The Unruly Bookstore
In October of 1994 a hacker, using someone else's account, logged onto Prodigy's Money Talk bulletin board and posted some disparaging statements about a stockbrokerage named Stratton Oakmont.
Prodigy users hanging out on this bulletin board would soon read that Stratton was a "cult of brokers who either lie for a living or get fired." They would read that a recent public offering that Stratton conducted for Solomon Page Ltd. was a "major criminal fraud."
Unfortunately for Prodigy, it had advertised itself as a "family oriented" service. The judge read this to mean that they exercise editorial control and are responsible for any libellous statements uploaded to its bulletin boards. Despite the thousands of posts which come in daily and the seminal case a few years earlier Cubby v. CompuServe, which held CompuServe to be like a bookseller, or distributor of information, Judge Stuart Ain decided that Prodigy was a publisher. As such, they were responsible for everything offered up on its system.
In September 1995, Prodigy settled with Stratton Oakmont and issued a written apology, but claimed that no money had changed hands. The parties asked the Judge to vacate his decision--effectively erasing it from the law books. The judge declined. The precedent stands.