United States District Court, N.D. California
June 25, 2004.
OPTINREALBIG.COM, LLC, Plaintiff,
IRONPORT SYSTEMS, INC. and its wholly owned subsidiary, SPAMCOP.NET, INC., Defendants.
The opinion of the court was delivered by: SAUNDRA ARMSTRONG, District Judge
ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION
This matter comes before the Court on the motion for a
preliminary injunction filed by plaintiff OPTINREALBIG.COM, LLC
("OptIn") to enjoin certain activities of defendant SPAMCOP.NET,
Inc. ("SpamCop") a wholly owned subsidiary of IronPort Systems,
Inc. Having read and considered the arguments presented by the
parties in their moving papers, and at the May 18, 2004 hearing,
the Court hereby DENIES OptIn's motion for preliminary
I. ADMINISTRATIVE ISSUES
During the May 18, 2004 hearing, the Court specifically
requested a supplemental declaration from SpamCop that explained
technical issues regarding how SpamCop's software functions. The
Court did not request the same from OptIn. Nevertheless, OptIn
took the liberty of submitting not only supplemental declarations
to bolster its arguments, but a supplemental brief regarding
issues related to the Communications Decency Act. Notably,
OptIn's submissions were filed on May 25, 2004, a week after the
Court held oral argument. Such uninvited submissions are
inappropriate and violate the notions of fairness that underlie
the judicial process. OptIn should be aware that future abuses of
the judicial process may result in sanctions.
The Court GRANTS SpamCop's motion to strike the supplemental
brief and declarations. [Docket No. 53]. Lest there be any doubt,
even if the Court had considered the supplemental filings, they would not change the Court's determination regarding OptIn's
motion for a preliminary injunction or the Court's reading of the
Communications Decency Act. The supplemental declarations and
briefing are not persuasive and, in fact, at some points actually
bolster SpamCop's position.
At the center of this case is a debate about bulk commercial
e-mails, whether they are legitimately solicited or unsolicited
mail known as SPAM, about those who make a living sending bulk
commercial emails, about those who make a living trying to
destroy spam senders, and about how these two business can
coexist. Plaintiff in this case, OptIn, is in the business of
sending bulk commercial e-mails. Defendant, SpamCop, is in the
business of collecting complaints from recipients of alleged spam
and forwarding these complaints to Internet Service Providers
("ISPs") who supply internet bandwidth to the purported spammers.
OptIn alleges that SpamCop has inflated the complaints against
OptIn, which has in turn caused ISPs to curtail the bandwidth
they allow OptIn, which in turn affects OptIn's ability to send
out e-mails it is contractually obligated to send.
A. What is Spam
Spam is "unsolicited e-mail, often of a commercial nature, sent
indiscriminately to multiple mailing lists, individuals, or
newsgroups; junk e-mail." American Heritage Dictionary of the
English Language, (4th ed. 2000). As much as 80 percent of the
e-mail received through the nation's largest ISP, America Online,
is spam. (Newby Decl., Exh. F.1, Newsday, Junk Mail Joust
(June 22, 2003)) AOL filters 2.4 billion spams a day. (Id.)
According to one consulting firm, coping with spam will cost U.S.
companies more than $10 billion this year in cash wasted. (Id.)
According to another research group, around $2 of the typical
monthly Internet service bill goes toward fighting spam. (Id.)
A representative for Sonic.Net, an ISP, has complained that,
"Spam consumes system resources such [as] disk storage space,
processor cycles and bandwidth, which slows delivery of normal
communications . . . and consumes, and in most cases wastes, the
time and energy of network administrative personnel and users."
(Cummins Decl. ¶ 4.) Mr. Cummins describes spam as a "pernicious
problem for ISPs . . . [as it is] relatively inexpensive for the
sender to send compared to the costs of printing and mailing
paper advertisements, and yet imposes a heavy cost on ISPs and
their customers who do not wish to receive spam." (Id.) These costs include "[f]iltering incoming
mail, protecting network security and clearing spam from users'
email inboxes [which,] takes a significant amount of time and
resources, including the time and energy of [an ISP's] staff of
system administrators and purchase or development of spam
filtering software tools." (Id.)
In response to these growing concerns regarding spam, in
December 2003, Congress enacted the Controlling the Assault of
Non-Solicited Pornography and Marketing Act of 2003, or the
CAN-SPAM Act of 2003. Pub.L. 108-187 (Dec. 16, 2003) ("CAN-SPAM
Act" or "the Act"). It took effect in January 2004. In enacting
CAN-SPAM, Congress found that:
The convenience and efficiency of electronic mail are
threatened by the extremely rapid growth in the
volume of unsolicited commercial electronic mail.
Unsolicited commercial electronic mail is currently
estimated to account for over half of all electronic
mail traffic, up from an estimated 7 percent in 2001,
and the volume continues to rise. Most of these
messages are fraudulent or deceptive in one or more
CAN-SPAM Act, Pub.L. 108-187, § 2(a)(2).
