MOTION to Dismiss for Lack of Jurisdiction

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

JAMES S. GORDON, Jr., a married
individual, d/b/a
‘GORDONWORKS.COM’,

Plaintiff,

v.

VIRTUMUNDO, INC, a Delaware
corporation d/b/a
ADNOWLEDGEMAIL.COM;
ADKNOWLEDGE, INC., a Delaware
corporation, d/b/a
ADKNOWLEDGEMAIL.COM;
SCOTT LYNN, an individual; and
JOHN DOES, 1-X,

Defendants.

DEFENDANTS’ MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
PURSUANT TO FED. R. CIV. P. 12(b)(2)

NOTE ON MOTION CALENDAR:
April 7, 2006

I. INTRODUCTION

Defendants Virtumundo, Inc. (“Virtumundo”), Adknowledge, Inc. (“Adknowledge”), and Scott Lynn (collectively “Defendants”) herein move to dismiss this action with prejudice for lack of personal jurisdiction. Defendants have had no contacts with Plaintiff, except Plaintiff randomly accessed in Washington emails he alleges Defendants initiated from out of this state. Defendants Adknowledge, Inc. and Virtumundo, Inc. are out-of-state corporations, and do not have any physical presence in the State of Washington. Defendant Scott Lynn is a resident of the State of Missouri, and serves as Chief Executive Officer of Adknowledge. None of Defendants have availed themselves of this forum and haling them into Court would offend the constitutional principles of due process. Accordingly, the Court should dismiss this action.

II. FACTS

Adknowledge is a Delaware corporation with its principal place of business located in the State of Missouri. See Declaration of Michael Geroe In Support Of Motion To Dismiss For Lack Of Personal Jurisdiction (“Geroe Decl.”) at ¶ 3. Virtumundo is a Delaware corporation with its principal place of business located in the State of Kansas. See Declaration of Allen Brandt In Support Of Motion To Dismiss For Lack Of Personal Jurisdiction (“Brandt Decl.”) at ¶ 5. Defendant Scott Lynn is a resident of Kansas City, Missouri, and serves as Chief Executive Officer of Adknowledge and sole shareholder of both entities.1

[1 Neither Defendant Virtumundo, Inc. nor Defendant Scott Lynn were properly served
with process in this action. Virtumundo, Inc. and Scott Lynn do not waive Plaintiff’s obligation
to serve valid process upon them.]

Adknowledge and Virtumundo advertise via email, but transmit email advertisements through the Internet to no particular destination. The email addresses to which emails are sent do not contain area codes or mailing addresses that would designate the location of the recipient. See Brandt Decl. at ¶ 24. Moreover, email can be accessed anywhere in the world via the Internet and, as a result, email cannot be sent to a particular geographic location. Id.; Geroe Decl. at ¶ 18. Accordingly, Adknowledge and Virtumundo have neither targeted any bulk email or other advertisements to the State of Washington (Geroe Decl. at ¶ 7), nor sought to provide any goods or services to the State of Washington (Brandt Decl. at ¶ 16).

To the contrary, both Adknowledge and Virtumundo have taken affirmative steps to avoid contact with Washington residents. Adknowledge provides permission-based marketing services wherein consumers may voluntarily provide their contact information if they are interested in receiving marketing offers regarding certain subject matter. See Geroe Decl. at ¶ 13. Customers can choose to provide varying amounts of information, including a city or state of residence if they wish. Id. Because of a desire to avoid litigation in Washington, Adknowledge adopted a practice in at least early 2004 of suppressing the transmission of commercial email to all consumers from its database who provide city or state information indicating residence in Washington. Id. at ¶ 15. The commercial email addresses which are suppressed from Adknowledge’s database receive no further communication or contact from Adknowledge. Id. In fact, Adknowledge has suppressed approximately 1.3 million email addresses from individuals who self-reported that they are from Washington State over a period of several years. Id. at ¶ 16. Additionally, Adknowledge ceased adding email addresses to its database from people who reported a Washington residence in December 2004. Id. at ¶ 17.

Virtumundo has also taken proactive steps to avoid contact with Washington and the plaintiff. Virtumundo’s General Counsel, Allen Brandt, after receiving notice from Adknowledge that Plaintiff James Gordon (“Plaintiff”) was targeting litigation against out of state parties, caused Plaintiff’s name to be removed from Virtumundo’s database of consumers. See Brandt Decl. at ¶ 25. Virtumundo never made any contact with Plaintiff via email, for commercial purposes, or otherwise. Id. at ¶ 26.

Nor do Adknowledge or Virtumundo have other contacts with the State of Washington. Adknowledge does not have any offices in the State of Washington. See Geroe Decl. at ¶ 5. Adknowledge does not own or rent real property in the State of Washington. Id. All of Adknowledge’s employees are located in the States of Missouri, California, New York, and Texas. Adknowledge has no employees in the State of Washington. Id. at ¶ 6. Adknowledge does not have any offices, statutory agents, telephone listings or mailing addresses in Washington. Id. at ¶ 7. Adknowledge has no bank accounts, licenses, or other operations in Washington. Id. Adknowledge is not subject to taxation in Washington. Id. at ¶ 9. Adknowledge does not advertise in any Washington newspapers or magazines or other Washington print, radio or television media. Id. at ¶ 10. Adknowledge does not generate any substantial percentage of its revenues from consumers clicking on its email advertisements in the State of Washington. Id. at ¶ 11.

Similarly, Virtumundo has no offices or employees in the State of Washington. See Brandt Decl. at ¶ 13. Rather, all employees are located in the State of Kansas. Id. at ¶ 15. Virtumundo does not own or rent real property in the State of Washington. Id. at ¶ 14. Virtumundo has no office, statutory agent, telephone listing or mailing address in Washington. Id. at ¶ 17. Virtumundo does not have any vendors, bank accounts, licenses or other operations in Washington. Id. at ¶ 18. Virtumundo is not subject to taxation in Washington. Id. at ¶ 19. Virtumundo does not advertise in any Washington newspapers or magazines, or other Washington media. Id. at ¶ 20. Virtumundo does not have any Washington-based shareholders. Id. at ¶ 21. None of Virtumundo’s employees or agents have traveled to Washington on official business. Id. at ¶ 22. Virtumundo does not generate any substantial percentage of its revenue from activities in the State of Washington. Id. at ¶ 23. In 2004, only 0.04% of Virtumundo’s revenue was generated from Washington. Id. In 2005, a mere 0.16% of Virtumundo’s revenue was generated from Washington. Id.

Finally, Plaintiff has not alleged a business relationship with any of the Defendants. Plaintiff has not alleged that Defendants have provided him goods or services. The only alleged relationship between Plaintiff and Defendants is that Defendants distributed emails over the Internet which Plaintiff fortuitously accessed while in the State of Washington.

III. ARGUMENT AND AUTHORITY

Rule 12(b)(2) of the Federal Rules of Civil Procedure provides that a Court may dismiss a motion for “lack of jurisdiction over the person.” FED. R. CIV. P. 12(b)( 2). The plaintiff bears the burden of proof on the necessary jurisdictional facts, such as the existence of “minimum contacts” between defendants and the forum state. See Flynt Distrib. Co., Inc. v. Harvey, 734 F.2d 1389, 1392 (9th Cir. 1984); Farmers Ins. Exchange v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 912 (9th Cir. 1990). When defendant’s motion to dismiss is made as its initial response, plaintiff must make a prima facie showing that personal jurisdiction exists. See Data Disc, Inc. v. Sys. Technology Assoc., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). In this context, a “prima facie” showing means that plaintiff has produced admissible evidence which, if believed, would be sufficient to establish the existence of personal jurisdiction. See WNS, Inc. v. Farrow, 884 F.2d 200, 203-04 (5th Cir. 1989).

The exercise of personal jurisdiction must comport with constitutional due process. Pursuant to due process, a defendant is subject to jurisdiction within a state only if it has “minimum contacts” with that state, “such that the maintenance of the suit does not offend the traditional notion of fair play and substantial justice.” International Shoe Co. v. Korea, 326 U.S, 310, 316 (1945).

The purpose of the “minimum contacts” requirement is to protect the defendant against the burden of litigation at a distant or inconvenient forum, and to ensure that states do not reach beyond the limits of their sovereignty imposed by their status in the federal system. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 - 292 (1980). The purposeful availment requirement ensures that defendants will not be “haled into a jurisdiction through ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts.’” Terracom v. Valley Nat’l Bank, 49 F.3d 555, 560 (9th Cir. 1995) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985)). The central concern of the jurisdiction inquiry is the relationship between the defendant, the forum, and the litigation. Shaffer v. Heitner, 433 U.S. 186, 204 (1977). Applying the foregoing standards to the instant motion requires dismissing this lawsuit.

A. The Complaint Does Not Allege a Prima Facie Case of
Specific Jurisdiction

Specific jurisdiction is satisfied only if the defendant has “purposefully directed” its activities at residents of the forum. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984) (emphasis added). Additionally, the litigation must result from injuries that “arise out of or relate to” those activities. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984). In that respect, the Ninth Circuit uses a three-part test to determine whether a district court may exercise specific jurisdiction over a nonresident defendant:
(1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections[;] (2) the claim must be one which arises out of or results from the defendant's forum-related activities[; and] (3) exercise of jurisdiction must be reasonable.
Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995) (citations omitted)(emphasis added). Plaintiff must satisfy each element of the test articulated in Ballard to defeat this Motion to Dismiss.

1. Defendants did not “purposefully avail” themselves of the
laws of the state of Washington.

The “purposeful availment” requirement is satisfied only where the plaintiff demonstrates that the defendant’s contacts with the forum state create a “substantial connection” with the forum state, and where the defendant’s conduct and connection with the forum are such that he should reasonably anticipate being haled into court there. Burger King Corp., 471 U.S. at 474-75. Courts that have examined whether a defendant who sent emails accessed in the forum state is sufficient to establish purposeful availment have consistently held that emails alone are not enough. Central to this analysis is the fact that email addresses (as opposed to mail address and phone numbers) are location neutral. For example, the sender of an email to “jim@gordonworks.com” has no reason to conclude that the emails will be viewed in any particular forum.

The District Court of Utah recently held that where only three email addresses out of 400 received in Utah could be identified as Utah addresses, the sending of mass email to those 400 addresses were insufficient to establish purposeful availment. Hydro Engineering, Inc. v. Landa, Inc., 231 F.Supp.2d 1130 (D. Utah 2002). In contrast, the defendants in this case are not alleged to have sent an email to a single address with a geographic indication. (Complaint, 4:8-9, alleging emails were sent to one or more addresses through the domain “gordonworks.com”.) See also, Barrett v. Catacombs Press, 44 F.Supp.2d 717, 729 (E.D.Pa. 1999) (holding that the exchange of three emails, without more, did not amount to purposeful availment); and Machulsky v. Hall, 210 F.Supp.2d 531, 542 (D.N.J. 2002) (email correspondence relating to a single purchase did not amount to “substantial connections” with the forum state). Recent State Court decisions further support the dismissal of Plaintiff’s suit. See, e.g., Fenn v. Mleads Enterprises, Inc., 2006 UT 8; 545 Utah Adv. Rep. 7; 2006 Utah LEXIS 8 (Utah February 10, 2006) (failing to find purposeful availment where marketing agency sent an email with no knowledge of geographic location where it would be retrieved); see also Metcalf v. Lawson, 148 N.H. 35 (N.H. 2002) (Holding that emails with a purchaser who bought an item through an online auction website, where the emails were sent without knowledge of purchaser’s residence, were insufficient to establish minimum contacts). In Fenn, the Utah Supreme Court recently considered whether email alone was sufficient to establish personal jurisdiction. The Fenn Court considered that, “The main complication is that a defendant . . . is generally unaware of the geographic location to which it sends an email because that information is not necessarily provided with the email address.” Fenn v. Mleads Enters., 2006 UT at 12. The Fenn Court held that sending emails to location-neutral addresses did not pass constitutional muster to establish personal jurisdiction.

Applying the Ninth Circuit’s standards and the overwhelming weight of authority addressing personal jurisdiction on the Internet also supports dismissal of the instant matter. The Ninth Circuit addressed the issue of purposeful availment as applied to Internet websites in Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 416 (9th Cir. 1997). The Cybersell Court held that in order for a website to give rise to personal jurisdiction, the website must have some presence in that jurisdiction and it is not sufficient that it merely operates a “passive” website. In Cybersell, the Ninth Circuit held that registering a domain name identical to a trademark and posting a web site via such domain name on the Internet is not sufficient to subject a party domiciled in one state to jurisdiction in another. See Cybersell, 130 F.3d at 418. There must be “something more” to demonstrate that the defendant purposefully directed his activity in a substantial way toward the forum state. Id. In Cybersell, defendant Cybersell, Inc. (a Florida corporation) registered the domain name .

Plaintiff Cybersell, Inc. (an Arizona corporation) had submitted an application to the United States Patent and Trademark Office to register the name CYBERSELL as a service mark, and had previously operated a web site using the mark. At the time Cybersell-FL registered the domain name, Cybersell-AZ’s web site had been taken down for reconstruction and the application for the service mark had not yet been approved. When Cybersell-AZ discovered defendant's web site, it filed a trademark infringement action in the District of Arizona. The Court found that defendant's use of the Cybersell name on an essentially passive web site advertisement did not constitute purposeful availment of the privilege of doing business in the state of Arizona because defendant had no contacts with Arizona other than maintaining a web page accessible to anyone over the Internet. Id. at 419; see also Bensusan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996), aff’d, 126 F.3d 25 (2d Cir. 1997) (holding that personal jurisdiction was improper as to a defendant who merely posted information on its Website).

The Ninth Circuit’s reasoning in Cybersell applies in the present matter. Like the defendant in that case, Defendants’ actions are distributed throughout the Internet without any purposeful direction towards any particular forum. Plaintiff’s location can not be discerned from his email addresses. Further, Plaintiff can access his email accounts via any Internet-enabled device located in any city, state or country on the planet. Thus, Plaintiff’s email address is in no way linked to the State of Washington.

Propagating information through email is no different than making information available through a passive Website. Email and Websites both distribute content to individual computers via the Internet; they simply use different transmission protocols. Internet content is distributed across the globe in the same technical fashion, regardless of whether the content is transmitted as an Internet world wide web site through TCP/IP protocol, or by email. From a jurisdictional standpoint, Email and Websites are indistinguishable. Thus, the reasoning and holding in Cybersell controls. Plaintiff alleges that his location could be determined “upon request” or from “other public sources.” (Complaint, 4:4-5.) The law places no burden on Defendants to research and discover Plaintiff’s location. The availability of this information for parties who wish to research it is insufficient to establish jurisdiction in Washington. Indeed, if the Court adopted a rule whereby the mere availability of information was sufficient to establish purposeful availment then the history of personal jurisdiction jurisprudence would be substantially different. The Cybersell court dismissed this approach when it considered that the defendant could have simply performed a trademark search to determine the potential plaintiff in Arizona, but held that due process does not require such a burden on those making information available over the Internet.

In an unreported case, the Ninth Circuit ruled that email alone is insufficient to establish personal jurisdiction. In Siskiyou Properties, LLC v. Bennett Holdings, LC, 13 Fed. Appx. 553, 2001 U.S. App. LEXIS 14429 (9th Cir. 2001), the Ninth Circuit held that “dozens [of] telephone, mail, fax and e-mail” sent to Oregon were not sufficient to establish purposeful availment in Oregon. The Ninth Circuit so held despite the fact that mail addresses clearly indicate the state to which the mail is sent without having to resort to a website. The Ninth Circuit, citing Burger King, 471 U.S. 478, noted that “a contract alone does not automatically provide the required minimum contacts for the exercise of personal jurisdiction.” Siskiyou Properties, 2001 U.S. App. LEXIS at 6-7.

Furthermore, it is well-settled in the Ninth Circuit and other circuits that phone calls, mailings and fascimile do not provide for personal jurisdiction. See Peterson v. Kennedy, 771 F.2d 1244, 1262 (9th Cir. 1985) (telephone and mail contacts alone are insufficient to satisfy the purposeful availment test); see also Thos. P. Gonzalez Corp. v. Consejo Nacional de Produccion de Costa Rica, 614 F.2d 1247, 1254 (9th Cir. 1980) (“use of the mails, telephone, or other international communications simply do not qualify as purposeful activity invoking the benefits and protection of the [forum] state”). For example, in Future Technology Today, Inc. v. OSF Healthcare Systems, 218 F.3d 1247 (11th Cir. 2000), the defendant and plaintiff engaged in regular, first-class mail, email, facsimile and telephone communications and the defendant performed services for the defendant, yet the Eleventh Circuit held that the defendant had not purposefully availed itself of the Plaintiff's jurisdiction. In Condon v. Flying Puck, LLC, 35 Fed. Appx. 173, 2002 U.S. App. LEXIS 9091 (6th Cir. 2002), the Sixth Circuit held that where an employee negotiated a contract with his future employer in the state of Ohio and exchanged emails, phone calls and faxes between California and Ohio, that the constitution mandated dismissal of plaintiff's case in Ohio. See also Bell Paper Box, Inc. v. Trans Western Polymers, Inc., 53 F.2d 920, 923 (8th Cir. 1995) (the use of mail or telephone from outside a state is insufficient alone to establish minimum contacts with the forum state); T.J. Raney & Sons, Inc. v. Sec. Sav. & Loan Assoc., 749 F.2d 523, 525 (8th Cir. 1984) (contact by phone or mail is insufficient to justify exercise of personal jurisdiction); Reynolds v. Int’l Amateur Athletic Fed’n, 23 F.3d 1110, 1119 (6th Cir. 1994) (“the use of interstate facilities such as the telephone and mail is a secondary or ancillary factor and cannot alone provide the minimum contacts required by due process”).

The foregoing authority demonstrates that contracts, mailings, facsimiles, emails and telephone calls in which the defendant has an established business relationship with the plaintiff is not sufficient to establish personal jurisdiction. Applying the foregoing authority to the present matter, Defendants would not have subjected themselves to jurisdiction by postal mailing directly to Plaintiff at his home in Washington the same advertisements to which Plaintiff objects in this case. In fact, Defendants could have actually entered into a contract with Plaintiff without being subject to Washington state jurisdiction. Therefore, a fortiori, sending email messages over the Internet with no foreseeable destination cannot purposefully avail the sender to a forum in which such email may be accessed. For this reason alone, the instant Motion to Dismiss should be granted.

2. Defendants’ alleged conduct did not arise out of this forum.

If the Court finds that Defendants did not purposely avail themselves of this forum, then it does not need to reach the second and third prongs of the Ninth Circuit’s specific jurisdiction test. If the Court does address those prongs, it should find that Plaintiff cannot establish that the claim “arises out of” actions in the state of Washington and that it is unreasonable to find jurisdiction in Washington.

