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Wednesday, March 18, 2020

Perry on the Law and Economics of Online Republication

Ronen Perry has posted to SSRN The Law and Economics of Online Republication.  The abstract provides:

Jerry publishes unlawful content about Newman on Facebook, Elaine shares Jerry’s post, the share automatically turns into a tweet because her Facebook and Twitter accounts are linked, and George immediately retweets it. Should Elaine and George be liable for these republications? The question is neither theoretical nor idiosyncratic. On occasion, it reaches the headlines, as when Jennifer Lawrence’s representatives announced she would sue every person involved in the dissemination, through various online platforms, of her illegally obtained nude pictures. Yet this is only the tip of the iceberg. Numerous potentially offensive items are reposted daily, their exposure expands in widening circles, and they sometimes “go viral.”

This Article is the first to provide a law and economics analysis of the question of liability for online republication. Its main thesis is that liability for republication generates a specter of multiple defendants which might dilute the originator’s liability and undermine its deterrent effect. The Article concludes that, subject to several exceptions and methodological caveats, only the originator should be liable. This seems to be the American rule, as enunciated in Batzel v. Smith and Barrett v. Rosenthal. It stands in stark contrast to the prevalent rules in other Western jurisdictions and has been challenged by scholars on various grounds since its very inception.

The Article unfolds in three Parts. Part I presents the legal framework. It first discusses the rules applicable to republication of self-created content, focusing on the emergence of the single publication rule and its natural extension to online republication. It then turns to republication of third-party content. American law makes a clear-cut distinction between offline republication which gives rise to a new cause of action against the republisher (subject to a few limited exceptions), and online republication which enjoys an almost absolute immunity under § 230 of the Communications Decency Act. Other Western jurisdictions employ more generous republisher liability regimes, which usually require endorsement, a knowing expansion of exposure or repetition.

Part II offers an economic justification for the American model. Law and economics literature has showed that attributing liability for constant indivisible harm to multiple injurers, where each could have single-handedly prevented that harm (“alternative care” settings), leads to dilution of liability. Online republication scenarios often involve multiple tortfeasors. However, they differ from previously analyzed phenomena because they are not alternative care situations, and because the harm—increased by the conduct of each tortfeasor—is not constant and indivisible. Part II argues that neither feature precludes the dilution argument. It explains that the impact of the multiplicity of injurers in the online republication context on liability and deterrence provides a general justification for the American rule. This rule’s relatively low administrative costs afford additional support.

Part III considers the possible limits of the theoretical argument. It maintains that exceptions to the exclusive originator liability rule should be recognized when the originator is unidentifiable or judgment-proof, and when either the republisher’s identity or the republication’s audience was unforeseeable. It also explains that the rule does not preclude liability for positive endorsement with a substantial addition, which constitutes a new original publication, or for the dissemination of illegally obtained content, which is an independent wrong. Lastly, Part III addresses possible challenges to the main argument’s underlying assumptions, namely that liability dilution is a real risk and that it is undesirable.

https://lawprofessors.typepad.com/tortsprof/2020/03/perry-on-the-law-and-economics-of-online-republication.html

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