Cubby, Inc. v. CompuServe, Inc.

CompuServe, Inc. (CompuServe) (defendant) ran an online service where subscribers could access numerous online forums. One of these forums was the Journalism Forum. The Journalism Forum was not managed by CompuServe, but it was managed by an independent company in accordance with CompuServe’s editorial standards. One publication available in the Journalism Forum was Rumorville, which provided reports about journalism. Rumorville was published by an organization that had no contractual or other direct relationship with CompuServe. CompuServe had no opportunity to review Rumorville’s contents before the contents were uploaded. Cubby, Inc. (plaintiff) intended to compete with Rumorville and developed Skuttlebut, which published news and gossip about the journalism industry. Cubby sued Rumorville and CompuServe for libel. Cubby claimed that Rumorville published false and defamatory statements about Skuttlebut, and that CompuServe carried these statements as part of the Journalism Forum. CompuServe argued that it was a distributor of Rumorville, as opposed to a publisher of Rumorville’s statements. CompuServe contended that, as a distributor of Rumorville, it could not be held liable for libel because it neither knew nor had reason to know of the defamatory statements. Cubby argued that CompuServe was a publisher of the statements and, thus, should be held to a higher standard of liability.