To determine whether a claim arises out of forum-related activities, courts apply a “but for” test. Ziegler v. Indian River County, 64 F.3d 470, 474 (9th Cir. 1995). The Ninth Circuit has adopted a “but for” test for determining whether a plaintiff’s claim arises out of a defendant’s forum related activities. Doe v. American Nat’l Red Cross, 112 F.3d 1048, 1051 (9th Cir. 1997). The “arising out of” requirement of the specific jurisdiction test is met if “but for” the contacts between the defendant and the forum state, the cause of action would not have arisen. See Terracom, 49 F.3d at 561. In Shute v. Carnival Cruise Lines, the Ninth Circuit reasoned that:
the ‘but for’ test is consistent with the basic function of the ‘arising out of’ requirement – it preserves the essential distinction between general and specific jurisdiction. Under this test, a defendant cannot be haled into court for activities unrelated to the cause of action in the absence of a showing of substantial and continuous contacts sufficient to establish general jurisdiction. . . . The ‘but for’ test preserves the requirement that there be some nexus between the cause of action and the defendant's activities in the forum.
Shute v. Carnival Cruise Lines, 897 F.2d 377, 385 (9th Cir. 1990) rev’d on other grounds, 499 U.S. 585 (1991)). Plaintiff cannot establish that “but for” the contacts between the Defendants and the forum state, the cause of action would not have arisen. To the contrary, Plaintiff’s allegations arise from Defendant’s alleged conduct in foreign jurisdictions. Defendants created email messages outside of Washington and distributed them through the Internet. Plaintiff does not allege any relationship between itself and Defendants, in Washington or otherwise other than the mere fortuitous fact that Plaintiff accessed the emails in Washington. Indeed, Plaintiff very well could have checked his email outside of this state. Even taking the allegations in the complaint as true, plaintiff cannot satisfy the Ninth Circuit’s “but for” requirement to find specific jurisdiction.

3. Personal jurisdiction over defendants is unreasonable. The reasonableness prong of the Ninth Circuit test requires that the Court’s exercise of jurisdiction comport with “fair play and substantial justice.” Burger King, 471 U.S. at 477-78. The factors that the Court must consider are:
(1) the extent of the defendant’s purposeful interjection into the forum state, (2) the burden on the defendant in defending in the forum, (3) the extent of the conflict with the sovereignty of the defendant’s state, (4) the forum state’s interest in adjudicating the dispute, (5) the most efficient judicial resolution of the controversy, (6) the importance of the forum to the plaintiff’s interest in convenient and effective relief, and (7) the existence of an alternative forum. Id.

No one factor is dispositive, and the district court must balance all seven. Core-Vent Corp. v. Nobel Indus., A.B., 11 F.3d 1482, 1488 (9th Cir. 1993).

The Ninth Circuit has held that “[t]he degree to which a defendant interjects himself into the state affects the fairness of subjecting him to jurisdiction.” Data Disc, Inc., 557 F.2d at 1288. Defendants’ interjections into Washington are attenuated and merely the result of the global availability of the Internet. Thus, the first factor weighs in favor of a finding of no personal jurisdiction.

The second factor in the reasonableness test clearly weighs in favor of dismissal. Defendants’ burden in proceeding in this forum is substantial. The burden on the out-of-state defendants to litigate this claim in Washington is significantly greater than the burden facing Plaintiff. Defendants’ principal places of business are in Missouri and Kansas. See respectively, Geroe Decl. at ¶ 3; Brandt Decl. at 5. All the witnesses for Defendants work and reside outside of Washington, in Missouri, Kansas, California, New York, and Texas. See Geroe Decl. at ¶ 6; Brand Decl. at ¶ 15.

Thus, considering the the number of witnesses that would be required to travel to Washington, the burden on Defendants to litigate this claim is significantly greater than the burden on Plaintiff. Moreover, even if the burdens were equal, this factor would tip in favor of the Defendants because the law of personal jurisdiction is “primarily concerned with the defendant’s burden.” Terracom, 49 F.3d at 561.

The efficiency of the forum also weighs against a finding of reasonableness. In evaluating this factor, the Ninth Circuit has looked primarily at the location of the witnesses and evidence. Core-Vent Corp. v. Nobel Indus., A.B., 11 F.3d 1482, 1489 (9th Cir. 1993). In the present matter, the majority of the witnesses are likely located in Missouri and Kansas. The Defendants’ witnesses likely would be employees or agents of Adknowledge and Virtumundo, located in Missouri, Kansas or one of the Defedants’ other offices. While litigating in any of these states would no doubt inconvenience Plaintiff, “neither the Supreme Court nor [the Ninth Circuit] has given much weight to inconvenience to the plaintiff.” Core-Vent, 11 F.3d at 1490.

Weighing the interests of the parties and witnesses, it is clear that the assertion of personal jurisdiction in Washington would impose a substantial burden on the Defendants and would be unreasonable. Accordingly, the “reasonableness” factor weighs in favor of granting Defendants’ motion.

B. Defendants Are Not Subject to General Jurisdiction
Because There Is No Continuous or Systematic Contact

A court may assert either general or specific jurisdiction over a defendant. It is unclear whether Plaintiff has alleged general as well as specific jurisdiction. See Complaint at 2:21 - 24; 3:1 - 13. Regardless, Plaintiff cannot establish general jurisdiction over Defendants.

General jurisdiction exists when a defendant is domiciled in the forum state or when its activities there are “substantial” or “continuous and systematic.” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16, 80 L. Ed. 2d 404, 104 S. Ct. 1868 (1984). The standard for establishing general jurisdiction is “fairly high,” Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir. 1986), and requires that the defendant’s contacts be of the sort that approximate physical presence. See Gates Lear Jet Corp. v. Jensen, 743 F.2d 1325, 1331 (9th Cir. 1984). Plaintiff cannot establish that any of the Defendants had “substantial” and “continuous and systematic” activities within the forum state. Such activities must be pervasive in order to establish general jurisdiction. Data Disc Inc., 557 F.2d at 1287. “[P]laintiff bears the burden of demonstrating [that] contacts with the forum state [are] sufficient to give the court in personam jurisdiction.” Mesalic, 897 F.2d at 699.

Defendants simply do not have any contacts with Washington. Adknowledge and Virtumundo have neither offices nor employees in the State of Washington. See Geroe Decl. at ¶¶ 5, 6; Brandt Decl. at ¶ 13. They do not own or rent real property in Washington, and they have no bank accounts, licenses or other operations in Washington. See Geroe Decl. at ¶¶ 5, 8; Brandt Decl. at ¶¶ 14, 18. Nor do Defendants have any telephone listings, mailing addresses or statutory agents in Washington. See Geroe Decl. at ¶ 8; Brandt Decl. at ¶ 17. Neither Adknowledge nor Virtumundo is subject to taxation in Washington. See Geroe Decl. at ¶ 9; Brandt Decl. at ¶ 19. Virtumundo and Adknowledge do not place any advertisements in Washington newspapers, magazines or other media. See Geroe Decl. at ¶ 10; Brandt Decl. at ¶ 20. Neither Virtumundo nor Adknowledge generate any substantial revenue from the State of Washington. See Geroe Decl. at ¶ 11; Brandt Decl. at ¶ 23.

To the contrary, Defendants have taken proactive steps to prevent contact with the State of Washington. Since at least early 2004 Adknowledge has suppressed the transmission of commercial email to all consumers who identify a city or state of residence in Washington, and accordingly has suppressed approximately 1.3 million emails to Washington residents over a period of several years. See Geroe Decl. at ¶¶ 15, 16. Adknowledge stopped adding email addresses to its database entirely in December 2004 from people who reported a Washington residence. Id. at ¶ 17. Adknowledge has taken all commercially reasonable steps possible to refrain from contacting the State of Washington. Virtumundo similarly took affirmative steps to avoid contact with Washington and Plaintiff by removing Plaintiff from its database. See Brandt Decl. at ¶¶ 25, 26.

IV. CONCLUSION

Defendants are not subject to jurisdiction in this forum. The only relevant jurisdictional facts are Plaintiff’s allegation that he accessed certain emails from Defendants while he was fortuitously located in Washington State. There is no evidence that Defendants had knowledge that Plaintiff would access the emails in Washington. Emails are location neutral and do not have the embedded information contained in postal mailings or phone numbers. Courts have consistently held that postal mailings and phone numbers are insufficient to establish jurisdiction. It makes no sense that it would be sufficient to confer jurisdiction to send an email if printing out that email and mailing it to Plaintiff would not be sufficient to confer personal jurisdiction.

Defendants respectfully request this Court dismiss this action with prejudice for lack of personal jurisdiction, and award Defendants their reasonable attorney’s fees pursuant to RCW 4.28.185(5).

DATED this 16th day of March, 2006.

Respectfully Submitted,

NEWMAN & NEWMAN,
ATTORNEYS AT LAW, LLP

By:
Derek A. Newman, WSBA No. 26967
Roger M. Townsend, WSBA No. 25525
Attorneys for Defendants

Attachment	Date	Size
MotDismissJurisdiction.pdf	06/28/09 1:04 pm	135.03 KB
MotDismissJurisProOrder.pdf	06/28/09 1:04 pm	49.92 KB

RESPONSE to Motion to Dismiss for Lack of Jurisdiction

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

JAMES S. GORDON, Jr., a married
individual, d/b/a
`GORDONWORKS.COM';

Plaintiff,

V.

VIRTUMUNDO, INC, a Delaware
corporation, d/b/a
ADNOWLEDGEMAIL.COM;
ADKNOWLEDGE, INC., a Delaware
corporation, d/b/a
ADKNOWLEDGEMAIL.COM;
SCOTT LYNN, an individual; and
JOHN DOES, I-X,

Defendants,

Plaintiff James S. Gordon, Jr., by and through his attorney of record, responds to Defendants' Motion To Dismiss as follows:

1. Introduction

Defendants seek to dismiss Plaintiff's Complaint against them, claiming lack of personal jurisdiction pursuant to CR I2(b)(2). Plaintiff asserts that personal jurisdiction clearly attaches to Defendant in the State of Washington. To hold differently would effectively eviscerate the Washington CEMA (RCW 19.190 et seq.) by preventing Washington citizens as well as the State Attorney General from applying the State's anti-spam laws to out-of-state spammers, such as Defendant here.

This case illustrates the evolving nature of the law of personal jurisdiction in response to new developments in technology. The trend in recent years has become quite clear, indicating that courts around the country, and in particular Washington courts, both state and federal, have been holding in favor of personal jurisdiction in cases involving contacts, including commercial emails, via the internet. (See Declaration of Robert J. Siegel and decisions attached thereto, including: two decisions by this Court, Judge Thomas Zilly at Exhibit "A"; two recent decisions from the U.S. Eastern District court of Washington at Exhibit "B"; a motion and decision from the Washington Superior Court For King County, Judge Hilyer, denying a similar motion to dismiss by this same Defendant, Virtumundo, as Exhibit "C"). Defendants' arguments are wholly without merit.

Facts

(For a complete statement of the facts discussed herein See Subjoined Declaration of James S. Gordon, Jr.)

On September 8, 2003, Plaintiff Gordon received a commercial email from Defendant Virtumundo with the subject line "NFL Sunday Ticket and 4 Free Months of DirecTV" purportedly advertising satellite television subscriptions for sale over the internet, and containing, in fine print, the misrepresentation that "You received this email because you signed up at one of Virtumundo's websites...", an allegation that Plaintiff wholly denies. This email was sent to his "james@gordonworks.com" email address, at his domain Gordonworks.com.

Mr. Gordon, as he routinely does, replied to the email and informed Defendants that he was a Washington State resident, and to cease and desist sending any further email. Subsequently, and incredibly, Mr. Gordon received over 6,000 more emails from Defendants at this email address, transmitted to and through his interactive computer service, and through his LLC's domain server. (Mr. Gordon's LLC, Omni Innovations, LLC has been added as a party plaintiff to this lawsuit by the filing of a First Amended Complaint concurrently herewith, a copy of which is attached to the subjoined Declaration of Robert J. Siegel).

Many of the offending emails contained a statement claiming that he had "subscribed" to receive commercial email, and that if he did nothing further, he would begin receiving more commercial email from Virtumundo. In response, Mr. Gordon sent an email to Virtumundo, informing it that he was a Washington State resident, that the email was in violation of RCW 19.190 and RCW 19.86, and requested that Virtumundo cease and desist sending all email, either sent by Virtumundo or by anyone else on its behalf. The email also included a list of all email addresses owned by Mr. Gordon, and specified that if Virtumundo continued sending him email, it agreed to submit itself to the jurisdiction and venue of the courts of Washington. This email did not "bounce," indicating that Virtumundo received the email.

Mr. Gordon subsequently sent numerous other cease and desist emails to Virtumundo, including the same message, literally thousands of times! Despite the repeated notices and warnings sent to Defendants, instead of ceasing and desisting its commercial email campaign to Mr. Gordon as he requested, Virtumundo continued to send email after email to him, advertising a wide array of products and services. See Declaration of James Gordon. The notices sent by Mr. Gordon to Defendants were much clearer and specific than would be a questionable request to "unsubscribe"1.

[1 Plaintiff notes that the use of the term "unsubscribe" implies that he "subscribed" to receive unlawful email in the first place, which Mr. Gordon categorically denies having done.]

After his numerous attempts failed to stop the flow of unsolicited email from Defendants, Mr. Gordon served Defendants with this lawsuit. As is apparent from the declarations submitted in support of Defendants' Motion, and notwithstanding the objectionable nature of same, Defendants admit to selling goods and services through commercial email transmitted through the internet, and nowhere do they flatly deny that Plaintiff received the emails in question from them. Nonetheless, Defendants make the untenable claim that they have not subjected themselves to the jurisdiction of the Washington courts because they do not have the requisite "minimal contacts" with this State, and/or "purposeful availment" on their behalf cannot be established. Plaintiff submits that, in light of the well- established law in this area, as set forth below, such a position is specious, and borders on the frivolous!

II. Argument and Authority

A. The Court Should Consider Only Plaintiffs Factual Allegations.

When a district court acts on a defendant's motion to dismiss under Rule 12(b)(2) without holding an evidentiary hearing, the plaintiff need make only a prima facie showing of jurisdictional facts to withstand the motion to dismiss. Ballard v. Savage et al, 65 F.3d 1495 (1995). "[T]he plaintiff need only demonstrate facts that if true would support jurisdiction over the defendant." Id, citing Data Disc, Inc. v. Systems Technology Assos., 557 F.2d 1280, 1285 (9th Cir. 1977). The facts are viewed in the light most favorable to the Plaintiffs. Compuserve Inc. v Patterson, 89 F.3d 1257, 1262, (6th' Cir. 1996), citing Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). "Furthermore, a `court disposing of a 12(b)(2) motion does not weigh the controverting assertions of the party seeking dismissal,' ... because we want `to prevent non-resident defendants from regularly avoiding personal jurisdiction simply by filing an affidavit denying all jurisdictional facts.' Id at 1459 (emphasis added). Dismissal in this procedural posture is proper only if all the specific facts which the plaintiff alleges collectively fail to state a prima facie case for jurisdiction. Id. Unless directly controverted, the plaintiff's version of the facts is taken as true. Doe v. Unocal, Corp., 248 F. 3d 915, 922 (9th Cir. 2001).

Conflicts in the evidence set forth in the parties' affidavits must be resolved in the plaintiff's favor. Id. Here, Plaintiff has clearly met his burden, and Defendant's Motion should be dismissed.

B. The Statements Of Defendants' Corporate Counsel Should Be Stricken And/Or Ignored.

It likely has not gone unnoticed by the Court that the only sworn statements submitted on behalf of both defendants are not from corporate officers, but rather from their respective corporate counsel, Messrs. Geroe and Brandt. Notwithstanding the highly unusual, and unreliable nature of such testimony, the Court should take particular notice of the fact that nowhere in the Defendants' brief (nor in the sworn statement of Defendant Virtumundo's corporate counsel) does the Defendant ever deny sending Spam to Mr. Gordon. This omission is particularly telling given the fact that the entire basis of the Plaintiffs complaint is the allegation that the Defendant sent thousands of unsolicited, and otherwise unlawful emails to Mr. Gordon. Instead, the Defendant's counsel simply ignores the issue, essentially arguing that "there was no intentional contact by Defendant with anyone in Washington State", and that they, Defendants, intentionally don't target Washington residents (while claiming they can't ascertain the actual location of the email addresses they regularly send commercial emails to), as if the thousands of Defendant's illegal spams were not "contacts", and were not "intentional".

As this Court is well aware, intent has nothing to do with the issue and is nowhere required in order to violate the Washington CEMA. The sworn testimony of the Defendant's corporate counsel is also glaringly equivocal, admitting that a certain amount of their revenue is indeed derived from transactions/sales in Washington, while disingenuously attempting to minimize that admission by stating an unsupported, and uncertified revenue figure completely out of context, i.e., the actual dollar amounts derived from Washington transactions. Thus, we have no way to know just how many dollars .04%, and .16% of Defendants' revenue these percentages actually represent. Nonetheless, for these purposes, it matters not whether these numbers represent millions of dollars, or mere pennies. Neither Defendants' intent nor their revenue is relevant to the determination of whether this Court may exercise personal jurisdiction over them.

Notwithstanding the foregoing, Plaintiff moves this Court to ignore the factual allegations made by "Defendant's Motion " and strike the allegations contained within the attached affidavits upon which its entire motion is necessarily, albeit improperly, founded, and consider only the collective claims made by Plaintiff: here, in the subjoined Declarations, attached exhibits, and in his Complaint and First Amended Complaint.

C. Plaintiffs Prima Facie Facts Clearly Support Personal Jurisdiction.

In Washington, a traditional analysis of jurisdiction under its long-arm statute involves two separate issues: (1) does the statutory language purport to extend jurisdiction, and (2) would imposing jurisdiction violate constitutional principles. Grange Insurance Association v. Washington, 110 Wn.2d 752, 757 P.2d 933 (1988), citing Werner v. Werner, 84 Wn.2d 360, 364, 526 P.2d 370 (1974).

1. Statutory authority

Plaintiff alleges that the Defendant engaged in conduct in violation of RCW 19.190 et seq., the Washington Commercial Electronic Mail Act (CEMA). Long arm jurisdiction under this act is specifically granted under RCW 3.66.020. Plaintiffs First Amended Complaint also adds allegations and causes of action under: The Federal Can-Spam Act of 2003, 15 U.S.C. §7701, et seq; the Washington State Identity Crimes Act, RCW 9.35 et seq.; the Washington Deceptive Offers Act, RCW 19.170 et seq.; and for Injunctive Relief.

Further statutory authority is granted pursuant to RCW 19.86, which provides that violations of the CEMA statute constitute per-se violations of the Consumer Protection Act. Under RCW 19.86.160, persons who fall within the service provisions of the CPA are "deemed to have thereby submitted themselves to the jurisdiction of the courts of this state within the meaning of RCW 4.28.180 and RCW 4.28.185."

Thus, Washington's long arm statute clearly extends jurisdiction over the Defendant through the Consumer Protection Act. (See State v Readers Digest Association, 81 Wn. 2d 259, 277 (1991), which held that the performance of an unfair trade practice in Washington, even though by a foreign corporation which had no agents, employees, offices or property in the state, was alone sufficient to establish jurisdiction.)

Further statutory authority is extended by RCW 4.28.185(b), which extends jurisdiction over persons who commit tortious acts in Washington. Federal Courts have ruled that sending unsolicited email constitutes the common law tort of trespass to chattels. America Online Inc. v. LCGM In, 46 F. Supp. 2d 444, 451-452 (E.D. VA, 1998). Washington State courts have ruled that deceptive acts of consumer fraud of the type addressed under the CPA may constitute "tortious" acts for the purposes of extending long-arm jurisdiction over an out of state defendant.

Authority is also extended by RCW 4.28.185(a), which extends jurisdiction over any person who transacts business within this state. Further, in addition to the many thousands of unlawful commercial email solicitations received by Plaintiff, it is expected that discovery will reveal the extent of Defendants' true business transactions in this State, and will show substantial sales that Defendants have made in the State of Washington. (Defendants have already admitted that they do transact business on the internet in this State by virtue of statements contained in their supporting Affidavits indicating that a percentage of their sales, albeit an unspecified amount, are to Washington residents).

