:Information Law and Policy Spring 10

By Leah Anderson, Jackson Hull, Kimra McPherson, and Michael Porath

This week, we examine the extent to which information and the methods through which it is communicated to consumers expose information providers (such as authors, publishers, cartographers, and ISPs) to liability. We feel it is helpful to first evaluate liability exposure first along a spectrum — the axis of which measures the explicitness of the terms between information provider and consumer. We render it here from most to least explicit:

Terms Of Service –> Shrinkwrap License Agreements/Purchase Orders –> Implied Warranties –> Negligence –> Strict Product Liability

Fully explicit terms may be recorded as contractual obligations, such as in a TOS or terms attached to a purchase order. The terms are dictated by the provider; consumers are bound to the terms “whether they read them or not” (Mortenson, p. 4).  As indicated in Mortenson v. Timberline, attachments and subsequent modifications to preliminary terms are allowed under current licensing law. Consumers are bound to these new terms, often after simply continuing to use the product. Though the terms are explicit, the mechanics and timing of consumers’ agreement to them can vary: In Williams v. AOL, the court found the provider liable for damages because of AOL forced “subscribers [to] ‘agree’ to the TOS after configuration of the computer has been altered” (Williams, p. 2). Even with clearly stated terms, information providers can still incur liability.

Near the center of this spectrum lie implied agreements and liability for the “standard of care” expected by consumers. At issue with implied warranties is the extent to which a provider is liable for the information communicated to the consumer. In Cordoza v. True, the court distinguished “between the tangible properties of these goods and the thoughts and ideas conveyed thereby” (Cordoza, p. 2).  Here, the court provides immunity from liability to information providers who disseminate information without review. Any implied liability in that arrangement applies to the book or software itself, not the information it provides.

This immunity weakens as the provider claims status as a “professional” as or is generally perceived as such in the field. “When a person (or a firm) acts in a manner a reasonable person in the same circumstances would have recognized does not live up to a duty of care owed toward others” (Samuelson, p. 24), they may be guilty of negligence.  With respect to software, the information provided becomes more prescriptive, leaving the consumer out of the “judgment loop” (Samuelson, p. 26) and exposing the provider to claims of negligence.

On the far end of the spectrum are terms imposed by strict product liability. In this situation, the information itself may be cast as a product. When this claim is proven, the provider is “liable without fault” (Samuelson, p. 25) — meaning outside any contractual obligations with a consumer.  In Aetna v. Jeppesen, the chart manufacturer was held liable for its product’s inconsistent representation of information — a liability that extended to damages brought by parties with whom the provider had no formal or implied agreement, such as the families of the passengers.  Strict product liability may extend to any party involved in the dissemination of the information, its expected use, and any misuse of the information. It can also have an impact on how damages are awarded.

Producers v. Consumers: Who’s Responsible?

In discussing this spectrum thus far, we’ve been focusing mostly on the responsibility borne by a producer or distributor of information. But the consumer (or other user) of the information bears some responsibility as well.

For example, in Mortenson v. Timberline, the terms of service explicitly defined a “preferred method of conducting business” (Mortenson, p. 8). In agreeing to the terms, a consumer takes on a fair amount of responsibility for knowing what they actually say. (We, along with the judges of the majority opinion, question Mortenson’s behavior: An experienced consumer of software should expect that some terms are attached, rather than turn a blind eye if a box with no terms attached magically shows up.)

A customer’s responsibility can shift in cases where an implied warranty is concerned. Cardozo v. True doesn’t consider the liability of the author or publisher, only that of the seller; it’s possible the author could have been held liable for publishing incomplete information. But it could also be argued that the reader of the information isn’t exempt from common sense (i.e. “don’t put something in your mouth if you don’t know what it is”). Thus, we suspect liability in implied warranty cases would have to be weighed carefully against personal responsibility.

In the case of torts and strict product liability when no explicit contractual obligations are defined, the matter of personal responsibility becomes even more important: As Aetna v. Jeppesen demonstrates, a court can apportion the degree of fault between the customer (in this case, the airline and its pilots) and the provider of a service or good. The provider of the information needed to demonstrate some reasonable standard of care (though as some particularly pointed comments in the opinion state, so did the pilots).

A customer, in effect, cannot be completely exempt from acting responsibility in any case. However, the better-defined the contractual relationship, the more opportunity the producer has to explicitly shift responsibility to the consumer.

