Monthly Archives: May 2011

Good night, Sleep Tight, But the Bedbugs Still Bite (Spring 2011 Litigation Quarterly)

Masked in the shadows of homes and hotels, bloodthirsty vermin wait for darkness to fall, so that they can prey on human flesh.  What sounds like fodder for a Hollywood thriller is all too real.   America is faced with a “recent plague”1 that is “becoming an epidemic.”2 Tiny parasitic insects that live in bedding, sheets, mattresses and furniture have been taking a bite out of the condominium and hotel businesses.  Pests that once were mostly an afterthought, known more for their inclusion in a children’s rhyme than as a threat to sleeping family members, are back in the public consciousness in a big way.  So much so, that New York Magazine has decried that we are “living in the age of bedbugs.”3

The bedbug infestation has reached such a degree of proliferation that the first North American Bed Bug Summit was held in Rosemont, Illinois on September 21, 2010.4 With paranoia and stigma riding the coattails of the bedbugs into the spotlight, lawsuits too, have followed.  Courts across the country have had to determine factual and legal thresholds for lawsuits involving bedbugs.  Most of the recent cases have sounded in negligence.

Plaintiffs in Florida have sought damages under theories of both gross negligence and simple negligence.5 Under Florida law, to show gross negligence, a plaintiff must demonstrate three elements:  1) a composite of circumstances exist which together constitute a clear and present danger; 2) awareness by the defendant of such danger; and 3) a conscious, voluntary act or omission by the defendant in the face thereof which is likely to result in injury.6 Florida courts have held that a swarm of bed bugs lying in wait under the covers can constitute a triable issue of fact concerning a “clear and present danger of insect attack.”7 Courts have looked to a variety of factors in determining whether a defendant is aware of the danger of lurking bed bugs, taking into consideration:  prior recent tenant complaints of an insect infestation in the property,8 logs or records detailing complaints of bed bugs in units in the same building as the property,9 and complaints by the Plaintiff himself over the course of multiple days staying in the property.10 The third element is met when evidence can show that a manager or proprietor ignores the bedbugs and continues to put customers into contact with them.11

Courts in Florida have also recognized that Plaintiffs can bring bedbug related claims under a theory of simple negligence.12 Simple negligence consists of a duty of care owed by the defendant to the plaintiff, a breach of that duty, proof that the breach was the cause of the injury to the plaintiff, and proximately caused damages.13 A hotel owes its business invitees: 1) the duty to exercise reasonable care in maintaining its premises in a reasonably safe condition; and 2) the duty to warn of concealed perils that are or should be known to the landowner and that are unknown to the invitee and cannot be discovered through the exercise of due care.14 Tiny though they may be, a family of bedbugs tucked away in the nooks and crannies of a hotel room can qualify as a concealed peril that cannot be discovered through the exercise of due care by a patron.15

Through these two vehicles of liability, plaintiffs across the country have won some sizable verdicts and settlements after receiving bedbug bites and the occasional rash.  In Alabama, a plaintiff negotiated a $9,800 settlement award after a four year old child received insect bites on her arms, legs and torso while at the defendant day care facility.16 In Mississippi, $4,000 was awarded by a jury to a plaintiff who suffered an allergic reaction to bedbug bites she received in her room at the defendant resort.17 While in New Jersey, two plaintiffs who suffered multiple injuries, including insect bites after sleeping on a bed purchased from the defendant’s store, received a total verdict of $49,000.18

However, the risks to a hotel or resort can prove to be far greater that this sampling of verdicts and settlements.  In a case cited throughout bedbug litigation, an Illinois court held that evidence supported finding that a hotel chain’s conduct was willful and wanton in failing to avoid a known risk of bedbug infestation, and thus supported a finding of gross negligence and an award of punitive damages to the hotel guests who were bitten by bedbugs: where the hotel chain refused a recommendation of a hired exterminator to spray every room, where the hotel chain refused a hotel manager’s recommendation to close the hotel while every room was sprayed, and where the hotel chain placed guests in rooms known to be infested with bed bugs.19 The jury found $5000 in general damages and $186,000 in punitive damages.  The judgments were upheld.20