Congress further found that "[t]he receipt of unsolicited
commercial electronic mail may result in costs to recipients who
cannot refuse to accept such mail and who incur costs for the
storage of such mail, or for the time spent accessing, reviewing,
and discarding such mail, or for both" and that spam "also
decreases the convenience of electronic mail and creates a risk
that wanted electronic mail messages, both commercial and
noncommercial, will be lost, overlooked, or discarded amidst the
larger volume of unwanted messages, thus reducing the reliability
and usefulness of electronic mail to the recipient." CAN-SPAM
Act, Pub.L. 108-187, § 2(a)(3)-(4).
Accordingly, "[t]he growth in unsolicited commercial electronic
mail imposes significant monetary costs on providers of Internet
access services, businesses, and educational and nonprofit
institutions that carry and receive such mail, as there is a
finite volume of mail that such providers, businesses, and
institutions can handle without further investment in
infrastructure." CAN-SPAM Act, Pub.L. 108-187, § 2(a)(6).
B. SpamCop SpamCop is an interactive Internet-based service whose mission
is to reduce spam by reporting complaints to ISPs that provide
Internet access to the senders of spam ("spammers"). (Haight
Decl. ¶¶ 2-3). Whereas many anti-spam companies provide filtering
services, which blocks an anti-spam customer from receiving spam,
SpamCop goes one step further. It forwards complaints to ISPs to
encourage ISPs to sanction spammers, including cutting off the
spammers bandwidth (e.g. their access to the Internet). (Haight
Decl. ¶¶ 4-6). SpamCop's founder, Julian Haight, has stated that
he has helped close many spammers' e-mail accounts. (Piepmeir
Decl., Exh. A, New York Times, To Protest Unwanted E-Mail,
Spam Cop Goes to the Source (June 24, 1999)).
1. How the SpamCop System Works
SpamCop's registered users forward what they believe to be spam
to SpamCop. SpamCop determines the ISPs from which the alleged
spam was sent, including the ISPs supporting banner ads that
accompanied the spam. (Haight Decl. ¶ 4.) Typically, spammers are
able to disguise their identity by, for example, using fictitious
e-mail addresses, or ones that are closed within a short time
after mailing. CAN-SPAM Act, Pub.L. 108-187, § 2(a)(7). SpamCop
addresses this issue by using a combination of Unix utilities
(the utilities employed by most e-mail systems) to cross-check
all the information in an e-mail header and find the e-mail
address of the administrator on the network where the e-mail
originated. (Haight Decl., Exh. A, SpamCop.net: What is this?
How does it work? How do I Use it?).
To find the originating ISP, SpamCop software breaks down the
e-mail header into its component parts ("parsing"), and then runs
a thorough search on the IP addresses to determine the
originating network. (Haight Supp. Decl. ¶ 11.) A reported
message may contain information in its headers indicating
numerous potential sources. (Haight Supp. Decl. ¶ 12.) In some
cases, the sender of bulk e-mails may send messages through
multiple ISPs. (Id.) In those instances, SpamCop alleges that it
is difficult to determine the exact originating ISP, and
therefore, it forwards the complaint to all of the ISPs through
which the message may have been sent. (Id.) Additionally, web
site or banner advertisement links in the message may indicate
the actual source that is responsible for the message. (Id.) For
example, if a reported message contains a banner advertisement
for "AcmeMortgages.com," it is possible that the entity that is
ultimately responsible for the e-mail is AcmeMortgages.com. (Id.)
In some circumstances, there are also red herring links to websites in a report message that the
senders include in an apparent effort to make it difficult for
recipients and software like SpamCop's to determine the true
source of the message. (Id.)
Once the IP addresses are parsed from the e-mails, SpamCop's
system determines the address at an ISP to which the e-mail
should be reported. (Haight Supp. Decl. ¶ 13.) SpamCop
cross-checks the IP addresses in the message headers against
numerous internal and online databases including but not
limited to SpamCop's internal database. (Id.) SpamCop uses a
number of sources including default postmaster and abuse accounts
maintained by the ISPs, a database maintained by Abuse.Net (an
independent third party that tracks addresses at ISPs for the
submission of e-mail abuse complaints), and routing information
that SpamCop has gathered. (Id.) In addition, ISPs sometimes
designate one or more individuals within their organization to
whom complaints about spam may be directed. (Id.)
SpamCop's registered users who report purported spam may add
comments to the report. (Haight Decl. ¶ 4.) When SpamCop forwards
the user's complaint, it does not add any comments or criticism
of its own. Instead, it states: "This message is brief for your
comfort. Please follow links for details." (Haight Supp. Decl. ¶
14.) An ISP administrator who clicks on the links will be sent to
a page on SpamCop's website. On that page SpamCop explains to
ISPs that it has tracked the source of purported spam to the ISP.
While it encourages the ISP to take action against the spammer,
it also cautions, "Please be careful when taking action. It is
possible (though unlikely) that the account is what we call `an
innocent bystander.'" (Haight Decl., Exh. C, SpamCop.net:
Introduction What is this thing? How does it work?) SpamCop
also states, "SpamCop administrators do not, and cannot verify
the claims made by it's [sic] users. Not only are there simply
far too many reports filed for anyone to manually review them,
but even if it were to, there is no way for us to know whether a
user actually did or did not solicit a message prior to reporting
it as spam." (Id.) It also gives ISPs the option of not receiving
these unsolicited reports.