“12 Principles” and Consumer Awareness

With personal responsibility in mind, it’s interesting to look at the two digital cases  in particular through the lens of the propositions in Jean Braucher’s “New Basics: 12 Principles for Fair Commerce in Mass-Market Software and Other Digital Products.” Braucher argues for policy (and, ideally, federal legislation) that would clarify expectations for both producers and consumers in transactions of mass-market digital products: “We need some standardization of use rights if customers are to have any hope of knowing what they are” (p. 16).

Of the principles put together by Americans for Fair Electronic Commerce Transactions (p. 8), the following particularly apply to these cases:

I. Customers are entitled to readily find, review, and understand proposed terms when they shop.

II. Customers are entitled to actively accept proposed terms before they make the deal.

III. Customers are entitled to information about all known nontrivial defects in a product before coming to the deal.

V. Customers are entitled to have their disputes settled in a local convenient venue.

VI. Customers are entitled to control their own computer systems.

Facts that speak to principles II, V, and VI are clearly at play in Williams v. AOL: The subscribers’ computer systems were found to be altered in ways that the subscribers couldn’t control before they had the chance to actively accept the terms of service. Additionally, principle VI would suggest that forcing plaintiffs to travel to a specific court wouldn’t be a fair provision in a TOS agreement. In Mortenson v. Timberline, principle III is key: leaving aside the issue of who initiated the contract, the facts are clear that Timberline knew about a key defect in the software before the contract was enacted.

It’s notable that each of these 12 principles starts with “customers are entitled to . . .” — leaving a fair amount of responsibility in the customer’s hands to exercise those rights. Discussing principle I, Braucher notes: “Advance disclosure in the digital era is cheap, probably cheaper than getting terms onto disks or printed on pieces of paper and into boxes.” But customers have to take the next step of finding/reviewing/understanding. Would we do it? In discussing this post, the authors found that we’d virtually never read a TOS agreement all the way through (outside of class assignments, that is). In looking at the TOS for products that we regularly use, we learned some things that surprised us (Adobe Flash can’t be used on a tablet PC; PayPal users aren’t supposed to share other users’ information with anyone, a term that at least one group member has probably inadvertently violated.) Policy can encourage availability of information and fairness of terms, but customers will still bear some burden of due diligence and common sense.

Looking Towards the Future: Does Expanding Legislation Make Sense?

Common sense, of course, is a consistently evolving concept as well — especially as we’re asked to consider and evaluate more and more information. When Samuelson was surveying the information landscape in 1993, “Harry’s Medical Home Companion” may have been a futuristic fantasy. Today, websites employing this general concept are commonplace. Yet to many modern web users, the idea (suggested in Samuelson’s article) that any of today’s numerous non-professional websites could be held liable for the advice they provide seems laughable; not only would such litigation be impossible to control due to the sheer volume of unintelligent recommendations made on the Internet today, but it would also effectively eliminate any incentive for content providers to post any free and open content online out of fear of arousing a lawsuit.

In fact, many of the assumptions and discussions contained in this article seem horribly dated and irrelevant to us today, even though the article was written less than 20 years ago. For example, it is doubtful that the societal reverence to electronic information that may have once created an unwarranted sense of reliability will persist in a world of Wikipedia and gossip blogs. Also, because the vast majority of us no longer pay for Internet usage by the hour, taking time to browse through or examine online information products before purchase is no longer an issue of financial investment beyond that which we would incur in the non-cyber world.

This generates an important point: if all of the recommendations in Samuelson’s article or Braucher’s paper were somehow codified into law, how much of that law would remain applicable in field that changes so rapidly and unpredictably? Furthermore, how can we determine whether a law that was meant to protect freedom of expression on the Internet may later be applied to some new electronic medium in a way that unintentionally limits expression via this new medium based on the manner in which the law was designed or worded?

If we are working under the assumption that law should be designed to have some type of permanence, this line of argument would justify continued hesitance to reform laws related to the exchange of electronic information (contrary to the ideas that spawned the Braucher paper).  While we obviously cannot provide a clear resolution to this issue in one blog post, we would like to point out the notable absence of discussion of long-term applicability in the 12 principles. In a future study, it would be interesting to re-evaluate how challenging it would be to codify each of these “principles” without burdening the new laws with a cripplingly narrow scope or potentially hazardous future applications.

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