Bedbugs have taken a bite out of the retail market as well.  In July 2010, Hollister, Abercrombie and Fitch and Victoria’s Secret were forced to close stores in New York City when the tiny bloodsuckers moved in.21 The stigma associated with an infestation can be particularly damaging with bedbugs.  Dr. Susan Jones, an associate professor of entomology at Ohio State University explains why:  “Ticks and mosquitoes bite us when we’re outside, in their world, but bedbugs invade the safety and sanctity of our homes.  We see our homes as a sanctum.  Bedbugs hide in our spaces and come out at night to feed on us.  They are an insect that only consumes blood and prefers human blood.”22

Despite the recent media reports, a well prepared defense team can mount successful challenges to bedbug plaintiffs.  There is not a presumption of negligence merely because bedbugs are found in a hotel or store.23 Negligence must be proved.  The nexus between duty and liability is proof of negligence.24 Negligence in this context requires not only proof of the condition which caused the injury but that the condition was known or should have been known by the landlord prior to the occurrence, so that he had an opportunity to correct it.25 Even knowledge of a prior bed bug infestation in another apartment or hotel room does not necessarily impute knowledge of a similar condition elsewhere on the property.26 While the best defense to bedbug litigation is an aggressive policy of pest control prevention, and immediate remedial efforts upon the discovery of the vampiric visitors, the law does not impose strict liability on landlords, and the negligence standard places a seasoned defense team in a much more tenable position.  The potential damage to a business from a bedbug claim could be staggering.  As such, defense teams should place a strong emphasis on confidentiality agreements in settlement, and stiff penalties for violations of such an agreement.

These tiny insects are not known to carry any diseases, and their bite typically does not even rouse a sleeping person from their slumber, yet they have certainly left a mark on the psyche of the nation and its juries.  While a prompt and fair evaluation of a bedbug case can certainly mitigate the potential issues faced by hotels, resorts, retailers, multiunit buildings and their insurance providers, the bedbugs have announced their presence on the litigation scene, and they are ready to dine on sleeping invitees and unprepared litigants alike.

(Endnotes)

1      Hager, Emily (August 20, 2010). “What Spreads Faster Than Bedbugs?  Stigma”. The New York Times.

2     Jacobs, Andrew (November 27, 2005).  “Just Try to Sleep Tight.  The Bedbugs Are Back”. The New York Times.

3     Robertson, Lindsay (August 21, 2009).  “We Are Still Living in the Age of Bedbugs”. New York Magazine.

4     CTV.ca News Staff (November 27,. 2010).  “Landlords, tenants seek solutions in bed bug fight.”  CTV Toronto.

5     Livingston v. H. I. Family Suites, Inc., 2006 WL 1406587 (M. D. Fla. 2006).

6     Dent v. Florida Power & Light Co., 633 So.2d 1132, 1134 (Fla. 4th DCA, 1994) (citing Sullivan v. Streeter, 485 So.2d 893,895 (Fla. 4th DCA 1986).

