“… GiveForward has an interest in the content posted on its site because it takes a share of the profits made from each fundraiser. However, this interest does not translate into GiveForward creating content for each fundraiser—rather GiveForward provides a forum and gives helpful hints and suggestions to forum posters.”

You can read about the entire odyssey below if you want but we had the chance to speak with Thomas Selz, founding partner of law firm Frankfurt, Kurnit, Klein & Selz based in Manhattan for some additional insight into the case. Selz has been engaged in media, entertainment, and copyright law, for decades so he has some background on these issues. Selz is also described as an expert in crowdfunding laws and regulations, he believes that Hodges’ claims were, in part, tossed out because the creators of the campaign really did not use GiveForward’s coaching advice. While they read the emails and ingested the crowdfunding tips – the campaign creators pretty much did their own thing.

According to Selz, “the problem was that GiveForward was trying to be very helpful”. It is the fact that GiveForward actually assigned a “coach” to help campaigns be more effective and hence raise more money that gives pause.

“They were not simply acting as a passive platform to host content, they were actually getting involved,” explains Selz. “Luckily for the platform there were people who testified that the [campaign] never used any of the suggestions”.

Selz is of the opinion that this fact was a material factor in the court deciding for GiveForward and against Hodges. So in the end GiveForward did not have an active role in the fraud nor the breach of privacy laws. But questions remain.

“It is an interesting case to me because these websites that are trying to help out could theoretically get into trouble,” says Selz.

This all swirls around what determines an “active role” versus a “passive platform”. So basically GiveForward may have dodged a bullet. Selz does not see the courts’ explanation as a definitive response as to how involved a crowdfunding platform may be in supporting campaign creators. Think not just about donations based platforms but of all of the rewards-based platforms like Kickstarter, Indiegogo, Tilt etc. Are they at risk?

Selz says that is the crux of the issue. While all of these sites have disclaimers stating they are not responsible for the content – where do you draw the line? In the above dispute, the fraud element went away because all of the money was returned. But that still did not stop a lawsuit from occurring. Selz described the courts’ decision as a warning to people operating crowdfunding sites.

“The amount of information and support you give could become a bit of a problem,” he says.

As we all know, the courts are not perfect in their judicial wisdom. In the United States, we love to sue each other with unrivaled vigor. This will not be the last lawsuit brought against a crowdfunding platform, especially as the industry gets larger.