Centers of Excellence: Blogging & Podcasting

The first lawsuit involving the use of Twitter was filed in Chicago last week.

The lawsuit was filed by a realty company in connection with one of its tenant’s tweets. Specifically, the tenant arguably stated “Who said sleeping in a moldy apartment was bad for you? Horizon realty thinks it’s okay.” The realty company sued the tenant for libel. While the fact that the case filed has been widely reported, I would like to discuss its merits.

The first important take-away from this case is that any statement, no matter how short, could be subject to defamation claims which companies need to keep in mind when allowing their employees to use social networking. A good social networking policy should provide guidance and training to employees about the need to be truthful and to disclose that they are blogging on behalf of the company; monitor the employees to confirm compliance; and promptly remove postings that do not comply with policy.

Second, I believe this case may turn on whether Horizon Realty is a public figure. In the landmark case, New York Times v. Sullivan, the U.S. Supreme Court held that some libelous speech is protected by the first amendment. Specifically, public figures who allege libel must prove actual malice in order to recover damages. In Gertz v Robert Welch, Inc., the Supreme Court further defined what constituted a public figure. 418 US 323 (1974). Since Gertz, hundreds of state and federal courts have addressed the issue.

At first blush, I would submit that Horizon Reality may be deemed a public figure, and therefore it must prove actual malice to recover damages against the tenant. In such case, it would be very hard for Horizon Realty to prove the tenant acted with actual malice, and as such the case may be dismissed at the motion to dismiss stage. But, its appears that states have split decisions on whether companies like the realty management here are public figures.

On one hand, a California court found that a real estate developer was a public figure because it participated in a controversy regarding a public ordinance for a building project. Okun v Superior Court of Los Angeles County, 29 Cal 3d 442 (1981). On the other hand, a New York court found that a land sales company was not a public figure for the purposes of discussing a land fraud controversy. Lake Havasu Estates, Inc. v Reader’s Digest Assoc., 441 F Supp 489 (SDNY 1977). Notably, the New York court believed that the land sales company did not seek interviews, nor was it a publicly held company, and was therefore not a public figure.

In this case, one might argue that Horizon Reality is not a public figure (and Horizon should not have to prove actual malice), because it is not a publicly traded company, nor it did not seek interviews or other media attention regarding the quality or fitness of its units. On the other hand, one may argue that Horizon Realty is a public figure (requiring Horizon to prove actual malice), because it is a registered limited liability company in Illinois, subject to similar benefits as publicly traded Illinois corporations.

Notably, Twitter was not a named party to this lawsuit, because it is protected under the safe harbor provisions of the Communications Decency Act (“CDA”). The CDA states that “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” As such, Twitter would not be treated as the party making the statements in connection with this lawsuit, and would likely be protected as an I.S.P.

These materials have been prepared by Winston & Strawn for informational purposes only. These materials do not constitute legal advice and cannot be relied upon by any taxpayer for the purpose of avoiding penalties imposed under the Internal Revenue Code.