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08 Nov 2010

Yet another unfortunate CAN SPAM case Email

The case Melaleuca v. Hansen has been moving slowly through Idaho federal court since 2007. On Sept 30 the court decided in favor of the defendants. Although the outcome is probably correct, the court's decision perpetuates the misreading of CAN SPAM from the infamous Gordon case that makes it in practice impossible to win a CAN SPAM case in the 9th Circuit.

The facts of the case are fairly straightforward. Hansen is an "executive" with a multi-level marketing company called ITV. Back in 2007, Hansen sent some mail to "executives" of Melaleuca, a competing MLM company, trying to induce them to work for ITV. Melaleuca sued with a variety of charges, including CAN SPAM violations. After several years of skirmishing over such issues as whether the defendant, who lives in California, could be sued in Idaho where Melaleuca is, and whether the defendant's wife was a party to the case, the court finally decided in June that Melaleuca didn't have standing to sue, and affirmed that conclustion a week ago.

To have standing to sue under CAN SPAM, you need to be a "provider of Internet access service." Melaleuca provides e-mail addresses to its employees, but contracts the work out to an ISP called IP Applications. The ISP assigned its CAN SPAM clains to Melaleuca, but not until after filing suit, which the judge said was too late. I don't know enough law to know the ins and outs of establishing standing, but I expect that a federal judge does, and so the suit fails right there.

The CAN SPAM law actually says a "provider of Internet access service adversely affected by a violation of" specified sections of the act. The Gordon court interpreted "adversely affected" to mean that a plaintiff has to show specific damage from the specific spam identified in the suit. The Ninth Circuit affirmed that decision, and the current decision quotes it:

[T]he harm must be both real and of the type experienced by ISPs. While the harm need not be significant in the sense that it is grave or serious, the harm must be of significant to a bona fide IAS provider, something beyond the mere annoyance of spam and greater than the negligible burdens typically borne by an IAS provider in the ordinary course of business. (minor typos fixed)

I can't blame this judge, who has to follow the precedent in his circuit, but this interpretation was and is just plain wrong, and has the effect of making it impossible for anyone to win a CAN SPAM suit.

Spamming is a "sausage slicing" attack, in which each individual act is trivial, but the aggregate is significant. (The classic sausage slicing crime is the probably mythical bank progammer who rounded all the fractional cents of interest calculations into his own account.) I would think it was obvious that was the reason that Congress wrote statutory damages into CAN SPAM, exactly so recipients don't have to show per-spam actual damages. Other than some implausible situations in which a single spammer accounts for a large fraction of an ISP's total mail stream, the identifiable damage from a single spam and even a single spammer is dauntingly difficult to measure.

This interpretation also suggests a fundamental misunderstanding of the way that e-mail and spam work, as though there is a miasma of spam that lands randomly on mail servers, sort of like drizzle on your windshield. In fact, every e-mail message, spam or otherwise, is addressed to specific recipients, and the only reason anyone receives any spam at all is that spammers sent it to him. It may seem hard to imagine that every droplet that lands on your windshield was aimed directly at you by the cloud from which the drizzle fell, but spam is not rain, and the analogy is wrong.

Melaleuca says they will appeal, which strikes me (and other observers) as a really bad idea. The lack of standing for not being an ISP seems open and shut, and even if there is a case that persuades the Ninth Circuit to reconsider its "adverse effect" rule, this one, with only six messages at stake, isn't it. The best I can hope for is that the appeals court finds the former consideration adequate to dismiss the suit, and stops there.

But in the meantime the unfortunate fact is that if you want to have any hope of winning a CAN SPAM case, don't file it on the west coast.

posted at: 23:48 :: permanent link to this entry :: 1 comments
posted at: 23:48 :: permanent link to this entry :: 1 comments

comments...        (Jump to the end to add your own comment)

To Win a CAN-SPAM Case, you have to
To be able to win a CAN-SPAM case, you have to be a professional plaintiff with an ISP that is specifically designed not to operate a business, but to crash as a result of spam.

Under many rulings, including in my case, to have standing, you have to associate the crash, upgrades, etc. to the particular spam being complained of.

A legitimate ISP will design a system and upgrade the system before a particular set of spam causes damage. The extensions of record makes reference to AOL being an ISP and blocking 3.2 billion e-mails a day, if a spammer sends only 10 million e-mails in a day, that spammer could not be sued by AOL because the harm must have come from the other 3.2billion - 10 million e-mails that arrived that day.

(by Bill Silverstein 10 Nov 2010 17:10)

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