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| Electronic communications, privacy, identify theft, data protection, adware, spyware, and more |
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A pair of spam litigation veterans (William Silverstein and e360) clashed in a dispute in the Central District of California, where Judge Snyder denied e360's Motion for Summary Judgment and granted in part and denied in part Sliverstein's Anti-SLAPP Motion to Strike and to Dismiss e360's Claim for Abuse of Process. (Access the court's order here. Disclaimer: I had a tough time following the court's recitation of the facts and procedural background.)
Background
Silverstein brought claims against e360, Moniker, and David Linhardt alleging CAN-SPAM violations. Defendants 360 and Bargain Depot filed counterclaims for defamation and abuse of process. Silverstein also brought a claim for defamation against e360.
Silverstein brought a Motion to Strike Defendants' counterclaims, and Defendants moved for summary judgment on Silverstein's CAN-SPAM claims. Apart from granting attorney's fees to Silverstein on a partial win on his Motion to Strike both sides walked away without conclusive victories.
Anti-SLAPP Issue (Silverstein's Motion)
e360's defamation claims were based on two statements, one referring to e360 as "liars" and "spammers," and the other referring to e360 as a "spammer," based on Silverstein's statement that he "received spam from e360, therefore e360 must be a spammer."
An anti-SLAPP motion requires a showing that the claims at issue arise from the speaker's acts "in furtherance of a person's right of petition or free speech . . . in connection with a public issue." With respect to the first claim, the court held that Silverstein failed to present evidence that he made the statements at issue in preparation for the litigation and denied his request as to the first statement. The second statement was made in a public forum (Usenet) and the court moved to the second issue of whether there was a viable claim. Here, the court found that plaintiff failed to present adequate justification with respect to his statement that e360 was a spammer and on this basis denies Silverstein's request to strike this defamation claim (without prejudice to later renewal).
Abuse of Process (Silverstein's Motion)
With respect to the second claim (for abuse of process) e360 rightly conceded that e360's claim lacked merit, and even offered to drop the claim. Silverstein contended that e360 never actually requested the court to dismiss the claim and that he incurred attorney's fees in dealing with it anyway. The court agrees with Silverstein on this but disagreed as to the amount of fees. The court found that Silverstein sought to recover for fees which were not actually incurred in connection with dealing with this claim and that his attorney's billing records were inadequate to justify the sought after award. The court ultimately ordered Silverstein to submit additional evidence on this point . . . and indicated that although Silverstein will likely be entitled to an award of fees, the amount may be less than Silverstein expects.
CAN-SPAM Claims (e360's Motion)
The court disposed of e360's motion to dismiss the CAN-SPAM claims against it on largely procedural grounds. Silverstein argued that e360 had not properly responded to his discovery requests and thus he lacked evidence sufficient to oppose the motion. The court directed him to file a motion to compel in front of the magistrate.
Libel Per Se (e360's Motion)
Silverstein also brought a claim that e360's statement that Silverstein was a "criminal vigilante," implying that Silverstein improperly accessed e360's servers to transmit bad emails to e360's clients constituted, libel per se. e360 argued that e360's statement was mere hyperbole and cited to among other cases, the famous Goetz v. Kunstler case (where Goetz's claim that Kunstler libelled him by calling him a "murderous vigilante" was dismissed). The court disagreed, finding that it was not clear based on the context of the statement that e360's statute would be reasonably understood as mere hyperbole.
e360 also argued that its statements that Silverstein improperly accessed e360's statements were privileged because the statements by e360 were made only in the context of a court filing. The court agreed, since Silverstein could not point to any other place where e360 allegedly made these statements, and granted e360's motion as to this statement. (Should e360 have brought an anti-SLAPP motion on this particular claim?)
* * *
I'm not really sure how to react as to all this litigation, except that it sure seems from reading the court's order that the parties are aggressively litigating issues that are unlikely to result in any life-altering results. e360's counterclaims are not terribly likely to succeed, and even if they do, unlikely to result in a significant damage award. Similarly, the recent trend of cases makes Silverstein's claims seem lukewarm, at best. The fact that the parties are fighting tooth and nail over seemingly tenuous defamation/libel claims is also telling. The dispute is not really about spam any more, it's about something else entirely. The statements made by the parties publicly pretty much confirms this.
When all is said and done you're left with the feeling that this litigation falls squarely in the heap of the rest of the lawsuits (Virtumundo, Mummagraphics, and others) that are really going to not make one bit of difference regarding the millions of pieces of spam that you and I receive on a regular basis. And in this respect, the biggest loser of all seems to be the CAN-SPAM Act.