2. Due process

The Ninth Circuit employs a three-part test to determine if a district court can exercise specific jurisdiction:
(1) The nonresident defendant do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or results from the defendant's forum-related activities; and (3) exercise of jurisdiction must be reasonable.
Panavision v. Toeppen, 141 F.3d 1316, 1320 (1998).

(a) The First Element - Purposeful Availment.

The purposeful availment requirement ensures that a nonresident defendant will not be hauled into court based upon "random, fortuitous or attenuated" contacts with the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985). This requirement is satisfied if the defendant "has taken deliberate action" toward the forum state. Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). "Fulfilling this step is not necessarily precluded by a lack of physical contacts with the forum. Rather, `within the rubric of 'purposeful availment' the [Supreme] Court has allowed the exercise of jurisdiction over a defendant whose only 'contact' with the forum state is the 'purposeful direction' of a foreign act having effect in the forum state."' Core-Vent Corp v. Nobel Industries, 11 F.3d 1482,1485, (1993), citing Haisten v. Grass Valley Medical Reimbursement Fund, 784 F.2d 1392, 1397 (9th Cir. 1986). The "effects test" was established in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) in which the Supreme Court held that the inquiry into whether a defendant purposefully availed itself on the forum state slightly shifts when the application turns on a tort claim.

Defendant relies heavily on Cybersell v. C bbersel1, 130 F.3d 414 (1997) arguing that somehow the purposeful transmission of thousands (and likely millions) of commercial emails is the equivalent of operating a passive advertisement on a website (the act in question in Cybersell). While passive internet advertising alone may not be sufficient to subject a party to jurisdiction in another state, when that party "purposefully (albeit electronically) directed his activity to the forum state," such is considered "something more" and sufficient to satisfy the purposeful availment requirement. Panavision, at 1321, citing Cybersell Inc. v. Cybersell Inc., 130 F.3d 414 (9" Cir. 1997), and cases attached in Exhibit "A". Numerous courts have found that email is in fact just such a "purposeful" act, as the sender must affirmatively enter the recipients address into a program, formulate a message, and direct the message to the targeted address by pushing a "send" button, or by affirmatively and purposefully programming specific software to accomplish those acts.

In any event, Defendant's ownership and operation of a website advertising its spamming abilities is not alleged as the basis for jurisdiction here. It makes no difference whatsoever whether Defendants' websites are "active" or "passive," or whether Defendants even operate a website at all. It is the intentional and purposeful direction of thousands of emails to Plaintiff, particularly after repeated, direct notices to cease and desist that constitutes purposeful availment here.

The fact that Mr. Gordon gave direct notice to Virtumundo to cease and desist is further dispositive here. The U. S. Supreme Court has held in the context of junk mail that a mailer's right to communicate is circumscribed by an affirmative act of the addressee giving notice that he wishes no further mailings from that mailer. Rowan v. U.S.P.S., 397 U.S. 728, 737, 90 S. Ct. 1484, 25 L. Ed. 2d 736 (1970). They noted the importance of the long held right of "a householder to bar, by order or notice, solicitors, hawkers, and peddlers from his property." Id, citing Hall v. Commonwealth, 188 Va. 72, 49 S. E. 2d 369, appeal dismissed, 335 U.S. 875 (1948). Chief Justice Burger in his opinion stated:
"We therefore categorically reject the argument that a vendor has a right under the Constitution or otherwise to send unwanted material into the home of another. If this prohibition operates to impede the flow of even valid ideas, the answer is that no one has a right to press even "good" ideas on an unwilling recipient. . . . The asserted right of a mailer, we repeat, stops at the outer boundary of every person's domain."
Rowan, at 738.

(Although difficult to understand why, Defendants cite to a recent case decided by the Supreme Court of Utah, Fenn v. Mleads Enterprises, Inc., 2006 UT 8; 545 Utah Adv. Rep. 7. Reliance on this case is patently misplaced for several reasons. First, that case involved a Utah citizen, Ms. Fenn, who sought to sue a notorious spammer under Utah's anti-spam statute, which it should be noted is glaringly less aggressive in its scope and intent than the Washington CEMA. That case involved the sending of only one (1) single email by defendant there, unlike the thousands received by Plaintiff here. And further, there was no allegation in that case that the Plaintiff specifically, and repeatedly (thousands of times) demanded that defendant cease and desist from sending further emails, nor did she apparently notify that defendant of her address and residency in Utah, as Plaintiff also did repeatedly in the instant case. The Utah court focused there on the paucity of evidence, i.e., only one (1) single email, and the fact that there was no "interactivity", to establish the requisite minimum contacts, i.e., "plaintiff never responded to the email nor did she contact Mleads through any other means." stating: "Although the possibility existed for an exchange to occur, because it did not, these facts fall under the type of interactive activity for which the exercise of personal jurisdiction is improper," id at p. 5. Thus, even the Utah court left open the possibility of finding personal jurisdiction over a spammer defendant where, as here, the interactive activity factor was satisfied. Further distinguishing Fenn from the instant case, the Washington CEMA includes a presumption that senders of commercial emails have knowledge of their recipients' state of residence if this information is available from the domain owner of the email address, which is the case here with plaintiff Gordon's domain and email addresses. Of course, this alleged fact by Mr. Gordon must be assumed to be true under a CR 12(B)(2) analysis, and thus, contrary to its self-serving protestations, Defendants here are presumed to have had knowledge of Mr. Gordon's Washington residency. Unlike the Washington CEMA, however, the Utah statute at issue in Fenn contained no such provision.)

Defendant also claims that purposeful availment is lacking because Mr. Gordon fortuitously opened his email from within Washington, and that it lacks the ability to differentiate where an email will be accessed. An identical argument was raised by the defendant in Verizon v. Ralsky, and that court utterly rejected the argument. That court cited Internet Doorway, Inc. v. Parks, 123 F.Supp.2d 773, 779-80, (S.D. Miss 2001), and held that "[n]otwithstanding that [the defendant] had indiscriminately transmitted her e-mails all over the world,...'by sending an e-mail solicitation to the far reaches of the earth for pecuniary gain, one does so at her own peril, and cannot then claim that it is not reasonably foreseeable that she will be haled into court in a distant jurisdiction to answer for the ramifications of that solicitation." Verizon, at 615-616.

That court also noted that "one of the key factors courts have focused on in finding purposeful availment of a forum state concerning conduct over the internet is whether the activity was driven by pecuniary gain rather than personal purposes." Id, citing Internet Door at 779-80. Such commercial email transmissions were held to be "knowing and repeated." Id, at 616.

Here, Virtumundo also purposefully and knowingly directed thousands, and likely millions of commercial e-mails to Washington residents. All of them were exclusively for its own pecuniary gain, as it was hired to send the commercial email to market certain products on behalf of its "marketing partners".

Furthermore, it makes no difference whatsoever where Mr. Gordon opens the emails in question. The CEMA makes no reference to where the email is opened in determining whether it violates the statute, but rather only requires that the email address is held by a resident of Washington State. RCW 19.190.020(1). Residents of Washington can access their email accounts from anywhere in the world, and if that email violates the statute, they can bring suit. It would be ridiculous to limit their right of action only if they happen to be within the borders of the state when they choose to open their inboxes.

Although the Washington Supreme Court has not directly addressed the jurisdictional question now before this Court, State v. Heckel, 122 Wn. App. 60, 93 P.3d 189 (2004), and State v. Heckel, 143 Wn.2d 824 at 840 (2001), makes it abundantly clear how the Washington courts view personal jurisdiction in the context of unlawful CEMA violations. There, on appeal from the trial court's grant of summary judgment in favor of the State, defendant/appellant Heckel, as Defendants do here, argued that the State had failed to establish that he had "knowledge", or should have known, that any particular email he sent was directed to a Washington resident. The Court of Appeals dispensed with that argument stating:
"Again, if we were to interpret the Act the way Heckel suggests, no spammer sending deceptive e-mail could ever violate the Act as long as he were to use a bulk e-mail program to harvest large numbers of addresses without regard to residence of the owners, because he could always claim that he had no specific knowledge about particular recipients,"
and further,
"The State urges this court to adopt the reasoning of the trial court and at least two federal district courts and hold that a spammer sending millions of e-mails over the Internet has reason to know that he could be "ha[u]led into court in a distant jurisdiction to answer for the ramifications of that solicitation." Internet Doorway, Inc. v. Parks, 138 F.Supp.2d 773, 779-80 (S.D.Miss.2001); Verizon Online Servs., Inc. v. Ralsky, 203 F.Supp.2d 601, 618 (E.D.Va.2002).
Heckel urges a rejection of this "statistical argument," arguing that the Act requires a "particular" or "specific" e-mail address of a Washington resident and that reasonable minds could differ on whether sending any particular number of e-mail messages must statistically impose a conclusive presumption that some of those would be directed to the addresses of Washington residents. But Heckel does not dispute that he sent between 100,000 and 1,000,000 messages per week over a period of at least four months. Based on these numbers, we agree with the State and conclude that Heckel had reason to know that his spam would be directed to Washington residents," Id. at p. 69.

Under the CEMA a person knows that the recipient of an email is a Washington resident "if that information is available, upon request, from the registrant of the internet domain name contained in the recipient's electronic mail address." RCW § 19.190.020(2), and further, knowledge is imputed if residency information of an email recipient is available from the domain name registrant. However, in Heckel the Washington State Court of Appeals Division I held that this is not the exclusive way of demonstrating knowledge. State v. Heckel, 122 Wash.App. 60, 93 P.3d 189 (2004) ("Heckel II"), review denied, 153 Wash.2d 1021, 108 P.3d 1229 (2005). The Court in Heckel II held that there were numerous ways that a spammer knew, or had reason to know, that email addresses to which he sent his span were held by Washington residents, including: 1) proof that the recipient's email address was included in the Washington Email Registry co-sponsored by the Washington Attorney General and the Washington Association of Internet Service Providers ("the WAISP Registry"); and 2) proof that the spammer sent millions of emails thereby putting him on notice that a substantial volume would be received by Washington residents. Id. at 67-70, 93 P.3d 189.

The comments and holdings in both Heckel I and 11 take the wind out of Defendants' arguments here. Here, as in Heckel, although short on details as to how many emails Defendants send out each day, week, month, they admit that they do in fact regularly send commercial emails out over the internet, and that some portion of their revenue is derived from transactions in the State of Washington. Thus, it is a reasonable assumption to make, taking Plaintiff's allegations as true, that Defendants are engaged in sending at least the number of emails Heckel did, but likely many times more. Moreover, the Heckel decisions poignantly suggest that the analytical factors of the CEMA must be on the spammers who send commercial email to Washington residents, and not on where the spam may be accessed. Accordingly, likewise, it is both reasonable and proper to impute to them the knowledge that they would have been sending some of those emails to computers owned by Washington residents, and domiciled in the State of Washington.

Virtumundo disregarded Mr. Gordon's repeated requests to stop sending him email, purposefully choosing to ignore him. They literally inundated him with thousands of emails. This Court should therefore find that Defendant has purposefully availed itself of the privilege of conducting its commercial activities in Washington, and that Plaintiff has established the first element of the test for personal jurisdiction.

(b) The Second Element - The claim arises out of or results from the defendant's forum-related activities.

The second requirement for specific jurisdiction is that the contacts constituting personal availment must be the ones that give rise to the current suit. The Ninth Circuit measures this requirement in terms of "but for" causation. Zeigler v. Indian River County, 64 F.3d 470, 474 (9th Cir. 1995). Here, it is clear that but for Defendant's emailing to Plaintiff, there would be no violation of the Washington Commercial Electronic Mail Act and Consumer Protection Act, and thus no suit. Defendant directed its emails to email addresses it knew or should have known belonged to a Washington resident; a Washington resident received its emails; and those emails violated a Washington statute in Washington. Thus, the second element of the test is easily met.

(c) The Third Element - The exercise of Washington jurisdiction is reasonable.

The final requirement for specific jurisdiction is reasonableness. For jurisdiction to be reasonable, it must comport with fair play and substantial justice. Burger King Corp. v. Rudzeicz, 471 U.S.462, 476, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985). Burger King explicitly places upon the defendant the burden of demonstrating unreasonableness and requires the defendant to put on a "compelling case." Id, at 476-77, emphasis added (See also Core-Vent, at 1487, Panavision at 1322.)

Defendant has failed to establish any case whatsoever, much less a "compelling case," that the exercise of Washington jurisdiction is somehow "unreasonable. The Ninth Circuit uses a seven factor test to determine reasonableness:
(1) the extent of a defendant's purposeful interjection; (2) the burden on the defendant in defending in the forum; (3) the extent of conflict with the sovereignty of the defendant's state; (4) the forum state's interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiffs interest in convenient and effective relief; and (7) the existence of an alternative forum.
Panavision, at 1323, citing Burger King, 471 U.S. at 476-77.

No one factor is dispositive; a court must balance all seven. Core-Vent, 11 F.3d at 1488. Defendant has not addressed any of the seven factors.

Plaintiff asserts for the following reasons that jurisdiction is reasonable:

i. Purposeful interjection. Here, the degree of interjection is substantial. Defendant has sent over 5,000 emails to Plaintiff alone that specifically violate the CEMA, and likely an untold number of other emails to other Washington residents. In fact, as Mr. Gordon states in his Declaration, even after this action was filed, Defendants continued to send unlawful emails to him.

ii: Defendants burden in litigating. While a factor, unless the "inconvenience is so great as to constitute a deprivation of due process, it will not overcome clear justifications for the exercise of jurisdiction." Caruth v. International Psychoanalytical Ass'n, 59 F.3d 126, 128-29 (9th Cir. 1995). Defendant's burden would be relatively light litigating in Washington (see v, below).

Virtumundo advertises itself as a leading email marketing company, while Plaintiff is an individual, and small sole proprietorship business. Virtumundo has litigated in Washington before, and Washington State courts have asserted jurisdiction over it. Further, as the Washington Supreme Court has held, "the local benefits of [Chapter 19.190 RCW] outweighs any conceivable burdens the Act places on those sending commercial e-mail messages." State v. Heckel, 143 Wn.2d 824 at 840 (2001).

iii: Sovereignty. This factor concerns the extent to which this Court's exercise of jurisdiction in Washington would conflict with the sovereignty of Virtumundo's home state of Missouri. This action concerns the violation of a Washington statute in Washington.

iv: The Forum state's interest. "[T]he protection of legal rights of Washington residents is a legitimate state interest." Sorb Oil Corp. v. Batalla Corp., 32 Wn.App 296, 301, 647 P.2d 514 (1982). Plaintiff is a Washington state resident. The Washington legislature found that the practices covered by the Washington Commercial Electronic Mailing Act are "matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW." RCW 19.190.030(3).

v: Efficient resolution. This factor focuses on the location of the evidence and witnesses. There is limited evidence in the present case, which primarily consists of e-mails and other electronic media that can easily and economically be reduced to CD-ROMs, and/or transmitted electronically. Few witnesses will need to be called.

vi: Convenient and effective relief for Plaintiff. It will be convenient for Plaintiff to litigate this matter in Washington, and would be unduly burdensome for him to litigate elsewhere, including in Defendants' home state.

vii: Alternate forum. The Defendant could assert that it would be preferable to try this matter in Missouri, applying Washington law. But, both public and private interests weigh heavily in Plaintiff's favor here. The evidence, consisting of the actual illegal email transmissions, is in Washington. Public factors compel a Washington forum: it is desirable to have this controversy decided in the locale where people most affected by it, Washington residents reside. Jury duty should not be imposed on Missouri residents, with no relation to the litigation, to decide a violation of Washington law. "There is an appropriateness ... in having the trial... in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself." J. H. Baxter & Co. v. Central Natl. Ins. Co., 105 Wn. App 657, 20 P.3d 967 (2001).

Accordingly, the exercise of jurisdiction in Washington is overwhelmingly reasonable.
CONCLUSION

For the reasons stated above, Plaintiff has established clear statutory authority for an exercise of personal jurisdiction over Defendants, and has satisfied all due process requirements: Defendants have purposefully availed themselves of the privilege of conducting activities within the forum state of Washington, thereby invoking the benefits and protections of its laws; the claim arises out of that activity; and the exercise of jurisdiction is reasonable. As such, Plaintiff has established jurisdiction over Defendants in Washington, and Defendants' Motion should be denied.

Appeals Docket as of 12/2/09

06/18/2007 2 DOCKETED CAUSE AND ENTERED APPEARANCES OF COUNSEL. CADS SENT (Y/N): N. setting schedule as follows: appellant's designation of RT is due 6/25/07, ; appellee's designation of RT is due 7/5/07,, ; appellant shall order transcript by 7/16/07, ; court reporter shall file transcript in DC by 8/15/07; certificate of record shall be filed by 8/22/07 ; appellant's opening brief is due 10/1/07, ; appellees' brief is due 10/31/07,, ; appellants' reply brief is due w/in 14 days of svc of aple's brief. [07-35487] (KM)

06/18/2007 3 Filed attorney for Appellant Civil Appeals Docketing Statement served on 6/15/07 (to CONFATT) [07-35487] [07-35487] (KM)

06/19/2007 4 Filed order CONFATT ( LW) Case referred to Confatt for assessment conference only. Conference to be on 8/2/07 at 4:00 pm, PT. By telephone (y/n): yes. The br sch pre set by the court remains in effect. [07-35487] (KM)

08/03/2007 5 Filed order CONFATT (CG) On or before 8/15/07, counsel is requested to contact the mediator to report on the status of the case. [07-35487] (SB)

08/16/2007 6 Filed order CONFATT (CG) On or before 9/12/07, counsel is requested to contact the mediator to report on the status of the case. [07-35487] (SB)

08/28/2007 7 Filed Douglas E. McKinley's motion to withdraw as counsel , extend time to file appellant's opening brief ; served on 8/27/07 PROMO. (KKW)

08/31/2007 9 Filed order (Deputy Clerk: cb) The mtn of Douglas E. McKinley and Robert J. Siegel for leave to withdraw as aplts' csl is granted. Court records shall be amended to reflect that James S. Gordon is representing himself pending any appearance by csl. the corporate aplt is reminded that it must be represented by csl. Onbefore the date the opn breif is due, the corporate aplt shall engage csl csl. Failure to secure represenation will result in dismissal of the corporate aplt's appeal. The mtn to amend briefing is granted in part. The opnb rief is due 11/1/07. The ans brief is due 12/3/07. The opt rpy brief is due 14 days after service of the ans brief. If aplts engage new csl, the clerk will entertain a request for a further reasonable extension of time to file the brief. A copy of this order shall be provided to aplts at 9804 Buckingham Drive, Pasco, WA 99301. [07-35487] (KKW)

09/04/2007 12 Filed Appellant (Prose) James S. Gordon response (UNDER SEAL) opposing his attorney' motion to withdraw as counsel of record served on 8/29/07 PROMO. [07-35487] (KKW)

10/03/2007 13 Filed original and 7 copies Appellant James S. Gordon opening brief ( Informal: yes) 5 pages ; served on 10/1/07 [07-35487] (KKW)

10/10/2007 14 Filed order CONFATT (CG) Because both sides are not represented by cnsl, this case is not selected for program. Cnsl are requested to contact the mediator should new cnsl enter an appearance for aplts. The br sch pre set by the court remains in effect. [07-35487] (KM)

11/09/2007 15 Received Amicus State of Washington's brief in 15 copies of 20 pages; deficient: late pending mtn with PROMO;served on 11/8/07 [07-35487] (KKW)

11/09/2007 16 Filed Amicus State of Washington's motion to file late the brief served on 11/8/07 PROMO. (KKW)

