Cubby, Inc. v. CompuServe, Inc., Stratton Oakmont, Inc

"family-oriented" computer service. This decision simply required that to the extent computer
networks provide such services, they must also accept the concomitant legal consequences. In
addition, the Court also notes that the issues addressed herein may ultimately be preempted by
federal law if the Communications Decency Act of 1995 is enacted.
The Court now turns to the second issue presented here, of whether Epstein was PRODIGY's
agent for the purposes of the acts and omissions alleged in the complaint. Agency is a legal
relationship which results from the manifestation of consent of one person to allow another to act
on his or her behalf and subject to his or her control, and consent by the other to so act. The
starting point for an agency analysis in this case is the "Bulletin Board Leader Agreement"
between PRODIGY and Epstein. This Agreement sets forth eleven specific responsibilities
expected of a Board Leader including (I) the posting of a minimum of 120 notes on the bulletin
board each month; (II) working with member Representatives; (III) providing monthly reports
and (IV) following any additional procedures provided by PRODIGY. The Agreement also
requires prior PRODIGY approval of all promotional efforts. In addition, the Agreement
contains the following language.
You will be solely responsible for all of your actions as a Board Leader. While
Prodigy will certainly support your actions as a Board Leader as a general matter (so
long as they are not in breach of this Agreement), we will not assume any liability
for anything you do (or fail to do) as a Board Leader. You hereby indemnify and
agree to hold Prodigy harmless from and against all claims cost, liabilities
judgments . . . arising out of or in connection with anything you do. . .
Being a Board Leader does not make you a Prodigy Services Company
employee, representative or agent, and you agree not to claim or suggest that you are
one.
Prodigy relies on this language to extricate itself from any alleged agency relationship with
Epstein. However, talismanic language does not determine an agency relationship. The Court
must look to the substance of the relationship. Where one party retains a sufficient degree of
direction and control over another, a principal-agent relationship exists. In addition, whether one
is an independent contractor is not determinative of whether one is an agent.
As to the substance of the relationship between PRODIGY and its Board Leaders,
PRODIGY Security Officer McDowell testified that Board Leaders are required to follow the
Guidelines and that PRODIGY performs a "management function" with respect to the activities
of the Board Leaders. Furthermore, Epstein's Supervisor, Jennifer Ambrozek, testified that
PRODIGY reviews the Guidelines with Board Leaders, who are then required to enforce the
Guidelines. Board Leaders are also given a 28 page "Bulletin Board Leader Survival Guide"
wherein many technical terms and procedures are explained, and the following caveat is given:
IF YOU DON'T KNOW WHAT SOMETHING IS OR WHAT IT'S SUPPOSED
TO DO, LEAVE IT ALONE UNTIL YOU CAN ASK.
The aforementioned testimony by PRODIGY employees and documentation generated by
PRODIGY, together with the Guidelines themselves, leave no doubt that at least for the limited
purpose of monitoring and editing the "Money Talk" computer bulletin Board, PRODIGY
directed and controlled Epstein's actions. Based on the foregoing, the Court holds that Epstein
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