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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Spam/Junk Email - Internet Library of Law and Court Decisions - Updated November 22, 2008

File No. C20546/99 (Ontario Superior Court of Justice, June 14, 1999)(CANADA)

Court Canadian court holds that sending unsolicited bulk e-mail, or "spam," is contrary to the emerging principles of "Netiquette" and accordingly violates a hosting agreement in which plaintiff "agree[d] to follow generally accepted 'Netiquette' when sending e-mail messages or posting newsgroup messages ...".

To promote its internet business and website, plaintiff sent internet users unsolicited bulk e-mail, commonly known as "spam." The recipients of this spam registered complaints with defendant, which hosted plaintiff's website. Defendant informed plaintiff that such activity was not permitted under the hosting agreement between the parties. Instead of discontinuing its activities, however, plaintiff engaged a third-party to send its spam. As a result, defendant deactivated plaintiff's website.

Plaintiff moved the court for an "interlocutory injunction," directing defendant to "reactivate the plaintiff company's website." The court rejected this application, finding that plaintiff's conduct was a breach of the parties' agreement, which permitted defendant to stop hosting plaintiff's website.

Defendant was permitted to take such action not only because plaintiff had breached the agreement's prohibition against violating 'generally accepted Netiquette,' but also because plaintiff had breached a provision of that agreement which permitted defendant to add additional terms to the contract. Defendant's notice to plaintiff to cease sending spam was seen by the court as notice of defendant's decision to add such an additional provision to the parties' contract. Plaintiff's refusal to comply with this new provision constituted an additional breach of the parties' agreement, and provided additional justification for the deactivation of plaintiff's website.

496 F.Supp.2d 653 (E.D. Va., July 12, 2007)

Court denied motion to dismiss complaint charging the defendant Union and two of its organizers with violating the CAN-SPAM Act by sending email solicitations promoting union membership to Verizon employees which purported to come from Verizon managers who did not authorize their transmission.  The Virginia District Court held that it could exercise personal jurisdiction over the non-resident Union organizers because both the corporate servers used to transmit these emails, as well as some of the employees who received them, were located in Virginia. 

The Court further held that plaintiff Verizon had stated valid CAN-SPAM claims against the defendants.  In reaching this result, the Court rejected defendants’ contentions that their solicitations constituted non-commercial speech promoting union membership exempt from the strictures of CAN-SPAM.  Because the Union rendered a service – representation of employees – for a fee – union dues – the emails constituted commercial speech.  As such, held the Court, the failure of these emails to accurately describe their source, or to appropriately advise that they were, in fact, advertisements, as well as their failure to provide mandated opt-out instructions, rendered their senders potentially liable for violations of CAN-SPAM.

2000 U.S. Dist. Lexis 17055, 121 F. Supp. 2d 1255 (N.D. Iowa, September 29, 2000)

The court denied plaintiff AOL's motion for summary judgment seeking to hold defendant liable for violations, inter alia, of the Computer Fraud and Abuse Act, the Virginia Computer Crimes Act, and common law trespass to chattels, as a result of the transmission of unsolicited bulk e-mail advertising defendant's products to AOL users. The court reached this conclusion because, based on the record before it, it could not determine whether the parties who sent the e-mail in question were defendant's agents, acting under its control, or independent contractors.

46 F. Supp.2d 444, Civ. Act. No. 98-102-A, (E.D. Va., Nov. 10, 1998)

Court found that defendants were guilty of both dilution and false designation of origin in violation of the strictures of the Lanham act, because they sent approximately 92 million unsolicited spam e-mails to AOL subscribers advertising pornographic web sites, each of which contained a forged header falsely indicating that the spam was sent from an AOL account holder utilizing AOL computers. Because this conduct was prohibited by AOL's Terms of Service, the court also found that it constituted a trespass to chattels, and ran afoul of both the Computer Fraud and Abuse Act and the Virginia Computer Crime Act. The court further found that defendants violated the Computer Fraud and Abuse Act, 18 U.S.C. section 1030 (a)(2)(c), by becoming AOL subscribers and using the access accordingly granted to AOL's system to run extractor programs that harvested the e-mail addresses of potential spam targets in violation of AOL's Terms of Service. The court issued an injunction, enjoining defendants from continuing to send unsolicited spam, or harvest AOL subscriber e-mail addresses.