7     See Livingston v. H. I. Family Suites, Inc., 2006 WL 1406587 (M. D. Fla. 2006).

8     Id.

9     Id.

10   See Prell v. Columbia Sussex Corp, 2008 WL 4646099 (E. D. Pennsylvania 2008)

11    See Livingston v. H. I. Family Suites, Inc., 2006 WL 1406587 (M. D. Fla. 2006).

12   Id.

13   See Eppler v. Tarmac America, Inc., 752 So.2d 592, 594 (Fla.2000).

14   See St. Joseph Hospital v. Cowart, 891 So.2d 1039, 1040 (Fla. 2d DCA 2004).

15   See Livingston v. H. I. Family Suites, Inc., 2006 WL 1406587 (M. D. Fla. 2006).

16   Wyatt, Pro Ami, Slaton v. Heritage Christian Academy; Heritage Assembly, 2003 WL 25693187 (Ala. 2003)

17   Elgandy v. Boyd Mississippi, Inc., 2003 WL 24571854 (Miss. 2003).

18   Huynh v. J.C. Penny Co., Inc., 2008 WL 4145883 (N.J. 2008).

19   Matthias v. Accor Economy Lodging, Inc; Motel 6 Operating LP, 2003 WL 25147946 (N.D. Ill. 2003).

20  Id.

21   Watson, Bruce (July 27, 2010).  “Bedbugs Are Back and They’re Bleeding Us Dry.” Daily Finance.

22  Id.

23  Mitchell v. Capitol Management Corp., 2010 WL 4074940 (N.J. Super. A.D. 2010).

24  Dwyer v. Skiline Apartments, 123 N.J. Super 48, 52 (App.Div.), aff’d, 63 N.J. 577 (1973).

25  Mitchell v. Capitol Management Corp., 2010 WL 4074940 (N.J. Super. A.D. 2010).

26  Id.

The Interplay Between Uninsured Motorist Coverage, Workers’ Compensation Benefits, and When Such Benefits Are Available (Spring 2011 Litigation Quarterly)

Although an uninsured motorist carrier (“UMC”) is entitled to set off the payments made by a workers’ compensation insurer (“WCI”) to the plaintiff from the damages to be paid by the UMC, the determination of how that set off is calculated is crucial for ensuring that the UMC is not providing recovery to the plaintiff that should have been provided by the WCI.  By adding a provision to their insurance policies that they will not compensate the claimant for injuries that were compensated or could have been compensated by a WCI, UMCs may be in a better position to set off their damages to a plaintiff by the amount that the plaintiff was entitled to recover from the WCI rather than simply what the plaintiff did in fact recover.1 An insured may have received less than the amount to which she was entitled because she may have settled out of haste in order to receive funds from a WCI or because she choose to receive treatment from a non-workers’ compensation doctor.  She even may have planned that the UMC would later pay the remainder of her damages up to the point of permissible coverage.

The relationship between uninsured motorist coverage and workers’ compensation insurance is governed by Fla. Stat. § 627.727.  Section (1) of that statute provides:

[t]he coverage [provided by the UMC] described under this section shall be over and above, but shall not duplicate, the benefits available to an insured under any workers’ compensation law, personal injury protection benefits, disability benefits law, or similar law; . . . and such coverage shall cover the difference, if any, between the sum of such benefits and the damages sustained, up to the maximum amount of such coverage provided under this section.2 (emphasis added).

Thus, a UMC is only required to compensate an insured for damages that have not been covered by workers’ compensation benefits or similar law.  Florida courts have found that payments by a UMC to the insured are to be reduced by the present workers’ compensation benefits that have been paid or are due and payable.3 Thus, an insured may settle for a lower amount to receive funds immediately and then seek full damages from a UMC.  Additionally, an insured could seek medical treatment from a non-workers’ compensation doctor and then seek have UMC cover those costs when she could have been treated by a doctor who would have been paid for by a WCI.  In so doing, the insured would claim that only the amount received, rather than the larger amount that could have been received, should be set off as the higher amount is no longer “available” under Fla. Stat. § 627.727, despite the fact that it had been available.

In USAA Cas. Ins. Co. v. McDermott, the Second District Court of Appeals for the State of Florida found that a UMC that provided coverage for a police officer injured in a car accident involving a fleeing suspect was not entitled to set off workers’ compensation benefits that were likely payable to the officer in the future.4 In finding that the UMC was not entitled to a setoff of workers’ compensation benefits likely payable in the future, the court noted that the insurance policy did not contain a provision that entitled the UMC to set off such benefits.5 The court suggested that such a provision would permit the UMC to set off future benefits so long as the provision did not run afoul of the statutory scheme created by Fla. Stat. § 627.727 or run contrary to Florida public policy.6

A provision in a UMC’s insurance policy that states that the UMC will be entitled to a setoff of the workers’ compensation benefits that are or were available to the insured may be enforceable because such a provision should be compatible with both Florida statutes and public policy.  First, policy language that would permit the UMC to setoff workers’ compensation benefits that “were available” would closely mimic the language already present in Fla. Stat. § 627.727.  Importantly, the language in Fla. Stat. § 627.727 focuses on availability of the benefits but does not specify when those benefits are to be available, i.e. in the past or in the future.  There is even an argument to be made that a contract provision would not be necessary to setoff benefits that had been available but not received because of the temporally ambiguous “available” language contained in Fla. Stat. § 627.727.  A clear contractual provision, however, would be more likely to succeed than an argument only based on the statutory language.

