Denial of CDA immunity defense not immediately appealable

Originally published by Andre Hanson (US).

On November 1, 2016, the U.S. Court of Appeals for the Tenth Circuit ruled that the Communications Decency Act (CDA) provides immunity from liability, not from suit, precluding interlocutory appellate jurisdiction under the collateral order doctrine. General Steel Domestic Sales, L.L.C. v. Chumley, et al., Case No. 15-1293, __ F.3d __, 2016 WL 6441028.

The underlying case concerned two competing Colorado-based prefabricated steel building companies: General Steel Domestic Sales, LLC (“General Steel”) and Atlantic Building Systems, LLC, d/b/a Armstrong Steel Corporation (“Armstrong”). Armstrong’s on-line advertising campaign, entitled “Industry Related Legal Matters,” comprised posts which “summarize[d], quote[d], and reference[d] lawsuits involving General Steel.” 2016 WL 6441028, at *1. Alleging that some of these posts contained libel, General Steel sued under state law tort theories, and for unfair competition under the Lanham Act.

Armstrong brought a motion for summary judgment claiming that it was immunized from liability under Section 230 of the CDA, 47 U.S.C. § 230. Section 230 provides protections for on-line content providers, directing that:

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

Id. at § 230(c)(1). With respect to “civil liability,” the CDA further states:

No provider or user of an interactive computer service shall be held liable on account of . . . any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1).

Id. at § 230(c)(2)(B). While contrary state laws are expressly preempted, id. at § 230(e)(3), the CDA directs that it shall not “be construed to limit or expand any law pertaining to intellectual property,” 47 U.S.C. § 230(e)(2) .

Citing these provisions, the trial court granted in part and denied in part Armstrong’s motion for summary judgment, holding that the defendant was entitled to immunity for three posts because those posts “simply contained links to content created by third parties.” 2016 WL 6441028, at *1 (emphasis added). On the other hand, the court held Armstrong was not entitled to immunity for advertising it developed itself “by selectively quoting and summarizing court documents in a deceiving way.” Id. Citing § 230(e)(2)’s “law pertaining to intellectual property” exclusion, the district court held that “the CDA’s immunity provision does not apply to the Lanham Act.” Id. (emphasis added.)

In August 2015, Armstrong filed an interlocutory appeal of the summary judgment order, claiming the order was immediately appealable under the collateral order doctrine.  On November 1, 2016, the Tenth Circuit concluded it lacked jurisdiction and dismissed the appeal.

With statutory exceptions for enumerated interlocutory orders, such as grants or denial of injunctions, see 28 U.S.C. § 1292(a), and discretionary interlocutory appeals authorized by the district court and allowed by the appellate court, 28 U.S.C. § 1292(b), the federal circuit courts of appeal generally only have appellate jurisdiction over “final decisions of the district courts of the United States . . . .” 28 U.S.C. § 1291. The collateral order doctrine arose out of Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). as a judge-crafted exception to § 1291’s jurisdictional limitation, allowing appellate review of interlocutory orders which do not finally conclude a case in its entirety, but which nevertheless:

1. conclusively determine the disputed question,
2. resolve an important issue completely separate from the merits of the action, and
3. is effectively unreviewable on appeal from a final judgment.

P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144 (1993). Though narrowly construed, orders rejecting dismissal motions based on immunity to suit, such as a claim of qualified immunity in a civil rights action, generally qualify as “final” and appealable collateral orders under this doctrine. E.g., Mitchell v. Forsyth, 472 U.S. 511, 526 (1985).

The Tenth Circuit focused its jurisdictional analysis on whether the protections offered by the CDA amounted to immunity from suit or immunity from liability. On the one hand, a denial of immunity from suit was unreviewable in not immediately appealable, and thus qualified as a “final” order under the Cohen doctrine. “If, however, Section 230 of the CDA only protects against liability, then we lack jurisdiction because a district court order denying liability is certainly reviewable on appeal.” 2016 WL 6441028, at *2 (citing Lauro Lines S.R.L. v. Chasser, 490 U.S. 495, 500 (1989)).

The court ultimately “conclude[d] that Section 230 of the CDA provides immunity only from liability, not suit.” Id. The court first observed that “[t]o find that the CDA bars suit, the CDA must contain ‘an explicit statutory or constitutional guarantee that trial will not occur.’” Id. (quoting Midland Asphalt Corp. v. United States, 489 U.S. 794, 801 (1989)). Rejecting the argument that an express preemption provision constitutes such a bar, the court held that “[t]he CDA does not contain such language.” Id. Moreover, because “[i]mmunity from suit is a benefit typically only reserved for governmental officials.” the court was “hesitant to extend immunity from suit to a private party without a statutory basis.” Id. at *3. The appellate court did not address the district court’s determination that immunity from liability did not extend to Lanham Act claims. Id.

On August 21, 2015, shortly after the Notice of Appeal had been filed, the district court had granted Armstrong’s motion to vacate a trial setting (scheduled for August 24, 2015), and stayed the case pending resolution of the appeal. In March 2016, the court sua sponte denied all pending motions without prejudice and administratively closed the case. On November 8, 2016, about a week after the Tenth Circuit dismissed the appeal, the parties stipulated to the dismissal of the case with prejudice.

Commentary

General Steel reflects an interesting development in authority construing § 230 of the CDA. Reaffirming the limited scope of the Cohen collateral order doctrine, the Tenth Circuit’s decision should make unhappy defendants hesitate before seeking an appeal-as-of-right of an order denying a dispositive motion brought under the immunity provisions of the CDA. Following the parties’ stipulated dismissal, it appears that the district court’s ruling that § 230 does not apply to Lanham Act claims will not be tested on appeal.

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