Here it is boys
Software firm's fight with AOL continues
By Aaron Baca
Journal Staff Writer
Albuquerque's Ben Ezra Weinstein has its legal work cut out in the coming weeks.
The small software firm, which sued America Online last year for damages it says AOL caused by publishing incorrect stock information, is trying to do something not many others have been able to: beat America Online.
To win, Ben Ezra Weinstein, which produces and markets a variety of financial software for small companies, has to overcome not only America Online's considerable resources, but also a mounting pile of legal decisions in favor of AOL.
The heart of Ben Ezra Weinstein's case is a challenge to a broad protection afforded to Internet service providers like AOL by a little-publicized portion of the 1996 Communications Decency Act.
The act, among other things, protects Internet providers because they are typically transmitting a third party's information rather than compiling it themselves.
The court action began last year in March when shares of Ben Ezra's stock on an America Online stock listing were reported to be worth far less than their actual trading price.
America Online's service listed the stock as trading for 17 cents per share when, at the time, the shares were actually trading for $1.84 per share.
The listing ended up jolting shareholders who then dumped the company's stock, driving its value down, the company contends in the lawsuit it filed last year.
An attorney for the Albuquerque firm, Steve Aguilar, declined to discuss the case just yet.
But, in its suit, the company said America Online should be responsible for damages because it was somehow negligent in how it reported Ben Ezra Weinstein's stock prices.
American Online's associate general counsel, Randall Boe, also declined to make any statements about the case, saying the company does not comment about active lawsuits against it.
In court documents, though, the giant Internet provider contends it is not liable for damages because it is shielded by the 1996 Communications Decency Act.
The act, which received widespread attention two years ago for its attempt to limit indecent and offensive material on the Internet, has been whittled down by lawmakers and courts because of its original censorship-leanings.
A less publicized portion of the law, however, remains intact. That part of the law protects Internet service providers because generally they are passing on a third party's data rather than compiling it themselves.
While that meets the traditional functions of a publisher in other actionable legal standards, lawmakers extended protection to Internet providers in these cases to promote free speech on the Internet.
In the Ben Ezra Weinstein suit, America Online has recognized, in court papers, a mistake regarding Ben Ezra Weinstein's stock price was made. The error, however, was made by the service America Online contracts with to gather stock information, the company contends.
That mistake fits under the protected standard granted under the communications act, America Online says.
Even though its suit is still alive, the odds seem to be against Ben Ezra Weinstein based on America Online's previous success using the communications act.
For instance:
The company was named in a defamation suit by White House aide Sidney Blumenthal against columnist Matt Drudge. But America Online successfully argued it was protected under the law and a judgment in the company's favor was granted in April.
Last year, an Oklahoma man sued America Online over vulgar and allegedly defamatory postings about him that were posted on an America Online electronic bulletin board. A judge ruled in America Online's favor in November 1997.
Also last year, America Online deflected a suit brought against it accusing the service of facilitating the sale of pornographic materials by members of the service.
All of the suits had one thing in common: immunity under the communications act.
Ben Ezra Weinstein's lawyers disagree with America Online's arguments for immunity. And they persuaded a state District Court judge in October to allow them to gather more information about how America Online puts its stock information together and how it interacts with the company it contracts with to gather its stock listings.
Although the court greatly restricted Ben Ezra Weinstein's request to gather information about America Online, company officials say they feel they've achieved at least a small measure of success where other suits have failed.
"We remind current and potential shareholders that we are in the software business, not the business of litigating with AOL," Ben Ezra chief operating officer Michael Weinstein said about the case. "No one should view this event as anything other than a step -- albeit a significant step -- in a very long and complicated journey."
Aguilar said the company is working at completing its discovery process and will be preparing an answer to America Online's motion to dismiss the suit by the end of January.
"We will see what happens then," Aguilar said.
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