2. Removal of the Registered User's Names
When it forwards the report to the ISPs, SpamCop removes the
e-mail address of the registered user. (Haight Decl. ¶ 9.) Its
purpose in doing so is to protect the privacy of the registered
user. (Id.) SpamCop believes that if it did not remove the
registered user's e-mail address, the registered user could be
subjected to retaliatory actions, including hacking attacks or
being flooded with spam. (Id.) Registered users also prefer that their names be removed. (Block Decl. ¶
SpamCop also admits, however, that it removes the names to
preserve the efficacy of its business by preventing spammers form
"list washing." (Id.) List washing is a process whereby spammers
remove the very small percentage of people on their bulk lists
that actually report spam. SpamCop believes that if spammers
could target and selectively remove those persons reporting spam,
they could evade detection and continue to send unsolicited bulk
e-mail messages to other recipients. (Id.)
OptIn states that it is not a spammer, but rather a sender of
bulk commercial e-mails in compliance with federal laws. (Richter
Decl. ¶ 2.) OptIn provides "opt-outs" on e-mails it sends, and it
sends e-mails only to those Internet users who have directly
opted-in, or indirectly opted-in by visiting a particular
website. (Id.) OptIn contracts with ISPs to provide OptIn
bandwidth so that it may meet its contractual terms to send
e-mail advertisements on behalf of OptIn and its customers.
(Richter Decl. ¶ 3.) It needs a great deal of bandwidth because
it sends "millions" of e-mails each day. (Richter Decl. ¶ 2.)
OptIn is, however, the target of parallel suits by the Attorney
General's Office of the State of New York and Microsoft
Corporation for sending what these two plaintiffs describes as
spam. (Newby Decl., Exh. C.) OptIn's founder, Scott Richter, has
been described in various press reports as "the world's
third-largest spammer." (Newby Decl., Exh. D.) Numerous other
articles submitted by SpamCop also describe Mr. Richter and OptIn
as spammers, responsible for billions of unsolicited bulk
commercial e-mails. (Newby Decl. Exh. F.) In other words, SpamCop
is not the only entity describing OptIn as a spammer.
OptIn's principle ISP is a company called Optigate. On or about
April 29, 2004, Optigate informed Mr. Richter that its upstream
provider, Above.net, had terminated some of Optigate's bandwidth
because of OptIn's violations of Above.net's "Acceptable Use
Policy" (which prohibits spamming). (Richter Decl. ¶ 10.)
Above.net did not specifically state that the violations came to
its attention through reports from SpamCop.
OptIn has been informed by Optigate that if it, or Above.net,
continue to receive SpamCop reports regarding OptIn, they will be
forced to terminate OptIn's bandwidth entirely. (Wolfe Decl. ¶
4.) Other ISPs who provide OptIn with bandwidth have informed
OptIn of the same. (Morrison Decl. ¶ 5.) D. The Dispute Between SpamCop and Optin
OptIn alleges that SpamCop sends multiple copies of the same
reports to ISPs, which inflates the actual number of reports
against OptIn. In other words, one complaint becomes multiple
complaints that cannot be distinguished because SpamCop has
removed the registered user's e-mail address from the reports.
(Wolfe Decl. ¶ 3.)
Officially, SpamCop discourages individuals from submitting
more than one complaint regarding a single spam. (Haight Decl. ¶
8.) SpamCop attempts to remove duplicative submissions and states
that it takes corrective action against individuals who submit
duplicate requests, up to and including banning complaints from
individuals engaged in this practice. (Id.)
SpamCop further explains that it does not intentionally send
multiple copies of the same complaint to the same ISP. Its
software is not designed to do so. (Haight Supp. Decl. ¶ 20.) If
the multiple copies are being sent, it is for one of three
reasons. First, it may be because the ISP has directed that
complaints be sent to more than one recipient within its system.
(Haight Supp. Decl. ¶ 13.) Second, if the ISP supported both the
e-mail and the banner ad, then SpamCop may report two issues, one
that the purported spam passed through the ISP's network, and two
that the ISP hosted a banner ad appearing in the purported spam.
(Haight Supp. Decl. ¶ 16.) Finally, though SpamCop is not aware
of any, multiple mailings may be caused by a bug in its program.
(Haight Supp. Decl. ¶ 20.)
At the hearing, the parties disputed whether Exhibit B of the
Wolfe Declaration proved that multiple copies of the same e-mail
report were being sent to one ISP. OptIn's counsel, relying on
hearsay, argued that the exhibit demonstrated that the same
report had been sent multiple times. In his supplemental
declaration, Mr. Haight has explained that this is not the case.
(Haight Supp. Decl. 17.) The Court is satisfied by Mr. Haight's
explanation of Exhibit B of the Wolfe Declaration. Exhibit B is a
copy of a report that SpamCop sends to itself when its system
identifies Internet access providers or linked advertisers in the
spam, but does not republish the report to those
entities.*fn1 On its website, SpamCop provides a link called "You are
mailbombing me! How can I make it stop?" This link allows ISPs to
change their preferences for receiving reports from SpamCop,
request that SpamCop stop sending reports, or send only certain
reports. (Haight Supp. Decl. ¶ 20.) SpamCop alleges that in April
2004, it received 89,000 reports of spam emanating from OptIn.
