Does 1-46, John v. GTE Corporation ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-4323
JOHN DOE and other members of the
football team at Illinois State University,
et al.,
Plaintiffs-Appellants,
v.
GTE CORPORATION and GENUITY INC.,
Defendants-Appellees.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 C 7885—Charles P. Kocoras, Chief Judge.
____________
ARGUED SEPTEMBER 24, 2003—DECIDED OCTOBER 21, 2003
____________
Before BAUER, EASTERBROOK, and DIANE P. WOOD, Circuit
Judges.
EASTERBROOK, Circuit Judge. Someone secreted video
cameras in the locker rooms, bathrooms, and showers of
several sports teams. Tapes showing undressed players
were compiled, given titles such as “Voyeur Time” and
“Between the Lockers,” and sold by entities calling them-
selves “Franco Productions,” “Rodco,” “Hidvidco—Atlas
Video Release,” and other names designed to conceal the
persons actually responsible. All of this happened without
the knowledge or consent of the people depicted. This suit,
2 No. 02-4323
filed by football players at Illinois State University, wres-
tlers at Northwestern University, and varsity athletes from
several other universities, named as defendants not only
the persons and organizations that offered the tapes for sale
(to which we refer collectively as “Franco”), plus college offi-
cials who had failed to detect the cameras (or prevent their
installation), but also three corporations that provided In-
ternet access and web hosting services to the sellers. The
sellers either defaulted or were dismissed when they could
not be located or served. The college officials prevailed on
grounds of qualified immunity. The only remaining defen-
dants are the informational intermediaries—large corpora-
tions, two-thirds of them solvent. The solvent defendants
are GTE Corp. and Genuity Inc. (formerly known as GTE
Internetworking), both of which are subsidiaries of Verizon
Communications. (The third, PSInet, has been liquidated in
bankruptcy. As plaintiffs did not file claims in that proceed-
ing, PSInet has been discharged from any liability.) The
district court dismissed all claims against them in reliance
on 47 U.S.C. §230(c). See 2000 U.S. Dist. LEXIS 8645 (N.D.
Ill. June 21, 2000) (reiterating an earlier opinion dated
April 20, 2000). After the judgment became final with the
resolution or dismissal of all claims against all other de-
fendants—the defaulting defendants were ordered to pay
more than $500 million, see 2002 U.S. Dist. LEXIS 24032(N.D. Ill. Nov. 25, 2002), though there is little prospect of
collection—plaintiffs filed this appeal in order to continue
their pursuit of the deep pockets.
Plaintiffs commenced this litigation in state court. Three
defendants employed by public universities removed it to
federal court under 28 U.S.C. §1441(b), observing that the
claim against them rests on 42 U.S.C. §1983. Neither the
parties nor the district judge noticed that removal requires
the consent of all defendants. See Hanrick v. Hanrick, 153
U.S. 192 (1894); Torrence v. Shedd, 144 U.S. 527 (1892);
Phoenix Container, L.P. v. Sokoloff, 235 F.3d 352 (7th Cir.
No. 02-4323 3
2000). This defect in the removal process could have justi-
fied a remand, but because 30 days passed without pro-
test—and the problem does not imperil subject-matter juris-
diction—the case is in federal court to stay. See 28 U.S.C.
§1447(c).
What GTE and Genuity (collectively GTE) sought, and
what the district court granted, is dismissal under Fed. R.
Civ. P. 12(b)(6) for failure to state a claim on which relief
may be granted. Yet the reason behind the district court’s
ruling is not failure to state a claim, but an affirmative de-
fense provided by §230(c). Affirmative defenses do not
justify dismissal under Rule 12(b)(6); litigants need not try
to plead around defenses. See Gomez v. Toledo, 446 U.S.
635 (1980). Plaintiffs do not protest the district court’s use
of Rule 12(b)(6), however, perhaps because the decision
could have been recast as a judgment on the pleadings un-
der Rule 12(c). Nor do they seek better notice or a crack at
discovery. Their only argument is that §230(c) does not
assist GTE. We turn to that question without fussing over
procedural niceties to which the parties are indifferent.
According to the complaint, GTE provided web hosting
services to sites such as “youngstuds.com” at which the
hidden-camera videos were offered for sale. GTE did not
create or distribute the tapes, which were sold by phone and
through the mail as well as over the Internet. Although the
complaint is not specific about just what GTE did, we may
assume that GTE provided the usual package of services
that enables someone to publish a web site over the
Internet. This package has three principal components: (1)
static IP (Internet protocol) addresses through which the
web sites may be reached (a web host sometimes registers
a domain name that corresponds to the IP address); (2) a
high-speed physical connection through which communica-
tions pass between the Internet’s transmission lines and
the web sites; and (3) storage space on a server (a computer
and hard disk that are always on) so that the content of the
4 No. 02-4323
web sites can be accessed reliably. Advertisements about,
and nude images from, the videos thus passed over GTE’s
network between Franco and its customers, and the data
constituting the web site were stored on GTE’s servers.
