Federal Judge Rejects Strict CAN-SPAM Causation


Judge Henderson of the Northern District of California rejected expansive use of the Gordon/no-standing argument (at the Motion to Dismiss stage).  (Order denying Motion to Dismiss here [pdf].)  In the process I would say he went a bit further:
Imposing a requirement that the plaintiff show a particular email caused the "adverse effects," therefore, makes a standard for ISP standing that no ISP can realistically meet.  It defines the private right of action set out in section 7706(g)(1) out of existence.
Judge Henderson surveys the (few) standing/harm cases (Hypertouch, Gordon/Virtumundo, Brosnan, and finally Asis v. Optin Global). Gordon is easily explainable on the basis of the factual context of the case, and Hypertouch and Brosnan didn't contain extensive discussion of the issues.  The surprising case he focuses on is Asis (also decided in the Northern District) and he has some interesting words to say about this decision:

[The requirement that] the allegedly deceptive email caused the adverse effects listed . . . appears to have evolved as an artifact of courts' paraphrasing each other, without an explicit analysis of what, in reality, would be required to show causation.

Ouch.  Almost reads like an appeal brief counsel for Asis would write in the Optin case.   Here's what I had to say about Optin, which sounds fairly similar to what Judge Henderson says in this case:

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.

I guess we'll have to wait and see what the Ninth Circuit says, but this definitely adds something to the mix (and in the meantime gives plaintiffs something to cite to).
 
 
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