Next, while there are no Florida cases directly addressing whether public policy would permit such a provision, it has arisen in other jurisdictions.  For example, in Dwight v. Tennessee Farmers Mutual Insurance Co., the plaintiff sought payment from a UMC even though she had failed to pursue a workers’ compensation claim.7 The insurance policy between the UMC and the plaintiff included a provision that compensation under that policy would be reduced by the amount paid or payable under any workers’ compensation law.8 Even though the plaintiff had already waived her workers’ compensation claim by the time of the ruling, the court permitted a setoff of the amount that the plaintiff could have received from her WCI because those benefits had been available.9 In explaining the policy because its ruling, the court noted, “[t]he plaintiff’s unilateral waiver of benefits may not operate to increase the contractual obligations of the [UMC].”10

Moreover, prohibiting UMCs from setting off their damages by the amount that could and should have been paid by a WCI would force UMCs to increase rates for fear that they would be required to cover expenses and risks that they reasonably believed would be covered by WCIs.  Such a rule would thereby increase the cost of uninsured motorist coverage, and decrease the availability of uninsured motorist insurance for those individuals who truly need coverage for the expenses it was designed to cover.  Thus, it should not be the responsibility of a UMC to cover for expenses that ought to be paid by a WCI.  Therefore, it should not violate public policy to require a party to seek the highest amount of coverage possible from a WCI before demanding payment from a UMC.  As a result, UMCs should adopt clear language in their policies that provides for a setoff of workers’ compensation benefits that both are available and were available in order to increase any potentially obtainable setoff of workers’ compensation benefits.

(Endnotes)

1      Although many UMC policies contain a clause that UMCs will not pay for any element of loss if a person is entitled to receive payment for that loss by a WCI, this clause may not be broad enough to cover elements of loss for which a person had been entitled to receive payment from a WCI.

2      Fla. Stat. § 627.727 (2010).

3      See National Union Fire Ins. Co. of Pittsburgh v. Blackmon, 754 So. 2d 840 (Fla. 1st DCA 2000); see also Lobry v. State Farm Mut. Auto. Ins. Co., 398 So. 2d 877 (5th DCA 1981).

4      See USAA Cas. Ins. Co. v. McDermott, 929 So. 2d 1114 (2nd DCA 2006).

5      See id. at 1119.

6      See id.

7      See Dwight v. Tennessee Farmers Mutual Insurance Co., 701 S.W.2d 621 (Tenn. Ct. App. 1985).

8      See id. at 622.

9      See id.

10            Id.

The Not So “Grave” Results of the Graves Amendment for Rental Car Companies (Spring 2011 Litigation Quarterly)

Just prior to publication, the Florida Supreme Court issued an opinion affirming the Fourth District’s ruling in Vargas v. Enterprise Leasing Co., 36 Fla. L. Weekly S187a (Fla. 2011).  The law in Florida is now settled: The Graves Amendment, 49 U.S.C § 30106, preempts Florida Statute § 324.021(9)(b)2 (2007), thereby insulating rental car companies from vicarious liability while engaged in the trade or business of renting or leasing motor vehicles.  In affirming, the Florida Supreme Court also upheld that Florida Statute § 324.021(9)(b)2 is not a financial responsibility law and that the Graves Amendment violate the Commerce Clause of the United States Constitution.

