Computer underground Digest Wed May 31, 1995 Volume 7 : Issue 44 ISSN 1004-042X Editors: J

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Computer underground Digest Wed May 31, 1995 Volume 7 : Issue 44 ISSN 1004-042X Editors: Jim Thomas and Gordon Meyer (TK0JUT2@MVS.CSO.NIU.EDU Archivist: Brendan Kehoe Shadow Master: Stanton McCandlish Field Agent Extraordinaire: David Smith Shadow-Archivists: Dan Carosone / Paul Southworth Ralph Sims / Jyrki Kuoppala Ian Dickinson Tibia Editor: Who built the Seven Towers of Thebes? CONTENTS, #7.44 (Wed, May 31, 1995) File 1--The Trivia Winner---- File 2--ACLU Cyber-Liberties Alert #5 File 3--Sen. Feinstein S.2375 (Wiretap bill) File 4--Full text of _Stratton Oakmonth v. Prodigy_ File 5--Prodigy decision location and amateur analysis File 6--Cu Digest Header Info (unchanged since 19 Apr, 1995) CuD ADMINISTRATIVE, EDITORIAL, AND SUBSCRIPTION INFORMATION APPEARS IN THE CONCLUDING FILE AT THE END OF EACH ISSUE. --------------------------------------------------------------------- Date: Tue, 30 May 1995 15:29:25 -1000 From: frankt@PIXI.COM(Frank Tutt) Subject: File 1--The Trivia Winner---- ((MODERATORS' NOTE: And the first who knew it was not a A Monkey.....)) Please pass to your "Trivia Editor": > Trivia Editor: Writer of the song "Daydream Believer Is: ?????? That would be John Stewart, originally with the Kingston Trio, later a solo act from early seventies through ??. Frank Tutt Comin' at ya from Aiea, Hawaii (Consonant-free!) "Consistency is the hog-goblin of little minds" ------------------------------ Date: Fri, 26 May 1995 18:35:05 -0400 From: Lynnclu@AOL.COM Subject: File 2--ACLU Cyber-Liberties Alert #5 ACLU Cyber-Liberties Alert: 05/26/95 Feinstein Amendment Would Censor Online Info About "Explosive Materials" Senator Feinstein (D-CA) has indicated that she will offer an amendment to the broad counter-terrorism bill (an incredibly unconstitutional and anti-liberty bill) now pending in the U.S. Senate. The ACLU opposes the Feinstein amendment as a blatant violation of the First Amendment's free speech guarantees. While the amendment applies to all media, it grew out of Senator Feinstein's vilification of the internet at the Senate's May 11 counter-terrorism hearings. The Feinstein amendment must be **rejected** -- it cannot be "fixed." Join the ACLU, People for the American Way, and others in opposing this amendment. **ACT NOW** Fax, write, or call Senator Feinstein to express your opposition to the amendment. Senator Dianne Feinstein FAX 202/228-3954 Voice 202/224-3841 SH-331 SOB Washington, DC 20510-0504 ----------------------------------- Earlier today, the ACLU faxed the following letter in opposition to the amendment to all U.S. Senators. i--------------------------------------------------------- American Civil Liberties Union Washington National Office 122 Maryland Avenue, NE VIA FAX RE: The Feinstein Amendment on Disseminating Information on Explosives Dear Senator: The American Civil Liberties Union has already communicated its position on the proposed anti-terrorism legislation. Senator Feinstein has indicated she intends to introduce an amendment making a criminal offense out of the dissemination of information about manufacturing explosives. The Feinstein amendment would, for example, make it a felony, punishable by 20 years imprisonment, for any person "to disseminate by any means information pertaining to, in whole or in part, the manufacture of explosive materials if the person . . . reasonably should know that" the materials are likely to be used to further a federal crime. Because it covers pure speech, without even a focus on a particularized threat of violence, the Feinstein amendment is clearly unconstitutional. In fact, it is difficult to contemplate an amendment in this area that would be more demonstrably unconstitutional. The amendment is also unnecessary. Current law, 18 U.S.C.sec. 231, makes it a felony to teach explosives to any person if it is known or should have been known that that person intended to use the explosives unlawfully in furtherance of a civil disorder. Current law, however, focuses on a particular person using the information for a particular criminal purpose. The Feinstein amendment, however, criminalizes merely putting out information -- in print, on radio or television, in cyberspace -- without any requirement of knowledge of the particular would-be criminal or would-be crime. In fact, the media coverage of the Oklahoma City bombing has left everyone