SpamCop alleges that it is not responsible for the actions ISPs
take once they receive the reports. Moreover, SpamCop argues, the
ISPs do not rely on the reports alone to determine whether to
sanction or terminate network access to a spammer. For example, a
representative for the ISP Sonic states that although "Sonic
welcomes the receipt of [SpamCop's reports], [they] are not the
only source of data  but instead are only a part of what we
consider." (Cummings Decl. ¶ 5.) Sonic considers "other data,
including but not limited to listings in various lists,
newsgroups and mailing lists." (Cummings Decl. ¶ 6.) Sonic also
clarifies that it understands that SpamCop's "process of
reporting suspected spam is automated." (Cummings Decl. ¶ 7.)
Thus, Sonic "undertakes its own investigation to ensure that a
flagged IP address is in fact conducting activity in violation of
[Sonic's policy on spam]." (Id.)
OptIn counters that Sonic may be the exception, rather than the
rule. The proprietor of Cheap Unix Hosting, for example, states
that he has made the decision to terminate customers based solely
on receiving SpamCop complaints. (Papadakis Decl. ¶ 2.) "This
decision is based on the fact that if I do not terminate the
customer who is the target of the SpamCop complaints, our
upstream providers will terminate our services." (Id.)
The director of the ethical volume e-mailing company Hula
Direct states that "[i]t has been my experience with [ISPs] that
such providers rely heavily on complaints from SpamCop to make a
determination of whether my company is in compliance with the
[ISPs'] acceptable use policy and/or determine if my company is
sending spam. At times [ISPs] will use SpamCop complaints
exclusively to make this determination and to determine whether
or not to shut off services to my company." (Warsinke Decl. ¶ 1.) The managing partner of IPWS, LLC, an ISP states that "IPWS
entered into a contract with [OptIn] to provide OptIn with
bandwidth," but that he was notified by his upstream provider
Qwest that they had received numerous SpamCop reports regarding
OptIn and were "terminating their services to us that pertain to
OptIn because of the number of SpamCop complaints they received."
(Morrison Decl. ¶ 2; Morrison Decl. ¶ 3.)
From the facts in the record, at the very least, SpamCop's
reports can strongly influence or play an important role in an
ISP's decision to sanction senders, such as OptIn.
Before analyzing the merits of OptIn's preliminary injunction
motion, the Court reviews the Communications Decency Act ("CDA")
to determine whether SpamCop is immune.
A. Communications Decency Act
CDA § 230 provides, "No provider or user of an interactive
computer service shall be treated as the publisher or speaker of
any information provided by another information content
provider." 47 U.S.C. § 230(c)(1). The purpose of this section is
"to maintain the robust nature of Internet communication and
accordingly, to keep government interference in the medium to a
minimum." Zeran v. America Online, Inc., 129 F.3d 327, 330 (4th
Cir. 1997). "Congress recognized the threat that tort-based
lawsuits pose to freedom of speech in the new and burgeoning
Internet medium. The imposition of tort liability on service
providers for the communications of others represented, for
Congress, simply another form of intrusive government regulation
of speech." Id. Through § 230, Congress "sought to prevent
lawsuits from shutting down websites and other services on the
Internet." Batzel v. Smith, 333 F.3d 1018, 1027-28 (9th Cir.
Thus, under § 230, interactive service providers and users
cannot be held liable for the republication or redistribution of
statements "provided by any other content provider."
47 U.S.C. § 23(c)(1). An "interactive computer service" is broadly defined as
"any information service, system, or access software provider
that provides or enables computer access by multiple users to a
computer server. . . ." 47 U.S.C. § 230(f)(2). Courts construing
§ 230(f)(2) have recognized that the definition includes a wide
range of cyberspace services, not only internet service
providers. See, e.g., Blumenthal v. Drudge, 992 F. Supp. 44 (D.D.C. 1998) (AOL is an "interactive
computer service"); Gentry v. eBay, Inc., 99 Cal.App.4th 816,
831 & n. 7 (2002) (on-line auction website is an "interactive
computer service"); Schneider v. Amazon.com, 108 Wash.App. 454,
31 P.3d 37, 40-41 (2001) (on-line bookstore Amazon.com is an
"interactive computer service").
B. Where the CDA Applies
"[C]laims seeking to hold a service provider liable for its
exercise of a publisher's traditional editorial functions such
as deciding whether to publish, withdraw, postpone or alter
content are barred." Carafano v. Metrosplash.com, Inc.,
207 F. Supp.2d 1055, 1064 (C.D.Cal. 2002). For example, America
Online is a typical interactive computer service. Zeran, 129
F.3d at 329; Blumenthal, 992 F. Supp. at 50. In Blumenthal, a
district court held that while America Online: (1) solicited a
gossip report from author Matthew Drudge; (2) retained the right
to modify or edit it (but declined to do so); (3) heavily
advertised the report and encouraged people to becomes
subscribers of AOL to access the report; (4) it was nevertheless
immune from suit. All that America Online had done was republish
the report. It was not responsible for its content.