24 F.Supp.2d 548 (E.D.Va., October 29, 1998)

Court awards AOL summary judgment against a spammer, finding that the sending of over 60 million pieces of unauthorized junk e-mail to AOL subscribers after receipt of cease and desist letters constituted an actionable trespass to AOL's computer network. In reaching this conclusion, the court relied on Compuserve Inc. v. Cyber Promotions, 962 F. Supp. 1015 (S.D. Ohio 1997). The court further held that by including forged headers in much of this e-mail which indicated the e-mail came from an "" member account, defendants had both diluted plaintiff's famous mark and used it to falsely designate the e-mails' origin in violation of the Lanham Act. Implicit in the court's decision is a holding that a famous mark is tarnished when associated with the sending of spam.

Civ. Act. No. 04-2593 (MLC)(D.N.J., July 23, 2007)

Court upholds validity of exculpatory clause in the parties’ contract, which bars plaintiff from recovering consequential damages as a result of defendant’s alleged breach of the agreement.  As a result, the Court granted defendant’s motion for summary judgment, and dismissed plaintiff’s claims for consequential damages.  These claims arose out of defendant’s termination of the parties’ agreement, and refusal to provide plaintiff with internet connectivity services, due to complaints received by defendant that plaintiff was engaged in ‘spamming other customers’ in violation of defendant’s acceptable use policy.

962 F. Supp. 1015, Case No. C2-96-1070 (S.D. Ohio, Feb. 3, 1997)(Graham, J.)

Court issued preliminary injunction enjoining the defendants, inter alia, from sending unsolicited advertisements via E-mail to any CompuServe subscribers. The court held that by sending junk e-mail, defendants had committed the tort of tresspass on personal property by utilizing without permission the computer system which supports CompuServe's e-mail facilities.

156 F. 3d 513 (3rd Cir., September 25, 1998)

(Court holds that the state courts have exclusive jurisdiction over suits brought by private consumers to enforce the provisions of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, which, inter alia, prohibits the use of any device to send an unsolicited advertisement to a telephone facsimile machine. The court accordingly dismissed a federal suit charging that the sending of unsolicited e-mail or spam violated the TCPA. Left for another day was the question of the applicability of the TCPA to unsolicited e-mail.)

Case No. 20030946-CA (Utah Court of Appeals, October 15, 2004)

Court affirms the dismissal of claims brought under Utah's antispam statutes (since repealed) against defendant Redmond Ventures, a software company.  The Court held that the software company was not responsible for e-mail sent to plaintiffs advertising defendant's product, even if sent by independent contractors engaged by defendant to markets its product, because the agreement governing that marketing relationship prohibited the use of unsolicited commercial e-mail.

No. A092653 (Cal. Crt. App., First Appellate Dist., January 2, 2002)

Reversing the court below, the Court of Appeals for the State of California, First Appellate District, holds that Section 17538.4 of the California Business and Professions Code, which regulates the sending of unsolicited commercial e-mail ("UCE") to California residents, does not run afoul of the Commerce Clause of the United States Constitution. The court accordingly reinstated so much of plaintiff's complaint which asserts unfair business and unlawful advertising practice claims arising out of defendants' transmission of UCE in violation of Section 17538.4. The Court also granted plaintiff leave to replead his claim that defendants' transmission of UCE constitutes an impermissible trespass to chattels -- namely plaintiff's computer -- finding his existing complaint deficient as a result of its failure to allege the injury necessary to sustain such a claim.

Case No. 2:06-cv-327 (S.D. Ohio, June 19, 2007)

Court holds that defendants, individual officers of co-defendant Search Cactus LLC (“Search Cactus”) can be held personally liable for violations of the Ohio Consumer Sales Practices Act (“OCSPA”) arising out of the transmission by Search Cactus of allegedly misleading and deceptive promotional emails, if “the officer took part in the act, specifically directed the act, or participated or cooperated in the act.”  Because the complaint alleged that the individual defendants approved the content of the promotional emails in question, the Court denied the individual defendants’ motion to dismiss, and allowed plaintiff, a recipient of such emails, to pursue his OCSPA claim against them.

