Record $11.3 Million Verdict Highlights Internet Exposures
What is reportedly the largest verdict to date in a case involving blog or message-board postings on the internet was returned in a Florida case this month: $11.3 million. Some observers think the verdict represents a trend in this type of case and that this decision itself will stimulate more litigation over online postings.
The size of the award may well be skewed because the defendant was unable to pay for a lawyer to defend herself. But that fact, too, could become a common factor in this type of case. According to news reports, Carey Bock of Mandeville, La. posted negative messages on a website that serves parents of troubled teens. Bock’s comments were about the plaintiff, Sue Scheff of Weston, Fla. Scheff operates a referral service to help parents of troubled children, and Bock accused Scheff of being a “crook” and a “fraud.”
Because many internet postings are made by individuals rather than companies, and because persons making postings may be pulled into litigation in distant jurisdictions, it may not be unusual that this kind of case will be lightly defended, if defended at all. Bock’s difficulty defending herself was further complicated by Hurricane Katrina.
Another interesting facet of this case is that punitive damages constituted almost half of the total award. An insurance policy that covers punitive damages has long been of key importance to defamation defendants.
The Media Law Resource Center has documented more than 50 blogging-type cases across the U.S. One case, from South Dakota, resulted in a $3 million award that withstood appeal.
The availability of specific coverage for blogging exposures appears to be very thin across the marketplace, though some companies may include the exposures in a broader policy. Euclid Managers can provide insurance protection to Corporate Bloggers through our coverage forms. For more information about blogging exposures, read our previous posts : Hot Prospects for Internet Liability Insurance and Corporate Blogging Adds One More Risk to a Company’s Internet Exposures.

Reader Comments (2)
Depending on the circumstances, however, in an online defamation case a federal statute may be relevant to the outcome. The Communications Decency Act (CDA) was enacted in 1996, and a portion of it was included in the legislation largely in response to a very poor court decision holding a company that provided an online forum liable for a posting by someone else who was not an employee. Although the company defendant involved in that case ultimately prevailed, through a somewhat unusual circumstance the court’s decision stood on the record.
Congress included Section 230 in the CDA to provide immunity to providers and users of an interactive computer service as to information that is provided by another information content provider. For example, AOL would not be liable for a posting to one of its bulletin boards made by an AOL customer. That immunity has been attacked repeatedly in litigation but has proven through the years to be a resilient and powerful defense tool. Most recently the California Supreme Court applied the immunity in a case called Barrett v. Rosenthal (http://en.wikipedia.org/wiki/Barrett_v._Rosenthal).
The twist under the facts you described, is that not only is the company the employer of the person who posted the offending item, but it is also the host of the site. It is entirely likely the company would be named as a defendant along with the party who made the posting, assuming that person could be identified. The action against the company theoretically could attempt to establish liability of the employer on two fronts: as employer and as host of the site. The company could be expected to argue that in its capacity as the provider of an interactive online service, it is immune from a defamation action under the terms of the CDA. Absent some unexpected fact, that should be a strong defense. On the other front, if the facts permitted, the company could be expected to argue that it was not responsible as an employer for the act of posting by the employee because the posting was done outside the course and scope of the poster’s duties. We would expect the outcome of this issue to be fact-dependent, turning on the nature of the employee’s duties and the content of the posting. In addition to asserting that it was not responsible for the employee’s action, the company could argue that the posting was not defamatory to begin with, again assuming the facts permitted.