In Batzel, the Ninth Circuit held that where: (1) a listserv
moderator made minor edits to an e-mail he received; and (2)
forwarded it to his automatic listserv; (3) he was immune from
liability. Had he engaged in extensive or substantive editing, he
could have been liable because then he would have altered the
statements rather than merely redistributed them. Id.
Both the Blumenthal court and the Ninth Circuit have noted
that any analogy between activities in the bricks and mortar
(traditional, non-Internet) world and the Internet world will
fail because Congress has distinguished the activities of the
two. In Blumenthal, because AOL had the right to exercise
editorial control, the court noted that had AOL's activity been
limited to the bricks and mortar world, it would have likely
found that AOL was indeed liable. As the Ninth Circuit has
explained, "[t]he specific provisions at issue here, § 230(c)(1),
overrides the traditional treatment of publishers, distributors,
and speakers under statutory and common law." Batzel, 333 F.3d
at 1026. This is because "[a]s a matter of policy, Congress
decided not to treat providers of interactive computer services
like other information providers such as newspapers, magazines or
television and radio stations, all of which may be held liable
for publishing or distributing obscene or defamatory material written or prepared
by others." Id. (internal quotations and citations omitted).
C. Where the CDA Does Not Apply
In contrast, where a service provider contributes to the
content, then it is not immune. For example, in Carafano v.
Metrosplash.com, 207 F. Supp.2d 1055 (C.D.Cal. 2002), the
defendant provided multiple-choice questions and a series of
essay questions that shaped the eventual content that subscribers
posted. This rendered the defendant "responsible . . . in part
for the creation or development of information provided through
the Internet. . . ." Id. at 1066-1067.
In MCW, Inc. v. badbusinessbureau.com, 2004 WL 833595
(N.D.Tex. April 19, 2004), the defendants operated a web site
that served in part as a consumer complaint forum. Not only did
the defendants post consumer complaints, they organized them
geographically by company and under various other headings
including "Con Artists" and "Corrupt Companies." Id. at *9 fn.
10. Moreover, the defendants contributed to the content by
instructing a consumer to take photos to include in his complaint
that defendants then posted. Id. at *10. Thus, the defendants
did not merely exercise the traditional rights of a publisher,
they contributed to and shaped the content. Accordingly, they
were not immune from liability. Id.
The Courts review of the case law, supra, focuses on
publication. In the case at hand, the parties agree that in
addition to publishing the reports of registered users, SpamCop
distributes them by forwarding copies of the reports to third
parties who are not subscribers to SpamCop's services. Although
the Ninth Circuit has not directly addressed the issue of
distributors, it has observed that courts have consistently found
that the CDA does not distinguish between publishers and
distributors. Batzel, 333 F.3d at 1027 fn. 10 (and cases cited
therein). "Congress made no distinction between publishers and
distributors in providing immunity from liability." Blumenthal,
992 F. Suppp. at 52. "[I]f computer service providers were subject
to distributor liability, they would face potential liability
each time they receive notice of a potentially defamatory
statement from any party, concerning any message." Zeran, 129
F.3d at 333.
Thus, the question becomes, under what circumstances is a
distributor immune under the CDA? The parties did not cite any authority that focused on
distributors. The Court itself has not found any. Optin argues
that the focus should be on the breadth of the distribution. In
Blumenthal, AOL's activities were limited to subscribers. In
Batzel, the listserv manager selected the particular e-mails to
be published, which were then sent to subscribers of the
listserv. In contrast, SpamCop sends its reports to
nonsubscribers. OptIn argues that deliberately sending the
reports to non-subscribers, that is third parties who did not
choose to receive the reports, removes SpamCop from immunity. In
essence, OptIn is analogizing the act of editing so as to alter
the content, which would remove a publisher from immunity, to the
act of editing a distribution list to include non-subscribers.
There is no precedent, however, for such an analogy. The focus
is not on the distribution list, it is on the content of the
e-mail and the distributor's complicity in shaping that content.
Moreover, the Court is not persuaded that sending reports to
non-subscribers somehow affects the immunity of a distributor.
Nor is it persuaded that Congress intended such distribution to
affect immunity. Rather, Congress has chosen to provide "immunity
even where the interactive service provider has an active, even
aggressive role in making available content prepared by others."
Blumenthal, 992 F. Supp. at 51-52. Distributing content to
nonsubscribers may be perceived as aggressive activity, but it
does not destroy the distributor's immunity.
Reviewing the case law and the statute, it appears that the
focus on distributor liability is and should be conterminous with
the focus on publisher liability: content. Just like a publisher,
if a distributor alters the content, then the distributor may be
liable. For example, the Carafano court noted that because it
had found that the defendant was liable for altering the content,
it did not need to reach the question of whether the defendant
was also liable as a distributor for defamation. 207 F. Supp. at
1074-75. Because the defendant created and tailored membership
questionnaires that helped to create the subsequent content, the
defendant was not just a passive conduit of information. It was a
contributor to the content.
E. Whether SpamCop has Contributed to the Content
Thus, to determine whether or not SpamCop is immune, the Court
must determine whether SpamCop has contributed to the content.
