8th Circuit Adopts Fair Housing Council CDA Analysis.

When Cozy Kitten Cattery spotted what it felt was defamatory comments concerning their business on complaintsboard.com it raised their hackles and the fur started flying.  After a series of complaints were filed in state and federal courts, the district court dismissed the complaint against InMotion after raising, Sue Sponte (on its own), the issue of whether 47 U.S.C. 230 of the Communications Decency Act shielded InMotion as the ISP which hosted the offending website. (on its own), the issue of whether 47 U.S.C. 230 of the Communications Decency Act shielded InMotion as the ISP which hosted the offending website.

Noting that the case was the first opportunity for the 8th Circuit Court of Appeals to hear a case involving Section 230, the court adopted the reasoning of of the 9th Circuit that it interpreted as holding that CDA immunity did not apply to websites that are designed to encourage or facilitate defamatory, or other wrongful speech, however, CDA immunity does apply to voluntary information and speech created by third parties and not required by the website ISP.  Citing, Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, 521 F.3d 1157, (9th Cir. 2008).     Most commentators have noted that the tension that the reasoning of Fair Housing Council creates by not allowing absolute immunity to ISP’s is that courts must weigh when affirmative actions in facilitating comments crosses the line into becoming an active participant, rather than merely a conduit.

The CDA was initially drafted in response to a series of court cases which began placing liability on ISP if they took on the role of a publisher through editing and affirmative management of comments.  Recognizing that it was bad policy to hold ISPs liable because the elected to try and take steps to mitigate harm, Congress enacted the CDA (which was largely thrown out in subsequent challenges – with section 230 surviving) to provide ISP with a means of managing content without assuming liability. Fair Housing Council recognized the intent of of Congress, while recognizing that the lines between conduit  and speaker is sometimes blurred.  While retaining the CDA’s intent to protect ISPs and allow them to exercise control over speech that occurs on their watch, Fair Housing Council strips websites attempting to hide behind it when they take an active roll in shaping the speech in the first place.

 

Tax Deductions for Creatives

As Tax day approaches its important to take into account targeted deductions that benefit Creatives. One such deduction is the Domestic Production Activities Deduction (AKA Section 199 deduction) which was meant to encourage U.S. job creation. The deduction was created in 2004 as a part of the American Jobs Creation Act of 2004 and is one of those nice benefits that is targeted at small businesses operating as sole proprietors, partnerships, LLC, or S Corps.

So What?
For many creative based businesses, this deduction may provide a significant deduction on gross income, based on the amount of W-2 wages spent in the production of their work. The deduction specifically singles out wages paid out in the sound recording, software (including websites), and film (excluding porn) industries, as well as producers of personal tangible items (clothing, books, etc.) for an additional tax credit against profits.

What to do?
Simple – if you are engaged in one of these categories, had a profit, and paid W-2 wages, make sure that your tax preparer is aware that you may have this additional 6% deduction available to you, or if you prepare your own taxes, be sure to look though the instructions for Form 8903 .

IRS Circular 230 Notice:
United States Treasury Regulations require me to disclose the following: Any tax advice included in this document is not intended or written to be used, and it cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.

Liability for Withholding Passwords

Update (6/8/10): Terry Childs was found guilty of one felony count of denying computer services.

Does your company have a clear policy concerning who may receive admin passwords? The city of San Francisco apparently has some problems in this area.

Terry Childs

IT manager Terry Childs was arrested earlier this year for refusing to provide administrative passwords for the city’s computer network. The city alleges that he was setting up a network that he could take over remotely and take down at his whim – Mr. Childs claims that the policies of the city did not allow him to provide the passwords to his managers and that once he turned them over to the Mayor, the management simply didn’t understand the technology enough to understand how to use them.

Apparently out of fear that his release will result in a melt down of the city’s computer network, the judge in the case has set bail at 5 million dollars, as opposed to a lower bail such as one million as is common for murder suspects.

Password Policies

While the facts are clearly in dispute, the case demonstrates: 1) the need to thoughtfully consider your password policies and those of companies you are dealing with, 2) the need to have clear documentation on systems available for others to understand how your systems operates, and the need to consider whether to make sure that your contracts address liability issues related password and access issues.

For a good article discussing the case go to www.infoworld.com