C98-20064 (N.D. Ca., April 20, 1998)

Court enjoined defendants both from sending spam which falsely stated it came from plaintiff's e-mail service, and from using Hotmail accounts as mailboxes for "spam" reply. Court held that such conduct violated plaintiff's Term's of Service, which prohibited the use of Hotmail accounts to facilitate the transmission of spam. To use plaintiff's service defendants, after being afforded the opportunity to view the Terms of Service, clicked on a box indicating their assent to be bound thereby. As such, the Court's holding reflects its willingness to uphold the validity of a click-wrap agreement between the parties. The Court also held that defendants' conduct constituted trademark infringement and dilution, as well as trespass to chattels and a violation of the Computer Fraud and Abuse Act.

Civil No. 05-040-S-EJL, 2005 WL 1244961 (D. Idaho, May 25, 2005)

The Court holds that the inclusion of allegedly false information in the body of an e-mail does not constitute a violation of either Sections 7704(a)(i) or (b)(A)(ii) of the CAN-SPAM Act, 15 U.S.C. §7701 et seq. and accordingly dismisses a complaint asserting claims alleging their violation.

1 CA-CV 02-0701 (Arz. Crt. App., September 20, 2005)

Court holds defendant's unauthorized transmission of commercial e-mails automatically converted by recipient's cell phone carrier into text messages runs afoul of the Federal Telephone Consumer Protection Act, 47 U.S.C. §227 ("TCPA").  Such conduct constitutes a prohibited use of an "automatic dialing system" to make a "call" to a "telephone number assigned to a cellular telephone service." 47 U.S.C. §227 (b)(1)(A)(iii).  The Court further held that the TCPA was neither preempted by the CAN-SPAM Act's regulation of such conduct, nor an unconstitutional regulation of speech that violated the First Amendment.

498 F.Supp.2d 1293, 2:07-cv-01929-ABC-AGR (C.D. Ca., July 2, 2007).

Finding plaintiff MySpace likely to prevail on its claims that defendant Sanford Wallace violated the CAN-SPAM Act, 15 U.S.C. Section 7704, as a result of his transmission of unsolicited commercial emails to MySpace users, the Court issued a preliminary injunction, enjoining defendant, inter alia, from further use of MySpace or its internet messaging service, from establishing or maintaining MySpace accounts, or from using MySpace for commercial purposes.

Defendant sent email messages to MySpace users that redirected them to a website containing a MySpace logo at which defendant solicited their user name and passwords.  Defendant used this information to hijack and log onto those users’ profiles, from which he then sent messages to the users’ MySpace ‘friends’ inviting them to visit defendant’s websites.  These email messages did not comply with CAN-SPAM.  Among other things, they did not contain a valid physical address for defendant, did not provide opt out instructions, or provide a valid return email address at which defendant could be contacted to request that no further emails be sent.  Moreover, they did not, in their header information, identify defendant as their source.  As such, held the Court, plaintiff was likely to establish a number of violations of CAN-SPAM, and was accordingly entitled to injunctive relief. 

In reaching this result, the Court found that CAN-SPAM applied to emails sent from one MySpace user to another, over the MySpace network.  The Court also noted that CAN-SPAM applied to instant messages.

CV 06-3391-RGK (JCx) (C.D. Cal., February 28, 2007)

Court holds that defendant’s creation and use of 95 MySpace accounts to transmit unsolicited commercial email promoting its communications products runs afoul of both the CAN-SPAM Act, and California Business and Professions Code Section 17529.5, and violates MySpace’s Terms of Service.  Defendant created these accounts without identifying itself as the account holder.  The emails violated CAN-SPAM because they failed to contain either a valid physical address for defendant the, or instructions on how to avoid receiving further email solicitations.  In addition, they were impermissibly sent to MySpace user email addresses generated by use of a script software program, another violation of CAN-SPAM.  They were also sent from email accounts obtained through false or fraudulent pretenses, as a result of defendant’s failure to accurately identify itself as the account holder.   

The Court found that these emails also violated California B & P Code Section 17529.5, both because they contained false header information that failed to identify the as their source, and because they contained misleading subject lines that failed to accurately describe the emails’ contents.