The Graves Amendment appears clear on its face, but due to its financial impact, the law has been repeatedly challenged on various grounds since its enactment on August 10, 2005.  The Graves Amendment is part of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (“SAFETEA-LU”).1 This federal law was designed to abolish the states’ ability to impose vicarious liability on businesses engaged in renting or leasing motor vehicles.  Thus, under the Graves Amendment, rental vehicle owners, as lessors, are insulated from liability that occurs while the vehicle is being used during the lease period, provided the lessor is not guilty of criminal wrongdoing or negligence.2

The challenges to the Graves Amendment in Florida have arisen precisely because the application of the federal law changed the landscape of Florida’s Dangerous Instrumentality Doctrine and the application of the vicarious liability laws.3 Whether the Graves Amendment will continue to shield businesses leasing cars in Florida may soon be decided by the Florida Supreme Court.4 As of the preparation of this article, the Court had not yet rendered an opinion on the certified question that has been fully briefed and argued before it: Whether the Graves Amendment, 49 U.S.C. § 30106, preempts § 324.021(9)(b)(2), Florida Statutes (2007)?

 

State versus Federal Laws

 

Florida’s Dangerous Instrumentality Doctrine (“Doctrine”), codified as § 324.021(9)(b)(1), Fla. Stat., stems from the concept of vicarious liability and assumes that a motor vehicle is a “dangerous instrumentality.”5 The Doctrine imposes strict liability on the owner or lessor of a motor vehicle who voluntarily entrusts the vehicle to an individual whose negligent operation of it causes injury.6 An owner who gives authority to another to operate the owner’s vehicle, by either express or implied consent, has a nondelegable obligation to ensure that the vehicle is operated safely.7

The Doctrine, as applied to motor vehicles, is unique to Florida and has been applied with very few exceptions.8 The Florida Supreme Court, in 2000, noted that “if Florida’s traffic problems were sufficient to prompt its adoption in 1920, there is all the more reason for its application to today’s high-speed travel upon crowded highways.”9 In 1999, the Florida Legislature codified §  324.021(9)(b), Fla. Stat., creating an exception to the Doctrine, thereby limiting the amount that a short-term lessor of automobiles (less than one year) is liable.10 As a result of the exception, a short term lessor is liable only up to $100,000.00 per person and up to $300,000.00 total for bodily injury and up to $50,000.00 for property damage, with an additional $500,000.00 allowed if the lessee is uninsured.11 That law remained undisturbed until the federal Graves Amendment was codified in 2005.

The Graves Amendment states that a rental car company will not be held liable for the tortious actions of the driver of a car that the company owns, rents, or leases to an individual, regardless of whether the driver is an insured motorist, so long as the rental car company is not negligent or guilty of criminal wrongdoing.12 Case law has focused on whether section (b)(2) of the Graves Amendment, which details the “financial responsibility laws” applicable to business entities engaged in the trade or business of renting or leasing motor vehicles, preempts state laws that impose liability on owners or lessors of vehicles up to certain amounts listed in the pertinent state statutes.  Although “financial responsibility” is left undefined in the Graves Amendment, nothing in this portion of the Code supersedes any law of any State regarding imposition of liability on such businesses for failure to meet the financial responsibility or liability insurance requirements under State law.13

In Florida, the Fourth District Court of Appeal has noted that “the common usage of financial responsibility thus means an insurance equivalent, that level of security required to pay for damages arising from motor vehicle accidents, as a condition of acquiring a driver’s license or registering a vehicle. . . .”14 Furthermore, the District Courts of Appeal in Florida have all reached decisions holding that the Graves Amendment preempts §  324.021(9)(b), Fla. Stat., thereby insulating rental car leasing companies from any liability so long as they are not negligent or engaged in criminal wrongdoing during the leasing process.

The Effect of the Graves Amendment through Florida Case Law

 

Prior to the enactment of the Graves Amendment, Florida courts applied the Doctrine with few exceptions to protect allegedly injured plaintiffs.15 Furthermore, a United States District Court for the Southern District of Florida Judge held that the  Graves Amendment was unconstitutional because it exceeded Congress’s powers under the Commerce Clause.16 This Court reasoned that “state laws are not to be preempted by a federal statute unless it is the clear and manifest purpose of Congress to do so.”17 However, on appeal to the Eleventh Circuit, the judgment entered against the rental car lessor was vacated and remanded with instructions to enter judgment in favor of the car rental lessor consistent with the decision reached in Garcia v. Vanguard Car Rental USA, Inc.18