with sufficient knowledge so that everyone could be prosecuted if he or she published information on explosives, regardless of the purpose. Even an article that described how a fertilizer-based bomb was built in order to suggest prophylactic measures to preclude such threats could be the basis of its author's prosecution. Under the Feinstein amendment, all the newspapers and broadcasters who described how bombs are built in the coverage on Oklahoma City could be prosecuted if they ran similar stories again. There are many reasons -- quite distinct from engaging in violence -- why individuals might wish to disseminate information about explosives. These range from county extension agents with suggestions on tree stump removal, to OSHA guidelines on demolition of buildings, to construction company planning excavations, to newspapers reporting on current events. The Feinstein amendment would subject to criminal prosecution the people involved in all these situations -- because, after Oklahoma City all of them would meet the absurdly low standard for criminal culpability in the amendment. As the ACLU, People for the American Way and others have noted: The Feinstein amendment takes the lowest standard used for culpability under the criminal statutes and seeks to apply it to actions the Constitution requires be given the highest level of protection -- the exercise of their right of free speech. Because the Feinstein amendment would criminalize such a broad scope of First Amendment-protected activity, it would also enormously increase the investigative and surveillance authority of the FBI. In order words, the Feinstein amendment would turn a whole host of actions into crimes thereby establishing the criminal predicate for which the FBI guidelines allow an investigation to be pursued. Even worse, the FBI investigates when it merely has a "reasonable indication" that a crime might have been committed. This means that anyone who simply disseminates -- on paper, over the airwaves, or in cyberspace -- information on manufacturing explosives is made subject to investigation by the FBI. This would happen even if the disseminator had no grounds to believe the information could be used for a crime, because the FBI could claim merely to be investigating to see whether a crime had been committed The Feinstein amendment would also have the effect of forcing the internet --as well as libraries, broadcasters and publishers -- to do the impossible task of prescreening the recipients of their information. Such a requirement is obviously impossible to meet. It also destroys the very purpose of both the internet and libraries -- providing the widest possible access to information. The American Civil Liberties Union strongly urges the United States Senate to defeat the Feinstein amendment on disseminating information relating to explosives. Sincerely, Laura Murphy Lee, Director ACLU Washington National Office Donald Haines Legislative Counsel ----------------------------------------------------------------- For more information about the ACLU's Cyber-Liberties efforts and our opposition to the counter-terrorism bill, see our online resources: ACLU Free Reading Room -- gopher:// ACLU Constitution Hall on America Online -- keyword ACLU To request our FAQ, or be added to/dropped from our list, write to ------------------------------ Date: Sat, 27 May 95 23:23:09 -0500 From: Subject: File 3--Sen. Feinstein S.2375 (Wiretap bill) Following is the substance of a letter which I wrote to Senator Dianne Fein- stein regarding S.2375 (the wiretap bill). Those of you who agree with my point of view are welcome to use it as a model for writing to your own senators. May 20, 1995 The Honorable Dianne Feinstein United States Senator, State of California 11111 Santa Monica Blvd. Los Angeles, Ca. 90025 Re: S.2375 Dear Senator Feinstein: I have obtained a copy of the referenced bill for which you voted, and which was passed last year. I have read it with interest. I would like to make the following observations: (1) The words "or lawfully authorized" which appear in section 2604 may seem innocuous, but they in fact constitute a very powerful quantifier -- so powerful, in fact, that they render superfluous the other half of the disjunction in which they appear -- i.e. "any court ordered . . . interception", since court ordered interceptions are obviously a subset of the class of all lawfully authorized acts. (2) Although the bill contains a section of definitions (2601), the expression "lawfully authorized" is not addressed. (3) Little solace is to be had from the fact that the bill requires that a wiretap be effected ". . . only with the affirmative intervention of an individual officer or employee of the carrier.", since such intervention can be obtained by such means as intimidation, bribery or collusion. (Section 2604). (4) The bill contains no provision for the punishment of any federal employee who should succeed in performing an illegal wiretap by means of the technology required by this bill. What this means, in practical terms, is that if I should write a letter to the editor of my local paper in which I criticize Attorney General Reno for her handling of the Waco, Texas tragedy, and recommend that she be dismissed from her position and prosecuted for the unwarranted deaths of the men, women and children who died there, and Ms. Reno should learn of this letter, she could then go on a "fishing expedition" by having my phone tapped in an attempt to retaliate against me. She could further claim that she had the legal right to require such a wiretap, since she is the lawfully appointed Attorney General. In the unlikely event that a court should find that Ms. Reno acted unlawfully, such a finding would be essentially meaningless, since Congress has provided no penalty for an illegal wiretap carried out by a federal employee. I cannot believe that you would knowingly subject the people of the State of California to the potential for such abuse. I prefer to think that you did not fully understand the implications of this bill at the time you voted for it. I would like to see the law which emerged from this bill rescinded in its entirety. Failing that, I believe it should be amended so that a wiretap can be lawfully performed only if a judge has issued a court order authorizing it -- no exceptions. In addition, I believe a section should be added requiring severe penalties for any employee of the federal government who succeeds in performing a wiretap without such authorization. I would recommend a minimum ten year prision term, a minimum $50,000 fine and the forfeiture of all pension and other benefits which would otherwise appertain to such an employee. Since this letter is concerned with a matter of public policy, I reserve the right to place it, along with any reply which you may choose to provide me, on the Internet. Thank you for considering my opinions. Sincerely, Paul Hinderman ------------------------------ Date: 29 May 1995 13:07:53 -0400 From: kadie@EFF.ORG(Carl M. Kadie) Subject: File 4--Full text of _Stratton Oakmonth v. Prodigy_ [ found this at There is now also a copy at The _Cubby v. CompuServe_ decision is also on-line: and - Carl] ========================================================= SUPREME COURT - STATE OF NEW YORK Present: HON. STUART L. AIN Justice TRIAL/IAS, PART 34 NASSAU COUNTY STRATTON OAKMONTH, INC. and DANIEL PRUSH, Plaintiff(s), INDEX No. 31063/94 -against- MOTION DATE: 3/10/95 PRODIGY SERVICES COMPANY, a Partnership of Joint Venture with IBM CORPORATION and SEARS-ROEBUCK & COMPANY, "JOHN DOE" AND "MARY DOE", Defendant(S). The following papers read on this motion: Plaintiffs' Notice of Motion & Exhibits 1 Plaintiff's Supporting Exhibits P & O (filed separately under seal pursuant to a confidentiality agreement) 1A Plaintiffs' Memo of Law in Support 2 Appendix to Plaintiffs' Memo of Law 3 Defendant's Opposing Affidavit and Exhibits 4 Defendant's Memo of Law in Opposition 5 Reply Affidavit 6 Reply Memo of Law 7 Upon the foregoing papers, it is ordered that this motion by Plaintiffs for partial summary judgment against Defendant PRODIGY SERVICE COMPANY ("PRODIGY") is granted and this Court determines, as a matter of law, the following two disputed issues as follows: (I) that PRODIGY was a "publisher" of statements concerning Plaintiffs on its "Money Talk" computer bulletin board for the purposes of Plaintiffs' libel claims; and, (ii) that Charles Epstein, the Board Leader of PRODIGY's "Money Talk" computer bulletin board, acted as PRODIGY's agent for the purposes of the acts and omissions alleged in the complaint. At issue in this case are statements about Plaintiffs made by an unidentified bulletin board user or "poster" on PRODIGY's "Money Talk" computer bulletin board on October 23rd and 25th of 1994. These statements included the following: (a) STRATTON OAKMONTH, INC. ("STRATTON"), a securities investment banking firm, and DANIKI PORUSH, STRATTON's president, committed criminal and