Class Action Against Reunion.com Gets Another Chance?
Reunion.com faces a class action complaint alleging it engaged in deceptive marketing practices. (Previous posts: Spam Notes; Technology & Marketing Law blog; E-Commerce and Tech. Law blog.) The factual allegations in the complaint are not crystal clear, but Reunion.com was accused of duping registering users into forwarding emails to all of their friends encouraging their friends to join Reunion.com.
The complaint alleged claims under California's anti-spam statute. The trial court judge initially dismissed the complaint with leave to amend. The second time around, the court dismissed the complaint on two grounds: (1) the claims were preempted by CAN-SPAM; and (2) the claims were not supported by an allegation of actual injury. (Previous post noting the second ruling here.) The court issued a follow-up order to its second order of dismissal.
A few days before the court issued its second dismissal order, the Ninth Circuit referred Kleffman v. Vonage (another preemption case) to the California Supreme Court. The plaintiff in this case brought a motion for reconsideration, arguing that the Ninth Circuit's referral of Kleffman shed light on the Ninth Circuit's thinking on preemption. I think their argument was that the court would not have referred the case if the claims were preempted - the referral order was necessarily based on an implicit finding of no preemption. Based on this, and the fact that Reunion had not argued the no allegation of injury argument which supported the second dismissal, plaintiff brought a motion for reconsideration.
The court rejects the argument based on the Ninth Circuit's referral in Kleffman, and rules that the Ninth Circuit's referral order is not indicative of anything. With respect to the actual injury argument the court gives the parties additional time to brief the issue of whether: "an allegation of damage is required under the California anti-spam law". If all of this feels like a bunch of "inside baseball," it's because it is. The Ninth Circuit should provide guidance soon (hopefully) on the preemption issue. Virtumundo has already been argued, and another case (Asis) dealing with the preemption issue vis a vis the California statute is winding its way through the appeal process. The one issue that is interesting (and probably equally "inside baseball") is whether the claims based on the California statute are subject to Article III standing restrictions. (Can a plaintiff who has not suffered Article III harm sue in federal court under a state statute that does not require actual harm?) I forget what the basis was for being in federal court in the first place (CAFA), but this will obviously inform the issue.
(Access a copy of the court's order granting reconsideration and ordering additional briefing [pdf] here.)
A few days before the court issued its second dismissal order, the Ninth Circuit referred Kleffman v. Vonage (another preemption case) to the California Supreme Court. The plaintiff in this case brought a motion for reconsideration, arguing that the Ninth Circuit's referral of Kleffman shed light on the Ninth Circuit's thinking on preemption. I think their argument was that the court would not have referred the case if the claims were preempted - the referral order was necessarily based on an implicit finding of no preemption. Based on this, and the fact that Reunion had not argued the no allegation of injury argument which supported the second dismissal, plaintiff brought a motion for reconsideration.
The court rejects the argument based on the Ninth Circuit's referral in Kleffman, and rules that the Ninth Circuit's referral order is not indicative of anything. With respect to the actual injury argument the court gives the parties additional time to brief the issue of whether: "an allegation of damage is required under the California anti-spam law". If all of this feels like a bunch of "inside baseball," it's because it is. The Ninth Circuit should provide guidance soon (hopefully) on the preemption issue. Virtumundo has already been argued, and another case (Asis) dealing with the preemption issue vis a vis the California statute is winding its way through the appeal process. The one issue that is interesting (and probably equally "inside baseball") is whether the claims based on the California statute are subject to Article III standing restrictions. (Can a plaintiff who has not suffered Article III harm sue in federal court under a state statute that does not require actual harm?) I forget what the basis was for being in federal court in the first place (CAFA), but this will obviously inform the issue.
(Access a copy of the court's order granting reconsideration and ordering additional briefing [pdf] here.)
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