Franco rather than GTE determined the contents of the
site, though the complaint raises the possibility that GTE’s
staff gave Franco technical or artistic assistance in the
creation and maintenance of its web site. Sales occurred
directly between Franco and customers; communications
may have been encrypted (most commercial transactions
over the Internet are); and GTE did not earn revenues from
sales of the tapes. Franco signed contracts with GTE prom-
ising not to use the web site to conduct illegal activities,
infringe the rights of others, or distribute obscenity (a
promise Franco broke). GTE thus had a contractual right
to inspect each site and cut off any customer engaged in
improper activity. We must assume that GTE did not ex-
ercise this right. Some domain administrators and other
personnel maintaining GTE’s servers and communications
network may have realized the character of Franco’s wares,
but if so they did not alert anyone within GTE who had the
authority to withdraw services. Managers were passive, and
the complaint alleges that GTE has a policy of not censoring
any hosted web site (that is, that GTE does not enforce the
contractual commitments that Franco and other customers
make).
The district court’s order dismissing the complaint rests
on 47 U.S.C. §230(c), a part of the Communications Decency
Act of 1996. This subsection provides:
(c) Protection for “Good Samaritan” blocking
and screening of offensive material.
(1) Treatment of publisher or speaker. No
provider or user of an interactive computer service
shall be treated as the publisher or speaker of any
information provided by another information con-
tent provider.
No. 02-4323 5
(2) Civil liability. No provider or user of an inter-
active computer service shall be held liable on
account of—(A) 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, harass-
ing, or otherwise objectionable, whether or not such
material is constitutionally protected; or (B) any
action taken to enable or make available to infor-
mation content providers or others the technical
means to restrict access to material described in
paragraph (1).
These provisions preempt contrary state law. “No cause
of action may be brought and no liability may be imposed
under any State or local law that is inconsistent with this
section.” 47 U.S.C. §230(e)(3). But “[n]othing in this section
shall be construed to limit the application of the Electronic
Communications Privacy Act of 1986 or any of the amend-
ments made by such Act, or any similar State law.”
47 U.S.C. §230(e)(4). We therefore start with the question
whether plaintiffs have a claim under the Electronic
Communications Privacy Act.
Plaintiffs rely on 18 U.S.C. §2511 and §2520, two provi-
sions of that statute. Under §2511(1), “any person who—(a)
intentionally intercepts, endeavors to intercept, or procures
any other person to intercept or endeavor to intercept, any
wire, oral, or electronic communication; (b) intentionally
uses, endeavors to use, or procures any other person to use
or endeavor to use any electronic, mechanical, or other de-
vice to intercept any oral communication” faces civil liabil-
ity. Section 2520(a) creates a damages remedy in favor of
a person “whose wire, oral, or electronic communication is
intercepted, disclosed, or intentionally used in violation of
this chapter”. Franco and confederates intercepted and dis-
closed oral communications (the tapes have audio as well as
6 No. 02-4323
video tracks) and thus are liable under §2511 and §2520.
But what could be the source of liability for a web host?
GTE did not intercept or disclose any communication; and
though one could say that its network was a “device” to do
so, plaintiffs do not make such an argument (which would
be equally applicable to a phone company whose lines were
used to spread gossip). Instead plaintiffs say that GTE is
liable for aiding and abetting Franco. Yet nothing in the
statute condemns assistants, as opposed to those who di-
rectly perpetrate the act. Normally federal courts refrain
from creating secondary liability that is not specified by
statute. See Central Bank of Denver, N.A. v. First Interstate
Bank of Denver, N.A., 511 U.S. 164 (1994). Although a
statute’s structure may show that secondary liability has
been established implicitly, see Boim v. Quranic Literacy
Institute, 291 F.3d 1000 (7th Cir. 2002), it is hard to read
§2511 in that way. Subsection 2511(1)(c) creates liability for
those who wilfully disseminate the contents of unlawfully
intercepted information. See Bartnicki v. Vopper, 532 U.S.
514 (2001). A statute that is this precise about who, other
than the primary interceptor, can be liable, should not be
read to create a penumbra of additional but unspecified
liability.
What is more, GTE’s activity does not satisfy the ordinary
understanding of culpable assistance to a wrongdoer, which
requires a desire to promote the wrongful venture’s success.
See generally United States v. Pino-Perez, 870 F.2d 1230(7th Cir. 1989) (en banc). A web host, like a delivery service
or phone company, is an intermediary and normally is in-
different to the content of what it transmits. Even entities
that know the information’s content do not become liable for
the sponsor’s deeds. Does a newspaper that carries an
advertisement for “escort services” or “massage parlors” aid
and abet the crime of prostitution, if it turns out that some
(or many) of the advertisers make money from that activity?