fraudulent acts in connection with the initial public offering of stock of Solomon-Page Ltd., (b) the Solomon-Page offering was a "major criminal fraud" and "100% criminal fraud"; (c) PORUSH was "seen to be proven criminal"; and, (d) STRATTON was a "cult of brokers who either lie for a living or get fired." Plaintiffs commenced this action against PRODIGY, the owner and operator of the computer network on which the statements appeared, and the unidentified party who posted the aforementioned statement. The second amended complaint alleges ten (10) causes of action, including claims for per se libel. On this motion, "in order to materially advance the outcome of this litigation" (Zamansky affidavit, par. 4), Plaintiffs seek partial summary judgment on two issues, namely: (1) whether PRODIGY may be considered "publisher" of the aforementioned statements; and, (2) whether Epstein, the Board Leader for the computer bulletin board on which the statements were posted, acted with actual and apparent authority as PRODIGY's "agent" for the purpose of the claims in this action. By way of background, it is undisputed that PRODIGY's computer network has at least two million subscribers who communicate with each other and with the general subscriber population on PRODIGY's bulletin boards. "Money Talk" the board on which the aforementioned statements appeared, in allegedly the leading and most widely read financial computer bulletin board in the United States, where members can post statements regarding stocks, investments and other financial matters. PRODIGY contracts with bulletin Board Leaders, who, among other things, participate in board discussions and undertake promotional efforts to encourage usage and increase users. The Board Leader for "Money Talk" at the time the alleged libelous statements were posted was Charles Epstein. PRODIGY commenced operations in 1990. Plaintiffs base their claims that PRODIGY is a publisher in large measure on PRODIGY's stated policy, starting in 1990, that it was a family oriented computer network. In various national newspaper articles written by Geoffrey Moore, PRODIGY's Director of Market Programs and Communications, PRODIGY held itself out as an online service that exercised editorial control over the content of messages posted on its computer bulletin boards, thereby expressly differentiating itself from its competition and expressly likening itself to a newspaper. (see, Exhibits I and J to Plaintiffs' moving papers.) In one article PRODIGY stated: "We make no apology for pursuing a value system that reflects the culture of the millions of American families we aspire to serve. Certainly no responsible newspaper does less when it carries the type of advertising it published, the letters it prints, the degree of nudity and unsupported gossip its editors tolerate." (Exhibit J.) Plaintiffs characterize the aforementioned articles by PRODIGY as admissions (see, Dettner v Pokoik, 81 AD2d 572, app. demd. 54 NY2d 750) and argue that, together with certain documentation and deposition testimony, these articles establish Plaintiffs' prima facie case. In opposition, PRODIGY insists that its policies have changed and evolved since 1990 and that the latest article on the subject, dated February, 1993, did not reflect PRODIGY's policies in October, 1994, when the allegedly libelous statements were posted. Although the eighteen month lapse of time between the last article and the aforementioned statements is not insignificant, and the Court is wary of interpreting statements and admissions out of context, these considerations go solely to the weight of this evidence. Plaintiffs further rely upon the following additional evidence in support of their claim that PRODIGY is a publisher: (A) promulgation of "content guidelines" (the "Guidelines" found at Plaintiff's Exhibit F) in which, inter alia, users are requested to refrain from posting notes that are "insulting" and are advised that "notes that harass other members or are deemed to be in bad taste or grossly repugnant to community standards, or are deemed harmful to maintaining a harmonious online community, will be removed when brought to PRODIGY's attention"; the Guidelines all expressly state that although "Prodigy is committed to open debate and discussion on the bulletin boards, ... this doesn't mean that 'anything goes'"; (B) use of a software screening program which automatically prescreens all bulletin board postings for offensive language; (B) the use of Board Leaders