EBay Found Not Liable for Users’ Statements

In a ruling that limits EBay Inc.’s responsibility for the actions of its users, a Los Angeles County Superior Court judge has dismissed a libel claim against the Internet auction site made by a shopper who was criticized by a merchant.

The dismissal last week by Superior Court Judge Thomas L. Willhite Jr. suggests EBay can’t be held responsible for postings made by buyers and sellers on its site.

“As long as they’re not the ones who provide the content, then they’re okay,” said Eugene Volokh, a professor at the UCLA School of Law who specializes in 1st Amendment issues.

Roger M. Grace sued EBay in January, claiming he was defamed on the site by a merchant who sold him six vintage entertainment magazines in December. Grace, a Los Angeles-based publisher of several California newspapers, said he received negative feedback from Tim Neeley, who sells Hollywood memorabilia. According to the court ruling, the feedback -- a form of commentary that allows EBay buyers and sellers to leave messages regarding their transactions -- said, “Complaint: Should be banned from EBay!!!! Dishonest all the way!!!”

At issue in the case was whether San Jose-based EBay is responsible for what is posted on its feedback forum, as a newspaper could be for libelous quotes it publishes, or whether the site is simply a conduit for information, like a phone company or a bulletin board.

The judge ruled that EBay should not be held accountable for comments posted by users because the federal Communications Decency Act of 1996 says an “interactive computer service” provider is not the publisher of information posted by its users.

The decision “affirms the principle that EBay is not responsible for acts of third-party users, including the feedback area,” said company spokesman Chris Donlay, noting that other recent court decisions have freed the company from liability for items sold on the site.

Grace, the editor in chief and general counsel for the Metropolitan News-Enterprise and other legal newspapers, called the ruling “erroneous.” He contends EBay, unlike Internet service providers, is a publisher and should be held accountable for its content.

“I’m not concerned with some potshots taken by a local character,” said Grace, who said he plans to appeal. “I’m concerned about EBay’s arrogance in saying that no matter how clearly the matter is defamatory, we’re protected by immunity.”

In fact, there is uncertainty over whether companies that operate Web sites should be treated the same as Internet service providers, said Erwin Chemerinsky, a professor at the USC School of Law who specializes in constitutional issues.

Should EBay “be regarded like a bulletin board that just provides a forum?” he asked. “Or should we regard them much more like a newspaper?”

Experts say Grace has a stronger claim against Neeley, who posted the negative comments. Indeed, Grace said he has sued Neeley. Neeley could not be reached for comment.

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Times wire services were used in compiling this report.