CDA Provides Immunity from Liability, Not Suit: Tenth Circuit | Practical Law

CDA Provides Immunity from Liability, Not Suit: Tenth Circuit | Practical Law

In General Steel Domestic Sales, LLC v. Chumley, in a matter of first impression, the US Court of Appeals for the Tenth Circuit ruled that the immunity under the Communications Decency Act (CDA) bars liability for claims relating to third-party content, but does not bar suit.

CDA Provides Immunity from Liability, Not Suit: Tenth Circuit

Practical Law Legal Update w-004-3718 (Approx. 3 pages)

CDA Provides Immunity from Liability, Not Suit: Tenth Circuit

by Practical Law Intellectual Property & Technology
Published on 03 Nov 2016 • USA (National/Federal)
In General Steel Domestic Sales, LLC v. Chumley, in a matter of first impression, the US Court of Appeals for the Tenth Circuit ruled that the immunity under the Communications Decency Act (CDA) bars liability for claims relating to third-party content, but does not bar suit.
On November 1, 2016, in General Steel Domestic Sales, LLC v. Chumley, the US Court of Appeals for the Tenth Circuit dismissed an interlocutory appeal from the US District Court for the District of Colorado, ruling that, in a matter of first impression for the Tenth Circuit, Section 230 of the Communications Decency Act (CDA) provides immunity from liability, but not from suit ( (10th Cir. Nov. 1, 2016)).
General Steel Domestic Sales, LLC and Armstrong Steel Corp. are competing prefabricated steel building companies. Armstrong and its CEO, Ethan Chumley, a former General Steel employee, began an online negative advertising campaign against General Steel. Armstrong created negative advertisements that would appear when internet users searched for “General Steel.”
General Steel filed suit against Armstrong and Chumley claiming:
  • Unfair competition and unfair trade practices under the Lanham Act.
  • Libel and libel per se.
  • Intentional interference with prospective business advantage.
  • Civil conspiracy.
Armstrong and Chumley moved for summary judgment, claiming immunity under Section 230 of the CDA (47 U.S.C. § 230). The district court:
  • Granted immunity to Armstrong Steel for the advertisements that only contained links to content created by third parties.
  • Denied immunity to Armstrong Steel for the advertisements that it created and developed directly.
Armstrong filed an interlocutory appeal and argued that the Tenth Circuit has jurisdiction under the collateral order doctrine to review the denial of immunity under the CDA. This required the Tenth Circuit to determine, in a matter of first impression, whether the CDA provides either:
  • Immunity from suit, which would permit an interlocutory appeal of the district court's denial of immunity.
  • Only immunity from liability, which would not meet the requirement of the collateral order doctrine that a non-final decision be effectively unreviewable on appeal.
In considering whether the CDA bars suit, the Tenth Circuit explained that:
  • To provide immunity from suit, a statute must contain an explicit guarantee that suit cannot be brought.
  • The following language in § 230(e)(3) is merely a preemption provision, not an explicit bar to suit:
"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."
The Tenth Circuit concluded that the CDA only provides immunity from liability, not from suit, and therefore that it lacks appellate jurisdiction over the district court's denial of immunity under the CDA.