such as Epstein whose duties include enforcement of the Guidelines, according to Jennifer Ambrozek, the Manager of PRODIGY's bulletin boards and the person at Prodigy responsible for supervising the Board Leaders (see Plaintiffs' Exhibit R, Ambrozek deposition transcript. at p. 191) and (b) testimony by Epstein as to a tool for Board Leaders known as an "emergency delete function" pursuant to which a Board Leader could remove a note and send a previously prepared message of explanation "ranging from solicitation, bad advice, insulting, wrong topic, off topic, bad taste, etcetera." (Epstein deposition Transcript, p. 52). A finding that PRODIGY is a publisher is the first hurdle for Plaintiffs to overcome in pursuit of their defamation claims because one who repeats or otherwise republishes a libel is subject to liability as if he had originally published it. In contrast, distributors such as book stores and libraries may be liable for defamatory statements of others only if they knew or had reason to know of the defamatory statement at issue. A distributor or deliverer of defamatory material is considered a passive conduit and will not be found liable in the absence of fault. However, a newspaper, for example, is more than a passive receptacle or conduit for news, comment and advertising. [as to the content of the paper constitute Miami Herald Publishing Co. v Tornillo, 418 US 241, 258.] The choice of material to go into a newspaper and the decisions made as to the content of the paper constitute the exercise of editorial control and judgment. (Id.)., and with this editorial control comes increased liability. (See Cubby, supra.) In short, the critical issue to be determined by this Court is whether the foregoing evidence established a prime facie case that PRODIGY exercised sufficient editorial control over its computer bulletin boards to render it a publisher with the same responsibilities as a newspaper. Again, PRODIGY insists that its former policy of manually reviewing all messages prior to posting was changed "long before the messages complained of by Plaintiffs were posted". (Schneck affidavit, par. 4.) However, no documentation or detailed explanation of such a change, and the dissemination of news of such a change, has been submitted. In addition, PRODIGY argues that in terms of sheer volume--currently 60,000 messages a day are posted on PRODIGY bulletin boards--manual review of messages is not feasible. While PRODIGY admits that Board Leaders may remove messages that violate its Guidelines, it claims in conclusory manner that Board Leaders do not function as "editors". Furthermore, PRODIGY argues generally that this Court should not decide issues that can directly impact this developing communications medium without the benefit of a full record, although it fails to describe what further facts remain to be developed on this issue of whether it is a publisher. As for legal authority, PRODIGY relies on the Cubby case, supra. There the defendant CompuServe was a computer network providing subscribers with computer related services or forums including an online general information service or "electronic library". One of the publications available on the Journalism Forum carried defamatory statements about the Plaintiff, an electronic newsletter. Interestingly, an independent entity named Cameron Communications, Inc. ("CCI") had "contracted to manage, review, create, delete, edit and otherwise control the contents of the Journalism Forum in accordance with editorial and technical standards and conventions of style as established by CompuServe". The Court noted that CompuServe had no opportunity to review the contents of the publication at issue before it was uploaded into CompuServe's computer banks. Consequently, the Court found that CompuServe's product was, "in essence, an electronic for-profit library" that carried a vast number of publications, and that CompuServe had "little or no editorial control" over the contents of those publications. In granting CompuServe's motion for summary judgment, the Cubby court held: A computerized database is the functional equivalent of a more traditional news vendor, and the inconsistent application of a lower standard of liability to an electronic news distributor such as CompuServe than that which is applied to a public library, book store, or newsstand would impose an undue burden on the free flow of information. (776 F. Supp. 135, 140.) The key distinction between CompuServe and PRODIGY is two