OptIn argues that SpamCop has contributed to the content of the
reports in two ways. First, it has included information in the
reports. Second, by sending out numerous reports, it affects the
impact of the reports. With respect to content, unlike the defendants in MCW, Inc. v.
badbusinessbureau.com, SpamCop does not organize the reports
with headings or other matter. Unlike the defendants in
Carafano, SpamCop has not created questionnaires or other forms
that registered users use in shaping the content of the reports.
Instead, when SpamCop sends out the reports, it removes the
registered user's name and includes the following statement:
"This message is brief for your comfort. Please follow links for
details." The links lead a recipient back to SpamCop's website,
where SpamCop explains its business, provides an opt-out, and
cautions that it cannot guarantee the veracity of the report.
These activities cannot be considered a contribution to the
content. They do not alter, shape, or even edit the content.
SpamCop's activities are even more innocuous than, for example,
the activity and addition that the defendant in Batzel
provided. In Batzel, the defendant provided minor edits to the
actual content; he also stated in the republication that a copy
of the original e-mail had been sent to the authorities. The
Ninth Circuit held that such activity did not "rise to the level
of development" because it did not alter the basic form and
message of the original e-mail. Batzel at 1031.
With respect to the impact, it may be true that SpamCop is
aggressive in mailing the reports to any and all ISPs that it can
identify in the mailing header of the purported spam. OptIn has
failed to show, however, that SpamCop sends multiple copies of
the same report to the same recipient in order to inflate its
impact. Even if OptIn had, the Court is not persuaded that
multiple mailings would amount to an alteration in the content
found within each report. The content of each republished report
remains the same and a recipient may identify them as multiple
copies of the same report. In addition, in terms of the
traditional role of a distributor, the Court perceives no
substantive difference between distributing one copy of an item
once, and distributing the same item numerous times.
SpamCop is an interactive service provider, like web sites such
as Amazon.com. It uses interactive computer services to
distribute its on-line mailing and to post the reports on its
website. See Batzel at 1031 (describing characteristics of an
interactive service provider for CDA immunity). It collects
reports from registered users. It posts them on its website. It
sends copies of the reports to non-subscribers. It may be
aggressive in its mailings, but SpamCop has not altered the
content of the messages and thus, under the CDA it is immune from liability. For this reason alone, the Court
DENIES OptIn's motion for a preliminary injunction. For the sake
of thoroughness, however, the Court sets out in Section IV,
infra, the reasons why even if SpamCop were not immune from
liability, OptIn's motion for preliminary injunction would
IV. PRELIMINARY INJUNCTION
OptIn has requested that the Court issue a preliminary
injunction enjoining SpamCop from: (1) making any slanderous or
libelous statements pertaining to OptIn; (2) directly or
indirectly transmitting or sending reports it forwards to third
parties regarding OptIn to anyone other than OptIn's originating
ISP; (3) removing the e-mail addresses from reports it receives
regarding OptIn; and (4) otherwise engaging in the unlawful
conduct set forth in the Complaint.
From the outset, it should be clear that the first and last
request are too broad and too vague for a preliminary injunction.
"Any slanderous or libelous statement" could include a statement
regarding the pending suit, other suits pending against OptIn, or
past criticism of OptIn. "Otherwise engaging in unlawful conduct
set forth in the Complaint" presumes that the Complaint sets
forth unlawful conduct and imposes a judgment against SpamCop
even before a judgment has been rendered. Thus, the only two
activities the Court considers in regards to an injunction are
the second (transmitting reports to third parties other than
OptIn's originating ISP) and the third (removing e-mail addresses
from reports it receives).
A. Legal Standard
In the Ninth Circuit, two interrelated tests exist for
determining the propriety of the issuance of a TRO or preliminary
injunction. Under the first test, the Court may not issue a
preliminary injunction unless: (1) the moving party has
established a likelihood of success on the merits; (2) the moving
party will suffer future irreparable injury and has no adequate
remedy at law if injunctive relief is not granted; (3) the
balance of hardships tips in favor of the movant; and (4)
granting the injunction is in the public interest. Martin v.
International Olympic Committee, 740 F.2d 670, 674-75 (1984). An
alternative articulation of the test is whether the moving party
"meet[s] its burden by demonstrating either a combination of
probable success on the merits and the possibility of irreparable
injury or that serious questions are raised and the balance of
hardships tips sharply in its favor." Martin, 740 F.2d at 675.
The two tests are not, however, separate and unrelated; they represent the "extremes of a single continuum."
Benda v. Grand Lodge of Int'l Ass'n of Machinists,
584 F.2d 308, 315 (9th Cir. 1978).
B. Likelihood on the Merits
OptIn bases its preliminary injunction on: trade libel,
intentional interference with contractual relations and unfair
1. Trade Libel
To prevail in a claim for trade libel, a plaintiff must
demonstrate that the defendant: (1) made a statement that
disparages the quality of the plaintiff's product; (2) that the
offending statement was couched as fact, not opinion; (3) that
the statement was false; (4) that the statement was made with
malice; and (5) that the statement resulted in monetary loss.
Guess, Inc. V. Superior Court, 176 Cal.App.3d 473, 479 (1986).
