The Ninth Circuit decision in Gordon v. Virtumundo (9th Cir., 2009) ___ F.3d ____ (No. 07-35487) is in a case that actually originated in the District Court for the Western District of Washington, not from California at all. But it shows such common sense and spine on the part of both the District Court and the Ninth Circuit in wading into uncharted legal waters that I want to talk about it anyway. The question is whether an individual can make himself a bounty hunter for purposes of enforcing the CAN-SPAM Act (15 U.S.C.
ยง7701 et seq.) by buying a domain name, setting up an e-mail address on leased server space, registering for a bunch of online promotions and giveaways and then allowing the e-mail address's inbox to collect the inevitable spam. For those of you who are interested in this question, but not all that interested, the answer is "no."
For those with more interest, there's more after the jump.
CAN-SPAM, of course, is short for the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, conclusively demonstrating the limited imaginations among acronym-composing congressional staffers. The Act prohibits the transmission of messages with "deceptive subject headings" or "header information that is materially false or materially misleading." There are other requirements as well. Based on the 240 items accumulated in CBL's Outlook spam folder since yesterday morning, the Act isn't working very well.
The Act allows enforcement by the Federal Trade Commission, state attorneys general and other state and federal agencies. There is also what the Ninth Circuit describes as a "limited private right of action," allowing a "provider of Internet access service adversely affected by a violation" to bring suit in any district court for an injunction, actual damages or statutory damages of between $25 and $300, and, of course, attorneys' fees.
The Plainitff, James Gordon, and his company, Omni Innovations LLC, registered the Internet domain "gordonworks.com," hosted a site on a server owned by GoDaddy.com (a web hosting company and domain registrar previously best known for its suggestive Super Bowl commercials), and set up an e-mail address, "[email protected]," and then additional accounts and e-mail addresses. He then started engaging in online behavior which is generally not recommended to people who don't want to be buried in Spam: registering for stuff, entering prize giveaways and opting in to e-mail lists. And you'll never guess what happened: The in boxes on gordonworks.com started being inundated with Spam.
And you'll never guess what happened next: he started filing lawsuits for violation of the CAN-SPAM act, including this one against Virtumundo, whhich was alleged to have sent more than 13,000 materially misleading or otherwise unlawful commercial e-mail messages to accounts hosted through gordonworks.com. Of course, Gordon sought several millions of dollars in statutory and treble damages, attorneys' fees and costs.
The District Court granted summary judgment in Virtumundo's favor, and the Ninth Circuit affirmed, because Gordon lacked standing. Just setting up e-mail accounts did not make Gordon an Internet access service provider. And the spam had no "adverse effect" on him. He had pretty clearly set up the entire domain and its accounts for the purpose of generating litigation. To the extent that Gordon sustained any burden at all because of the Spam, "the burdens Gordon complains of are almost exclusively self-imposed and purposefully undertaken."
In short,
Gordon has created a cottage industry where he and his "clients" set themselves up to profit from litigation. The CAN-SPAM Act was enacted to protect individuals and legitimate businesses -- not to support a litigation mill for entrepreneurs like Gordon."
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