fold. First, PRODIGY held itself out to the public and its members as controlling the content of its computer bulletin boards. Second, PRODIGY implemented this control through its automatic software screening program, and the Guidelines which Board Leaders are required to enforce. By actively utilizing technology and manpower to delete notes from its computer bulletin boards on the basis of offensiveness and "bad taste", for example, PRODIGY is clearly making decisions as to content (see, Miami Herald Publishing Co. v Tornillo, supra), and such decisions constitute editorial control. (Id.) That such control is not complete and is enforced both as early as the notes arrive and as late as a complaint is made, does not minimize or eviscerate the simple fact that PRODIGY has uniquely arrogated to itself the role of determining what is proper for its members to post and read on its bulletin boards. Based on the foregoing, this Court is compelled to conclude that for the purposes of Plaintiffs' claims in the action, PRODIGY is a publisher rather than a distributor. An interesting comparison may be found in Auvil v. CBS 60 Minutes (supra), where apple growers sued a television network and local affiliates because of an allegedly defamatory investigative report generated by the network and broadcast by the affiliates. The record established that the affiliates exercised no editorial control over the broadcast although they had the power to do so by virtue of their contract with CBS, they had the opportunity to do so by virtue of a three hour hiatus for the west coast differential, they had the technical capability to do so, and they in fact had occasionally censored network programming in the past, albeit never in connection with "60 Minutes". The Auvil court found: It is argued that these features, coupled with the power to censor, triggered the duty to censor. That is a leap which the Court is not prepared to join in. ... ... plaintiffs' construction would force the creation of full time editorial boards at local stations throughout the country which possess sufficient knowledge, legal acumen and access to experts to continually monitor incoming transmissions and exercise on-the-spot discretionary calls or face $75 million dollar lawsuits at every turn. That is not realistic. ... More than merely unrealistic in economic terms, it is difficult to imagine a scenario more chilling on the media's right of expression and the public's right to know. (ACO F. Supp. at 931-932.) Consequently, the court dismissed all claims against the affiliates on the basis of "conduit liability", which could not be established therein absent fault, which was not shown. In contrast, here PRODIGY has virtually created an editorial staff of Board Leaders who have the ability to continually monitor incoming transmissions and in fact do spend time censoring notes. Indeed, it could be said that PRODIGY's current system of automatic scanning, Guidelines and Board Leaders may have a chilling effect on freedom of communication in Cyberspace, and it appears that this chilling effect is exactly what PRODIGY wants, but for the legal liability that attaches to such censorship. Let it be clear that this Court is in full agreement with Cubby and Auvil, Computer bulletin boards should generally be regarded in the same context as bookstores, libraries and network affiliates. [See Edward V. DiLello, Functional Equivalency and the application to Freedom of Speech on Computer Bulletin Boards, 26 Colum. J. Law & Soc. Probs. 199, 210-213 (1993),] It is PRODIGY's own policies, technology and staffing decisions which have altered the scenario and mandated the finding that it is a publisher. PRODIGY's conscious choice, to gain the benefits of editorial control, has opened it up to a greater liability than CompuServe and other computer networks that make no such choice. For the record, the fear that this Court's finding of publisher status for PRODIGY will compel all computer networks to abdicate control of their bulletin boards, incorrectly presumes that the market will refuse to compensate a network for its increased control and the resulting increased exposure. [See, Eric Schlachter, Cyberspace, The Free Market and The Free Marketplace of Ideas: Recognizing Legal Differences in Computer Bulletin Board Functions, 16 Hastings Communication and Entertainment L.J., 87, 138-139.) Presumably PRODIGY's decision to regulate the content of its bulletin boards was in part influenced by its desire to attract