OptIn asks the Court find that: (1) SpamCop's sending of the
same report to not just OptIn's originating ISP, but to any ISP
to which SpamCop can trace the alleged spam is a statement that
disparages OptIn; (2) that the accusation of spam is couched as
fact; (3) that by virtue of the mailing of one report to numerous
ISPs, SpamCop inflates the actual number of reports against OptIn
which results in a falsity; (4) that there is malice in that
SpamCop's very purpose is to shut down senders of bulk commercial
e-mails whether they be legitimate or not; and (5) OptIn has had
its bandwidth reduced by Optigate and its bandwidth cut by IPWS.
First, the Court questions whether SpamCop's reports can be
deemed to be couched as fact when SpamCop informs the ISPs that
it cannot verify the reports. SpamCop does not represent that the
reports are of spam, or that the registered user opted-out of the
OptIn mailings and nevertheless continued to receive the
Second, with respect to the issue of falsity, the Court
questions whether SpamCop sends the same report several times to
the same ISP. OptIn has not demonstrated that it does. OptIn also
alleges that by sending the reports to all of the ISPs on the
mailing header, which includes the upstream and downstream ISPs,
SpamCop creates a falsity by inflating the number of reports
against it. The Court questions, however, whether SpamCop can be
held responsible for an upstream ISP's determination to cut
bandwidth when it knows that reports sent to both it and its downstream ISP
may be duplicative. It would seem that given the industry
knowledge about SpamCop, ISPs must make their own determination
as to what weight, if any, they will give SpamCop's
Setting aside these questions, though, OptIn still faces a
fundamental hurdle in its claim for trade libel malice. It has
not submitted any evidence that SpamCop has particular malice
towards it. Without even a hint of malice, it is difficult to say
that OptIn has a likelihood of prevailing on the merits of its
trade libel claim.
2. Interference with Contractual Relations
To prevail on a claim for interference with prospective
economic advantage, a plaintiff must prove: (1) the existence of
an economic relationship between the plaintiff and a third party;
(2) that the defendant was aware of the relationship and acted
wrongfully with the purpose of disrupting the relationship; (3)
that the relationship was disrupted; and (4) that the plaintiff
suffered damages that flow proximately from the disruption.
Lowell v. Mother's Cake & Cookie Co., 79 Cal.App.3d 13, 17
(1978). The wrongful act must be "conduct that was wrongful by
some legal measure other than the fact of interference itself."
Tuchscher Development Enterprises, Inc. V. San Diego Unified
Port Dist., 106 Cal.App.4th 1219, 1242 (2003).
Here, OptIn's claim falters on the second issue that
SpamCop's interference was actually wrongful. OptIn has not
demonstrated that SpamCop's sending the reports to ISPs is
wrongful by some legal measure. At the hearing, OptIn argued that the actual wrong arose from
SpamCop misleading ISPs by inflating the number of reports.
OptIn, however, failed to prove that SpamCop actually sends
numerous copies of the same report to the same ISP or that the
result of such mailings is that ISPs mistakenly believe that the
reports are from numerous registered users, rather than one.
At the hearing, OptIn also argued that the multiple mailings
have harmed OptIn's reputation because third party ISPs are now
less likely to contract with OptIn to provide bandwidth. This,
however, must be countered by the numerous news articles that
clearly establish that OptIn's reputation as a spammer precedes
it. It is being sued by the state of New York and Microsoft
Corporation. It has been described as a spammer in numerous press
articles and it has been found by one Internet analysis group to
be the third largest spammer in the world.
Moreover, to the degree that SpamCop's practice does inflate
the number of actual reports or otherwise harms OptIn's
reputation, it is the ISPs themselves who allow SpamCop's reports
to impact their perception of OptIn and affect their decision
making. Whether they choose to rely entirely on SpamCop's
reports, or ignore them, or to conduct some investigation on
their own, it is the ISPs who ultimately make the decision
whether or not to terminate OptIn's bandwidth. In addition,
because SpamCop reproduces the purported Spam in full, the ISPs
can actually determine for themselves whether or not OptIn has
complied with CAN-SPAM by providing a valid and functioning
Again, based on the record, OptIn has not established that it
is likely to prevail on its claim of interference with
prospective economic advantage.
3. Unfair Business Practices
OptIn alleges that SpamCop's activities amount to unfair
business practices because despite OptIn's numerous attempts to
persuade SpamCop to provide the e-mail addresses of the
registered users in order to that OptIn can correct its bulk list
servers, SpamCop has refused to cooperate.
To be specific, CAN-SPAM regulates the activities of senders of
bulk commercial e-mails. It requires that unsolicited messages
contain certain minimum elements such as a valid and functioning
return address, a "clear and conspicuous" identifier that the
message is an advertisement or solicitation, a means for the
recipient to opt-out, a valid physical postal address of the
sender, and warning labels on e-mail containing sexually oriented material. CAN-SPAM Act, Pub.L.
108-187, Sec. 5. It imposes penalties on those senders who, for
example, fail to include these elements, or fail to honor opt-out
requests. CAN-SPAM Act Pub.L. 108-187, Sec. 4-5.
OptIn alleges that it provides opt-out links and honors opt-out
requests. It is concerned that the registered users who are
sending reports to SpamCop represent people whose opt-out
requests have failed for some reason. It believes that it needs
the e-mail addresses of those users in order to take corrective
action to delete them from its bulk lists. If these registered
users have opted-out, but the opt-out has failed and OptIn
continues to send them e-mails, OptIn will be in violation of
CAN-SPAM and subject to fines.