11/16/2007 17 Filed order (Deputy Clerk: amt) The State of WA motion to file late amicus curiae brief is granted. The amicus brief already rec;d is ordered filed. The current briefing schedule remains in effect. The corporate aplt Omni Innovations LLC only is dismissed.Corporations must be represented by licensed csl. The clerk shall remove aplt Omni Innovations LLC as a party. [07-35487] (FT)

11/16/2007 19 Filed original and 15 copies State of Washington's brief of 20 pages ;served on 11/8/07 [07-35487] (FT)

11/19/2007 20 Filed Aples' response opposing amicus motion to file late brief served on 11/16/07 nan/order of 11/16/07 [07-35487] (KKW)

12/04/2007 21 Received orig. 15 copies Virtumundo Inc, Adknowledge Inc, Scott Lynn's brief of 35 pages and 3 vol. Exc; served on 12/3/07 deficient: footnotes too small [07-35487] (KKW)

12/14/2007 22 Filed Appellant James S. Gordon emergency motion to stay served on 12/14/07 MOATT. (KKW)

12/17/2007 27 Filed notice of appearance of Timothy J. Walton for Aplt. [07-35487] (KKW)

12/17/2007 28 Received orig. 6 copies James S. Gordon's reply brief ( Informal: No ) of 10 pages; served on 12/17/07 deficient No cert. of Compliance, proof of service, no table of content, no table of authority,typeface too small.. Notified counsel. [07-35487] (KKW)

12/18/2007 23 Received Appellee Virtumundo Inc, Appellee Adknowledge Inc, Appellee Scott Lynn's satisfaction of (major) brief deficiency, by submitting corrected brief served on 12/17/07 [07-35487] (KKW)

12/18/2007 24 Filed original and 15 copies appellee Virtumundo Inc, Scott Lynn's 35 pages brief, 3 vol. Exc. ; served on 12/17/07 [07-35487] (KKW)

12/20/2007 29 Received Appellant James S. Gordon's satisfaction of (major) brief deficiency, by submitting corrected brief served on 12/20/07 [07-35487] (KKW)

12/20/2007 30 Filed original and 15 copies James S. Gordon reply brief, ( Informal: No ) 11 pages; served on 12/20/07 [07-35487] (KKW)

12/24/2007 31 Received Appellant (Prose) James S. Gordon's motion for an emergency stay ; served on 12/14/07 (Aplt is represented by csl) MOATT. [07-35487] (KKW)

12/26/2007 32 Filed Appellee Virtumundo Inc, Appellee Adknowledge Inc, Appellee Scott Lynn response opposing appellant's motion for an emergency stay served on 12/26/07 MOATT. [07-35487] (hardcopy recvd 12/28/07) (KKW)

12/31/2007 35 Filed Appellant James S. Gordon (Prose) reply to response to supporting appellant's emergency mtn ;served on 12/28/07 MOATT. [07-35487] (KKW)

01/02/2008 33 Filed Appellant James S. Gordon's motion for an emergency stay; served on
12/14/07 (aplt is represented by csl; Clerk ordered to file motion 1/2/08). [07-35487] (LA)

01/02/2008 34 Filed order (MOATT)(Diarmuid F. O'SCANNLAIN, Barry G. SILVERMAN): The Clerk shall file aplt's emergency motion for injunctive relief. Aplt's emergency motion for injunctive relief is denied without prejudice to its renewal following presentation to the district court. Cite. On 12/17/07, Timothy J. Walton enetered an appearance as counsel for aplts. Aplts are reminded that pro se filings are not permitted where the party is represented by counsel. This case is ready for calendaring. Faxed to counsel at 3:30pm., [07-35487] (LA)

02/07/2008 36 Calendar check performed [07-35487] (TH)

03/26/2008 37 Sent letter to Office of Solicitor General in accordance with FRAP 44 and 28 U.S.C. § 2403(a). (SS)

07/08/2008 38 Filed Appellant James S. Gordon, Jr. rule 60 (B) motion to vacate judgement based on fraud or misrepresentation. Served on 07/03/2008 (MT)

07/10/2008 39 Received Appellant James S. Gordon, Jr. notice regarding related cases. (MT)

08/07/2008 40 Received Appellant James S. Gordon, Jr. supplement to rule 60 (b) motion to vacate judgement based on fraud or misrepresentation; (copy in moatt) served on 08/05/2008 (MT)

08/26/2008 41 Filed order (Appellate Commissioner) The court has received appellant’s pro se motion to vacate judgment pursuant to rule 60(b). Because appellant is represented by counsel, the court will not consider the pro se filing. The Clerk shall serve a copy of the pro se motion on appellant’s counsel of record, Timothy Walton, Esq. This case is ready for calendaring. (MOATT) (KKW)

09/16/2008 42 Calendar check performed. (RG)

09/30/2008 43 Calendar materials being prepared. (AM)

10/08/2008 44 CALENDARED: 12/11/2008 9:30 AM Seattle, WA Seattle Park Pl 21st (AM)

10/23/2008 45 Filed Asis Internet Services, Joel Householter and Ritchie Phillips motion to file amicus curiae brief and to file late amicus brief which was served on 10/22/2008, served on 10/22/2008. (FEDEX TO PANEL) (LA)

10/23/2008 46 Received original and 15 copies of Amici Curiae Asis Internet Services, Joel Householter and Ritchie Phillips brief in 18 pages. Deficiency: Motion pending Served on 10/22/2008. (FEDEX TO PANEL) (LA)

10/28/2008 47 Filed clerk order (Deputy Clerk:KKW ): The motion of ASIS Internet Services, et al., to file an amicus brief and to file the brief late is GRANTED. The parties may file supplemental briefing addressing the arguments of the amicus curiae by no later than November 14, 2008. This order does not consolidate this case and any other proceeding or appeal currently pending before this court. (KKW)

10/28/2008 48 Filed original and 15 copies of Asis Internet Services, Joel Householter and Ritchie Phillips amicus brief of 18 pages. Served on 10/22/2008 (already sent to panel) (LA)

11/03/2008 49 Filed Attorney Timothy J. Walton, Esquire for Appellant James S. Gordon, Jr. motion for continuance of oral argument. Served on 10/31/2008. FAXED SEATTLE PANEL. (MT)

11/03/2008 50 Notice of Oral Argument on DECEMBER Calendar. Please return ACKNOWLEDGEMENT OF HEARING NOTICE form to: SEATTLE Office. Please open attached documents to view details about your case. (KM)

11/05/2008 51 Filed clerk order (Deputy Clerk:WL ): The oral argument on this matter is hereby rescheduled to Tuesday, December 9, 2008, at 9:30 a.m. in Seattle, Washington. The Appellant’s Motion for Continuance of Oral Argument is DENIED. (WL)

11/05/2008 52 UPDATED CASE CALENDARED: 12/09/2008 9:00 AM Seattle, WA Seattle Park Pl 21st (RG)

11/14/2008 53 Received original and 5 copies of Appellant James S. Gordon, Jr. supplemental brief, per 10/28/08 order, (Informal: No) of 13 pages + 6 page attached declaration by James S. Gordon. Served on 11/10/2008. Deficiency: Insufficient brief copies. Other deficiency: Incorrect color of covers, no table of contents, no table of authorities, brief has attached pro se declaration by represented aplt, brief has non-record documents attached as exhibits. Notified counsel. (FEDEX TO PANEL) (LA)

11/17/2008 54 Filed clerk order (Deputy Clerk:KKW ):The deadline for Appellant James S. Gordon, Jr. to file corrections to Appellant’s Deficient Supplemental Brief is hereby AMENDED. Corrections to Appellant’s Deficient Supplemental Brief must be filed no later than Friday, November 21, 2008. (KKW)

11/18/2008 55 Received original and 15 copies of Appellees' supplemental brief (Informal: No) of 21 pages, per 10/28/08 order. Deficiency: No certificate of service. Notified counsel. (FEDEX TO PANEL) (LA)

11/19/2008 56 Filed clerk order (Deputy Clerk:KKW ): The deadline for Appellees Virtumundo, Inc. et al., to file corrections to Appellees’ Deficient Supplemental Brief is hereby AMENDED. Corrections to Appellees’ Deficient Supplemental Brief must be filed no later than Friday, November 21, 2008. (KKW)

11/21/2008 57 Filed (ECF) Appellant James S. Gordon, Jr. citation of supplemental authorities. Date of service: 11/21/2008. [6716122] (TJW)

11/21/2008 58 Submitted (ECF) Supplemental brief for review. Submitted by Appellant James S. Gordon, Jr.. Date of service: 11/21/2008. [6716123] (TJW)

11/21/2008 60 Received corrected deficiency of certificate of service (brf served 11/14/08) from Appellees served on 11/19/2008. (LA)

11/21/2008 61 Filed original and 15 copies of Appellees' (Informal: No) supplemental brief of 21 pages. Served on 11/14/2008. (already fedexed to panel) (LA)

11/24/2008 59 Supplemental Brief [6716123-2] will not be filed because of deficiencies (no certificate of service, footnotes too small). Within 5 working days of the filing of this order, filer shall submit a new brief via ECF curing the deficiencies. If a motion was filed with the brief, the motion should be filed again with the submission of the new brief. The previously established briefing schedule remains in effect. [6716286] (LA)

11/25/2008 62 Received appearance notice of Attorney(s) Michael R. Geroe for party(s) Virtumundo Inc Appellee Adknowledge Inc John Does Scott Lynn, in case 07-35487. (MT)

11/28/2008 63 Submitted (ECF) Supplemental brief for review. Submitted by Appellant James S. Gordon, Jr.. Date of service: 11/25/2008. [6722207] (TJW)

11/28/2008 64 Submitted (ECF) Supplemental brief for review. Submitted by Appellant James S. Gordon, Jr.. Date of service: 11/25/2008. [6722210] (TJW)

12/01/2008 65 Electronically-filed document [6722207-2] Brief Submitted for Review (ECF Filing) is stricken because there is an error in the document (duplicative). (LA)

12/01/2008 66 Filed Supplemental Brief [6722210-2] filed by James S. Gordon, Jr. in 07-35487. Within 5 working days of the filing of this order, filer is ordered to file 10 copies of the brief in paper format, with a Tan cover, accompanied by certification that the brief is identical to the version submitted electronically. (LA)

Letter to Solicitor General

The following is the text of a letter sent to the Solicitor General by the 9th Circuit.

I'm not sure who is alleging a constitutional infirmity in CAN-SPAM here. It could be Virtumundo challenging the law itself or it could be Gordon challenging the standing requirement that limits standing to sue to prosecutors and ISPs. Since the docket doesn't yet let us see the briefs in the case, it's hard to say.

==========================================
Dear Ms. Spadoni:

In accordance with Federal Rule of Appellate Procedure 44 and 28 U.S.C. § 2403(a), we are certifying to the Attorney General and informing the Solicitor General of a constitutional challenge to a federal statute raised in a pending appeal in which the United States is not a party.

The case is Gordon v. Virtumundo, Inc., Ninth Circuit docket number 07-35487. The federal statute at issue is the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, 15 U.S.C. §§ 7701-7713.

Attachment	Date	Size
GordonAppelateLetter.pdf	04/18/08 1:37 pm	125.31 KB

Supplemental Brief of Appellants in Response to Amicus Brief

It looks like the 9th Circuit is finally getting on the ECF bandwagon. That means that we'll be able to see filings on appeals in the 9th Circuit. Most of this case's appeal is not available through PACER, but stuff is starting to turn up now.

Here is a supplemental brief in the ancient Gordon v. Virtumundo case that James Gordon lost on standing issues.

The 9th Circuit expressly allowed the attorneys in the case to rebrief things brought up by an amicus curae brief filed by ASIS and others, even though that brief isn't available in PACER either.

====================================
Appeal No. 07-35487

IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
__________________________________

JAMES S. GORDON, JR.
Appellants/Plaintiffs,

vs.

VIRTUMUNDO, INC. ADKNOWLEDGE, INC.,
SCOTT LYNN and JOHN DOES I-X,
Appellees/Defendants.

__________________________

On Appeal from the United States District Court

Supplemental Brief of Appellants in Response to Amicus Brief

For the Western District of Washington
Hon. John C. Coughenour
Case No. CV06-0204JCC
_______________________________

Timothy J. Walton (California State Bar No. 184292)
WALTON & ROESS LLP
407 South California, Suite 8
Palo Alto, CA 94306
Phone (650) 566-8500
Fax: (650) 618-8687
Attorneys for Plaintiff JAMES S. GORDON, JR.

_______________________________

November 25, 2008

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TABLE OF CONTENTS
I. INTRODUCTION……………………………………1

II. STATEMENT OF FACTS……………………………2

III. DISCUSSION…………………………………………5

A. THIS COURT SHOULD NOT AFFIRM DISMISSAL BECAUSE PLAINTIFFS PLED FACTS SUFFICIENT TO STATE A CLAIM ………………………………………5

B. APPELLANTS ARE PROVIDERS OF INTERNET ACCESS SERVICES AND WERE ADVERSELY AFFECTED BY RESPONDENTS’ VIOLATIONS OF LAW…………………………………………………6

1. Appellants Provide Internet Access Service …………6

2. Appellants Were Adversely Affected………………………7

C. INTERNET SERVICE PROVIDERS HAVE A RIGHT OF ACTION UNDER 15 U.S.C. § 7706………………………9

D. SPAM IMPOSES SIGNIFICANT ECONOMIC BURDENS ON INTERNET SERVICE PROVIDERS…………………9

E. PLAINTIFF WAS HARMED AND IS THEREFORE ENTITLED TO DAMAGES PROVIDED BY THE STATUTE…………………………………………………11

IV. CONCLUSION………………………………………14

Certificate of Service……………………………………………… 15

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TABLE OF AUTHORITIES
CASES PAGE
ASIS Internet Services v. Active Response Group, Case No. C076211 TEH, United States District Court for the Northern District of California…………………………………………………………1, 2, 3, 4, 5, 10, 11, 13
Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007) 5
Brosnan v. Alki Mortgage, L.L.C., 2008 WL 413732, (2008) 2, 10
Haselton v. Quicken Loans, Inc. Case No. C07-1777RSL, United States District Court, Seattle, Washington…………………………1, 6, 7
Facebook, Inc. v. ConnectU LLC, 489 F. Supp. 2d 1087, 1094 (N.D. Cal. 2007)……………………………………………………………7
Gordon v. Virtumundo, Inc. 2007 WL 1459395 (W.D. Wash. 2007) 10
Hypertouch Inc. v.Kennedy-Western University, 2006 WL 648688 (N.D. Cal. 2006)……………………………………………………2, 10
MySpace, Inc. v. The Globe.com, Inc., No. 06-3391, 2007 WL 1686966 (C.D. Cal. Feb. 27, 2007)…………………………………7
ASIS Internet Services V. Optin Global, Inc., 2008 WL 1902217 (N.D. Cal. 2008)……………………………………………………2, 10
Resident Councils of Washington v. Leavitt, 500 F.3d 1025, 1032 (9th Cir. 2007)………………………………………………………12
Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1296 (9th Cir. 1998) ………………………………………………………………5
Tcherepnin v. Knight, 389 U.S. 332, 336 (1967)……………12

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STATUTES, RULES AND SECONDARY AUTHORITIES
47 U.S.C. § 230…………………………………………………12
47 U.S.C § 231 (e)(4)……………………………………………6
15 U.S.C. § 7704…………………………………………………7, 9
5 U.S.C. § 7706…………………………………………………9
15 U.S.C. § 7706(a)………………………………………………9
15 U.S.C. § 7706 (b)……………………………………………9
15 U.S.C. § 7701(1)………………………………………………9
15 U.S.C. § 7701(2)………………………………………………8
15 U.S.C. § 7701(6)………………………………………………10
15 U.S.C. § 7704…………………………………………………7, 9
15 U.S.C. §7704(a)(1)……………………………………………9
15 U.S.C. §7704(b)………………………………………………9
15 U.S.C. §7704(d)………………………………………………9
15 U.S.C. § 7706…………………………………………………9
15 U.S.C. § 7706 (a) ……………………………………………9
15 U.S.C. § 7706(b) ………………………………………………9
15 U.S.C. § 7706(f) ………………………………………………9
15 U.S.C. § 7706(g)(1) …………………………………………7, 9, 11, 13
15 U.S.C. § 7706(g)(3)……………………………………………11
15 U.S.C. § 7706(g)(4)……………………………………………11
15 U.S.C. § 7710 …………………………………………………11
47 U.S.C. § 230 ……………………………………………………11
47 U.S.C § 231 (e)(4)………………………………………………6

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I. INTRODUCTION

This is a reply brief in response to the amicus brief filed by ASIS Internet Services on or about October 20, 2008. This Court ordered that the "parties may file supplemental briefing addressing the arguments of the amicus curiae" (Order dated October 28, 2008.) Appellees filed their response to the amicus brief on November 14, 2008. Also, there has been a recent case law development that Appellants wish to bring to this Court's attention. This brief encompasses the issues raised in the Amicus brief. The District Court below erred in determining causation and standing and ignored the distinction between offending emails and the resulting adverse effects.

In one recent decision, a federal district court decided that an Internet service provider (“ISP”) is damaged when it is forced to use spam filters or investigate deceptive email. Appellants were damaged because they were forced to use filters and had to investigate deceptive emails to improve filters, and received 13,800 emails from Appellees. This Court should consider the reasoning of the recent federal decisions in ASIS Internet Services v. Active Response Group, Case No. C076211 TEH, United States District Court for the Northern District of California and Haselton v. Quicken Loans, Inc. Case No. C07-1777RSL, United States
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District Court, Seattle, Washington, Order Granting Motion for Partial Summary Judgment.

II. STATEMENT OF FACTS

The Honorable Thelton Henderson of the U.S. District Court for the Northern District of California ruled1 that a plaintiff, ASIS Internet Services, had standing as a provider of Internet access services to its customers (the opinion is hereinafter referred to as “ASIS”). This ruling, dated July 30, 2008, came fourteen months after the decision of the Honorable John Coughenour in the instant case and more than nine months after filing of the opening brief by Appellants. The issues are strikingly similar between ASIS and the instant case as each case pled damages under the CAN-SPAM Act of 2003 as well as their respective state anti-spam statutes. The primary difference between ASIS and instant action is that the ASIS court elucidated the adverse effects to which plaintiffs were subjected and the court below in the instant case did not or, at best hinted at, the adverse effects which were evidenced in the record.

[1 Asis Internet Services v. Active Response Group, Case No. C076211 TEH, United States District Court for the Northern District of California.]

Judge Henderson acknowledged the rulings in three cases2 which were
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similar to the case at bar. However, he refused to be swayed by “an artifact of courts” paraphrasing each other, without an explicit analysis of what, in reality, would be required to show causation (between offending emails and the resulting adverse effects). (See ASIS at 7:1-2.) The ASIS court found that “a provider of Internet access services has standing if it can show that it suffered spam-related harm or costs of the type typically experienced by ISP rather than consumers, and carried the allegedly unlawful deceptive email over its facilities”. (Id. 2:23-26.)

[2 Hypertouch Inc. v.Kennedy-Western University, 2006 WL 648688 (N.D. Cal. 2006), Brosnan v. Alki Mortgage, L.L.C., 2008 WL 413732, (2008), and ASIS Internet Services V. Optin Global, Inc., 2008 WL 1902217 (N.D. Cal. 2008)]

The lower court in the instant case stated that Appellants did not have standing as their harm was similar in nature to a regular user of the Internet. In fact, the evidence in the record below contains details of the harm actually sustained by Appellants and which was not similar to what a non-ISP would experience. (See e.g., Appellees Supplemental Excerpts of Record "ER") at 060:8-12, 063-64, 067:4-9, 067:21-068: 4 and 493:14-20 (Appellants had to replace computers), 268:23-269:5 (Appellants had to purchase software to deal with spam sent by Appellees), 365:19 (purchase of spam filters), 472:2 and 475:14-15 (server cost tripled), and 481:14-15 (several other adverse effects).)