The Garcia decision has influenced the Florida District Courts of Appeal to consistently hold that the Graves Amendment preempts the Doctrine. 19 When Garcia was before the Fourth District, the District Court held that section 324.021(9)(b)(2), Fla. Stat., was not a financial responsibility law because it did not impose liability on car rental companies for failing to meet financial responsibility or liability insurance requirements under state law.20 Administrators and personal representatives of estates of two people killed in a three-car accident involving a rental car brought a wrongful death claim against Vanguard Car Rental USA, which filed a declaratory action and motion for summary judgment.21 Further, the Garcia Court held that the Graves Amendment was a valid exercise of Congress’s Commerce Clause power,22 thereby negating any constitutional arguments made by plaintiffs. In Garcia v. Vanguard Car Rental USA, Inc., the Eleventh Circuit affirmed that decision.23

In Vargas v. Enterprise Leasing Co., the Fourth District Court of Appeal held that the federal Graves Amendment preempted the state “financial responsibility” statute.24 Thus, in Vargas, the state law requiring rental car companies to be financially responsible for up to an additional $500,000.00 if one of their cars is driven by an uninsured or underinsured motorist having less than $500,000.00 in combined insurance limits, was preempted by the federal Graves Amendment.25 The sole count against Enterprise Leasing asserted that it was vicariously liable under the Doctrine.26 The Circuit Court granted Enterprise Leasing’s motion for summary judgment, holding that the Graves Amendment preempted this section of the Florida Statutes.27 In affirming, the Fourth District Court of Appeal concluded that the state statute was neither a “financial responsibility law” nor a “liability insurance requirement,”28 which would bring it within a savings clause of the Graves Amendment.29

 

Conclusion

 

The Graves Amendment has thus far achieved its purpose of protecting rental car companies from vicarious liability in Florida.  The majority of Florida’s intermediate appellate courts have reached the conclusion that the Graves Amendment preempts the Doctrine.30 The Fourth District followed the Garcia Court’s rationale but cited that the facts were virtually identical to Vargas.31 The Fourth District certified the question regarding whether the Graves Amendment preempts section 324.021(9)(b)(2), Fla. Stat., to the Florida Supreme Court, as did the Second32 and Fifth33 Districts.  As of publication of this article, the Florida Supreme Court has not yet rendered an opinion.34

The results of the Graves Amendment are not so “grave” for lessors of rental cars in the current legal environment.  Currently, lessors are protected in Florida but await the Florida Supreme Court’s decision on this matter.  Of course, if the Florida Supreme Court rules against preemption, defendants may request the matter be heard by the Eleventh Circuit, which has clearly ruled that the Graves Amendment preempts Florida state law.35 But should the Florida Supreme Court affirm the District Courts of Appeal in determining that the Graves Amendment preempts the Doctrine, it will shore up existing precedent and force plaintiffs to seek alternatives such as filing direct negligence claims against rental car companies for lack of maintenance, repair, and other defective conditions.  We will also likely see a rise in negligent entrustment claims against rental car companies.  How “grave” the Graves Amendment will be remains to be seen.

(Endnotes)

1       Garcia v. Vanguard Car Rental USA, Inc., 10  F. Supp. 2d 821 (M.D. Fla. 2007).

2      Kamarsingh v. PV Holding Corp., 983 So. 2d 599 (Fla. 3d DCA 2008).

3      See Susco Car Rental Sys. of Fla. v. Leonard, 112 So. 2d 832 (Fla. 1959); Lynch  v. Walker, 159 Fla. 188, 31 So. 2d 268, 271 (Fla. 1947) overruled in part on other grounds by Meister v. Fisher, 462 So. 2d 1071 (Fla. 1984); Poole v. Enterprise Leasing Co. of Orlando, 2006 WL 1388442 (2006).

4      See Vargas v. Enterprise Leasing Co., 993 So. 2d 614 (Fla. 4th DCA 2008); Tocha v. Richardson, 995 So. 2d 1100 (Fla. 4th DCA 2008); West v. Enterprise Leasing Co., 997 So. 2d 1197 (Fla. 2d DCA 2008); Karling v. Budget Rent A Car Sys., Inc., 2 So. 3d 356 (Fla. 5th DCA 2009).