Finally, the Court found defendant’s conduct violated MySpace’s Terms of Service, which prohibited the use of MySpace accounts both for commercial purposes and to transmit spam, and prohibited the use of scripts to generate email addresses for the transmission of commercial email to MySpace account holders.  As such, the Court held defendant liable for liquidated damages of $50 for each email sent as mandated by the Terms of Service.  In reaching this result, the Court rejected defendant’s challenge to such clause on the ground that it was an unenforceable penalty provision.

469 F.3d 348, No. 05-2080 (4th Cir., November 17, 2006)

The Fourth Circuit affirms the dismissal of claims brought by defendants under CAN-SPAM and Oklahoma statutory and common law arising out of defendants’ receipt of 11 unsolicited commercial emails from plaintiff  Defendants’ claims were premised both on their assertion that the email at issue contained inaccurate contact information, and that plaintiffs continued to send them commercial email after receipt of a complaint from defendants concerning the emails.

The Court dismissed the claims defendants advanced under an Oklahoma state statute that sought to regulate the transmission of commercial email that contained any false information as to its source, holding that state statute preempted by the Federal CAN-SPAM Act.  The Court dismissed the trespass to chattels claim asserted by defendants on the grounds that defendants did not establish that they sustained more than nominal damages as a result of their receipt of the commercial emails in question.  The Fourth Circuit held this failing fatal to defendants’ trespass to chattel claim.  Finally, the Fourth Circuit dismissed defendants’ CAN-SPAM Act claim, holding the immaterial errors in the header/source information of commercial emails was not actionable under CAN-SPAM.  Defendants could readily identify and contact the sender of the emails in question from the information contained therein.  Defendants’ claims that plaintiffs violated CAN-SPAM’s provisions concerning the removal of a recipient from future emails upon request failed because defendants did not show plaintiffs engaged in “a pattern or practice” of failing to honor such requests, a prerequisite to such a claim under CAN-SPAM.

No. 97-06273 (Texas District Court Travis County, Nov. 10, 1997)

(Court permanently enjoined defendants from continuing their unauthorized use of plaintiffs' domain name as the return address in spam e-mailing. This mailing, to thousands of invalid e-mail addresses, resulted in a flood of "returned" e-mails, which crashed plaintiff ISP's mail system and disrupted plaintiffs' business. The court also awarded damages, including attorneys' fees, on trespassing and nuisance theories)

30 F.Supp.2d 1292, 1998 U.S. Dist. Lexis 17253 (D. Colo., October 16, 1998)

Court held that defendant who engaged an independent contractor to mount a spam advertising campaign on defendant's behalf could not be held vicariously liable for damages caused when the independent contractor, without defendant's knowledge, inserted a "forged" header in the spam's "From" and "Reply to" fields which header constituted plaintiff's domain name. This act had the predictable effect of causing plaintiff to receive both numerous complaints from recipients of the e-mail, as well as "bounced back" undeliverable e-mail.

The court further held that plaintiff's counsel had no absolute immunity from defamation claims brought by defendant arising out of various statements counsel made about defendant and the lawsuit which were posted to plaintiff's website. While such a privilege does exist for statements made by the attorney "... during the course and as part of a judicial proceeding in which [she] participates as counsel if it has some relationship to the proceeding," it does not extend to statements made concerning the lawsuit to via the Internet to the public at large. The court nonetheless dismissed defendant's counterclaim for libel per se because the allegedly defamatory statements were non-actionable statements of opinion that, in most instances, also failed to be sufficiently plain on their face to be libelous per se.

No. 98-2-25480-7 SEA (Wash. Super. Crt., King Co., March 10, 2000) reversed, 143 Wn.2d 824; 24 P.3d 404 (Wash. 2001) cert. denied (2001)

In a brief order, Washington Superior Court Judge Palmer Robinson declared Washington State's Unsolicited Electronic Mail Act, RCW 19.190.020 and RCW 19.190.030, unconstitutional on the grounds that it violates the Commerce Clause of the United States Constitution because it is "unduly restrictive and burdensome" of interstate commerce.