Oh well.....
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| Posted by Venkat at | | | |
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So sez this law.com article:
Achieving flow may be important, but Craig Jeffrey, an eighth-year associate in Bryan Cave's Chicago office, said that he needs to respond to the outside distractions that come his way when he is drafting contracts or memos.
"There's an expectation on the sender's side that I'm going to respond instantaneously," he said, adding that he has encountered co-workers who respond only to e-mail once an hour or at other designated times.
"I haven't been able to exercise that kind of restraint," said Jeffrey, who practices real estate and banking and public finance law.
In many ways, technology has improved writing skills, Romig said.
Word processing basics, such as spell-check, passive-voice detection and subject-verb disagreement prompters can make more time for "what's really hard about writing," she said.
Advances in legal research also have improved writing, she said. Before online research, Shepardizing a case, for example, required a trip to the library to page through creaky volumes.
But the use of electronic research can create problems, especially for beginners, she said. All cases in electronic form look basically alike, she said.
A student or new lawyer might find a case clearly on point, but without the benefit of actually seeing the case in print, and where it sits on the bookshelf, the researcher may neglect to notice that it is from the 1920s or from a nonbinding jurisdiction.
"Holding the book reinforces the learning," she said.
I'm not terribly persuaded. [Ed.: says he who reads and links to the article without printing it out!]
I agree that it's a bad habit to read or edit something without actually printing it out. And here, some modern day habits may result in corners being cut. (Tough to print out a case if you are working remotely from the coffee shop I suppose . . . .) But as a general rule, people who cut corners tend to do so no matter what. And those that don't. Don't. I don't think technology has much to do with it.
And the argument that our attention spans are constantly being tested because we are being bombarded with text messages and instant messages? Again, if we're looking to be distracted, there are many ways to be distracted. The three martini lunch I'm sure didn't help fine tune many briefs.
I do agree that the habit of not seeing stuff in print is something that tends to result in careless errors, and this is something which should be avoided. But I think most people recognize this and avoid it. I also agree that sometimes researching is better accomplished by leafing through a treatise rather than trying out many online searches and hoping you chance upon the general vicinity of what you are looking for.
Overall, there are many ways in which the internet helps produce a better written product. Word usage, for example is something I look up right away when drafting a document. (Of course you can run into problems relying on google, but there are some more reliable sources out there.) I tend to think my usage errors have decreased for the most part as a result of being able to look up something online right away.
Me, I'll take an internet connection and a word processor/pdf program any day of the week. Have fun with your bound books and your typewriter! (These folks who lament the effects of modern technology on writing quality probably think that blogs don't add much to the research/writing process either. . . .)
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| Posted by Venkat at | | | |
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Funny . . . . that Stephen Dubner's worst email mistake is mistakenly sending an email to someone who thought he purposely copied the unintended recipient in order to insult them. I know someone who actually did that purposely, believe it or not. Sent an email to someone saying "I can't believe how stupid X is," and copied X on the email. Only to later claim inadvertence. It is one way of making a point to someone that you don't want to make directly. Passive-aggressive I guess, but I'm sure it's done more frequently than people think.
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| Posted by Venkat at | | | |
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I've never been overly enthusiastic about LinkedIn, but I'm becoming increasingly intrigued about how they generate their "people you may know" list. (I'm also getting sucked in to the "how many connections can you add" game.)
One set of thoughts as to how you may construct an algorithm here. Another piece of speculation here. The LinkedIn hive answers here. Earlier Valleywag post here.
What's eerie is that they suggest individuals that I've emailed once or twice and with whom I have no public connection on the web . . . at least without connecting a zillion dots.
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| Posted by Venkat at | | | |
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Asis Internet's two plus year long lawsuit against Azoogle (and others) came to an abrupt end in late March. (The court's order dismissing the claims and granting SJ can be accessed here. It was unsealed in late April.) Originally I didn't think the decision was terribly significant (although a worthy defense win for sure). But as I read it again I do think there is one somewhat tricky issue that's addressed by this dispute and something that could be revisited on appeal.
Background
Asis is a small internet access provider in California. At the time it filed the lawsuit it had about 1000 internet/email customers. Like all entities, Asis had in place some anti-spam measures (principally, a filtering service). Sometime in late 2005, Asis received a slew of messages regarding real estate financing. A principal of Asis became aware of the messages since they were sent to email addresses that were no longer active. The proprietor sensed that something was amiss (based on the addresses to which the messages were sent and based on their content) and filled out the forms in some of these emails. Much of the information included was bogus, except for a telephone number. She also included the name "Bruce Wolf". Shortly after filling out this form, she received numerous calls offering real estate financing offers and related information. The principal testified that she thought she filled out the form on a website registered to one of the defendants - AzoogleAds.com (the site was lowrateadvisors.com).
