The Communications Decency Act protects website publishers from lawsuits based on defamatory comments submitted by their users, even when those comments are reposted by the website’s administrators to a more prominent position, the New York Court of Appeals has ruled in a 4-3 decision.

In upholding a lower court’s dismissal of real estate broker Christakis Shiamili’s defamation suit against the operators of a defunct blog that promised to expose the "underbelly of Manhattan Real Estate," New York’s highest court said the defendants had only acted as editors and publishers, rather than creators, of most of the disputed content.

In February 2008, the blog — allegedly created and administered by employees of a rival brokerage firm — reposted a comment by an anonymous user who claimed Shiamili, the founder and CEO of Ardor Realty Corp., mistreated employees and was racist and anti-Semitic.

The commenter claimed that Shiamili had referred to one of Ardor Realty’s agents as "his token Jew."

In republishing the comment as a standalone post, website administrator Ryan McCann of The Real Estate Group of New York Inc. (TREGNY) allegedly headlined the post "Ardor Realty and Those People," and added an image of Jesus Christ with Shiamili’s face and the words, "Chris Shiamili: King of the Token Jews."

That post drew further comments that included more allegedly defamatory statements, including claims that Shiamili failed to pay office bills, physically abused his wife, and used his office space to commit adultery with prostitutes, the lawsuit alleged.

"Although the statements at issue are unquestionably offensive and obnoxious, defendants are nonetheless shielded from liability" by section 230 of the Communications Decency Act, Judge Carmen B. Ciparick wrote for the majority.

Passed by lawmakers in 1996, the act protects interactive websites that facilitate the creation of user-generated content, mandating that the sites cannot be treated as the "publisher or speaker" of information provided by others.

"Creating an open forum for third-parties to post content — including negative commentary — is at the core of what section 230 (of the Communications Decency Act) protects," Ciparick wrote.

The defendants did not become content providers by creating a new post out of one of the comments, she said.

Writing for the three dissenting judges, Chief Judge Jonathan Lippman called it "unfortunate" that the court — in its first case interpreting the Communications Decency Act — had "shielded defendants from the allegation that they abused their power as website publishers to promote and amplify defamation targeted at a business competitor."

If the defendants were accused only of merely reposting "these outrageous statements" to a more prominent position on the website, that might plausibly be considered an exercise of "a publisher’s traditional editorial functions," Lippman said, citing a previous case.

But Lippman argued that the defendants "embellished" the comments by adding a headline, editor’s note, and the "large, doctored photograph of (Shiamili) depicted as Jesus Christ."

Ciparick noted that Shiamili’s lawsuit did not allege that the headline or subhed allegedly created by McCann were defamatory. The illustration that accompanied the post was not defamatory, as "no reasonable reader could have concluded that it was conveying facts about the plaintiff," Ciparick wrote.

Lippman agreed that no reasonable reader would have concluded that the blog’s publishers "were asserting that (Shiamili) was in fact Jesus Christ or the king of ‘token’ Jewish real estate agents."

But a reasonable reader "might very well have concluded that the site editor was endorsing the truth of the appended (comment), which asserted that plaintiff was an anti-Semite who employed a single Jewish Realtor in order to maintain business with Jewish landlords," Lippman argued.

Lippman said he was not convinced that the defendants "served only as a passive conduit of this defamatory material" and should therefore be protected from defamation claims by the Communications Decency Act.

The allegation that the defendants appended the illustration to the reposted comment, if proven, should alone have placed the defendants outside of the protection of the act, Lippman wrote.

Although the website is now defunct, many posts — including those disparaging other brokers — have been preserved by the Internet Archive’s "Wayback Machine." The defendants in the case maintain that only McCann, who reported to TREGNY principal and Chief Operating Officer Daniel Baum, administered the website.

TREGNY has since merged with another brokerage firm, the Developers Group, and the merged firms are known as MNS. McCann, who is currently employed at MNS, and Baum, who is not, declined to comment through their lawyer.

Andrew I. Mandelbaum, the attorney who won a dismissal of the case for TREGNY/MNS in a lower appellate court, called the New York Court of Appeals ruling upholding that decision "a major victory for websites and blog operators."

New York’s highest court is now on the record as interpreting the Communications Decency Act as protecting websites from comments posted by comments by third parties, he said. But that "in no way changes ability of individuals who feel they were wronged to seek recourse against those (anonymous commenters) who actually did the posting," Mandelbaum noted.

Shiamili could file a motion to re-argue the case before the New York Court of Appeals, or ask the U.S. Supreme Court to review the case. Or he could attempt to ascertain the identities of the anonymous commenters on the site and file suit against them.

Shiamili told Inman News that one of the ways the site came to his attention was that a prospective employee told him she had decided not to join the firm because of what she saw on the blog. He said the blog harmed his business in other ways, but declined to offer further details, saying that could be the subject of further litigation.

In general, Shiamili said he’s all for consumers having forums to discuss real estate on the Internet, but that the blog in question was unique because it was allegedly operated by a direct competitor.

"In my opinion, the court should have asked what was the purpose of the website," he said. "For years, they were going after many other competitors."

If the Communications Decency Act does not allow courts to take such factors into consideration, Shiamili said, Congress should amend it to give businesses the right to defend themselves against veiled attacks by competitors.

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