CV-05-457-TUC-DCB (D. Az., Mar. 2, 2007)

Denying cross-motions for summary judgment, the Court allows the Government to pursue civil claims against defendant Cyberheat Inc. ("Cyberheat") for violation of the CAN-SPAM Act arising out of the transmission of sexually explicit emails by its affiliates that did not meet the strictures of the Act.  While Cyberheat did not directly pay its affiliates to transmit such emails, it paid them "finder's fees" for subscribers their promotional activities produced - including subscribers produced by email - and provided affiliates with promotional materials that could be used - via links - in promotional emails.  The court held that questions of fact as to defendant's knowledge of its affiliates' activities, and the steps defendant could or did take to prevent violations of the Act after it became aware of consumer complaints, prevented the court from determining whether Cyberheat should be held either vicariously liable for the acts of its affiliates, or to have initiated or procured the transmission of the offending emails within the meaning of the CAN-SPAM Act.   The court reached this result notwithstanding the fact that Cyberheat's contracts with its affiliates contained explicit prohibitions against the transmission of emails that violate CAN-SPAM.

The court held that because it was in the business of sending sexually explicit materials over the Internet, defendant owed a duty to the public to exercise reasonable care to prevent those who did not wish to see such materials from being involuntarily exposed to such uninvited intrusions.  The question of whether defendant Cyberheat met this duty was left for another day.

24 P.3d 404 (Supreme Court State of Washington, June 7, 2001), cert. denied, 122 S.Ct. 467 (2001)

Reversing the decision of the trial court, Washington's Supreme Court holds that Washington's Antispam law, chapter  19.190 RCW, does not run afoul of the Commerce Clause of the United States Constitution.  Washington's Antispam law regulates the sending of unsolicited commercial e-mail ("UCE") either to an e-mail address held by a Washington resident, or from a computer located in Washington.  The statute mandates that such e-mail may not "misrepresent or disguise … the message's point of origin or transmission path, or use a misleading subject line."  The statute also requires the sender of UCE to include a valid e-mail address to which recipients can respond.  In holding that the statute did not violate the Commerce Clause, the Court determined that the statute did not discriminate against Interstate Commerce, because it imposed the same obligations on everyone who sent e-mail to Washington residents, whether they reside in Washington or elsewhere.  The Court further held that the statute served the important State interests of protecting local ISPs, owners of domain names and Internet users from the unwanted costs associated with UCE, while imposing, at most, minimal burdens on interstate commerce by obligating those who send UCE to provide truthful subject lines and transmission paths.

Quick Hits

Asis Internet Services v. Optin Global, Inc., et al.
No. C 05-5124 (N.D. Ca., September 27, 2006)

Denying in large part defendants’ motion to dismiss, the Court held that plaintiff, an internet service provider, stated claims under both CAN-SPAM and California Business and Professions Code Section 17529 et seq., as a result of the transmission of allegedly deceptive and unsolicited commercial email to plaintiff’s servers.  These emails were allegedly sent to generate leads for defendants mortgage brokers’ businesses.  The complaint alleged that the emails in question were sent by ‘spammer defendants’ at the request of ‘lead generators’ who, in turn, had contracts with the defendant mortgage brokers to provide leads of prospective customers.  The Complaint alleged that the mortgage brokers “knew or consciously avoid knowing” that the lead generators and spammer defendants were violating CAN-SPAM, and of the injury being cause plaintiff thereby.  The Complaint further alleged that the emails at issue violated CAN-SPAM both because they contained false and misleading headers, indicating that they were purportedly sent from domains that were registered to unknown or false entities, and because they contained misleading subject lines that did not accurately describe the content of the emails, and instead implied that the user’s loan was approved or pre-approved.

A party can be guilty of violating CAN-SPAM even if it did not transmit the email at issue.  As explained by the Court, “to state a claim against the Mortgage Defendants under the CAN-SPAM Act, plaintiff must ‘prove that they paid or induced the Spammer defendants to initiate commercial email messages and that the Mortgage Defendants acted either with actual knowledge, or by consciously avoiding knowing, that the Spammer Defendants’ acts were illegal.”  Because the plaintiff’s complaint did just that, the Court denied, in large part, defendants’ motion to dismiss.

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e360Insight, LLC v. Comcast Corp.
No. 08-340, 2008 U.S. Dist. LEXIS 29287 (N.D. Ill. Apr. 10, 2008).