How about Verizon, which furnishes pagers and cell phones
No. 02-4323 7
to drug dealers and thus facilitates their business? GTE
does not want to encourage the surreptitious interception of
oral communications, nor did it profit from the sale of the
tapes. It does profit from the sale of server space and
bandwidth, but these are lawful commodities whose uses
overwhelmingly are socially productive. That web hosting
services likewise may be used to carry out illegal activities
does not justify condemning their provision whenever a
given customer turns out to be crooked. Franco did not de-
mand a quantity or type of service that is specialized to
unlawful activities, nor do plaintiffs allege that the band-
width or other services required were themselves tipoffs so
that GTE, like the seller of sugar to a bootlegger, must have
known that the customer had no legitimate use for the
service. Just as the telephone company is not liable as an
aider and abettor for tapes or narcotics sold by phone, and
the Postal Service is not liable for tapes sold (and delivered)
by mail, so a web host cannot be classified as an aider and
abettor of criminal activities conducted through access to
the Internet. Congress is free to oblige web hosts to with-
hold services from criminals (to the extent legally required
screening for content may be consistent with the first
amendment), but neither §2511(a) nor §2520 can be under-
stood as such a statute.
Section 230(c)(2) tackles this problem not with a sword
but with a safety net. A web host that does filter out offen-
sive material is not liable to the censored customer. Remov-
ing the risk of civil liability may induce web hosts and other
informational intermediaries to take more care to protect
the privacy and sensibilities of third parties. The district
court held that subsection (c)(1), though phrased as a defi-
nition rather than as an immunity, also blocks civil liability
when web hosts and other Internet service providers (ISPs)
refrain from filtering or censoring the information on their
sites. Franco provided the offensive material; GTE is not a
“publisher or speaker” as §230(c)(1) uses those terms; there-
8 No. 02-4323
fore, the district court held, GTE cannot be liable under any
state-law theory to the persons harmed by Franco’s ma-
terial. This approach has the support of four circuits. See
Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997);
Ben Ezra, Weinstein & Co. v. America Online, Inc., 206 F.3d
980 (10th Cir. 2000); Green v. America Online, Inc., 318
F.3d 465 (3d Cir. 2003); Batzel v. Smith, 333 F.3d 1018 (9th
Cir. 2003). No appellate decision is to the contrary.
If this reading is sound, then §230(c) as a whole makes
ISPs indifferent to the content of information they host
or transmit: whether they do (subsection (c)(2)) or do
not (subsection (c)(1)) take precautions, there is no liability
under either state or federal law. As precautions are costly,
not only in direct outlay but also in lost revenue from the
filtered customers, ISPs may be expected to take the do-
nothing option and enjoy immunity under §230(c)(1). Yet
§230(c)—which is, recall, part of the “Communications
Decency Act”—bears the title “Protection for ‘Good Samari-
tan’ blocking and screening of offensive material”, hardly an
apt description if its principal effect is to induce ISPs to do
nothing about the distribution of indecent and offensive
materials via their services. Why should a law designed to
eliminate ISPs’ liability to the creators of offensive material
end up defeating claims by the victims of tortious or crim-
inal conduct?
True, a statute’s caption must yield to its text when the
two conflict, see Trainmen v. Baltimore & Ohio R.R., 331
U.S. 519, 528-29 (1947), but whether there is a conflict is
the question on the table. Why not read §230(c)(1) as a def-
initional clause rather than as an immunity from liability,
and thus harmonize the text with the caption? See Carlisle
v. United States, 517 U.S. 416, 421 (1996). On this reading,
an entity would remain a “provider or user”—and thus be
eligible for the immunity under §230(c)(2)—as long as the
information came from someone else; but it would become
No. 02-4323 9
a “publisher or speaker” and lose the benefit of §230(c)(2) if
it created the objectionable information. The difference be-
tween this reading and the district court’s is that §230(c)(2)
never requires ISPs to filter offensive content, and thus
§230(e)(3) would not preempt state laws or common-law
doctrines that induce or require ISPs to protect the inter-
ests of third parties, such as the spied-on plaintiffs, for such
laws would not be “inconsistent with” this understanding
of §230(c)(1). There is yet another possibility: perhaps
§230(c)(1) forecloses any liability that depends on deeming
the ISP a “publisher”—defamation law would be a good
example of such liability—while permitting the states to
regulate ISPs in their capacity as intermediaries.