a market it perceived to exist consisting of users seeking a "family-oriented" computer service. This decision simply required that to the extent computer networks provide such services, they must also accept the concomitant legal consequences. In addition, the Court also notes that the issues addressed herein may ultimately be preempted by federal law if the Communications Decency Act of 1995, several versions of which are pending in Congress, is enacted. [See, Congressional Quarterly US S 652, Congressional Quarterly US HR 1004, and Congressional Quarterly US S314.] The Court now turns to the second issue presented here, of whether Epstein was PRODIGY's agent for the purposes of the acts and omissions alleged in the complaint. Agency is a legal relationship which results from the manifestation of consent of one person to allow another to act on his or her behalf and subject to his or her control, and consent by the other to so act. [Maurille v. Park Slope U-Maul, 194 AD2d 142; Restatement (Second) of agency *1 .] The starting point for an agency analysis in this case is the "Bulletin Board Leader Agreement" ("the Agreement" found at Exhibit A to Opposition Affidavit of William C. Schneck) between PRODIGY and Epstein. This Agreement sets forth eleven specific responsibilities expected of a Board Leader including (I) the posting of a minimum of 120 notes on the bulletin board each month; (II) working with member Representatives; (III) providing monthly reports and (IV) following any additional procedures provided by PRODIGY. The Agreement also requires prior PRODIGY approval of all promotional efforts. In addition, the Agreement contains the following language Although you will not be a PRODIGY representative, your actions as Board Leader will still reflect on PRODIGY. You will be solely responsible for all of your actions as a Board Leader. While PRODIGY will certainly support your actions as a Board Leader as a general matter (so long as they are not in breach of this Agreement), we will not assume any liability for anything you do (or fail to do) as a Board Leader. You hereby indemnify and agree to hold PRODIGY harmless from and against all claims cost, liabilities judgments ... arising out of or in connection with anything you do ... . . . Being a Board Leader does not make you a PRODIGY Services Company employee, representative or agent, and you agree not to claim or suggest that you are one. PRODIGY relies on this language to extricate itself from any alleged agency relationship with Epstein. However, talismanic language does not determine an agency relationship. [Matter of Shulman Transport Enterprises, Inc., 33 B.R. 383, 365, aff'd 744 Fzd 293.) The Court must look to the substance of the relationship. (fd.) Where one party retains a sufficient degree of direction and control over another, a principal-agent relationship exists. [Garcia v Herald Tribune Fresh Air Fund, Inc., 51 Ad2d *97.] In addition, whether one is an independent contractor is not determinative of whether one is an agent. [Columbia Broadcasting System, Inc. v Stokely-Van Camp, Inc., 522 F2d 369, Ackert v *******, 29 Misc2d 962, aff'd 20 AD2d *50.] As to the substance of the relationship between PRODIGY and its Board Leaders, PRODIGY Security Officer McDowell testified that Board Leaders are required to follow the Guidelines and the PRODIGY performs a "management function" with respect to the activities of the Board Leaders. (McDowell deposition transcript p. 78 found at Exhibit S to the moving papers.) Furthermore, Epstein's Supervisor, Jennifer Ambrozek , testified that PRODIGY reviews the Guidelines with Board Leaders, who are then required to enforce the Guidelines. (Ambrozek deposition transcript pp. 23 and 191, found at Exhibit R to the moving papers.) Board Leaders are also given a 28 page "Bulletin Board Leader Survival Guide" (Exhibit Q to the moving papers), dated October 1994, wherein many technical terms and procedures are explained, and the following caveat is given: IF YOU DON'T KNOW WHAT SOMETHING IS OR WHAT IT'S SUPPOSED TO DO, LEAVE IT ALONE UNTIL YOU CAN ASK. Where the facts are not disputed the question of agency should be resolved by the court. [Plymouth Rock Fuel Corp. v Leucedia Inc., 100 AD2d 842.] This is such a case. The aforementioned testimony by PRODIGY employees and documentation generated by PRODIGY, together with the Guidelines themselves, cannot be disputed by PRODIGY and leave no doubt that at least for the limited purpose of monitoring