## Facts

- Stratton Oakmont, Inc., and its president Daniel Porush alleged they were defamed by statements posted by an anonymous user on Prodigy’s “Money Talk” bulletin board.
- The posts allegedly accused Stratton Oakmont and Porush of criminal fraud and other misconduct in connection with a public offering and asserted they engaged in dishonesty as a business practice.
- Prodigy operated a nationwide online service with millions of subscribers and multiple bulletin boards, including “Money Talk.”
- Prodigy promulgated content guidelines for its bulletin boards, used screening software to filter offensive language, and utilized “Board Leaders” to participate in discussions and encourage use.
- Charles Epstein served as the “Board Leader” for “Money Talk” during the relevant period pursuant to a contractual relationship with Prodigy.
- Plaintiffs brought defamation and related claims against Prodigy and unidentified Doe defendants, alleging Prodigy was liable as a publisher of the posts.
- Plaintiffs moved for partial summary judgment on whether Prodigy was a publisher for libel purposes and whether Epstein acted as Prodigy’s agent.

## Issues

1. Whether an online service that imposed content rules and moderated posts should be treated as a “publisher,” rather than a “distributor,” for defamation liability arising from user-generated postings.
2. Whether the board leader for a moderated bulletin board acted as the service provider’s agent such that his relevant acts and omissions were attributable to the provider.

## Decision

- The court granted plaintiffs’ motion for partial summary judgment.
- The court held, as a matter of law, that Prodigy was a publisher of the statements posted on its “Money Talk” bulletin board for purposes of plaintiffs’ libel claims.
- The court held that Charles Epstein acted as Prodigy’s agent for the relevant acts and omissions at issue.

## Legal Principles

- In defamation, a publisher may be subject to liability for defamatory content it publishes, while a distributor is generally liable only upon proof of knowledge or reason to know of the defamation.
- An online service that holds itself out as exercising editorial control and implements moderation measures (such as content guidelines, contracted moderators, and filtering tools) may be treated as a publisher rather than a passive distributor for libel purposes.
- Where a service contracts with and authorizes a board leader to participate in and manage aspects of a bulletin board, the board leader may act with actual and apparent authority sufficient to establish agency, making the leader’s relevant conduct attributable to the service.

## Conclusion

The court ruled that Prodigy’s asserted and implemented control over bulletin-board content supported treating it as a publisher for defamation claims based on user posts, and it attributed the board leader’s relevant conduct to Prodigy under agency principles, granting partial summary judgment on those issues.


Stratton Oakmont, Inc. v. Prodigy Servs. Co., 23 Media L. Rep. 1794 (N.Y. Sup. Ct. May 24, 1995)