Azoogle is a firm that traffics in leads. (I say the word "traffic," as if there's something inherently wrong with buying and selling leads . . . but as this decision indicates, that's not necessarily the judicial view.) It shifted business models over the years, and in the past got into trouble for being affiliated with shady operators. Ultimately, it was removed from Spamhaus's ROKSO listing, and even seemed to ask Spamhaus "for advice about spammers who were copying Azoogle images." By the time of the lawsuit, Azoogle did business mostly with companies such as "Seamless Media," which the court describes as having a "good reputation". Seamless Media acquired the Bruce Wolf lead, and ultimately sold it to Azoogle. Azoogle in turn provided it to third parties.
Testimony on Damages
Here's what the court says about the anti-spam efforts of Asis (as recounted by Asis CEO and President, Nella White):
Regarding the burden that Spam has imposed on ASIS, Nella White states as follows:
ASIS Internet has received an ever-increasing amount of SPAM for the past several years. The cost of processing email and filtering out SPAM has grown dramatically. ASIS has had to add software, hardware, staff, and network band with to [*12] fight the SPAM. ASIS also currently uses a service, POSTINI, to preprocess all of the mail sent to its email server, at considerable expense.
White Opposition Decl., P 2.
In her deposition, White estimated that ASIS spends $ 3,000.00/month on spam filtering and employee time devoted to dealing with spam issues. Declaration of Jason Singleton in Support of Opposition to Azoogle's Motion for Summary Judgment ("Singleton Opposition Dec."), Ex. A (White Depo.) at 223. She also testified that a third of ASIS employee time is spent dealing with spam complaints. Calpotura Opposition Decl., Ex. K (White Depo.) at 90-9I, 98-99. However, she explained that the "bulk" of that time is spent dealing "indirectly" with spam complaints, namely, helping people who don't have proper email configurations. Id. Later in her deposition, she admitted that she had never been able to get her staff to provide breakdowns of how they spent their time and could not say how much time they spent dealing with spam. Calpotura Opposition Decl., Ex. K (White Depo.) at 99-100. White also testified that ASIS added only one employee during the relevant period, who was not hired to address spam problems but rather, was primarily involved in installing wireless broadband services. Id. Supplemental Declaration of Henry M. Burgoyne, III in Opposition to Plaintiff ASIS Internet Services, Inc.'s Motion for Summary Adjudication of Issues ("Burgoyne Supp. Decl."), Ex. A (White Depo.) at 89.
ASIS began using its current spam filtering service, Postini, in 2001. Burgoyne Motion Decl., Ex. S. Postini charges ASIS based on the number of customers who use the service rather than the volume of spam that it filters. Burgoyne Motion Decl., Ex. C (White Depa.) at 219, Ex. S (Postini Contract). Based on Postini invoices, the cost of Postini's services to Azoogle in 2005 was as follows: $ 465.90 (January 2005); $ 471.00 (February 2005); $ 474.00 (March 2005); $ 462.60 (April 2005); $ 467.40 (May 2005); $ 471.00 (June 2005); $ 474.60 (July 2005); $ 360.00 (August 2005); $ 453.00 (September 2005); $ 457.50 (October 2005); $ 439.80 (November 2005); $ 439.80 (December 2005). ASIS's system administrator is Falcon Knight, which has leased two servers to ASIS since 2004 or 2005. Burgoyne Decl., Ex. J (Deposition of Shawn O'Connor) at 18, 55.
The Court's Ruling
The court stopped to flag some interesting issues along with way (use and reliability of Wayback machine, testimony of experts regarding the number and timing of the various emails, etc.). But ultimately, the decision turned on the Virtumundo problem. Defendants argued, citing to Gordon v. Virtumundo, that Asis did not present sufficient (or any) evidence of damages resulting from the allegedly improper emails. There was no evidence that the emails reached any Asis end users. No evidence that the spam-filtering service bills of Asis went up. No evidence that Asis was forced to hire additional employees to deal with the offending emails. According to the court, "Asis suffered no meaningful adverse effect as a result of the Emails of any kind. As a result, it does not have standing to assert its claims under the CAN-SPAM Act."
