I'm surprised that anything at LiveJournal is that much alive. MySpace and later Facebook killed most of it.
I've had an LJ account since 2004 and have participated in several communities there. All were created and run by members. I have also read the 9th Circuit opinion, so before you jump on me, please catch up on your reading if you have not already read it.
Before I read the 9th Circuit opinion, I took at look at the ONTD community's bio/rules page. Everything looked like a normal volunteer-run LJ community with an owner and team of volunteer moderators, except for one thing: The owner "Pinky" is obviously an anonymous profile, created in 2010 and with only one journal entry ever (but with thousands of comments made), and listing no friends, communities joined, communities followed.
On page 7 of the 9th Circuit decision, we read:
When ONTD was created, like other LiveJournal communities, it was operated exclusively by volunteer moderators. LiveJournal was not involved in the day-to-day operation of the site. ONTD, however, grew in popularity to 52 million page views per month in 2010 and attracted LiveJournal’s attention. By a significant margin, ONTD is LiveJournal’s most popular community and is the only community with a “household name.” In 2010, LiveJournal sought to exercise more control over ONTD so that it could generate advertising revenue from the popular community. LiveJournal hired a then active moderator, Brendan Delzer, to serve as the community’s full time “primary leader.” By hiring Delzer, LiveJournal intended to “take over” ONTD, grow the site, and run ads on it.
In other words, LiveJournal appears to have rigged a friendly takeover of ONTD and installed one of their employees, Brendan Delzer (likely user "Pinky"), so as to be able to capture ad revenue from the community.
And on page 13:
Mavrix, relying on the common law of agency, argues that the moderators are LiveJournal’s agents, making LiveJournal liable for the moderators’ acts. The district court erred in rejecting this argument.
For most LJ communities, this would not be a good assumption. In the case of ONTD, however, the nominal "owner" of the community is an LJ employee (agent), and that employee has the power to appoint other moderators (sub-agents).
Regarding agency under our common law, principals are liable for the actions of their agents and sub-agents. It's a risk that you assume (often unknowingly for most people) whenever you hire or appoint someone to act on your behalf.
Regarding agency the court concludes on page 15:
We therefore have little difficulty holding that common law agency principles apply to the analysis of whether a service provider like LiveJournal is liable for the acts of the ONTD moderators.
and on pages 16-17 (note that this is not an accurate description of the thousands of LJ communities that are truly run by volunteers):
Although LiveJournal calls the moderators “volunteers,” the moderators performed a vital function in LiveJournal’s business model.10 There is evidence in the record that LiveJournal gave moderators express directions about their screening functions, including criteria for accepting or rejecting posts. Unlike other sites where users may independently post content, LiveJournal relies on moderators as an integral part of its screening and posting business model. LiveJournal also provides three different levels of authority: moderators review posts to ensure they contain celebrity gossip and not pornography or harassment, maintainers delete posts and can remove moderators, and owners can remove maintainers. Genuine issues of material fact therefore exist regarding whether the moderators had actual authority.
And on pages 26-27, among other instructions for the next fact finder:
LiveJournal derives revenue from advertising based on the number of views ONTD receives. Mavrix presented evidence showing that approximately 84% of posts on ONTD contain infringing material, although LiveJournal contested the validity of this evidence. The fact finder should determine whether LiveJournal financially benefitted from infringement that it had the right and ability to control.
And the conclusion on page 28:
For the foregoing reasons, we reverse the district court’s grant of summary judgment to LiveJournal, vacate its order denying discovery, and remand for further proceedings consistent with this opinion.
REVERSED, VACATED and REMANDED.
This does not mean that the case will result in a jury trial as some claim, but rather that the original court must first address the deficiencies in fact finding and evidence gathering (e.g. depositions) before the case proceeds. There is no reference to a jury trial in the entire decision. It could still even result in another summary judgement in favor of LJ, presumably after they have followed the instructions from the appellate court.
The case will involve LJ's status as an "internet service provider" (not defined in the appellate opinion) and their liability for the actions of their employee & subagent (Brendan Delzer (likely akak user "Pinky"), and the sub-agents that he appointed.
I am attaching the opinion of the 9th Circuit Court of Appeals. Note that in the U.S. all court opinions are in the public domain. The first person who pulls it out of the courts' PACER system has to pay by the page, but thereafter they can be shared freely.