The court below said that the harm must be significant. But Judge Henderson realized that such a requirement was leading to the “progressively more restrictive interpretations of the Act, inconsistent with the statutory structure and purpose.” (ASIS at 2:21-23.)

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The ASIS court wrote: The Senate Report on the CAN-SPAM Act provides, in the section on enforcement, that: Section 7(f) would allow a provider of Internet access service adversely affected by a violation of section 5 to bring a civil action in Federal district court or other court of competent jurisdiction. This could include a service provider who carried unlawful spam over its facilities, or who operated a website or online service from which recipient email addresses were harvested in connection with a violation of section 5(b)(1)(A)(I). This language equates “carrying unlawful spam” with adverse effects caused by the violation. (ASIS order at 7:23-8:2.)

It was uncontested that Gordon’s server “carried” the unlawful spam, which Judge Henderson stated is equated to adverse effects caused by the violation. Appellants can show that they spent thousands of dollars on five new computers, on annual server fees. (See ER493:14-20, 268:23-269:5, 365:19.) Appellants spent thousands of dollars on forensic software, lost scores of customers (see ER 226:7-15), and spent an inordinate amount of time contacting law enforcement, regulatory bodies, and spammers seeking the cessation of the increasing spam load they endured. (See ER 63:24-64-:7 (describing difficulties and stating costs); see also ER 649:2-7 (noting irony that one of the adverse effects of the spam was loss of customers, which Defendants below argued eliminated the Plaintiffs' standing).) The ASIS court also stated, “an ISP is wronged when it is forced to carry, filter, or investigate deceptive email”. (ASIS. at 8:8-9.) Appellants were wronged because they were forced to do all those things.

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It is also uncontested that domains on Appellants' server received spam. Appellants were forced to create filters. (See e.g. 227:25-228:7 and 482:20-483:1) Appellants had to investigate senders of email. (Id. at ER 263:25-264:6 and 447:8-10.) It would be incongruous for the Court to find that only those ISPs that failed to investigate spam had standing to complain about it.

A holding that an ISP which successfully protects its consumers with filters and other spam management has no standing to bring suit would emasculate the private right of action (particularly given the individual’s lack of standing under CAN-SPAM), undercut the deterrent purposes of the Act, and inappropriately shift to the victim the responsibility to avoid spam by somehow not receiving it.

III. DISCUSSION

A. THIS COURT SHOULD NOT AFFIRM DISMISSAL BECAUSE PLAINTIFFS PLED FACTS SUFFICIENT TO STATE A CLAIM
A court should not grant dismissal unless the plaintiff has failed to plead "enough facts to state a claim to relief that is plausible on its face." (Asis Internet Services v. Active Response Group, Case No. C076211TEH, United States District Court for the Northern District of California, Order Denying Motion to Dismiss at 3:18 (citing Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007)).) Moreover, dismissal should be with leave to amend unless it is clear that
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amendment could not possibly cure the complaint's deficiencies. (Id. at 3:20-22 (citing Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1296 (9th Cir. 1998)).)

B. APPELLANTS ARE PROVIDERS OF INTERNET ACCESS SERVICES AND WERE ADVERSELY AFFECTED BY RESPONDENTS’ VIOLATIONS OF LAW

“The CAN-SPAM Act protects the interests of plaintiffs that are (1) ‘providers of Internet access service’ and (2) ‘adversely affected’ by a violation of specific provisions of the Act.” (Haselton v. Quicken Loans, Inc. Case No. C07-1777RSL, United States District Court , Seattle, Washington, Order Granting Motion for Partial Summary Judgment (“Haselton Order”) at 2:17-19.)

Here, Appellants are an Internet access service provider (see ER 004:24-005:7) and are adversely affected by Respondent’s violations of the Act. (See ER 60:4-8, 481:14-15.)

1. Appellants Provide Internet Access Services

“[A] service that enables users to access content, information, electronic mail, or other services offered over the Internet, and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers.” (Haselton Order at 3:2-8 (quoting 47 U.S.C § 231 (e)(4)).)

“Internet access service encompasses a wider range of entities than the term Internet Service Provider.” (Id. at 3:15-17.) “The plain language of the CAN-
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SPAM Act does not require an Internet access service to provide Internet connectivity to the end users.” (Id. at 3:20-21.) “[A] CAN-SPAM cause of action is not limited to entities that provide Internet connectivity.” (Id. at 4:6-7 (citing Facebook, Inc. v. ConnectU LLC, 489 F. Supp. 2d 1087, 1094 (N.D. Cal. 2007) and MySpace, Inc. v. The Globe.com, Inc., No. 06-3391, 2007 WL 1686966 (C.D. Cal. Feb. 27, 2007 (finding Internet access service “includes traditional Internet Service Provider”)).)

Appellants provide "email addresses, build[] web sites for others, and maintain[] a website that acts as a clearinghouse for job-search information and small business resources on the World Wide Web." (See ER at 060:4-8, see also 004:24-005:7.) Therefore, the first prong of Haselton test is met.

2. Appellants Were Adversely Affected

The CAN-SPAM Act provides a private right of action only to an Internet access service that is adversely affected by a violation of Section 7704. (15 U.S.C. § 7706(g)(1).) “Unsolicited commercial electronic mail imposes significant monetary costs on providers of Internet access services that carry and receive such mail”. (Haselton Order at 5:13-15 (quoting the Congressional findings).)

The Haselton court identified harms such as “slower Internet speeds, lost productivity, network system upgrades, unrecoverable data, expensive spam filter
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maintenance, and increased personal costs.” (Haselton Order at 6:9-12 (quoting Congressional findings).)

"Congress found that there was significant harm in the sending of bulk email with certain characteristics such as false headers, misleading subject lines, pornography and other harms." (Amicus Brief at 7 referring to 15 USC § 7701(1)-(2).) Appellants alleged false headers, misleading subject lines and other kind of harms. (See ER at 006:10- 20,008:18-25, 009:11-011:17.)

Appellants were harmed by slower Internet speeds, lost productivity, the need to constantly upgrade network systems (see ER at 493: 14-20, 268:23-269:5), install expensive spam filters (see ER at 365:19), permanently lost data and spend more in maintenance costs due to Respondents’ spam. (See ER at 472:2 and 475:14-15.)

Respondents’ spam has reduced Appellants’ network speeds, impaired his ability to notify subscribers about new ways to access services, and required an increase server and memory capacity. (See ER at 060-064, 067:21-069:11.) The amount of spam Appellants receive directly impedes the responsiveness of their servers and their ability to communicate with their subscribers to send them the locations of new proxy servers. Moreover, the mail that Appellants attempted to send to their subscribers, and the mail that business contacts attempted to send them, was sent more slowly, with random delays, and sometimes did not get sent
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or received at all. The tremendous amount of emails sent to Appellants "thwarts the efficacy" of their computers. (See ER at 067:21-68:11.)

C. INTERNET SERVICE PROVIDERS HAVE A RIGHT OF ACTION UNDER 15 U.S.C. § 7706

The CAN-SPAM Act makes it unlawful to "initiate the transmission" of a commercial email message that has false or misleading header information, or a deceptive subject line. (15 U.S.C. § 7704.) The Act is enforced by the Federal Trade Commission, other federal agencies, and state attorneys general. (15 U.S.C. § 7706(a), (b), (f).) The also creates a limited right of action for injunctive relief or damages by any "provider of Internet access service adversely affected by a violation" of sections 7704(a)(1), 7704(b), or 7704(d) of the Act. (15 U.S.C. § 7706(g)(1).)

D. SPAM IMPOSES SIGNIFICANT ECONOMIC BURDENS ON INTERNET SERVICE PROVIDERS

Considering both the definition of an Internet access provider and the requisite adverse effect, the court below looked to the legislative history of the CAN-SPAM Act. (Order at ER 659:20 - 667:3.) It noted that Congress focused on harm specific to Internet access providers, going beyond the "burden of sorting through an inbox of spam" borne by the ordinary consumer. (Id.) The Report of the Senate Committee on Commerce, Science and Transportation found that spam
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"imposes significant economic burdens on ISPs" by clogging computer networks, slowing service, and forcing Internet Access Providers to invest in new equipment to increase capacity and hire customer service personnel to deal with subscriber complaints. (ASIS, supra, at 4:22-28 (citing S. REP. NO. 108-102, at 6 (2003) (Comm. Rep. on CAN-SPAM Act of 2003 (S. 877)).) The “deceptive email causes the adverse effect”. (Id. at 6:27.) The ASIS court explained that

“[t]his requirement appears to have evolved as an artifact of courts' paraphrasing each other, without an explicit analysis of what, in reality, would be required to show causation. All courts3 that have construed the statute agree that the "adverse effects" on which standing can be predicated include network crashes, higher bandwidth utilization, and increased costs for hardware and software upgrades, network expansion and additional personnel.” (Id. at 7:1-7; see also 15 USC § 7701(6).)

[3 Hypertouch Inc. v. Kennedy-Western University, 2006 WL 648688, at 4 (N.D. Cal. 2006), Gordon v. Virtumundo, Inc. 2007 WL 1459395 (W.D. Wash. 2007), at 6 and 8, Brosnan v. Alki Mortgage, L.L.C., 2008 WL 413732, at 3 (2008), and ASIS Internet Services v. Optin Global, Inc., 2008 WL 1902217 (N.D. Cal. 2008) at 17. ]

Appellants suffered adverse affects under any reasonable reading of the statute. The adverse effects described in the record below are not such as would be typical of the regular Internet users. (See e.g. ER at 007:22-27, 009:18-19 and 493:14-20 (replace computers), 268:23-269:5
(purchase software to deal with spam sent by
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Appellees), 365:19 (purchase spam filters), 472:2 and 475:14-15 (servers cost tripled), and 481:14-15 (several other adverse effects).)

E. PLAINTIFF WAS HARMED AND IS THEREFORE ENTITLED TO DAMAGES PROVIDED BY THE STATUTE

“[A]n ISP is wronged when it is forced to carry, filter, or investigate deceptive email.” (ASIS at 8:9) The ASIS court held that a provider of internet access services is "adversely affected by a violation" of the CAN-SPAM Act within the meaning of § 7706(g)(1) if it has suffered specific harms, such as network problems or increased costs, and has carried the unlawful spam over its facilities. (Id. at 8:10-12.)

Providers of Internet access services can seek an injunction and collect damages of up to a hundred dollars per email for each CAN-SPAM violation or actual damages, together with attorneys’ fees. (Id. at 8: 13-20 (citing 15 U.S.C. § 7706(g)(1), (3) and (4)).)

The CAN-SPAM Act even orders the Federal Trade Commission to create a bounty payable to those who track down spammers and provide information leading to the FTC’s collection of a civil penalty. (Id. at 8:21-25 (citing 15 U.S.C. § 7710 (suggesting that punishment and deterrence, rather than compensating harm, are the Act’s primary goals)).) A broad interpretation of the standing provision which allows Internet access providers to join in enforcing the Act is
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consonant with this statutory purpose, and more fully effectuates the purpose of the private right of action than a more restrictive construction. (Id. at 8:25-9:2 (citing Resident Councils of Washington v. Leavitt, 500 F.3d 1025, 1032 (9th Cir. 2007) (quoting Tcherepnin v. Knight, 389 U.S. 332, 336 (1967) (courts should construe remedial legislation broadly to effectuate its purposes)).)

There is no reason to hold that Internet access services that block deceptive email (and incur costs doing so) cannot enforce the CAN-SPAM Act’s prohibitions. (See id. at 9:8-9.) On the contrary, a holding that an Internet access services which successfully protects its consumers by using filters and other spam management has no standing to bring suit would emasculate the private right of action, undercut the deterrent purposes of the Act, and inappropriately “shift to the victim the responsibility to avoid spam.” (Id. at 9:10) Such a holding also flies in the face of statutory protections for Internet access providers that attempt to protect Internet users from unlawful material (see e.g., 47 U.S.C. § 230) and would punish such providers for attempting to filter unwanted and unlawful email advertising and would benefit those bad actors that go to great lengths to hide, by immunizing them from any suit based upon investigation of available evidence.

Here, Appellants alleged facts sufficient to show they were “adversely affected by a violation” of the Act. (See ER at 007:22-27, 009:18-19, 60:8-12, 063:24-64:7, 067:4-9 and 067:21-68:4 and 493:14-20 (replace computers), Case: 07-35487 11/28/2008 Page: 16 of 19 DktEntry: 6722210
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268:23-269:5 (purchase software), 365:19 (purchase spam filters), 472:2 and 475:14-15 (servers cost tripled), and 481:14-15 (adverse effects).) Appellants were adversely affected because they received, processed, and stored the spam emails at issue in this suit; they spent significant time dealing with spam, incurred cost in spam filtering; have been forced to expand their server and network capacity because of spam; and have experienced network slowdowns because of spam. (See ER at 007: 60:8-12, 63:24-64:6, 007:22-27, 009:18-19, 067:4-9 and 067:21-68:4, 493:14-20, 268:23-269:5, 365:19, 472:2, 475:14-15, and 481:14-15.)

Moreover, Appellants were forced to purchase a new filtering system because of spam, in part because of the emails at issue in this case, and Appellants and their system administrator collectively spent many hours a week working on problems caused by spam. Appellants suffered specific harm because they incurred spam-related expenses for filtering systems, expanded server and network capacity, and personnel time. They carried Appellees unlawful emails over their facilities. Appellants have standing under 15 U.S.C. § 7706(g)(1). (See ASIS at 10:1-4.)

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IV CONCLUSION

This Court should consider the recent decisions by the Northern District of California and of the Washington District Court and reverse the findings below.

Dated: November 25, 2008

WALTON & ROESS LLP
/s/ Timothy J. Walton
Timothy J. Walton

Attachment	Date	Size
9thCASuppBriefAmicusGordon.pdf	12/02/08 2:44 pm	150.33 KB

Oral Arguments in the 9th Circuit

Here are the oral arguments in Gordon v. Virtumundo.

If you can read WMA files, then you should select that one as it is 1/9th the size of the MP3 format. It's also the original from the 9th Circuit's site.

For the convenience of those who cannot listen to WMA files I have converted it to MP3.

Attachment	Date	Size
07-35487.wma	12/11/08 1:10 pm	4.93 MB
07-35487.mp3	12/11/08 1:09 pm	45.71 MB

9th Circuit decision

Here is the decision from the 9th Circuit. It's a pretty solid win for Virtumundo and a solid loss not only for Gordon, but also the State of Washington (with a holding that its Commercial E-Mail Act is pre-empted by CAN-SPAM). Oddly, and in something of a vindication of Gordon's position, the panel refers to Virtumundo as "spammers" (see page 4: "In the parlance of our time, they are “spammers.”").

I'm not sure how comfortable I am with the concept that standing is determined not only by compliance with the statute (no matter how technical) but also by reaching back to legislative history. In this case, it appears that the panel's decision was reached as much by antipathy against Gordon (who is, let's face it, a VERY unsympathetic plaintiff) as it was anything else. And page 22's dual-level standing analysis dictum (presume standing when the plaintiff is a big provider and presume no standing when the plaintiff is a small provider) just seems odd to me.

One ray of hope for potential CAN-SPAM plaintiffs is found on page 21. There the panel, in dictum, states: "The e-mails at issue in a particular case must, at the very least, contribute to a larger, collective spam problem that caused ISP-type harms." The footnote mentions that the District Court's opinion has created some confusion on adverse effects and they reserve the question for another day with a better developed record. But, this may indicate that the 9th Circuit is perhaps a shade reticent to say that CAN-SPAM is only a tool that IAS provider can use against only the worst of the worst.

Finally, I have to say that I find Judge Gould's concurrence to be fairly compelling. Gordon was obviously trying to manufacturer a claim under CAN-SPAM and there is ample precedent under the common law to penalize him for that without needing to get into the legislative history.
---------------------------------------
FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

JAMES S. GORDON, JR., an individual doing business as gordonworks.com,
Plaintiff-Appellant,

v.

VIRTUMUNDO, INC., a Delaware corporation; ADKNOWLEDGE, INC., a Delaware corporation; and SCOTT
LYNN, an individual, Defendants-Appellees.

Appeal from the United States District Court
for the Western District of Washington
John C. Coughenour, District Judge, Presiding

Argued and Submitted

December 9, 2008—Seattle, Washington

Filed August 6, 2009

Before: Ronald M. Gould, Richard C. Tallman, and Consuelo M. Callahan, Circuit Judges.

Opinion by Judge Tallman;
Concurrence by Judge Gould

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COUNSEL
Timothy J. Walton, Walton & Rose, LLP, Palo Alto, California, for plaintiff- appellant James S. Gordon, Jr.

Derek Newman (argued), Randall Moeller, Newman & Newman, Attorneys at Law, LLP, Seattle, Washington, for defendants-appellees Virtumundo, Inc., Adknowledge, Inc., and Scott Lynn.

Shannon E. Smith, Deputy Attorney General, Robert M. McKenna, Attorney General of Washington, Seattle, Washington, for Amicus Curiae State of Washington.

Jason K. Singleton, Richard E. Grabowski, Singleton Law Group, Eureka, California, for Amicus Curiae ASIS Internet Services, Joel Householter, and Ritchie Phillips.

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OPINION

TALLMAN, Circuit Judge:

This case addresses unsolicited commercial e-mail, more commonly referred to as “spam.”1 While ignored by most and reviled by some, spam is largely considered a nuisance and a source of frustration to e-mail users who, at times, must wade through inboxes clogged with messages peddling assorted, and often unwanted, products and services. The rising tide of spam poses an even greater problem to businesses, institutions, and other entities through network slowdowns, server crashes, and increased costs. At the same time, commercial enterprise has staked its claim within the online world. The
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Internet is a unique medium that offers legitimate businesses a low-cost means to promote themselves and their wares and in turn fosters competition in the marketplace. Both consumers and Congress have come to view e-mail, when fairly employed, as an established and worthwhile device in the toolbox of accepted marketing practices.

[1 While “spam” in this context does not have a precise definition, it is typically understood to refer broadly to unsolicited e-mail messages (or “junk” e-mail), typically commercial in nature. See United States v. Kelley, 482 F.3d 1047, 1055 (9th Cir. 2007) (Thomas, J., dissenting).

The term “SPAM” originated as the trademark name for a canned precooked meat product manufactured by Hormel Foods Corporation. See Hormel Foods Corp. v. Jim Henson Productions, Inc., 73 F.3d 497, 500 (2d Cir. 1996). The e-mail-related connotation has its roots in a popular 1970 sketch by the British comedy troupe Monty Python’s Flying Circus, in which the word “spam” is repeated to the point of absurdity. Kelley, 482 F.3d at 1056 n.2 (Thomas, J. dissenting) (citing CompuServe Inc. v. Cyber Promotions, Inc., 962 F. Supp. 1015, 1018 n.1 (S.D. Ohio 1997)). A waitress recites menu items, which, to the restaurant patrons’ dismay, involve increasingly repetitive mention of SPAM, only to be periodically interrupted by a group of Vikings chanting a chorus about SPAM until normal dialogue is impossible. David Crystal, Language and the Internet 53-54 (2001) (citing to Monty Python’s Flying Circus, 2d series, episode 25 (BBC television broadcast Dec. 15, 1970)). Thus, in the context of the Internet, “spam” has come to symbolize unwanted, and perhaps annoying, repetitious behavior that drowns out ordinary discourse. The term was first used in the electronic messaging context to describe the practice of sending advertisements to many recipients, particularly on newsgroup forums. Id. But see S. Rep. No. 108-102, at 2 n.1 (2003), as reprinted in 2004 U.S.C.C.A.N. 2348, 2348 (noting that “[i]t all started in early Internet chat
rooms and interactive fantasy games where someone repeating the same sentence or comment was said to be making ‘spam.’ ”).]