The court also granted summary judgment on an alternative basis. The court found that there was insufficient evidence in the record for a jury to conclude that Azoogle "procured" the emails under CAN-SPAM. The court looked to the two definitions of procure and noted that in the context of an action brought by an ISP, the term procure also includes "conscious avoidance." In the typical context (w/respect to actions brought by AGs or the FTC?) procure means "intentionally to pay or provide other consideration to, or induce, another person to initiate such a message on one's behalf." Section 7706(g)(2) modifies that definition for ISP claims, and adds "with actual knowledge, or by consciously avoiding knowing." Ultimately, the court resolves this issue in Azoogle's favor, finding that there was no evidence from which a reasonable jury could conclude that Azoogle "made a deliberate choice not to know that Seamless Media would engage third parties to send out spam on Azoogle's behalf." However, the court rejects Azoogle's position that in order to implicate the conscious avoidance standard, the defendant would have some reason to know of the specific individual or entity which sent the spam. The question really is whether the defendant should be on notice and be charged with conducting due diligence on all of its partners, or whether it should conduct due diligence on partners who raise red flags.
What to Make?
The initial reaction is that the waves of Virtumundo are being felt far and wide. A follow up reaction is "wow I'm surprised at how often courts are ruling against spam plaintiffs . . . I thought judges equated spammers with purveyors of adult entertainment and online gambling . . . ." But thinking about it further I have to admit that the court granted summary judgment on an interesting issue and one that could well be fleshed out on appeal. (Asis already appealed but I'm not sure of how the timing/final judgment stuff will play out.) Here's how it looks: Congress set up CAN-SPAM with a flimsy definition of what constitute an IAS (ISP). It includes throwaway language in CAN-SPAM that only "adversely affected" entities can bring suit. People come along and file suits even though they pretty clearly lack any viable business activity (Gordon). As a result courts give teeth to the "adverse effect" requirement, requiring harm different from harm suffered by the typical end user. In this case we seem to have an entity that doesn't fall into the Gordon category, but it's clearly a small small ISP (and based in Humboldt county to boot). Assuming it received some non-CAN-SPAM compliant messages, it should have a claim under CAN-SPAM. There have been plenty of cases where larger ISPs with expensive experts go into mind numbing detail about the costs of their anti-spam efforts and speculate as to the per message cost imposed by spam. But no one is ever able really to pin point the increased cost of one particular message. Maybe that's why Congress included a statutory damages provision in the statute. From a policy standpoint the decision seems to create a structure where larger/more established ISPs can sue because they will have more sophisticated anti-spam efforts in place and will be better able to answer the question of the cost imposed by any particular message (granted with a lengthy piece of speculation from an expert). That's an odd outcome from CAN-SPAM, particularly since Congress did not impose any sort of size requirement for an ISP in order to be able to sue.
At the end of the day it's not clear that summary judgment was appropriate, particularly on the basis of no adverse effect. Maybe the extent of damages suffered should somehow mitigate the ultimate award but it seems to me that if you are an ISP (or a provider of IAS) and you received messages that did not comply with CAN-SPAM you should be able to sue. That's pretty much what the text of CAN-SPAM says.
As far as who you sue, that goes to the second point from the court's order. Here again I felt like the court took a perspective that viewed the facts most favorably to Azoogle. Azoogle allegedly buys and sells leads, including mortgage leads. It knew that some of its lead generators engaged in email activities. Some would argue that this itself should impose a heightened due diligence requirement on Azoogle. The fact that Azoogle bought and sold leads in the mortgage industry and bought and sold leads multiple times (including to Quicken, eLeadZ) could arguably have raised some red flags in the mind of the judge. Indeed, the court notes that Asis put forth evidence that Azoogle "did little to investigate the third party vendors it engaged." Nevertheless, the court is swayed by the fact that there's nothing in the record specifically about Seamless Media (??). The court's conclusion that "Seamless Media had a good reputation at the time, and was obliged by its contract with Azoogle to follow the law," either sounds incredibly naive. Or sounds like it takes a view of the facts most favorable to Azoogle.
I'm not sure where the appeal is at procedurally, but I think the chances of Asis are decent. Counsel for defense should be excited about this win for sure, but that excitement may be short-lived.
NB: I was involved as counsel for one of the defendants in the Braver case in the W.D. of Oklahoma. This revolved around mortgage leads as well, and the client was dismissed on jurisdictional grounds. This case ultimately settled.
