777 F.3d 712
4th Cir.2015Background
- Beyond Systems (MD) operated spam-trap e-mail accounts and retained large volumes of unsolicited commercial e-mails to support litigation; much of its revenue derived from such suits.
- Hypertouch (CA), related to Beyond Systems, previously sued Kraft over Gevalia e-mails and settled in 2006, disclaiming future claims based on those e-mails and agreeing to assist Kraft in identifying future problematic messages.
- Beyond Systems sued Kraft and Connexus in Maryland federal court alleging violations of California and Maryland anti-spam statutes based on many Gevalia-related e-mails (some the same as in Hypertouch’s suit).
- The district court granted partial summary judgment in part (precluding claims based on e-mails covered by the Hypertouch settlement and time-barred messages), tried liability issues to a jury, and found Beyond Systems an ISP but not a "bona fide" ISP because it solicited spam for litigation.
- The district court held that volenti non fit injuria (consent to harm) barred recovery; the Fourth Circuit affirmed, concluding Beyond Systems consented to the harm by creating spam traps and soliciting spam to generate claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing | Beyond Systems suffered concrete injury from receiving deceptive commercial e-mail and state law grants remedy | Defendants disputed harm or connection to defendants' conduct | Court: Beyond Systems had Article III standing |
| Preemption by CAN-SPAM | State anti-spam claims are not preempted because they target falsity/deception saved by CAN-SPAM savings clause | Defendants argued federal CAN-SPAM preempts state law | Court: State statutes here regulate falsity/deception in tort vein and are not preempted (Omega principle applied) |
| Application of common-law defenses (volenti non fit injuria) to statutory tort-like claims | Beyond Systems argued statutory remedies allow recovery despite its litigation-driven practices | Defendants argued volenti bars recovery because Beyond Systems solicited and consented to the spam harm | Court: Volenti applies to these tort-like statutes; Beyond Systems consented/solicited the harm and is barred from recovery |
| Scope of remedy for legitimate ISPs gathering evidence | Beyond Systems claimed gathering and retaining spam for litigation does not automatically bar relief | Defendants contended Beyond Systems’ deliberate creation of traps distinguishes it from legitimate ISPs | Court: Distinguishes legitimate ISPs from plaintiffs who gratuitously created circumstances to manufacture claims; affirms bar for Beyond Systems |
Key Cases Cited
- Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (jurisdictional standing requires concrete injury)
- Omega World Travel, Inc. v. Mummagraphics, Inc., 469 F.3d 348 (4th Cir.) (state anti-spam laws not preempted if in vein of torts addressing falsity/deception)
- Hypertouch, Inc. v. ValueClick, Inc., 192 Cal. App. 4th 805 (Cal. Ct. App.) (CAN-SPAM savings clause applies to state laws prohibiting material falsity/deception in commercial e-mail)
- MaryCLE LLC v. First Choice Internet, Inc., 890 A.2d 818 (Md. Ct. Spec. App.) (Maryland anti-spam violations are in the nature of tort and guided by tort principles)
- Janelsins v. Button, 648 A.2d 1039 (Md. Ct. Spec. App.) (consent defeats recovery for intentional invasions of interests)
- Gordon v. Virtumundo, 575 F.3d 1040 (9th Cir.) (distinguishing legitimate ISPs from parties who create circumstances primarily to obtain damages)