After individual states initially wrestled with properly balancing the benefits and burdens of commercial e-mail, Congress enacted legislation in an effort to curb the negative consequences of spam and spamming practices without stifling legitimate commerce. Through this opinion we review the federal statutory scheme of the Controlling the Assault of Non-Solicited Pornography and Marketing (“CAN-SPAM”) Act of 2003, 15 U.S.C. § 7701 et seq., and assume the formidable task of determining the statutory standing requirements and the scope of federal preemption intended by Congress.

In the case before us, James S. Gordon, Jr. and his company, Omni Innovations, LLC (“Omni”),2 sued Virtumundo, Inc., Adknowledge, Inc., and Scott Lynn, the sole shareholder of both companies, seeking injunctive relief and significant damages based on the receipt of thousands of commercial emails. Defendants are in the online marketing business and widely transmit e-mail advertisements and solicitations to potential consumers on behalf of third-party clients. In the parlance of our time, they are “spammers.”

[2 Unless otherwise specified, we use the term “Gordon” in the recitation of the facts to collectively refer to both plaintiffs, Gordon and Omni. Omni has no employees, and Gordon is its manager and sole member.]

Based on a dense record developed through substantial discovery, the district court granted summary judgment in favor of Virtumundo, Adknowledge, and Lynn (collectively, “Virtumundo”) on all of Gordon’s claims. We have jurisdiction over Gordon’s appeal pursuant to 28 U.S.C. § 1291. Having carefully and independently evaluated the issues in light of
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the evidence, we agree that summary judgment was proper and therefore affirm.

I

Gordon is the original registrant of the Internet domain “gordonworks.com,” which he hosts on server space that Omni leases from GoDaddy, a domain registrar and web hosting company that also sells e-business related software and services, see http://www.godaddy.com. The GoDaddy service
allows users to virtually access the server through an ordinary Internet connection—in Gordon’s case, a broadband connection from Verizon. Through a virtual desktop called a “Plesk,” Gordon is able to manage his domain. He can post content on the Internet, create new e-mail accounts, and set user names and log-on passwords. There are, of course, substantial restrictions regarding Gordon’s usage of the leased server space.

It was through this vehicle that Gordon created a personal e-mail address: “jim@gordonworks.com.” Around September 2003, Gordon created additional e-mail accounts through the gordonworks.com domain for about six friends and family members, which he monitored for “data collection” and “research purposes.” Gordon registered jim@gordonworks.com and the gordonworks.com e-mail addresses of his “clients” in response to various online promotions and for numerous prize giveaways. Gordon estimates that, in doing so, he subscribed, or “opted in,” to e-mail mailing lists somewhere between 100 and 150 times.3

[3 Gordon further admits subscribing to various mailing lists as part of his “reconnaissance” activities in preparation for his pending and potential lawsuits. For example, Gordon would register his e-mail address in order to gain access to corporate information about potential defendants.]

Soon thereafter, these accounts began receiving e-mails from businesses marketing their goods and services. Some of
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these messages were transmitted by online marketers, such as Virtumundo, on behalf of their clients. At his instruction, Gordon’s “clients” relinquished control of their e-mail accounts.
They then set up their own domains through GoDaddy, which they housed on the server space leased by Omni. This enabled these individuals to create their own e-mail addresses “@” personalized domain names—e.g., “anthonycentral.com,” “jaykaysplace.com,” and “chiefmusician.net”—rather than
gordonworks.com.

Gordon continued to maintain and monitor the abandoned gordonworks.com e-mail accounts. He described his ongoing efforts as “do[ing] research on the spam that comes through.” At some later point, Gordon configured the e-mail server to provide an automated response to all commercial e-mail sent to gordonworks.com accounts. The response was titled “NOTICE OF OFFER TO RECEIVE UNSOLICITED COMMERCIAL EMAIL (SPAM)” and purported to consummate a “binding contract” by which the sender agreed to either cease and desist or pay Gordon $500 for each additional unsolicited e-mail subsequently delivered to the account. While he claims that online marketers, including Virtumundo, ignored his requests that all gordonworks.com e-mail addresses be removed from their mailing lists, Gordon does not provide evidence, apart from a general “belief,” that he followed the “opt-out” procedure stated in the individual e-mail messages. Not surprisingly, the e-mail accounts continued to receive spam, which over time accumulated in the unused inboxes. At the time of his deposition in January 2007, these gordonworks.com e-mail accounts remained active. However, the only persons who actually used a gordonworks.com account were Gordon and his wife.

In 2004, Gordon began filing lawsuits in state and federal court against persons and companies who sent solicitations or advertisements to e-mail accounts hosted on Omni’s leased server space. In February 2006, Gordon filed this lawsuit against Virtumundo in the Western District of Washington. He asserted various causes of action for violations of the
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CAN-SPAM Act, 15 U.S.C. § 7701 et seq., the Washington Commercial Electronic Mail Act (“CEMA”), Wash. Rev. Code § 19.190.010 et seq., the Washington Consumer Protection Act (“CPA”), Wash. Rev. Code § 19.86.010 et seq., and the Washington “Prize Statute,” Wash. Rev. Code § 19.170.010 et seq. As relevant to this appeal, Gordon contends that Virtumundo sent, according to his most recent estimate, approximately 13,800 materially misleading or otherwise unlawful commercial e-mail messages to e-mail accounts hosted through gordonworks.com. Gordon sought injunctive relief, several millions of dollars in statutory and treble damages, and his attorney’s fees and costs.4

[4 For example, in his motion for partial summary judgment, which the district court denied, Gordon sought statutory damages in the amount of $10,257,000, plus attorney’s fees and costs, based on 7,890 allegedly unlawful e-mails.]

In December 2006, the Honorable John C. Coughenour granted in part and denied in part Virtumundo’s motion to dismiss for pleading deficiencies. The order dismissed Gordon’s Prize Statute claims, in their entirety, and his CEMA and CPA claims to the extent they related to the gathering of “personally identifying information.” Wash. Rev. Code § 19.190.080. The court gave leave to amend the complaint to cure pleading deficiencies, but Gordon never did so.

Virtumundo then moved for summary judgment on all remaining claims, which consisted of Gordon’s CAN-SPAM Act claims and the surviving CEMA and CPA claims. By Order dated May 15, 2007, the district court granted the defense motion, see Gordon v. Virtumundo, Inc., No. 06-0204, 2007 WL 1459395 (W.D. Wash. May 15, 2007). Judge Coughenour concluded that both Gordon and Omni lacked standing to pursue a private action under the CAN-SPAM Act and that the state law claims failed as a matter of law based in part on federal preemption grounds.

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Gordon alone now appeals this grant of summary judgment.5

[5 A notice of appeal was filed on behalf of both Gordon and Omni. Gordon and trial counsel parted ways following the district court’s summary judgment order, and Gordon proceeded pro se. Upon the filing of Gordon’s opening brief, we dismissed Omni from this appeal as an improper pro se corporate appellant.]

II

We review a district court’s grant of summary judgment de novo, and may affirm on any basis supported by the record. Burrell v. McIlroy, 464 F.3d 853, 855 (9th Cir. 2006). Our review is governed by the same standard used by the trial court under Federal Rule of Civil Procedure 56. Adcock v. Chrysler Corp., 166 F.3d 1290, 1292 (9th Cir. 1999). “Viewing the evidence in the light most favorable to the nonmoving party, we must determine whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law.” Devereaux v. Abbey, 263 F.3d 1070, 1074 (9th Cir. 2001) (en banc).

A determination of standing is a question of law that we review de novo, see Nat’l Res. Def. Council v. EPA, 542 F.3d 1235, 1244 (9th Cir. 2008), as is a finding of federal preemption,
see Indus. Truck Ass’n, Inc. v. Henry, 125 F.3d 1305, 1309 (9th Cir. 1997).

III

A

[1] We first turn to Gordon’s CAN-SPAM Act claims. The CAN-SPAM Act became effective on January 1, 2004, and was enacted in response to mounting concerns associated with the rapid growth of spam e-mails. Congress determined:

(1) there is a substantial governmental interest in
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regulation of commercial electronic mail on a nationwide basis;

(2) senders of commercial electronic mail should not mislead recipients as to the source or content of such mail; and

(3) recipients of commercial electronic mail have a right to decline to receive additional commercial electronic mail from the same source.

15 U.S.C. § 7701(b).6 The Act does not ban spam outright, but rather provides a code of conduct to regulate commercial email messaging practices. Stated in general terms, the CAN-SPAM Act prohibits such practices as transmitting messages with “deceptive subject headings” or “header information that is materially false or materially misleading.” See 15 U.S.C. § 7704(a)(1), (2). The Act also imposes requirements regarding content, format, and labeling. For instance, unsolicited email messages must include the sender’s physical postal address, indicate they are advertisements or solicitations, and notify recipients of their ability to decline further mailings. 15 U.S.C. § 7704(a)(5). Moreover, in order to comply with the Act, each message must have either a functioning return email address or a comparable mechanism that allows a recipient
to “opt out” of future mailings. 15 U.S.C. § 7704(a)(3).7

[6 The CAN-SPAM Act defines “commercial electronic mail message” to mean “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service (including content on an Internet website operated for a commercial purpose),” excluding transactional or relationship messages. 15 U.S.C. § 7702(2).

7 The CAN-SPAM Act also delineates “aggravated violations” for various spamming practices such as e-mail harvesting and dictionary server attacks, see 15 U.S.C. § 7704(b), which are not at issue in this lawsuit.]

[2] The CAN-SPAM Act’s enforcement provision empowers the Federal Trade Commission, state attorneys general,
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and other state and federal agencies to pursue legal actions to enforce the Act’s provisions. 15 U.S.C. § 7706(a), (b), (f).

Congress also provided a limited private right of action, which states: A “provider of Internet access service adversely affected by a violation of” § 7704(a)(1), (b), or (d), or “a pattern or practice that violates” § 7704(a)(2) through (5) of the Act “may bring a civil action in any district court” to enjoin further violation by a defendant or to recover either actual or statutory damages, whichever is greater. 15 U.S.C. § 7706(g)(1). Statutory damages under the CAN-SPAM Act are substantial and can equal as much as $300 per unlawful e-mail.8 15 U.S.C. § 7706(g)(3). The Act also authorizes an award of attorneys’ fees and costs against any party at the district court’s discretion. 15 U.S.C. § 7706(g)(4).

[8 Statutory damages are calculated by multiplying the number of violations (i.e., the number of unlawful e-mail messages) by up to $100 in the case of a violation of § 7704(a)(1), or by up to $25 for any other violation. 15 U.S.C. § 7706(g)(3). The court may consider the defendant’s conduct in setting the statutory damage award and, if it determines that violations are aggravated, may increase the damage award up to three times the amount otherwise available. Id.]

Therefore, in any private action claiming CAN-SPAM Act violations, a threshold issue is whether the plaintiff satisfies the statutory standing requirements. On its motion for summary judgment, Virtumundo challenged Gordon’s and Omni’s ability to pursue a private action under § 7706(g)(1).

The district court conducted a thorough analysis of the existing case law, the CAN-SPAM Act itself, and the legislative history. Based upon the well-developed facts of the summary judgment record, the district court concluded that Plaintiffs had not demonstrated adequate harm—i.e., an “adverse effect,” as the district court called it—and therefore lacked standing with respect to these federal claims. Gordon, 2007 WL 1459395, at *8.

We agree that Gordon lacks standing to bring a private action under the CAN-SPAM Act. We commend the district
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court’s pioneering analysis in this uncharted territory, and reach a similar conclusion based on our assessment of the CAN-SPAM Act’s statutory standing requirement and the appellate record.

B

As recognized by several courts, the case law regarding the relevant legal standards under the CAN-SPAM Act is “scant,” ASIS Internet Servs. v. Optin Global, Inc., No. 05-05124, 2008 WL 1902217, at *15 (N.D. Cal. Apr. 29, 2008), and few courts have construed the standing provision, ASIS Internet Servs. v. Active Response Group, No. 07-6211, 2008 WL 2952809, at *2 (N.D. Cal. July 30, 2008). Neither we nor any of our sister circuits have comprehensively addressed this issue. We endeavor to do so here, at least in part.

1

[3] We begin by acknowledging that the CAN-SPAM standing inquiry involves two general components: (1) whether the plaintiff is an “Internet access service” provider (“IAS provider”), and (2) whether the plaintiff was “adversely affected by” statutory violations. See, e.g., Brosnan v. Alki
Mortgage, LLC, No. 07-4339, 2008 WL 413732, at *1-*2 (N.D. Cal. Feb. 13, 2008). Beyond that, however, the statutory standing provision read as a whole is ambiguous—a point upon which all parties agree. We therefore employ familiar techniques of statutory construction to evaluate Congress’s intent with regard to both components and their relation to one another.

While over time courts have developed various canons to assist with statutory interpretation, this “is an area in which absolutist rules do not [always] lead to sensible or accurate results.” Mt. Graham Red Squirrel v. Madigan, 954 F.2d 1441, 1453 (9th Cir. 1992). “[I]t is,” after all, “the duty of a court in construing a law to consider the circumstances under
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which it was passed and the object to be accomplished by it.” United States v. Curtis-Nev. Mines, Inc., 611 F.2d 1277, 1280 n.1 (9th Cir. 1980) (quoting United States v. Anderson, 76 U.S. 56, 65-66 (1869)); accord Callejas v. McMahon, 750 F.2d 729, 731 (9th Cir. 1984). Therefore, especially in this highly technical and evolving field, “[c]ommon sense not dogma is what is needed in order to explore the actual meaning of legislative enactments.” Mt. Graham Red Squirrel, 954 F.2d at 1453.

There are a few points that heavily influence our analysis, which we identify at the outset. First, despite what Gordon and likeminded anti-spam enthusiasts might contend, the purpose of the CAN-SPAM Act was not to stamp spam out of existence. While Gordon is likely not alone in his deep-seated hostility toward spam and those who profit from it, there are beneficial aspects to commercial e-mail, even bulk messaging, that Congress wanted to preserve, if not promote. Indeed,
the Act recognizes e-mail’s value as a worthwhile commercial tool:

Electronic mail has become an extremely important and popular means of communication, relied on by
millions of Americans on a daily basis for personal and commercial purposes. Its low cost and global reach make it extremely convenient and efficient, and offer unique opportunities for the development and growth of frictionless commerce.

15 U.S.C. § 7701(a)(1); see also S. Rep. No. 108-102, at 2 (2003), as reprinted in 2004 U.S.C.C.A.N. 2348, 2349

(“Unlike direct mail delivered through the post office to consumers, [e-mail] can reach millions of individuals at little to no cost and almost instantaneously.”). The tailored regulations, which target deceptive and predatory practices and attempt to alleviate the negative effects of spam without unduly stifling lawful enterprise, embody the fine balance struck by Congress.

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Second, Congress conferred standing only on a narrow group of possible plaintiffs: the Federal Trade Commission, certain state and federal agencies, state attorneys general, and IAS providers adversely affected by violations of the CAN-SPAM Act. See 15 U.S.C. § 7706(a), (b), (f), (g). The decision to restrict the right of action does not reflect an indifference or insensitivity to the effects of spam on consumers. The contrary is true. The CAN-SPAM Act’s express findings and legislative history are littered with references to the burdens shouldered by individuals, businesses, and other institutions.

The Act itself recognizes the “costs to recipients . . . for the storage of [unsolicited commercial e-mail], or for the time spent accessing, reviewing, and discarding such mail, or both.” 15 U.S.C. § 7701(a)(3). We surmise that Congress’s intent was to limit enforcement actions to those best suited to detect, investigate, and, if appropriate, prosecute violations of the CAN-SPAM Act—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.

Third, our 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:

“[Section 7706](g) provides for a limited right of action by bona fide Internet service providers.” 150 Cong. Rec. E72-02 (Jan. 28, 2004) (remarks of Rep. Dingell) (emphasis added); accord id. at E73-01 (remarks of Rep. Tauzin). It is perhaps a sad reality that Congress must specify a bona fide IAS provider, as possibly distinct from a non-genuine IAS provider. But this 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 feefor-service operations,9 we think it did intend to exclude
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plaintiffs who, despite certain identifying characteristics, did not provide the actual, bona fide service of a legitimate operation. See 150 Cong. Rec. E72-02 (“[W]e intend that Internet access service providers provide actual Internet access service to customers.”). We believe that Congress’s clear intention to restrict private action remains of great importance and guides the proper standing analysis.

[9 In support of its summary judgment motion, Virtumundo argued that, as providers of free services, Gordon and Omni did not qualify as IAS providers. The district court correctly rejected this argument because Congress expressly discussed free Internet services when it enacted the CAN-SPAM Act. See S. Rep. No. 108-102, at 3 (mentioning Microsoft’s free e-mail service when discussing effects of the increasing volume of spam).]

Fourth and finally, we must factor into the calculus the unique nature of the subject matter at issue. Especially in this arena, the engine of innovation moves far more quickly and nimbly than the methodical pace of legislation. That is readily apparent here. In the few years since the CAN-SPAM Act became effective, the uses of the Internet and the prevalence and variety of available online services have multiplied exponentially. The marketplace has developed a panoply of related products and services not available when Congress authored the federal legislation. Significantly, no longer are typical Internet users primarily limited to accessing e-mail accounts and searching for content or information. With the rise of social networking sites, blogs, and other user-driven websites, the ability to post content on the Internet or to create forums for others to do so is no longer a privilege reserved for the technologically savvy or the financially elite. The rate of development will only accelerate. As this inevitably occurs and the gateway to the online world further widens for the masses, courts should be mindful that the lines Congress intended to draw when drafting the statutory text might lose clarity.

With these principles in mind, we apply a standing analysis that encapsulates Congress’s will when it provided a limited private right of action.

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2

[4] We first address whether Gordon is a “provider of Internet access service” who, if adversely affected by a statutory violation, has private standing to bring CAN-SPAM Act claims. The CAN-SPAM Act defines “Internet access service” by reference to the Communications Act, see 15 U.S.C. § 7702(11), which provides:

The term “Internet access service” means a service that enables users to access content, information, electronic mail, or other services offered over the Internet, and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers. Such term does not include telecommunications services.

47 U.S.C. § 231(e)(4). We have not previously spoken “as to who is an ‘Internet access service’ provider” within the meaning of the CAN-SPAM Act, see Ferguson v. Quinstreet, Inc., No. 07-5378, 2008 WL 3166307, at *5 (W.D. Wash. Aug. 5, 2008), and note the ambiguity of this statutory definition.

