Gordon v. Virtumundo, Inc., 575 F.3d 1040 (9th Cir. Aug. 6, 2009) (full-text).
Factual Background Edit
Plaintiff Gordon is the owner of the domain names “gordonworks.com” as well as the e-mail address “firstname.lastname@example.org” Around September 2003, he created additional e-mail accounts for about six friends and family members as well as accounts for his “clients,” which he used to respond to online promotions and prize giveaways. Gordon estimated that he subscribed to e-mail mailing lists somewhere between 100 and 150 times. An automated response was set up for all commercial e-mail titled “NOTICE OF OFFER TO RECEIVE UNSOLICITED COMMERCIAL EMAIL (SPAM)” containing a “binding contract” whereby the sender agreed to either cease and desist or pay Gordon $500 for each additional unsolicited commercial e-mail subsequently delivered to the account. Gordon, however, did not retain any proof that he abided by the “unsubscribe” or “opt-out” instructions provided in the e-mail he received.
Trial Court Proceedings Edit
In 2004 Gordon began filing lawsuits against senders of e-mail advertisements and in 2006 he brought suit against defendant Virtumundo for violations of the CAN-SPAM Act, the Washington Commercial Electronic Mail Act (“CEMA”), the Washington Consumer Protection Act (“CPA”), and the Washington “Prize Statute.” The Prize Statute claim was dismissed in its entirety as a result of Virtumundo’s motion to dismiss for pleading deficiencies and the district court granted a motion for summary judgment on the surviving claims concluding that neither party had standing to pursue a private action under the CAN-SPAM Act and that the state law claims failed as a matter of law based in part on federal preemption grounds.
Appellate Court Proceedings Edit
The CAN-SPAM Act does not ban spam outright but instead provides a code of conduct to regulate commercial activity. Enforcement of the Act is limited to the Federal Trade Commission, state attorneys general, and other state and federal agencies. A limited private right of action is extended to “providers of Internet access services adversely affected by a violation of the statute.” The Court of Appeals agreed that Gordon lacked standing to bring a claim under the Act absent a sufficient showing that he was an Internet access provider.
Gordon’s argument was based on his role as a domain name registrant and provider of access to e-mail for his friends, family, and clients. The Court rejected this argument and determined that Congress’ intent was to keep the class of private entities capable of bringing a claim limited to those best able to litigate and prosecute violations of the Act. While Gordon did provide an email address for a number of individuals his domain was housed on another company’s servers, and his own internet access was provided by a third company — both of which constituted an internet access provider — where he did not.
Even if the court had found Gordon to be an internet access provider, he failed to establish that he had been “adversely affected by” violations of the Act. While the statute does not delineate all the possible ways a provider can be adversely affected, case law dictates that receiving a large volume of email is not enough. The problems a provider faces must be more than just a high volume of traffic or decreased bandwidth; problems that providers face regardless of the interference of spam. Additionally, the problems faced must be unique to those encountered by Internet access providers, such as increased subscriber complaints, the cost of anti-spam technology, and the cost of new equipment to handle increased capacity.
Gordon also failed to prove being adversely affected by violations of the Act because the spam he received was a result of his own action, and possible inaction. The CAN-SPAM Act was never meant to offer a remedy for individuals who voluntarily opted-in to e-mail messages for the purpose of filing lawsuits. Additionally, without any evidence presented, it is difficult to believe that Gordon opted-out of every individual mailing.
Gordon’s evidence and arguments in support of his state law claims were lacking and the court found them to be preempted by the CAN-SPAM Act’s express preemption clause absent a demonstration that a genuine issue off material fact existed.