Court holds that the ‘Good Samaritan’ provisions of the Communications Decency Act (“CDA”), 47 U.S.C. Section 230(c)(2), immunize Internet Service Providers such as defendant Comcast from ‘good faith’ actions taken to block email marketers from sending email solicitations to users of the ISP’s services.  Plaintiff e360Insight brought this action in response to actions taken by Comcast to block it from sending email solicitations to Comcast customers.  Under the CDA, Comcast is entitled to immunity for “any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be … objectionable, whether or not such material is constitutionally protected …”.  230(c)(2)(A).  Thus, to be entitled to immunity, the ISP must show both that the materials it blocked are 'objectionable' and that it acted in good faith in blocking them.  The Court applied a subjective standard in determining whether the emails in question were objectionable and hence subject to blocking under the statute – i.e. the materials are objectionable if Comcast believes them to be objectionable.  Importantly, it did not matter if the emails complied with CAN-SPAM.  Said the Court:

compliance with CAN-SPAM, Congress decreed, does not evict the right of the provider to make its own good faith judgment to block mailings. …  Under the law, a mistaken choice to block, if made in good faith, cannot be the basis for liability under federal or state law.  To force a provider like Comcast to litigate the question of whether what it blocked was or was not spam would render Section 230(c)(2) nearly meaningless. 

Because Comcast believed the emails at issue were objectionable, and because plaintiff failed to adequately plead that Comcast did not act in good faith when it made its decision to block plaintiff’s emails, Comcast was entitled to immunity, and the Court dismissed the claims plaintiff asserted against it for violation of the Computer Fraud and Abuse Act and of plaintiff’s rights under the First Amendment, as well as for tortuous interference with prospective economic advantage and violation of the Illinois Consumer Fraud Act.

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Facebook, Inc. v. ConnectU LLC
Case No. C 07-01389 RS (N.D. Cal., May 21, 2007).

Court allows the social networking site Facebook Inc. (“Facebook”) to proceed with claims charging its competitor ConnectU with improperly harvesting email addresses of Facebook users from its site, who were then sent emails soliciting their patronage. 

Denying in part defendant’s motion to dismiss, the Court held that Facebook had stated a valid claim under California Penal Code Section 502 by alleged that defendant knowingly accessed Facebook’s site and, in violation of the site’s prohibitions, copied user email addresses.  One violates this section when he “knowingly accesses and without permission takes, copies, or makes use of any data from a computer, computer system or computer network, or takes or copies any supporting documentation, whether existing or residing internal or external to a computer, computer system, or computer network.”  This claim was valid notwithstanding the fact that ConnectU obtained such access by using, with their permission, authorized passwords given Facebook users. 

The Court also allowed Facebook to proceed with common law misappropriation claims arising out of such activities, holding the same were not preempted by the Copyright Act.

The Court did grant so much of ConnectU’s motion to dismiss which sought relief under California Business & Profession’s Code Sections 17529.4 and 17538.45, holding those statutes preempted by the Federal CAN-SPAM Act.  Cal. Bus. & Prof. Code Section 17529.4 makes it unlawful “for any person or entity to collect electronic mail addresses posted on the Internet if the purpose of the collection is for the electronic mail addresses to be used to … initiate or advertise in an unsolicited commercial email advertisement …”.  Because, under CAN-SPAM, the Act “supersedes any statute, regulation or rule of a State or political subdivision of a State that expressly regulates the use of electronic mail to send commercial messages, except to the extent that any such statute, regulation or rule prohibits falsity or deception in any portion of a commercial electronic mail message or information attached thereto,” the Court held these California statutes preempted, and accordingly dismissed Facebook’s claims thereunder.  The Court reached that result because “neither section 17529.4 nor section 17538.45 purport to regulate false or deceptive email, or require such falsity or deception as an element of the statutory violation.”

Finally, the Court dismissed, with leave to replead, Facebook’s CAN-SPAM Act claims, holding that the Act prohibited the use of materially false or misleading header information concerning the originating address of the emails, which had not yet been alleged here.  A claim alleging deception in the manner in which destination email addresses were obtained did not state a claim under CAN-SPAM, held the Court.   

