MySpace, Inc. v. The Globe.com, Inc., 2007 WL 1686966 (C.D. Cal., Feb. 27, 2007).
Factual Background Edit
MySpace is an online social networking service that allows members to create personal profiles in order to find and communicate with other people. To set up an account, the user must assent to the MySpace Terms of Service Contract (TOS) by checking a box. The TOS prohibits spamming, automated use of its system, use of MySpace's service for commercial endeavors, and promotion of information known to be false or misleading.
Globe.com provides internet-based communications services. Globe set up at least 95 virtually identical “dummy” MySpace profiles, with corresponding e-message accounts. Globe.com used these accounts to send almost 400,000 unsolicited commercial e-messages, using automated means, to market products to MySpace users. MySpace sent a cease and desist letter, filed an action under the federal anti-spam legislation known as CAN-SPAM Act as well as under state law. MySpace moved for summary judgment.
Trial Court Proceeding Edit
Federal law Edit
The CAN-SPAM Act is a federal statute that regulates the manner in which unsolicited commercial emails may be transmitted. It also creates a private right of action to a “provider of Internet access service” that provides access to electronic mail. Internet access services include traditional Internet service providers, any email provider, and even most website owners.
Globe.com argued that MySpace did not have standing to sue under the CAN-SPAM Act. Globe.com argued that e-messages are different than email because they always remain within the “walled garden” of MySpace and don’t use traditional email transfer methods. The CAN-SPAM Act defines “electronic mail message” as “a message sent to a unique electronic mail address.” “Electronic mail address” is defined as “a destination . . . consisting of a unique user name and a reference to an internet domain.” Since each MySpace user resides at a unique URL consisting of the internet destination (myspace.com) and a reference to the username, it comes within the statute’s definition. The court held that MySpace had standing.
The CAN-SPAM Act §7704(a)(1) prohibits the transmission of commercial email that contains false or misleading information. This includes information that appears in the line identifying a person initiating the message. The evidence indicated the Globe e-messages identify the sender as first name “tglo” and last name “phone” which is the product they sought to sell and not their identity. The court held in favor of MySpace.
Section 7704(a)(2) prohibits a person from transmitting commercial email containing a subject heading that he or she knows would likely mislead the recipient about a material fact regarding the content or subject matter of the message. Under Section 7706(g)(1), a private right of action under §7704(a)(2) is available only when there is a pattern or practice that violates this provision. Globe.com used many different subject headings. One subject heading was “the new MySpace phone” which misled recipients to believe that the product was affiliated with MySpace. Bloggers began making this error as well. Globe.com was aware that bloggers made the error and did not change the heading. This was evidence that Globe.com should have known the heading was misleading. The court looked at the other subject headings one by one but decided some accurately described the content of a message. This created a triable issue of fact as to whether there was a “pattern or practice” depending on the percent of the 400,000 messages that were misleading.
Section 7704(a)(5) requires that unsolicited commercial emails contain: (1) clear notification that the message is an [[advertisement], (2) clear notice of the opportunity to decline receipt of further messages from the sender, and (3) a valid physical postal address for the sender. Again, a private right of action is available only when the defendant has engaged in a pattern or practice of violating this provision. It was undisputed that none of defendant's 400,000 e-messages contained clear notice of the opportunity to decline or an address. Globe.com again argued there is no evidence of a pattern or practice. However it is undisputed that Globe.com employees were given written instructions on how to write these messages and sent nearly 400,000 over the course of 5 months as a regular marketing practice. The court held in favor of MySpace.
Section 7704(b) makes it an aggravated violation under §7704(a) when “the electronic mail address of the recipient was obtained using an automated means that generates possible electronic mail addresses.” It is undisputed that Globe.com used a script program to automatically generate IDs and to transmit messages. The court held in favor of MySpace.
State law Edit
California Civil Code §17529.5 prohibits email transmissions to or from California email addresses containing “falsified, misrepresented or forged header information” or a subject line that would likely “mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message.” The court held for MySpace because all e-message account servers are located in California.
MySpace also brought a breach of contract claim under its TOS agreement. The court found the use of a script to transmit an unsolicited marketing campaign violated the TOS. Globe.com sent e-messages between January 2006 and May 2006. In March 2006 MySpace added to its TOS a liquidated damages provision making it a $50 penalty for each unsolicited ad. In California, liquidated damages provisions are lawful if (1) damages from a breach would be impracticable or extremely difficult to determine with certainty; and (2) the amount represents a reasonable estimation of what such damages might be. The court found the provision lawful and to affect all Globe.com accounts, including those created before March 2006.
The court granted summary judgment on all of MySpace’s claims, except for the issue of pattern and practice.