Act]." In summary, lible resulting from the bulletin board postings can not effect either MIT or the SCIPB members. The Communications Decency Act provides complete immunity for liability for those postings, as long as their origins can't be traced back to MIT. B. Claims that the system is defective and that it is a trivial modification of a 6.001 problem set. The best defense for these lible claims is the truth defense. MIT has a number of software engineering experts; it would reassure everyone involved if the MIT administration would internally ask the Institute's own experts to review the claims SCIPB set forth for accuracy. Since 6.001 is an MIT class, its current and past lecturers would be well disposed to comment on whether one of their problem sets could be trivially modified to become the eHack server. Given the nature of technical discourse, its unlikely that the SCIPB members would completely fabricate such statements, so its in our best interests to attempt to verify their veracity. In the event that the Institute is unable to establish, internally, that the SCIPB's statements about the quality of eHack's server are essentially true, the best course of action is to contend that Ms. Hacker is either a public figure or a public official. The feasability and methodology for doing this are discussed in the next section, but suffice it to say that this option will likely succeed. Once Ms. Hacker is no longer being treated by the courts as a private citizen, then as publisher, MIT may invoke the New York Times defense to defamation suits which would shield both the Institute and the SCIPB members from defamation actions even if the allegations are substantially untrue. In the unlikely event that the courts decide Ms. Hacker to be a private citizen or if Ms. Hacker is able to present evidence that suggests the SCIPB or the Institute Administration knew their allegations were false or acted with reckless disregard for the truth, then MIT should invoke invoke the good samaritan clause of the Communications Decency Act. That would shield MIT itself from defamation liability, but would expose the individual members of the SCIPB to prosecution. This should only considered as a last resort. C. SCIPB's claim that the governor accepted a bribe There are actually two parallel claims here. The first claim is that the governor of Massachussetts accepted a $50,000 bribe and the second claim, which is that Alyssa Hacker tried to bribe the govorner of Massachussetts with $50,000. Assuming that MIT taking the stance of a publisher, the first assertion is proteced under the "actual malice" standard since the governor of Massachussetts is clealy a public official. This means that in order for the governor to sue for libel, he would have to prove that the members of SCIPB or the MIT administration knew that the bribery charge was false before publishing it or that either party acted with reckless disregard for the truth. This standard is extremely difficult to prove in court. Despite his threats, its unlikely that the governor or his office will ever sue, let alone win in court. The assertion that Ms. Hacker attempted to bribe the governor is more problematic. If the court regards her as a private citizen in this case, it will be dramatically easier for her to win a liable judgement. She would only have to prove that the bribery accusation identified her (it did), that it impinged her reputation (it did) and that the statement was false. In that case, she could sucessfully sue MIT and the SCIPB memebers unless MIT could prove that the statement was true. However, one could argue that Ms. Hacker is a public offical. As the President and CEO of corporation whose only client is a major government contract, Ms. Hacker is in charge of running a part of the government's business for it. She is, in effect, acting as an agent of the Commonwealth of Massachussetts. If the Commonwealth had decided to write its own software instead of hiring eHack to do the job for them, the public official in charge of writing such software would face the full scrutiny of the public as well as the press. Allegations about such an official would be subject to the "New York Times" defense against liable. Corporations subject themselves to stricter standards in many ways by accepting large government contracts. For example, they may be required to maintain certain preferences in their hiring of subcontractors. It is not at all unreasonable to expect the chief executive officer of a company whose product will handle the disbursement of hundreds of dollars of taxpayer funds to submit to the same scrutiny that any public official would. We cannot allow the government to discard its transparency to citizens merely by outsourcing its duties to private corporations. In the event that the court finds that Ms. Hacker is not acting in the capacity of a public offical, she may be found to be a public figure. After all, she is the President and CEO of growing start up company; as such she sets policy for the corporation and represents it to the public. Furthermore, she has sought and won a government contract from the commonwealth, no doubt predicating eHack's ability to make good on that contract with her own personal confidence. If nothing else, that should be enough to declare her a public figure. Anyone who insists on handling the public's money must become a public figure, if only so that the public may have accountability. One of the court's main concerns with protecting private citizens under liable standards that are easier to prove is that private citizens have so little ability to make their side of the story heard. Surely this does not apply to the CEO of an up and coming startup company. Finally, even if Ms. Hacker is treated as a private citizen by the court, that doesn't neccessarily foreclose the possibility of New York Times liability protection for the Institute as well as the SCIPB members. In New York Times v. Sullivan, the court approvingly quoted an earlier opinion by Justice Burch from the Supreme Court of Kansas, "It is of the utmost consequence that the people should discuss the character and qualifications of candidates for their suffrages. The importance to the state and to society of such discussions is so vast, and the advantages derived are so great, that they more than counterbalance the inconvenience of private persons whose conduct may be involved, and occasional injury to the reputations of individuals must yield to the public welfare, although at times such injury may be great. The public benefit from publicity is so great, and the chance of injury to private character so small, that such discussion must be privileged." This suggests that a trial court may view the incursions into Ms. Hacker's personal life caused by bribery allegations as "collateral damage" caused by the socially siginificant speech of exposing the conduct of the governor. The supreme court places such high value on this type of speech, that a lower court could perhaps be persuaded to accept the possible harm to Ms. Hacker's reputation as an acceptable tradeoff in exchange for information so valuable to the electorate. In summary, the governor's threats are of no real consequence. Its uncertain whether the Institute or the SCIPB memebers could be held liable for the allegations of bribery as they relate to Ms. Hacker, but there are a variety of convincing arguements that can be made before the court suggesting that Ms. Hacker should not be treated as a private citizen, thus securing the New York Times defense for our side. III. Conclusions and Reccomendations The most imnportant thing MIT can do at this point is to determine whether or not the allegations made by SCIPB were true. The required experts needed to do so are readily available to MIT. This will determine the course of the defense. Regardless, the governor has no realistice cause of action against anyone. Furthermore, the anonymous postings are also of no concern. The negative comments about the software itself and criticism of Ms. Hacker may be problematic if they are not factually correct. Even if they're not, however, there are ways to avoid liability. In the worst case, it may be necessary to issue a retraction for those statements only or to cut the SCIPB loose by invoking the CDA to immunify MIT of liability thereby exposing the SCIPB members. It may very well be that eHack has no interest in pursuing this matter to trial. Most start ups are extremely sensitive to their burn rate and would be unwilling to waste precious and limited capital on litigation. In general, the mere threat of litigation is enough, and threats are free. These kind of blackmail tactics ("Do what I say or I'll unleash my attack dog lawyers on you") are often nothing but bluff and bluster.