We need not decide which understanding of §230(c) is su-
perior, because the difference matters only when some rule
of state law does require ISPs to protect third parties who
may be injured by material posted on their services. Plain-
tiffs do not contend that GTE “published” the tapes and
pictures for purposes of defamation and related theories of
liability. Thus plaintiffs do not attempt to use theories such
as the holding of Braun v. Soldier of Fortune, 968 F.2d 1110(11th Cir. 1992), that a magazine publisher must use care
to protect third parties from harm caused by the sale of
products or services advertised within its pages, and we
need not decide whether such theories (if recognized by
state law and applied to ISPs) would survive §230(c).
Instead, they say, GTE is liable for “negligent entrustment
of a chattel,” a tort that the Restatement (Second) of Torts
§318 encapsulates thus:
If the actor permits a third person to use . . . chattels
in his possession otherwise than as a servant, he is,
if present, under a duty to exercise reasonable care so
to control the conduct of the third person as to prevent
him from intentionally harming others . . . if the actor
(a) knows or has reason to know that he has the ability
10 No. 02-4323
to control the third person, and (b) knows or should
know of the necessity and opportunity for exercising
such control.
See also Restatement (Second) of Torts §308. The idea is
that if A entrusts his car to B, knowing that B is not com-
petent to drive, then A (if present) must exercise reasonable
care to protect pedestrians and other drivers. Plaintiffs
want us to treat GTE’s servers, routers, and optical-fiber
lines as chattels negligently “entrusted” to Franco and used
to injure others. But GTE did not entrust its computers,
network, or any other hardware to Franco; it furnished a
service, not a chattel.
Plaintiffs do not cite any case in any jurisdiction holding
that a service provider must take reasonable care to prevent
injury to third parties. Consider the Postal Service or
Federal Express, which sell transportation services that
could be used to carry harmful articles. As far as we can
discover, no court has held such a carrier liable for failure
to detect and remove harmful items from shipments. That
likely is why plaintiffs have not sued any delivery service
for transporting the tapes from Franco to the buyers. Sim-
ilarly, telephone companies are free to sell phone lines to
entities such as Franco, without endeavoring to find out
what use the customers make of the service. See, e.g.,
Anderson v. New York Telephone Co., 320 N.E.2d 647 (N.Y.
1974) (no liability for phone company that furnished service
to someone who used the connection to play a defamatory
recording to all callers). Again plaintiffs have not sued any
phone company.
Yet an ISP, like a phone company, sells a communications
service; it enabled Franco to post a web site and conduct
whatever business Franco chose. That GTE supplied some
inputs (server space, bandwidth, and technical assistance)
into Franco’s business does not distinguish it from the les-
sor of Franco’s office space or the shipper of the tapes to its
No. 02-4323 11
customers. Landlord, phone company, delivery service, and
web host all could learn, at some cost, what Franco was
doing with the services and who was potentially injured as
a result; but state law does not require these providers to
learn, or to act as Good Samaritans if they do. The common
law rarely requires people to protect strangers, or for that
matter acquaintances or employees. See generally
Stockberger v. United States, 332 F.3d 479 (7th Cir. 2003).
States have enacted statutes to change that norm in some
respects; Dram Shop laws are good examples. Plaintiffs do
not identify anything along those lines concerning web
hosts. Certainly “negligent entrustment of a chattel” is not
a plausible description of a requirement that service pro-
viders investigate their customers’ activities and protect
strangers from harm. Nor does the doctrine of contributory
infringement, see Hard Rock Café Licensing Corp. v. Con-
cessions Services, Inc., 955 F.2d 1143 (7th Cir. 1992), offer
a helpful analogy. A person may be liable as a contributory
infringer if the product or service it sells has no (or only
slight) legal use, see Sony Corp. of America v. Universal
City Studios, Inc., 464 U.S. 417 (1984); In re Aimster
Copyright Litigation, 334 F.3d 643 (7th Cir. 2003), but
GTE’s web hosting services are put to lawful use by the
great majority of its customers. (This is why ISPs are not
liable as contributory infringers for serving persons who
may use the bandwidth to download or distribute copy-
righted music—and indeed enjoy safe harbors under the
Digital Millennium Communications Act, discussed in
Aimster, unless the ISP has actual notice that a given cus-
tomer is a repeat infringer.) For the same reason, plaintiffs’
invocation of nuisance law gets them nowhere; the ability
to misuse a service that provides substantial benefits to the
great majority of its customers does not turn that service
into a “public nuisance.”
Maybe plaintiffs would have a better argument that, by
its contracts with Franco, GTE assumed a duty to protect
12 No. 02-4323
them. No third-party-beneficiary argument has been ad-
vanced in this court, however, so we need not decide how it
would fare. None of the arguments that plaintiffs now make
shows that any of the states where their colleges and
universities were located requires suppliers of web hosting
services to investigate their clients’ activities and cut off
those who are selling hurtful materials, so the district
court’s judgment is
AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—10-21-03