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| Posted by Venkat at | | | |
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Ethan's post links to the order granting rehearing on the narrow issue of standing. Wow. Of course, the court could reaffirm its previous ruling, but it definitely means that they'll think again about the issue.
Ethan has a previous post that thoroughly recaps the court's decision here.
Added: the US Supreme Court issued a couple of First Amendment decisions this term in somewhat different contexts that could nevertheless be relevant to Jaynes. Both decisions somewhat limited the types of First Amendment challenges which could be brought. The first (Washington State Grange v. Washington Republican Party, et al.) involved a challenge to Washington State's top two primary system. The system had not yet been implemented, but the state republican party challenged the system saying the system would infringe on its First Amendment rights. The Court rejected the challenge saying that the implementation of the system could solve some of the hypothetical problems identified by the challenger and that it was not apparent people (voters) would be confused about party affiliation. (Access a link to the opinions here.) The second involved a challenge to Indiana's voter identification law (Crawford, et al. v. Marion County Election Board, et al.). The challengers again brought a facial challenge, arguing that regardless of the particular implementations, the law imposed a unique burden on a particular class of voters with no countervailing justification. While the Court was split, the Court applied the principles of Washington State Grange in ruling that hypothetical challenges to laws are disfavored. The Court (again, which was split) found that there was insufficient evidence of an actual burden to a particular class of voters to strike down the voter identification law. (Access a link to the opinions here.)
These cases obviously differ from Jaynes in a few respects. However, they are similar in the sense that they turn on the procedural issue of whether the court is going to evaluate the particular application of the law based on the evidence before it, or whether it would look to other circumstances. Jaynes's argument if I recall correctly somewhat depends on him being able to argue that although the law properly proscribed his conduct it was still overbroad and there were other innocent folks who could get swept up in the law. And a corollary to the Supreme Court decisions from this recent term may be that these innocent folks should bring their own challenge - it's not appropriate for Jaynes to mount that challenge. The narrow issue in Jaynes is whether federal or state standing rules apply. This could turn on state law and Virginia cases for the most part, unless US Supreme Court precedent has broad standing rules in place which allow people to bring First Amendment challenges. Here there's a stronger argument to be made that the states should respect these federal standing rules. On the other hand, to the extent the standing rules in federal court narrow the types of cases that can be brought and the types of First Amendment challenges, states are probably freer to impose their own standing rules.
It's tough to say how all of these decisions fit together (and the precise question reviewed again in Jaynes is whether state or federal standing rules apply in light of several specific cases) but it's still interesting to note a potential trend in the US Supreme Court to narrow the classes of cases where First Amendment challenges could effectively be brought.
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| Posted by Venkat at | | | |
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A couple of days ago I received an email from a friend - actually it was from reunion.com saying that my friend was looking for me. I thought it was quite odd since I actually talk to this friend from time to time. I figured it was just another spammer spoofing an address . . . or something. Little did I know that reunion most likely actually sent my friend an email saying that someone was looking for her, asked for her email information purportedly in order to allow her to access her message (from her friend) and then sent out a blast email to everyone in her address book.
Consumerist has a link to this LAT article which provides all of the gory details.
Reunion's practices raise a variety of issues on the legal side:
- CAN-SPAM
- state spam laws
- Computer Fraud and Abuse Act?
- Consumer Protection Laws (FTC-type statutes)
I'm not where to begin, but if the article and what's out there are accurate, reunion may want to consider changing their practices asap.
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| Posted by Venkat at | | | |
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Twitter has been receiving a lot of attention in the blogosphere lately. But no one ever seems to articulate exactly what is so useful about it. When people try to explain why they are so excited about it their explanation seems to boil down to . . . "so I signed up for twitter, posted some mundane details about what I happened to be doing . . . and people actually followed me on twitter."
And?
Kara Swisher asks when the mainstream will actually catch on:
In other words, confirming for me what I wrote last week about the intense obsession with the hottest new services like Twitter and FriendFeed, in the echo chamber of Silicon Valley, and how no one else cares yet.
She almost asks whether this will actually happen, but not quite.
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| Posted by Venkat at | | | |
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When the main contributor to a law firm blog leaves, what happens?
Should there be an announcement on the blog? Or should other contributors just sidle up and start posting.
I'm talking about Jeff Neuburger who posted at Thelen's Technology Law Update (an always great read). I'm not sure if he's gone, or even if there are any changes with the blog . . . but his name and pic used to be featured prominently on the blog and when I clicked over today I noticed someone else. Then I couldn't find his profile on the Thelen website anymore. Strange . . . .
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| Posted by Venkat at | | | |
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