5        Southern Cotton Oil Co. v. Anderson, 80 Fla.   441, 445 (Fla. 1920).

6        Aurbach v. Gallina, 753 So. 2d 60, 62 (Fla. 2000).

7        Id. citing Hertz Corp. v. Jackson, 617 So. 2d 1051, 1053 (Fla. 1993).

8        Id. citing Kraemer v. General Motors Acceptance Corp., 572 So. 2d 1363, 1365 (Fla. 1990).

9        Id.

10      § 324.021(9)(b)(2), Fla. Stat. (2007).

11       Vargas v. Enterprise Leasing Co., 993 So. 2d 614, 617 (Fla. 4thDCA 2008).

12      49 U.S.C. § 30106(a) (2005).

13      49 U.S.C. § 30106(b)(2) (2005).

14      Vargas v. Enterprise Leasing Co., 993 So. 2d 614, 619 (Fla. 4thDCA 2008).

15     Aurbach v. Gallina, 753 So. 2d 60, 62 (Fla. 2000) citing Kraemer v. General Motors Acceptance Corp., 572 So. 2d 1363, 1365 (Fla. 1990).

16     Vanguard Car Rental USA, Inc. v. Druin, 521 F. Supp. 2d 1343, 1347 (S.D. Fla. 2007).

17     Id.

18    Vanguard Car Rental USA, Inc. v. Druin, 2009 WL 995141 (2009) citing Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242 (11th Cir. 2008).

19     Garcia v. Vanguard Car Rental USA, Inc., 510 F. Supp. 2d 821, 825 (M.D. Fla. 2007).

20    Id.

21     Id. at 824.

22    Id. at 834.

23    Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242 (11th Cir. 2008).

24    Vargas v. Enterprise Leasing Co., 993 So. 2d 614 (Fla. 4th DCA 2008).

25    Id. at 619.

26    Id.

27    Id.

28    Id.

29    Id.at 618.

30   See St. Orange v. White, 988 So. 2d 59 (Fla. 1st DCA 2008); Blanks v. Enterprise Leasing Co. et al., (Fla. 3d DCA 2009); Vargas v. Enterprise Leasing, Co., 993 So. 2d 614 (Fla. 4th DCA 2008); Karling v. Budget Rent A Car Sys., 2 So. 3d 354 (Fla. 5th DCA 2008); Garcia v. Vanguard Car Rental USA, Inc., 510 F. Supp. 2d 821, 825 (M.D. Fla. 2007).

31     Tocha v. Richardson and Dollar Thrifty Auto. Group, Inc., 995 So. 2d 1100, 1102 (Fla. 4th DCA 2008).

32    West v. Enterprise Leasing Co., 997 So. 2d 1197 (Fla. 2d DCA 2008).

33    Karling v. Budget Rent A Car Sys., Inc., 2 So. 3d 356 (Fla. 5th DCA 2009).

34    Vargas v. Enterprise Leasing Co., 28 So. 3d 46 (Fla. 2009).

35    Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242 (11th Cir. 2008).

Defamation In A Cyber World (Spring 2011 Litigation Quarterly)

The Internet is a powerful medium of communication in which information can easily be accessed by millions of people worldwide through a global network of computers. Information on the Internet can be disseminated via email, posted on newsgroups, discussed in chat rooms or displayed on home pages in various formats such as sound, video or text. Unlike traditional forms of media, the Internet is unique in that publishers and editors are primarily absent in cyberspace.  The birth of the Internet created tension when courts attempted to apply traditional defamation law to this burgeoning new world.  To better protect internet service providers (“ISPs”) and website operators from third-party claims for defamation committed on the Internet; Congress enacted section 230 of the Communication Decency Act (“CDA”).1 The creation of section 230 provides federal immunity to providers and users of an interactive computer for defamatory content made by a third party on the website.

