[JURIST] The US Court of Appeals for the Ninth Circuit [official website] on Thursday rejected [opinion, PDF] an appeal from an Internet domain owner seeking to recover $10 million in damages from an online marketer under the federal CAN-SPAN Act [text, PDF]. James Gordon had recruited his friends and relatives to collect thousands of unsolicited emails as evidence that Virtumundo, Inc., had violated the federal law limiting the activities of so-called "spammers." The US District Court for the Western District of Washington [official website] granted summary judgment [order, PDF] to Virtumundo in May on the grounds that Gordon had not suffered "adverse effects" within the meaning of CAN-SPAM. The Ninth Circuit upheld the district court's decision, finding that Gordon was not an "Internet access service" (IAS) provider, and that therefore the limited right of private action in the the Act did not provide him with standing to sue. Writing for the court, Judge Richard Tallman said:
[O]ur review of the congressional record reveals a legitimate concern that the private right of action be circumscribed and confined to a narrow group of private plaintiffs. [T]his demonstrates to us that lawmakers were wary of the possibility, if not the likelihood, that the siren song of substantial statutory damages would entice opportunistic plaintiffs to join the fray, which would lead to undesirable results. While Congress did not intend that standing be limited to fee-for-service operations, we think it did intend to exclude plaintiffs who, despite certain identifying characteristics, did not provide the actual, bona fide service of a legitimate operation.
The court noted that limiting a right of action under CAN-SPAM to the Federal Trade Commission [official website], various state and federal agencies, and "adversely affected IAS providers" was not the product of Congressional "insensitivity to the effects of spam on consumers," but rather an effort to limit enforcement to "those well-equipped to efficiently and effectively pursue legal actions against persons engaged in unlawful practices and enforce federal law for the benefit of all consumers."
In May 2008, the social networking site MySpace [corporate website] won default judgment [text, PDF] under CAN-SPAM in a suit alleging that two individuals gained illegal access to user profiles and used them to send more than 730,000 messages containing predatory and fraudulent advertising. Last September, a Virginia anti-spam law was struck down [JURIST report] as unconstitutional by that state's Supreme Court. Jeremy Jaynes, convicted [JURIST report] and sentenced to nine years in prison under the Virginia law in 2004, was the first person in the US convicted of a felony for spamming [JURIST news archive]. In April 2008, the Virginia Supreme Court withdrew its opinion [order, PDF] upholding the conviction [JURIST report] and granted Jaynes' petition for rehearing, allowing him to challenge the statute on its face.