District courts in our circuit have interpreted the definition of “Internet access service” broadly to encompass a wide range of services, and not merely traditional Internet Service Providers (“ISPs”)—i.e., the service that connects customers to the Internet itself. See Hypertouch, Inc. v. Kennedy-Western Univ., No. 04-05203, 2006 WL 648688, at *3 (N.D. Cal. March 8, 2006) (stating that “a provider of e-mail service alone, without any other services, qualifies” as an IAS provider under the CAN-SPAM Act). For instance, one such court reasoned that, although the definition “appears primarily to contemplate services that provide consumers their initial connection point to the Internet, the language is broad enough to encompass entities such as Facebook,” a popular social networking site, “that provide further access to content and communications between users for persons who may initially
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access the Internet through a conventional [ISP].” Facebook, Inc. v. ConnectU LLC, 489 F. Supp. 2d 1087, 1094 (N.D. Cal. 2007); see also MySpace, Inc. v. The Globe.com, Inc., No. 06-3391, 2007 WL 1686966, at *3 (C.D. Cal. Feb. 27, 2007) (holding that MySpace had standing under the CAN-SPAM Act and interpreting the definition of “Internet access service” broadly to “include[ ] traditional [ISPs], any email provider, and even most website owners”). Gordon claims IAS-provider
status, asserting that through the gordonworks.com domain and the leased server space he enables users to access Internet content and e-mail. On a superficial level, this proposition is hard to dispute. In the most general terms, a “service that enables users to access” online content or e-mail could encompass the proprietor of an Internet coffee shop or, as one district court suggested, “any person who allows another person to use their computer to access the Internet,” Fergusen, 2008 WL 3166307, at *5. Indeed, at some level, common utility services play a role in enabling users to access Internet content. Without question, this was not what Congress intended when it was defining the private right of action.

[5] While we agree that statutory standing is not limited to traditional ISPs, we reject any overly broad interpretation of “Internet access service” that ignores congressional intent. Contrary to Gordon’s suggestion, providing e-mail accounts cannot alone be sufficient. Many employers and institutions, for example, provide their employees or members with e-mail accounts and service—including our court. The findings codified in the statute note Congress’s concern pertaining to the growth of unsolicited commercial e-mail and its imposition of “monetary costs on providers of Internet access services,” which have standing to sue, as well as on “businesses, and educational and nonprofit institutions that carry and receive such mail.” 15 U.S.C. § 7701(a)(6). Clearly, Congress viewed IAS providers as distinct from entities that merely “carry [or] receive such mail.” Standing under the CAN-SPAM Act requires more. See, e.g., White Buffalo Ventures, LLC v. Univ. of Texas at Austin, 420 F.3d 366, 373 (5th Cir. 2005) (“[W]e
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are hard-pressed to find that providing email accounts and email access does not bring [the University of Texas] within the statutory definition . . . .” (emphasis added)). There may well be a technical or hardware component implicit in the definition. But, we find the parties’ briefing on the topic inadequate to reach an informed decision here. Because it is not necessary to our holding, we decline this opportunity to set forth a general test or define the outer bounds of what it means to be a provider of “Internet access service.”

[6] Nevertheless, we conclude that Gordon does not fit any reasonable definition of “Internet access service” provider. Gordon is a registrant of a domain name, which he, through Omni, hosts on leased server space. He neither has physical control over nor access to the hardware, which GoDaddy owns, houses, maintains, and configures. From our review of the record, Gordon’s service appears to be limited to using his “Plesk” control panel, which he accesses via an ordinary Internet connection through an ISP, to set up e-mail accounts and log-in passwords and to execute other administrative tasks. Verizon enables his online access. GoDaddy provides the service that enables ordinary consumers to create e-mail accounts, register domain names, and build personalized web pages. Gordon has simply utilized that service for himself and on behalf of others. It matters not that he entered the keystrokes or clicked the mouse. Nor is it relevant that he created gordonworks.com e-mail addresses for family and friends, and not merely himself. While Verizon and GoDaddy might have a compelling argument that they are IAS providers within the meaning of the CAN-SPAM Act, Gordon’s claim that he holds such elite status is unconvincing.

In addition to his nominal role in providing Internet-related services, we are also troubled by the extent to which Gordon fails to operate as a bona fide e-mail provider. As discussed in greater detail below, Gordon has purposefully avoided taking even minimal efforts to avoid or block spam messages. Instead, Gordon devotes his resources to adding his “clients’ ”
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e-mail addresses to mailing lists and accumulating spam through a variety of means for the purpose of facilitating litigation.

[7] Gordon’s arguments of technical compliance with this standing component, without any regard for the overarching congressional purpose, are not compelling. The record here is sufficiently developed. We hold that Gordon is not an “Internet access service” provider within the meaning of the CAN-SPAM Act.

3

We next turn to the “adversely affected by” component of the CAN-SPAM Act’s standing inquiry. Gordon has undoubtedly encountered a large volume of commercial e-mail. This, however, is not enough to establish statutory standing. In order to pursue a private right of action, an IAS provider must demonstrate that it has been “adversely affected by a violation of . . . or a pattern or practice that violates” the Act. 15 U.S.C. § 7706(g)(1) (emphasis added). As with other issues on this appeal, we find little guidance in existing case law as to the meaning of the nebulous

a

[8] The CAN-SPAM Act itself does not delineate the types of harm suggested by the “adversely affected by” language. The district court, acknowledging this ambiguity, confronted the question by reference to traditional methods of statutory interpretation and ultimately concluded that the harm “must be both real and of the type uniquely experienced by IASs for standing to exist.” Gordon, 2007 WL 1459395, at *7 (emphasis added).10 To our knowledge, all courts that have addressed
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the issue have similarly concluded that the type of harm envisioned by Congress did not encompass the ordinary inconveniences experienced by consumers and end users. See Active Response, 2008 WL 2952809, at *5. We have considered the statutory text and the legislative record, and we agree.

[10 The district court further reasoned that if the limited private right of action is to have any traction at all, “[n]ot only must CAN-SPAM private plaintiffs allege a particular type of harm, the adverse effect they allege must be significant.” Gordon, 2007 WL 1459395, at *8 (emphasis added). The court did not explain the meaning of the term “significant.” As discussed herein, we believe that Congress intended that the alleged harm be something of significance to an IAS provider. To this extent, we agree with the district court’s reasoning that harm be significant.]

[9] It is notable that Congress conferred standing only on adversely affected IAS providers, but not adversely affected consumers. Logically, the harms redressable under the CAN-SPAM Act must parallel the limited private right of action and therefore should reflect those types of harms uniquely encountered by IAS providers. The Committee Report identified the cost of “investing in new equipment to increase capacity and customer service personnel to deal with increased subscriber complaints . . . [and] maintaining e-mail filtering systems and other anti-spam technology on their networks to reduce the deluge of spam” as undesirable consequences facing the typical ISP. S. Rep. No. 108-102, at 6. “All courts that have construed the statute” have similarly defined the harms upon which standing may be predicated to include “network crashes, higher bandwidth utilization, and increased costs for hardware and software upgrades, network expansion and additional personnel.” Active Response, 2008 WL 2952809, at *5. We conclude that these sorts of ISP-type harms are what Congress had in mind.11

[11 In their amicus brief, ASIS Internet Services, Joel Householter, and Ritchie Phillips (collectively, “ASIS”) argue that “harm” for CAN-SPAM standing purposes is merely “the cost of carrying SPAM emails over the [Internet access provider]’s facilities.” This view contradicts the plain text of the statute and the legislative goal of limiting the private right of action. No court has adopted this position, and we reject it as well. Congress stated that the private standing provision of § 7706(g)(1) “could include a service provider who carried unlawful spam over its facilities, or who operated a website or online service from which recipient e-mail addresses were harvested in connection with a violation.” S. Rep. No. 108-102, at 21 (emphasis added). In this context, the term “could,” which has a different meaning than “would,” see Rosas v. Monroe County Tax Claim Bureau, 323 B.R. 893, 900 (Bankr. M.D. Pa. 2004) (“There is a clear difference between the plain meaning of the words ‘could’, ‘might’ and ‘will.’ ”), implies that encountering spam is merely a component of the standing equation. Some qualifying harm must follow.]

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[10] We do not purport to enumerate each and every harm that might satisfy the CAN-SPAM Act’s standing provision. Nor do we suggest that the list is finite. At minimum, however, the harm must be both real and of the type experienced by ISPs. While the harm need not be significant in the sense that it is grave or serious, the harm must be of significance to a bona fide IAS provider—something beyond the mere annoyance of spam and greater than the negligible burdens typically borne by an IAS provider in the ordinary course of business. In most cases, evidence of some combination of operational or technical impairments and related financial costs attributable to unwanted commercial e-mail would suffice. See Hypertouch, 2006 WL 648688, at *4 (finding evidence
of “decreased server response and crashes,” “higher bandwidth utilization,” and “expensive hardware and software upgrades” sufficient harm for statutory standing).

Courts must of course be careful to distinguish the ordinary costs and burdens associated with operating an Internet access service from actual harm. We expect a legitimate service provider to secure adequate bandwidth and storage capacity and take reasonable precautions, such as implementing spam filters, as part of its normal operations. Courts should take an especially hard look at the cited harm if it suspects at the outset that a plaintiff is not operating a bona fide Internet access service, as is the case here.

Defining the type of harm required for CAN-SPAM Act standing is, however, only one part of the equation. Section
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7706(g)(1) also inquires whether the contemplated harm is attributable to the type of practices circumscribed by the Act —i.e., whether an IAS provider was adversely affected by misconduct. After all, network slowdowns, server crashes, increased bandwidth usage, and hardware and software
upgrades bear no inherent relationship to spam or spamming practices. On the contrary, we expect these issues to arise as a matter of course and for legitimate reasons as technology, online media, and Internet services continue to advance and develop. Therefore, evidence of what could be routine business concerns and operating costs is not alone sufficient to unlock the treasure trove of the CAN-SPAM Act’s statutory damages.

[11] To give the statutory text meaning there must be, at bare minimum, a demonstrated relationship between purported harms and the type of e-mail practices regulated by the Act—i.e., a showing that the identified concerns are linked in some meaningful way to unwanted spam and, in turn, represent actual harm. The e-mails at issue in a particular case must, at the very least, contribute to a larger, collective spam problem that caused ISP-type harms.12

[12 Whether a private plaintiff must allege and prove that the defendant’s particular e-mails caused ISP-type harms has been a point of conflict among district courts. While summary judgment in our case did not turn on a lack of causation, the district court’s order has contributed to the confusion within our circuit. In finding a lack of “adverse effect” to support standing, the district court remarked that Gordon and Omni “have alleged absolutely no financial hardship or expense due to e-mails they received from Defendants.” Gordon, 2007 WL 1459395, at *8 (emphasis added). Subsequent courts have interpreted this language to impose upon private plaintiffs the burden of showing that a defendant’s e-mails directly caused the harm alleged. See Optin Global, 2008 WL 1902217, at *17 (“While there is some evidence that spam generally has imposed costs on ASIS over the years, there is no evidence that the Emails at issue in this action resulted in adverse effects to ASIS . . . .” ); Brosnan, 2008 WL 413732, at *2-*3 (dismissing sua sponte plaintiff’s CAN-SPAM Act claims for lack of standing and citing Gordon for the proposition that “[t]he plaintiff must have suffered actual adverse effects as a result of Defendant’s actions”)

As some subsequent courts have cautioned, we are troubled by the possibility that imposing a direct causation requirement, although not inconsistent with the statutory text, might create an unworkable standard for private plaintiff standing given the impracticability of tracing a harm to a specific e-mail or batch of e-mails. See Active Response, 2008 WL 2952809, at *5. This reading erects a barrier that could in some situations insulate wrongdoers, especially less prolific spammers, from private enforcement actions. Nevertheless, our holding today does not foreclose this possible interpretation of § 7706(g)(1). We reserve this determination for another case where the issue is squarely presented to us and adequately briefed by the parties.]

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We note, in passing, that the threshold of standing should not pose a high bar for the legitimate service operations contemplated by Congress. In some civil actions—where, for example, well-recognized ISPs or plainly legitimate Internet access service providers file suit—adequate harm might be presumed because any reasonable person would agree that such entities dedicate considerable resources to and incur significant financial costs in dealing with spam. See S. Rep. No. 108-102, at 2-3 (recounting reports by America Online, Microsoft, and Earthlink regarding the effects of increasing volumes of spam). Where, by comparison, a private plaintiff’s status as an IAS provider is questionable and reasonably contested, courts should not only inquire into the plaintiff’s purported Internet-related service operations but also closely examine the alleged harms attributable to spam. We have confidence in our district courts to review the individual characteristics of the plaintiffs on a case-by-case basis and make a reasoned decision whether a purported IAS provider is truly the type of bona fide IAS provider adversely affected by commercial e-mail messaging that Congress envisioned when it enacted the CAN-SPAM Act.

b

In opposition to Virtumundo’s summary judgment motion, Gordon argued that he had been adversely affected by spam
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because he and his “clients” had been “forced to wade through thousands of e-mails sent by” Virtumundo that “clogged” his service. Applying the proper interpretation of the CAN-SPAM Act’s standing provision, we conclude that Gordon also fails the “adversely affected by” component. It is readily apparent that Gordon, an individual who seeks out spam for the very purpose of filing lawsuits, is not the type of private plaintiff that Congress had in mind when it fashioned § 7706(g)(1)’s standing provision. While many antispam enthusiasts may applaud his zealous counter-attack against alleged spammers, Gordon’s passion for the cause does not displace the will of Congress in drafting a narrow private right of federal action.

[12] Gordon has failed to argue, let alone come forth with evidence, that, even if he was an IAS provider, he has suffered any real harm contemplated by the CAN-SPAM Act. He has not hired additional personnel, nor has he experienced technical concerns or incurred costs that can be necessarily attributed to commercial e-mail. It is also compelling that Gordon purposefully refuses to implement spam filters in a typical manner or otherwise make any attempt to block allegedly unwanted spam or exclude such messages from users’ email inboxes. In fact, Gordon acknowledges that he was able to “blacklist” domain names at the server level, so that the GoDaddy server would reject e-mails from online marketers such as Virtumundo. Still, even without taking even basic precautions, he has not “come close” to using the 500 gigabytes of bandwidth available to him through GoDaddy. He has presented nothing beyond the negligible burdens typically experienced by bona fide IAS providers. As the district court concluded, Gordon has “suffered no harm related to bandwidth, hardware, Internet connectivity, network integrity, overhead costs, fees, staffing, or equipment costs.” Gordon, 2007 WL 1459395, at *8. Indeed, given his heavy dependence on the
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services and hardware of third parties, it would be difficult, if not impossible, for him to incur many of these harms.13

[13 We also note that there may be significance in distinguishing Gordon from Omni, a non-party to this appeal. See Real Marketing Servs., LLC v. Protocol Commc’ns, Inc. (In re Real Marketing Servs., LLC), 309 B.R. 783, 788 (Bankr. S.D. Cal. 2004) (holding that managing member lacked standing to bring claims for damages of LLC), relied upon in Finley v. Takisaki, No. 05-1118, 2006 WL 1169794, at *2-*3 (W.D. Wash. Apr. 28, 2006) (holding that, under Washington law, LLC members lacked standing because their claimed loss derived solely from their membership in the LLC); see generally United States v. Stonehill, 83 F.3d 1156, 1160 (9th Cir. 1996) (“Well-established principles of corporate law prevent a shareholder from bringing an individual direct cause of action for an injury done to the corporation or its property by a third party.”). The record is murky as to the distinction, due largely to Gordon’s inability to distinguish himself as an individual from his capacity as Omni’s agent. Because Omni has been dismissed from this appeal, Gordon’s claims are even weaker.]

Gordon’s claimed harms almost exclusively relate to litigation preparation, not to the operation of a bona fide service. Gordon made no real effort to avoid, block, or delete commercial e-mail, but instead has voluntarily assumed the role of a spam sleuth. He expends time and resources seeking out and capturing massive volumes of spam, which he collects and then organizes for use in his prolific lawsuits. He admits setting up domains as “spam traps” with the sole purpose of
snagging as many e-mail marketing messages as possible. The record reveals that gordonworks.com was one such trap. He is not alone in his litigation enterprise. His “clients” also use their personalized domains to gather commercial e-mails, which they then send to Gordon in enormous unsorted batches of 10,000 to 50,000 messages to fuel his various anti-spam lawsuits.14 In exchange, Gordon’s “clients” share in settlement proceeds. Gordon apportions the bounty according to each individual’s contribution to the particular lawsuit—i.e., the
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number of e-mails provided to Gordon for use against a specific defendant.

[14 Gordon has filed and continues to file numerous actions in state and federal courts against various defendants, often representing himself pro se. As the district court noted, in 2006 and 2007, Omni was a party to 10 other lawsuits pending in the Western District of Washington alone.

Gordon admits operating an anti-spam business, which entails, in his words, “[n]otifying spammers that they’re violating the law” and filing lawsuits if they do not stop sending spam.15 As Gordon concedes, he is a professional plaintiff. Reply Br. of Appellant at 5. Since at least 2004, Gordon has held no employment. He has never been compensated for any of his purported Internet services, and his only income source has come from monetary settlements from his anti-spam litigation campaign. Likewise, his company, Omni, generates no revenue and is financed strictly through these lawsuits against e-mail marketers. While the term “professional,” as in “professional plaintiff,” is not a “dirty word,” see Murray v. GMAC Mortgage Corp., 434 F.3d 948, 954 (7th Cir. 2006), and should not itself undermine one’s ability to seek redress for injuries suffered, Gordon’s status is uniquely relevant to the statutory standing question here. Cf. Hypertouch, 2006 WL 648688, at *4 n.2 (rejecting defendant’s argument that Hypertouch was a “professional plaintiff” that entered the ISP business for the sole purpose of bringing anti-spam lawsuits).

[15 As should be apparent here, “the law” that Gordon purportedly enforces relates more to his subjective view of what the law ought to be, and differs substantially from the law itself.]

[13] Because we are tasked with determining whether Gordon has been adversely affected by conduct regulated by the CAN-SPAM Act, it is highly significant that the burdens Gordon complains of are almost exclusively self-imposed and purposefully undertaken. Here, Gordon acknowledges that he benefits from the receipt of spam through his research and monetary settlements. The fact that Gordon derives substantial financial benefit but endures no real ISP-type harm from commercial e-mail, coupled with his unusual efforts to seek out and accumulate—rather than avoid or block—spam, dem-
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onstrates that he has not been adversely affected by alleged violations of the federal act in any cognizable way.

We do not discount the harmful effects spam and spamming practices, both lawful and unlawful, have upon businesses and consumers, and we recognize the need of bona fide IAS providers, both small and large, for a legal remedy against law-breaking spammers. We, like Congress, are sympathetic to legitimate operations hampered by a deluge of unwanted e-mail marketing. Our record, however, conclusively demonstrates that this is not the case before us. Gordon has created a cottage industry where he and his “clients” set themselves up to profit from litigation. The CAN-SPAM Act was enacted to protect individuals and legitimate businesses—not to support a litigation mill for entrepreneurs like Gordon.

[14] As discussed above, it is undisputed that Gordon encounters huge quantities of commercial e-mail. Nevertheless, he is neither a bona fide IAS provider nor has he been adversely affected by alleged violations of the CAN-SPAM Act. We conclude that Gordon lacks standing to pursue claims under § 7706(g)(1), and affirm the district court’s summary judgment dismissal of all his federal claims.

IV

Gordon also appeals the adverse summary judgment dismissing his claims for alleged violations of CEMA, Washington’s statute regulating commercial e-mail messages. See Wash. Rev. Code § 19.190.010 et seq. Like many other states, Washington has enacted legislation that seeks to curb e-mail abuses. CEMA states in relevant part:

(1) No person may initiate the transmission, conspire with another to initiate the transmission, or assist the transmission, of a commercial electronic mail message from a computer located in Washington or to an
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electronic mail address that the sender knows, or has reason to know, is held by a Washington resident that:

(a) Uses a third party’s internet domain name without permission of the third party, or otherwise misrepresents or obscures any information in identifying the point of origin or the transmission path of a commercial electronic mail message; or

(b) Contains false or misleading information in the subject line.