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Free Speech Coalition Inc. v. Mark Shurtleff, et al.
Case No. 2:05CV949DAK (D.Utah, March 23, 2007)

Court denies motion to enjoin enforcement of Utah's Child Protection Registry Act, a statute that prohibits the transmission of emails promoting products that are either harmful to, or that a minor is prohibited from purchasing to email addresses registered with the Utah registry, absent the consent of an adult.  The Court held plaintiff, a trade association representing members "involved in the production [or] dissemination of sexually explicit … expression", unlikely to succeed on the merits of its claims that Utah's Child Protection Registry Act was preempted by CAN-SPAM, or ran afoul of either the Commerce Clause or the First Amendment.  In reaching this result, the Court relied on an express exception to preemption provided in CAN-SPAM for state laws "relate[d] to … computer crime."

The People of the State of New York by Elliot Spitzer, Attorney General of the State of New York v. Monsterhut, Inc, d/b/a, et al.
Index No. 402140/02 (Sup. Ct, N.Y. Co., 2003)

At the request of the Attorney General, the Court issues a preliminary injunction, enjoining defendant Monsterhut from further fraudulently advising recipients of its commercial emails that such emails were sent to them because they had “opted-in.” Accepting the definition of the Attorney General, the court held that “in an opt-in protocol, consumer email addresses are collected and used only if the consumer affirmatively approves such collection.  For example, a consumer must mark a box indicating the desire to allow the use of his or her email address.”  Monsterhut did not meet this definition, because they sent emails to individuals who had opted-in to receive emails from the third parties from whom Monsterhut obtained their email addresses. 

The Attorney General asserted that these activities constituted fraudulent and deceptive advertising practices in violation of both NY General Business Law Sections 349 and 350, as well as Executive Law Section 63(12).  The Attorney General further alleged that Monsterhut had sent more than one half-billion commercial emails since March 2001, that more than 750,000 consumers had asked to be removed from Monsterhut’s email list, and that 40,000 consumers complained about Monsterhut’s practices.

It should be noted that the judge’s decision in this case is less than a model of clarity.

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White Buffalo Ventures, LLC v. University of Texas at Austin
420 F.3d 366 (5th Cir., August 2, 2005) cert. denied, 126 S.Ct. 1039 (January 9, 2006)

Affirming the Court below, the Fifth Circuit holds that the University of Texas at Austin (“UT”) can block unsolicited commercial email sent by plaintiff White Buffalo Ventures (“White Buffalo”) to UT students that promote plaintiff’s online dating services.  Importantly, UT can take such action notwithstanding the fact that White Buffalo’s commercial emails comply with CAN-SPAM.

In reaching this result, the Fifth Circuit rejected White Buffalo’s arguments that UT’s conduct constituted state action preempted by CAN-SPAM.  The Court held that UT was a state actor, and that its determination to block unsolicited commercial email was a state regulation that fell within the ambit of CAN-SPAM’s preemption clause, found in section 7707(b)(1).  This section provides that CAN-SPAM preempts state regulation of email unless such regulation ‘prohibits falsity or deception’ in the email.

However, the statute further provides that ‘nothing in this chapter shall be construed to have any effect on the lawfulness or unlawfulness … of the adoption, implementation or enforcement by a provider of Internet access service of a policy of declining to transmit, route, relay , handle or store certain types of electronic mail messages.’  Section 7707(c).   As the provider of Internet access service – students are enabled by UT to access the internet via its wireless network, and to use email addresses UT provides – this section expressly permitted UT to adopt a policy blocking those who send spam to its network.

The Fifth Circuit held that Section 7707(c) conflicts with Section 7707(b)(1), and thus draws into question the limits of the preemptive effect of CAN-SPAM.   Given these conflicting provisions, held the Court, the presumption against preemption counseled against finding UT’s regulations invalidated by CAN-SPAM.  As such, the Court rejected White Buffalo’s argument that CAN-SPAM mandated that UT’s policies be invalidated on the ground that they ran afoul of CAN-SPAM, or were preempted thereby.

The Court similarly rejected White Buffalo’s claim that UT’s bar on the transmission of its commercial emails ran afoul of the First Amendment.  The Court held that the regulation was reasonably calculated to protect a substantial governmental interest – protecting users of its email network from the hassle associated with unwanted spam – and was no more extensive than necessary to protect that interest. 

The Fifth Circuit did hold that an absolute ban on the transmission of White Buffalo’s emails may be an overly broad restriction – from a First Amendment prospective – if the only interest protected was the capacity of UT’s system to handle the needs of its user community.  Summary judgment was inappropriate, on the record then before the Court, to sustain such a contention.  

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