A federal judge (N.D. Cal.) ruled that mitigation is irrelvant to claims under CAN-SPAM and the California spam statute.  [Phillips v. Netblue, Inc., et al., 2006 U.S. Dist. LEXIS 92573 (N.D. Cal. 2006) (access a pdf version of the order here).]

Plaintiff brought a variety of claims under CAN-SPAM and the California spam statute.  The claims were premised on several different types of violations, including misleading subject line violations and forger header violations.   Defendants sought leave to amend and include the following defense:

Plaintiff has failed to mitigate his damages. Plaintiff has not taken reasonable steps to avoid receipt of the emails, and therefore, his damages should be reduced accordingly. Other than filing this lawsuit, Plaintiff has made no effort to notify Defendants that Plaintiff and/or Plaintiff's customers do not wish to receive marketing emails; instead Plaintiff has attempted to collect as many emails as possible on Plaintiff's server.

According to the court, the key issue is whether CAN-SPAM and California statutory damages are intended to be penalties, or whether they are intended to merely compensate plaintiffs.  If they fall into the first category then mitigation is inappropriate.  The court analyzes CAN-SPAM's statutory damages section and concludes that these damages are intended to be penalties.  First, the injured ISP has the right to collect the greater of actual or statutory damages.  Second, courts are granted discretion to reduce damages depending on the relative lack of wrongfulness of the defendant's conduct.  Finally, the fact that CAN-SPAM contains a cap for damages except for damages under § 7704(b) "reflects Congress's determination of the relatively greater wrongfulness of the latter sort of violation, rather than the desire to additionally compensate its victims."  The court concludes that the damages sought by Plaintiff are penalties.  The court runs through a similar analysis with respect to the state law claims (Section 17529.5).  These damages bear no relation to the actual injury suffered by plaintiffs. 

I don't have much to add to this.  My take would be a rather simplistic one.  Defendants should be allowed to show that a plaintiff failed to take reasonable efforts to prevent the occurrence of the violation - turning off the spam filter may fall in this category, along with failing to utilize reasonably available opt out mechanisms.  Once the violation is established, the court is required to stick to the statutory damage structure (which provides for reduction based on defendant's compliance efforts). 

I wonder how this affects the typical defendant claim that plaintiff opted in to receive messages in order to then file suit?  This line of defense may become a bit tougher under a decision such as this.  Also, the characterization of the damages as penalties may affect other issues - can defendant now claim that state law penalties should not be tacked on to federal penalties?  I doubt these level of damages would raise any eyebrows from a constitutional perspective, but it is worth nothing that copyright infringement defendants are raising the defense (I'm not sure how successful) that the statutory damages are excessive.  It seems to me that characterization of the damages as actual damages (estimated by the legislature) as opposed to penalties affects this issue.

[Finally, the court in footnote 1 cites to the section dealing with harvesting and dictionary attacks, and notes that "the work [sic][*] 'dictionary' quoted above is likely errata, and should read 'directory.' The substance of § 7704(b)(1) deals completely with the improper procurement or creation of email addresses, which would be contained in a directory, not a dictionary. . . ."  "Dictionary attacks" do indeed exist and the use of the word "dictionary" is not an error.]

This will probably not be the final word on the mitigation issue.  Either way, the decision is significant.

*  This reinforces my policy of avoiding the "[sic]" whenever possible.  I thought the typo may be a LexisNexis problem but it's in the original.