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Ninth Circuit Rules on CAN-SPAM Standing Requirements

25 August 2009

The U.S. Court of Appeals for the Ninth Circuit held on August 6, 2009 that standing for private plaintiffs under the CAN-SPAM Act is limited.  Judge Richard Tallman, who authored the court's opinion in Gordon v. Virtumundo, Inc., No. 07-35487 (Aug. 6, 2009, 9th Cir.), noted that this was the first case in which the Ninth Circuit had attempted to comprehensively address the standing requirements under CAN-SPAM. 

The plaintiff, James S. Gordon, operated a website through which he provided email addresses for himself and friends and family members.  He intentionally registered these email addresses with 100-150 email mailing lists.  After the addresses began receiving commercial email, Gordon filed suit against many of the companies, including Virtumundo, Inc., that had sent such email.

The CAN-SPAM Act is primarily enforced by the Federal Trade Commission and state Attorneys General.  However, the Act does provide a private right of action for a "provider of Internet access service adversely affected by a violation."  The Ninth Circuit held that Gordon failed to satisfy either prong of this standing requirement. 

In addressing the service provider prong of the standing requirement, the court noted that the CAN-SPAM Act does not limit standing to traditional Internet service providers and cited to two lower court decisions that held that the social networking services MySpace and Facebook qualified as "access services."  While explicitly declining the opportunity to set forth a general test as to what it means to be "a provider of Internet access service ," the court found that Gordon's service was limited to setting up email accounts and passwords and executing other administrative tasks, which was not enough to raise him to the level of Internet access service provider within the meaning of CAN-SPAM.  Gordon's online access was provide by Verizon, and GoDaddy provided the service that enabled Gordon to create the email addresses and the personalized web site; according to the court, both of these entities could have a compelling argument that they are Internet access service providers.

As for the second prong of the standing requirement, CAN-SPAM itself does not define "adversely affected."  The Ninth Circuit noted that "the harm must be both real and of the type experienced by ISPs."  Where there is suspicion that "a plaintiff is not operating a bona fide Internet access service," courts should take an especially close look at the cited harms.  The court found that Gordon had failed to argue that he had suffered any real harm as contemplated by the CAN-SPAM Act.  He did not have to hire additional personnel, nor did he experience the technical concerns or costs that may be attributed to commercial email.  Rather, the court found that Gordon intentionally sought out and benefited financially from the burdens of which he later complained and could not be considered "adversely affected."

Finally, the court also held that Gordon's state law claims regarding allegedly misrepresented email header information were preempted by CAN-SPAM.  The court held that Gordon's claim that the "from lines" of the emails failed to clearly identify Virtumundo as the sender, did not rise to the level of "falsity or deception," the only type of state law commercial email claim excepted from CAN-SPAM preemption.

Gordon's claims were therefore denied on three counts:  (1) he was not an Internet access service provider; (2) he was not adversely affected; and (3) his state law claims were preempted by CAN-SPAM.  Three strikes and this plaintiff is out.

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