OptIn has utterly failed to identify any law that would require
SpamCop to divulge these e-mail addresses. In a way, OptIn's
request is analogous to one who either intentionally or
unintentionally sends pornography to minors, who then asks for a
list of those minors so he will not continue to commit the crime.
The responsibility for complying with the Act and preventing the
violations begins and ends with OptIn.
C. Serious Questions
OptIn has not demonstrated a likelihood of success on the
merits. The Court has found that SpamCop is immune under the CDA.
Nevertheless, to be thorough, the Court reviews the other half of
the sliding scale: whether OptIn has raised serious questions
going to the merits and demonstrated the possibility of
D. Irreparable Harm
An irreparable harm is one that cannot be redressed by a legal
or equitable remedy following trial. Public Util. Comm'n v.
FERC, 814 F.2d 560, 562 (9th Cir. 1987) OptIn alleges that it
will suffer damage to the goodwill of its business, damage to
contract rights, and damage to the existence of its business.
Damage to a business' goodwill is typically an irreparable
injury because it is difficult to calculate. Rent-A-Center, Inc.
V. Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 603
(9th Cir. 1991). It is true that when SpamCop sends out reports
to ISPs, these reports affect OptIn's reputation and goodwill.
This does not mean, however, that SpamCop is fully responsible
for any damage these reports make to OptIn's goodwill. First,
there is the fact that OptIn's reputation precedes it. Second,
SpamCop cannot be held entirely responsible for the decisions
these ISPs make. These ISPs may be more likely to assume that OptIn is a spammer because they are already aware of
OptIn's reputation. Thus, it would take fewer reports to persuade
these ISPs to terminate OptIn's bandwidth.
The Second Circuit has found that where wrongful conduct
deprives a plaintiff of a unique contract right, there may be an
irreparable harm. Reuters Ltd. v. United Press Int'l, Inc.,
903 F.2d 904, 908-909 (2nd Cir. 1990). OptIn's bandwidth has been
diminished by one ISP and completely terminated by another. If
the Court found SpamCop's activity to be wrongful, or that there
were serious questions regarding SpamCop's activity, then the
loss of bandwidth could be an irreparable harm.
Irreparable harm is further found where the conduct of a
defendant threatens the existence of the business itself.
Petereit v. S.B. Thomas, Inc., 63 F.3d 1169, 1186 (2nd Cir.
1995). The more ISPs that refuse to provide OptIn bandwidth, the
less able OptIn will be to send out bulk commercial e-mails,
whether they comply with federal law or not.
In short, OptIn has demonstrated that it is likely to suffer
harm. The degree to which this harm is attributable to SpamCop is
unclear, especially because part of the harm has been created by
OptIn's own reputation independent of SpamCop. Moreover, to the
degree that OptIn does suffer harm, such as being cut-off from
bandwidth, the harm seems to emanate not from any act by SpamCop,
but by the individual decisions of ISPs to allot great weight to
SpamCop's reports without undertaking any investigation of their
E. Balance of Hardships
Assuming that OptIn faces irreparable harm, the Court must
balance that harm on the one hand, with the balance of hardships
on the other.
OptIn argues that in contrast to the irreparable harm it will
face, the hardships to SpamCop if an injunction issues are
minimal at best. It is not requesting that SpamCop cease its
business operations. It is simply requesting that SpamCop send
the reports only to OptIn's original ISP and that it provide
OptIn with the e-mail addresses of the registered users who filed
With respect to the first request, SpamCop has explained that
with some e-mails, it is impossible to determine the original
ISP. Moreover, it has explained that its software does not
distinguish between an "original" ISP and downstream or upstream
ISPs. Requiring SpamCop to limit its distribution would require SpamCop to alter its software. This creates a hardship on
With respect to the second request, the Court is quite wary
that requiring SpamCop to provide the e-mail addresses of the
registered users would have a chilling effect. Registered users
concerned about retaliatory actions or loss of privacy would be
less likely to post reports. The Court must balance this chilling
effect and the public interest in free speech on the one hand,
with OptIn's obligations under CAN-SPAM and the public's interest
in its compliance with that Act. Although OptIn has not
demonstrated that SpamCop is under a legal duty to provide OptIn
these e-mail addresses, OptIn alleges that if it does not have
them, then it is at risk of violating CAN-SPAM. Then again, it is
OptIn's responsibility to ensure that its own opt-out procedures
work, no one else's. Quite simply, the public's interest in
protecting privacy and free speech outweigh whatever risks OptIn
faces from its own faulty programming.
Based on the foregoing,
IT IS HEREBY ORDERED THAT OptIn's motion for a preliminary
injunction is DENIED. Pursuant to § 230 of the Communications
Decency Act, SpamCop is immune from liability for publishing or
distributing the reports of registered users. Even if SpamCop
were not immune, OptIn has failed to demonstrate that it is
likely to prevail on the merits or that the balance of hardships
tips in its favor.
IT IS FURTHER ORDERED THAT SpamCop's motion to strike the May
25 Pleadings is GRANTED.
IT IS SO ORDERED.