and editing the "Money Talk" computer bulletin board, PRODIGY directed and controlled Epstein's actions. In reaching this conclusion the Court has taken care not to rely on any testimony by Epstein, inasmuch as it is the conduct of the principal which must create the impression of authority, not the conduct of the agent. [See, Ford v Unity Hosp., 32 NY2d 464, 273.] Based on the foregoing, the Court holds that Epstein acted as PRODIGY's agent for the purposes of the acts and omissions alleged in the complaint. Dated: May 24, 1995 Mineola, New York ------------------------------ From: Subject: File 5--Prodigy decision location and amateur analysis Date: Mon, 29 May 1995 10:37:19 -500 Here is where you can find the judge's decision: I read the whole thing through, slowly, and just finished. While it's not a happy thing for Prodigy, the judge's reasoning seems pretty thorough. The logic states: PUBLISHER QUESTION: 1. Prodigy chose to censor/edit its discussion forums so as to be a "family" oriented BBS. 2. Prodigy willingly and knowingly marketed itself to the public as an edited forum. 3. Therefore, Prodigy has editing control, and the additional responsibilities that go with that control. 4. This distinction makes Prodigy more analogous to a newspaper, than to a "conduit" of information, like a bookstore. 5. Prodigy created its own internal staff of editors, who were required to follow Prodigy policy in their duties. 6. Therefore, Prodigy was actually editing the board, including at the time of the libelous posting. 7. SO: Prodigy is a publisher who published a libelous statement. RULE: Publishers, as people who repeat and perpetuate libelous statements, are liable for their actions as sure as if they wrote the libelous statement themselves. Contrast this with conduits, like bookstores, who do not exercise primary editing control over their wares and so are responsible only if they know, or have reason to know, that there is libelous content therein. AGENCY QUESTION: Prodigy tried to avoid liability by claiming that the board leaders are solely responsible for the content of their forum, and sign a waiver stating that they cannot deny this sole responsibility. The judge nuked that argument: 8. An agency is where one party (the board leader) agrees to act on behalf of another party (Prodigy), subject to the other party's (Prodigy's) control. 9. An agency relationship makes the primary (Prodigy) liable for the actions of the agent b/c of that control. 10. Prodigy put the agent in such a position of control that the substance of the relationship must govern, and not the purported waiver of a relationship: the judge cut through the B/S and didn't let Prodigy weasel out b/c the board leader was acting as Prodigy's agent, and held out to the public as such. 11. Therefore, Prodigy is liable for the actions of the agent, which means that Prodigy is liable for the libelous statements. WHOPPING HUGE CAVEAT The procedural stance of the decision was for a partial summary judgment. What this means is that the fighting parties (Prodigy and the financial house) have stipulated the material facts, and judgment is being issued "as a matter of law" on the relevant parts. I might be wrong about this, but it seemed to me that the financial house might still have to *prove* that the statements were indeed libelous, unless there's already been a finding of fact on that issue that isn't mentioned in the decision. Can somebody confirm whether or not the question of libel has been decided yet, either by a jury or as a matter of law? Thanks for reading this far, if you did. Does my interpretation hold water? ****************** Life is not a brief candle... It is a splendid torch that I want to make burn as brightly as possible before handing it on to future generations. --with thanks to George Bernard Shaw-- Brendon McNamara [] Boston University School of Law ------------------------------ Date: Sun, 19 Apr 1995 22:51:01 CDT From: CuD Moderators Subject: File 6--Cu Digest Header Info (unchanged since 19 Apr, 1995) Cu-Digest is a weekly electronic journal/newsletter. Subscriptions are available at no cost electronically. CuD is available as a Usenet newsgroup: Or, to subscribe, send a one-line message: SUB CUDIGEST your name Send it to LISTSERV@VMD.CSO.UIUC.EDU The editors may be contacted by voice (815-753-0303), fax (815-753-6302) or U.S. mail at: Jim Thomas, Department of Sociology, NIU, DeKalb, IL 60115, USA. 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