Subsection (c) of the CDA, known as the “Good Samaritan” provision, states that “no provider or user of an interactive computer shall be treated as the publisher or speaker of any information provided by another information content provider.”2 This section also states that no provider of an interactive computer shall be liable for any action that is taken voluntarily and in good faith to restrict access to inappropriate material, whether or not such material is constitutionally protected.3 Due to potential liability faced by ISPs and website operators, interactive service providers might choose to severely restrict the number and type of messages posted.  Congress considered the weight of the speech interests implicated and chose to immunize service providers and websites to avoid any such restrictive effect.4 In doing so, Congress made a policy choice to remove the Internet from traditional defamation law.  This choice holds the original publisher liable for his defamatory speech, but shelters publishers and distributors from any liability for speech that did not originate with them.

By enacting section 230, Congress created a federal immunity to any cause of action that would make service providers and websites liable for information originating with a third party.5 In addition, Congress sought to remove any disincentives tort liability might have on Internet providers and encourage them to self-regulate any offensive material over their services. 6

Courts have typically applied section 230 broadly, and, in some instances, provided immunity in cases that did not involve self policing.  In Zeran v. American Online, Inc., the court made it clear that section 230 grants publishers immunity from traditional publisher liability.7 Specifically, section 230 precludes courts from entertaining claims that would place a computer service provider in a publisher’s role.  Thus, lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions are barred.8 The court found that section 230 creates a blanket immunity protecting ISPs from any liability resulting from defamatory statements by a third-party using their service.  The blanket immunity provided by section 230 was further expanded in Blumenthal v. Drudge, where the court found the interactive computer service was nothing more than a provider of an interactive computer service on which the third party made the defamatory remarks.9 The court relied on the statutory language of section 230, which clearly states that such a provider shall not be treated as a “publisher or speaker,” and therefore, may not be held liable in tort.10

The blanket immunity provided by section 230 is not without limits.  In many cases, the courts have continued to find that the ISPs and websites are “information content providers,” thereby denying them immunity.  In Anthony v. Yahoo! Inc., the court found that Yahoo! was not absolved from liability under section 230 for assisting a third-party in distributing misrepresentations.11 Although a third-party created the defamatory content, Yahoo! was not entitled to immunity because Yahoo! assisted in the transmission of the defamatory content.  Similarly, in Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, the court found that the Defendant was an “information content provider” and immune from liability under the CDA.12 The Ninth Circuit repeatedly stated throughout its en banc opinion that the Roommates.com website required its users to provide certain information as a condition of its use and was, therefore, an information content provider.

Section 230 provides a valuable and necessary resource for protecting internet service providers and websites from the unpredictable behavior of the billions of users of the Internet.  ISPs and websites need to assume some responsibility for the content posted on its website, but it is unrealistic to require all content to be monitored.  Further, without section 230, the courts would be inundated with lawsuits against ISPs and websites.  In turn, to avoid litigation, websites would likely restrict all third party content, consequently limiting forums available to express one’s thoughts.

In a world where the Internet is quickly becoming the most commonly used media forum, it is important to know what safe guards are available to websites and internet service providers.  As the internet expands in the future, section 230 provides an important safeguard for Internet service providers and websites from a vast amount of litigation for the defamatory comment of third parties.

(Endnotes)

1        47 U.S.C. § 230.

2        47 U.S.C. § 230(c)(1).

3        47 U.S.C. § 230(c)(2)(A).

4        Zeran v. American Online, Inc., 129 F. 3d  327, 330 (4th Cir. 1997).

5         Zeran, 129 F. 3d at 330.

6        Ben Ezra, Weinstein, & Co. v. American Online, Inc., 206 F. 3d 980, 986 (10th Cir. 2000).

7        Zeran v. American Online, Inc., 129 F. 3d 327, 330 (4th Cir. 1997).

8         Zeran , 129 F. 3d at 330.

9        Blumenthal v. Drudge, 992 F. Supp.44,  52-53(D.D.C. 1998).

10      Id.

11       Anthony v. Yahoo! Inc., 421 F. Supp.2d 1257 (N.D. Cal. 2006).

12      Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, 521 F.3d 1157 (9th Cir. 2008).