Published by LawTechie - March 7, 2012 - LawTechie

E-Commerce LawThe North Carolina Court of Appeals has just issued a reversal of a trial court ruling that StubHub.com should be held liable for violation of ticket scalping laws, the appeals court finding that the e-commerce website is immune from such laws under Section 230 of the Communications Decency Act. Hill v. StubHub, Inc., No. COA11-685 (N.C. App. Ct. March 6, 2012).

The StubHub case is one of several recent lawsuits across the country where music labels attempt to hold websites liable for ticket scalping that occur via the websites’ e-commerce interfaces. In this case, the trial court ruled against StubHub, reasoning that the website’s e-commerce interface, which allowed users to specifically list tickets for sale and facilitated such sales transactions, so much involved StubHub in the sales process that the website could be considered the actual seller of the tickets whereas the user-seller was simply a “supplier” for StubHub’s ticket resales.

Citing Universal Communication v. Lycos, Inc., 478 F.3d 413, 418-19 (1st Cir. 2007), the appellate court noted that:

“[O]ther courts generally interpreted Section 230 immunity broadly, so as to effectuate Congress’s olicy choice… not to deter harmful online speech through the… route of imposing tort liability on companies that serve as intermediaries for other parties’ potentially injurious messages.”

The counter-argument would be: Wasn’t StubHub perfectly aware that its e-commerce system was being used by scalpers in violation of the relevant anti-scalping laws, and should such awareness and obvious complicity strip StubHub from Section 230 immunity?

The court of appeals answered the above in the negative, specifically, “it is, by now, well established that notice of the unlawful nature of the information provided is not enough to make it the service provider’s own speech.”

The case law, at least now in North Carolina, is clear that Section 230 is a very broad immunity for “passive” websites and e-commerce service providers.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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