Wash. Rev. Code § 19.190.020. The statute also prohibits certain practices aimed at inducing a person to reveal personally identifying information. Wash. Rev. Code § 19.190.080. Like its federal counterpart, CEMA provides for sizeable statutory damages or actual damages, whichever is greater.16 Wash. Rev. Code § 19.190.040.

[16 CEMA provides for greater per-violation statutory damages than the CAN-SPAM Act. A recipient of commercial e-mail or electronic text messages may recover $500 per violation, and an “interactive computer service” may recover $1,000 per violation. Wash. Rev. Code § 19.190.040.
An “interactive computer service” is defined as “any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the internet and such systems operated or services offered by libraries or educational institutions.” Wash. Rev. Code § 19.190.010(8).]

A

At the outset, we must frame the issue as it comes to us. First, Virtumundo does not contest Gordon’s standing to bring CEMA claims. In contrast to the more restrictive standing requirement of the CAN-SPAM Act, CEMA authorizes a recipient of a commercial e-mail message or an “interactive
computer service” to bring a private action. Id.

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Of Gordon’s various CEMA claims on appeal, only his claim relating to allegedly deficient headers requires detailed discussion. Gordon has no viable CEMA claim based on the body of the e-mail messages at issue. Unlike the CAN-SPAM Act, CEMA “does not regulate the body of the e-mail.” State v. Heckel, 93 P.3d 189, 194 (Wash. Ct. App. 2004), review denied, 108 P.3d 1229 (Wash. 2005) (“Heckel II”). Similarly, the state statute does not purport to regulate “opt-out” mechanisms.

Therefore, Gordon’s CEMA claims, by nature of the state statute, are limited to the information contained in the email headers and subject lines. We further conclude, however, that summary judgment was properly granted on Gordon’s claim that Virtumundo’s e-mail subject lines are deceptive. In opposition to Virtumundo’s summary judgment motion, Gordon failed to identify or describe any specific e-mail or subject line text and simply countered that “Gordon contests” the position that the subject lines are not misleading. Gordon does not attempt to better articulate this claim on appeal.

[15] The “party opposing summary judgment must direct [the court’s] attention to specific, triable facts,” S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir. 2003), and the reviewing court is “not required to comb through the record to find some reason to deny a motion for summary judgment,” Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1029 (9th Cir. 2001) (quoting Forsberg v. Pac. Nw. Bell Tel. Co., 840 F.2d 1409, 1418 (9th Cir. 1988)). See Hernandez v. Spacelabs Med. Inc., 343 F.3d 1107, 1112 (9th Cir. 2003) (“[The nonmoving party] cannot defeat summary judgment with allegations in the complaint, or with unsupported conjecture or conclusory statements.”). Because Gordon has failed to present a prima facie case in opposition to summary judgment, his claim that Virtumundo’s subject lines violate CEMA fails as a matter of law, and summary judgment was appropriate.

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Therefore, the sole remaining CEMA claim that we must address relates to the headers of Virtumundo’s e-mails. Gordon argues that the header information misrepresents or obscures the identity of the sender, and therefore violates CEMA, see Wash. Rev. Code § 19.190.020(1)(a). We review the district court’s conclusion that this claim is preempted pursuant to the CAN-SPAM Act’s express preemption clause, 15 U.S.C. § 7707(b).

B

1

As a preliminary matter, the Attorney General for the State of Washington (“State”), appearing here as amicus curiae, insists that we need not reach the preemption issue. See Atel Fin. Corp. v. Quaker Coal Co., 321 F.3d 924, 926 (9th Cir. 2003) (“We may affirm a district court’s judgment on any ground supported by the record, whether or not the decision of the district court relied on the same grounds or reasoning we adopt.”). The State argues that we may affirm summary judgment with respect to this CEMA claim because Gordon’s allegations regarding the header information do not satisfy “Washington’s well-developed deceptiveness standard,” as a matter of law. We have surveyed the legal landscape and note a fatal shortcoming in the State’s proposition. CEMA prohibits the sending of commercial e-mail that “misrepresents or obscures any information in identifying the point of origin or the transmission path.” Wash. Rev. Code § 19.190.020(1)(a). The standard for “deception” under Washington law is thus only relevant to the extent courts so limit the broad language of CEMA—a critical step that the State overlooks entirely.

In Benson v. Oregon Processing Service, Inc., 150 P.3d 154 (Wash. Ct. App. 2007), review denied, 175 P.3d 1092 (Wash. 2007), the state appellate court interpreted the previously undefined terms “misrepresent” and “obscure” according to their ordinary dictionary meaning—i.e., “misrepresent” to
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mean “representing incorrectly: to give a false, imperfect or misleading representation,” and “obscure” to mean “to conceal or hide from view as by or as if covering wholly or in part: make difficult to discern.” Id. at 156 (quoting Webster’s Third New Int’l Dictionary 1445 & 1557 (2003)). These broad definitions extend CEMA’s prohibitive reach and purport to regulate a vast array of non-deceptive acts and practices. As subsequent courts reviewing CEMA have recognized, without further clarification, “a sender of commercial email could be potentially held liable under [CEMA] for unintentional clerical errors,” Fergusen, 2008 WL 3166307, at *8, imperfect
representations, or immaterial misstatements.

[16] In short, we cannot conclude, as the State presumes, that CEMA’s prohibitions extend only to acts of deception. The Washington Legislature or state courts may ultimately mold CEMA’s broad language so as to cabin its breadth or interpret the law in conformity with federal legislation. This task is, however, a matter for the State, as sovereign, to resolve.17

[17 We acknowledge, however, that the State’s proposed interpretation is not unfounded. Some state court decisions imply a narrow interpretation of CEMA. See State v. Heckel, 24 P.3d 404, 412-13 (Wash. 2001) (en banc) (“Heckel I”) (commenting that “[CEMA] reaches only those deceptive
[unsolicited commercial e-mail] messages directed to a Washington resident or initiated from a computer located in Washington”); Heckel II, 93 P.3d at 193-94 (affirming the judgment and permanent injunction in favor of the State and remarking that “the Act is narrowly tailored to regulate only deceptive commercial speech, which is not protected by the First Amendment”). Moreover, the provision at issue is titled “Unpermitted or misleading electronic mail,” Wash. Rev. Code § 19.190.020 (emphasis added), which suggests that CEMA’s prohibition extends only to deceptive commercial e-mail. See Bhd. of R.R. Trainmen v. Baltimore & Ohio R.R. Co., 331 U.S. 519, 528-29 (1947) (noting that the title of a statute and the heading of a section may help “shed light on some ambiguous word or phrase”). This reading also finds support in the statute’s intersection with Washington’s consumer protection laws. See Wash. Rev. Code §§ 19.190.030(3) and 19.190.100. Logic dictates that by equivocating violations of CEMA to violations of the CPA, the Washington Legislature intended to adopt the CPA’s deceptiveness standard.]

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2

We therefore turn, as we must, to whether summary judgment was proper under the doctrine of preemption. As recently noted by a district court, “[t]here is no Ninth Circuit authority on whether Plaintiff’s claim under the provision of CEMA . . . is preempted by CAN-SPAM.” Fergusen, 2008 WL 3166307, at *7. Indeed, the scope of the CAN-SPAM Act’s preemption is an issue of first impression in this circuit. See ASIS Internet Servs. v. Consumerbargaingiveaways, LLC, No. 08-04856, 2009 WL 1035538, at *5 (N.D. Cal. Apr. 17, 2009).

The concept of preemption derives from the Supremacy Clause of the United States Constitution, which provides that the laws of the United States “shall be the supreme Law of the Land; . . . any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. “Consistent with that command, we have long recognized that state laws that conflict with federal law are ‘without effect.’ ” Altria Group, Inc. v. Good, 129 S. Ct. 538, 543 (2008) (quoting Maryland v. Louisiana, 451 U.S. 725, 746 (1981)). Courts typically identify three circumstances in which federal preemption of state law exists:

(1) express preemption, where Congress explicitly defines the extent to which its enactments preempt state law; (2) field preemption, where state law attempts to regulate conduct in a field that Congress intended the federal law exclusively to occupy; and (3) conflict preemption, where it is impossible to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment and execution of the full purpose and objectives of Congress.

Indus. Truck Ass’n, 125 F.3d at 1309 (citing English v. Gen. Elec. Co., 496 U.S. 72, 78-80 (1990)). When interpreting the
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scope of an express preemption clause, as is the case here, we must “identify the domain expressly pre-empted” by its language. Medtronic, Inc. v. Lohr, 518 U.S. 470, 484 (1996) (quoting Cipollone v. Liggett Group, Inc., 505 U.S. 504, 517(1992)).

Although the analysis of the scope of preemption begins with the text, “interpretation of that language does not occur in a contextual vacuum.” Id. at 484-85. Rather, this inquiry is guided by two principles about the nature of preemption.

First, there is a presumption against supplanting “the historic police powers of the States” by federal legislation “unless that [is] the clear and manifest purpose of Congress.” Id. at 485. “This presumption against preemption leads us to the principle that express preemption statutory provisions should be given narrow interpretation.” Air Conditioning & Refrigeration Inst. v. Energy Res. Conservation & Dev. Comm’n, 410 F.3d 492, 496 (9th Cir. 2005). Second, the preemption analysis is guided by the “oft-repeated comment . . . that the purpose of Congress is the ultimate touchstone in every preemption case.” Medtronic, 518 U.S. at 485 (quotations and brackets omitted). “As a result, any understanding of the scope of a pre-emption statute must rest primarily on a fair understanding of congressional purpose,” and calls for courts to consider not only the language of the statute itself but also the “statutory framework” surrounding it and the “structure and purpose of the statute as a whole.” Id. at 485-86 (quotations omitted); accord Altria Group, 129 S. Ct. at 543 (“Congress may indicate pre-emptive intent through a statute’s express language or through its structure and purpose.”).

With this framework in mind, we review the preemption clause of the CAN-SPAM Act, which states in relevant part:

This chapter supersedes any statute, regulation, or rule of a State or political subdivision of a State that expressly regulates the use of electronic mail to send commercial messages, except to the extent that any
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such statute, regulation, or rule prohibits falsity or deception in any portion of a commercial electronic mail message or information attached thereto.

15 U.S.C. § 7707(b)(1). The following subsection adds further clarity: Congress reiterated that the preemption clause “shall not be construed to preempt the applicability of—(A) State laws that are not specific to electronic mail, including State trespass, contract, or tort law; or (B) other State laws to the extent that those laws relate to acts of fraud or computer crime.” 15 U.S.C. § 7707(b)(2) (emphasis added). Thus, the express language of § 7707(b) demonstrates Congress’s intent that the CAN-SPAM Act broadly preempt state regulation of commercial e-mail with limited, narrow exception. Congress carved out from preemption state laws that proscribe “falsity or deception” in commercial e-mail communications.

To date, the Fourth Circuit’s opinion in Omega World Travel, Inc. v. Mummagraphics, Inc., 469 F.3d 348 (4th Cir. 2006), is the only federal circuit court decision addressing preemption of state law claims by the CAN-SPAM Act. In Omega, Mummagraphics alleged violations of the CAN-SPAM
Act and Oklahoma law, see Okla. Stat. tit. 15, § 776.1(A),18 based on e-mail messages that contained a variety of inaccuracies.19 Omega, 469 F.3d at 351. The Fourth Circuit reviewed the scope of the CAN-SPAM Act’s preemp-
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tion provision and concluded that Congress could not have intended, by way of the carve-out language, to allow states to enact laws that prohibit “mere error” or “insignificant inaccuracies.” Id. at 354-55. The court reasoned that a materiality component comported with the policy pursued by the federal legislation as a whole, further noting that a contrary reading “would upend [the] balance [struck by Congress] and turn an exception to a preemption provision into a loophole so broad that it would virtually swallow the preemption clause itself.” Id. at 355. Ultimately, the court determined that the challenged e-mails could not be actionable under the Oklahoma statutes “because allowing a state to attach liability to bare immaterial error in commercial e-mails would be inconsistent with the federal Act’s preemption text and structure, and, consequently, with a ‘fair understanding of congressional purpose.’ ” Id. at 359 (quoting Medtronic, 518 U.S. at 486).

[18 The Oklahoma statute prohibited the initiation of an e-mail message that the sender knows or has reason to know “[m]isrepresents any information in identifying the point of origin or the transmission path of the electronic mail message,” “[d]oes not contain information identifying the point of origin or the transmission path of the electronic mail message,” or “[c]ontains false, malicious, or misleading information which purposely or negligently injures a person.” Okla. Stat. tit. 15, § 776.1(A).

19 As a matter of clarity, the district court’s summary judgment order mistakenly refers to Mummagraphics as the “plaintiff.” Mummagraphics was a defendant in the underlying lawsuit and had alleged violations of the CAN-SPAM Act and Oklahoma law as counterclaims against plaintiff, Omega World Travel. Omega, 469 F.3d at 352.]

Having independently analyzed the CAN-SPAM Act’s text, structure, and legislative purpose, we reach the same conclusion as the district court and the Fourth Circuit,20 and interpret the CAN-SPAM Act’s express preemption clause in a manner that preserves Congress’s intended purpose—i.e., to regulate commercial e-mail “on a nationwide basis,” 15 U.S.C. § 7701(b)(1), and to save from preemption only “statutes, regulations, or rules that target fraud or deception,” S. Rep. No.
108-102, at 21 (emphasis added).

[20 Our reliance on Omega is limited to the Fourth Circuit’s interpretation of the CAN-SPAM Act’s preemption clause. We pass no judgment on whether summary judgment was appropriate based on the unique facts of that particular case.]

As with any issue of statutory interpretation, we start with the text itself. The CAN-SPAM Act’s preemption clause makes an exception for state laws that prohibit “falsity or deception” in commercial e-mail communication. 15 U.S.C. § 7707(b)(1). Because those terms are not defined in the statute, they should be given their ordinary meaning. Emmert
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Indus. Corp. v. Artisan Assocs., Inc., 497 F.3d 982, 987 (9th Cir. 2007). Whereas the word “deception” certainly denotes something more than immaterial inaccuracies or inadvertent mistakes, the word “falsity” is susceptible to differing dictionary meanings. “Falsity” means “quality or state of being false,” which is not itself informative. Merriam-Webster’s Collegiate Dictionary 451 (11th ed. 2005). The term “false” is defined, however, not only as “not true” but also as “intentionally untrue,” “adjusted or made so as to deceive,” and “intended or tending to mislead.” Id. We therefore acknowledge facial ambiguity in the statutory text. See Bryan A. Garner, Dictionary of Modern Legal Usage 348 (2d ed. 1995) (stating that “false” “is potentially ambiguous, since the word may mean either “erroneous, incorrect” or “purposely deceptive”); Bryan A. Garner, Garner’s Modern Am. Usage 339 (2003) (same).

Recognizing the same ambiguity, the Fourth Circuit applied the maxim of noscitur a sociis, a canon of statutory construction that “counsels that a word is given more precise content by the neighboring words with which it is associated.” United States v. Williams, 128 S. Ct. 1830, 1839 (2008). Reading “falsity” in conjunction with “deception,” which connotes a type of tort action based on misrepresentations, we are likewise persuaded that the exception language, read as Congress intended, refers to “traditionally tortious or wrongful conduct.” Omega, 469 F.3d at 354. We find further support for this reading in the statutory text, which counsels against any interpretation that preempts laws relating to “acts of fraud.” See 15 U.S.C. § 7707(b)(2). Indeed, the Committee explained that while “a State law requiring some or all commercial email to carry specific types of labels, or to follow a certain format or contain specified content, would be preempted[,] . . . a State law prohibiting fraudulent or deceptive headers, subject lines, or content in commercial e-mail would not be preempted.” S. Rep. No. 108-102, at 21 (emphasis added); see also 150 Cong. Rec. at E73-01 (recognizing broad preemption, except state laws prohibiting falsification techniques and
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deception). The Committee’s repeated reference to “fraud” and “deception” is telling and confirms that Congress did not intend that states retain unfettered freedom to create liability for immaterial inaccuracies or omissions.

Further scrutiny of congressional intent solidifies our reading of the preemption clause. As discussed supra, the CAN-SPAM Act prohibits only deceptive subject line headings or materially false or materially misleading header information. See 15 U.S.C. § 7704(a); accord 15 U.S.C. § 7701(b)(2) (“[S]enders of commercial electronic mail should not mislead recipients as to the source or content of such mail.” (emphasis added)). Significantly, Congress intended this standard to regulate commercial e-mail messaging practices “on a nationwide basis.”21 15 U.S.C. § 7701(b)(1). It was because the patchwork of state laws had proven ineffective that Congress sought to implement “one national standard,” S. Rep. No. 108-102, at 21, applicable across jurisdictions. The CAN-SPAM Act expresses this goal:

[21 The State argues that this policy goal does not extend to illegitimate commercial behavior, such as unfair or deceptive business practices. This argument, however, begs the question. Whether the exception language of § 7707(b) permits states to prohibit e-mail activity that is not unfair or deceptive is precisely the issue before us.]

Many states have enacted legislation intended to regulate or reduce unsolicited commercial electronic mail, but these statutes impose different standards and requirements. As a result, they do not appear to have been successful in addressing the problems associated with unsolicited commercial electronic mail, in part because, since an electronic mail address does not specify a geographic location, it can be extremely difficult for law-abiding businesses to know with which of these disparate statutes they are required to comply.
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15 U.S.C. § 7701(a)(11); see also S. Rep. No. 108-102, at 21-22 (“[I]n contrast to telephone numbers, e-mail addresses do not reveal the State where the holder is located. As a result, a sender of e-mail has no easy way to determine with which State law to comply.”). Moreover, a single e-mail could instantaneously implicate the laws of multiple jurisdictions as it journeys through cyberspace, traveling over various facilities before reaching its intended recipient, whose location is often unknown. Therefore, “one state’s Internet laws may impose compliance costs on businesses throughout the country.” Omega, 469 F.3d at 356 (citing PSINet, Inc. v. Chapman, 362 F.3d 227, 239-41 (4th Cir. 2004)). The CAN-SPAM Act was designed to ensure that “legitimate businesses would not have to guess at the meaning of various state laws when their advertising campaigns ventured into cyberspace.” Kleffman v. Vonage Holdings Corp., No. 07-2406, 2007 WL 1518650, at *3 (C.D. Cal. May 23, 2007) (concluding that the CAN-SPAM Act preempted California state law claims).

[17] It would be logically incongruous to conclude that Congress endeavored to erect a uniform standard but simultaneously left states and local lawmakers free to manipulate that standard to create more burdensome regulation. We are compelled to adopt a reading of the preemption clause that conforms with the statute’s structure as a whole and the stated legislative purpose. See 15 U.S.C. § 7701(b)(1). The CAN-SPAM Act established a national standard, but left the individual
states free to extend traditional tort theories such as claims arising from fraud or deception to commercial e-mail communication. To find otherwise would create “an exception to preemption [that] swallow[s] the rule and undermine[s] the regulatory balance that Congress established,” Omega, 469 F.3d at 356, and which would once again subject legitimate businesses to inconsistent and possibly incompatible state regulations.

Applying its proper reading, the CAN-SPAM Act’s preemption clause applies here and undermines Gordon’s
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remaining CEMA claim. Although he admits he was not in any way misled or deceived, Gordon argues that the headers in the e-mails at issue—specifically, the “from lines”—violate CEMA because they fail to clearly identify Virtumundo as the e-mails’ sender and therefore misrepresent or obscure the identity of the sender. See Wash. Rev. Code § 19.190.020(1)(a). The “from lines” at issue contain two components: a “from name” field, which typically references a topic or subject matter of the advertisement, and a domain name. Examples of “from lines” condemned by Gordon include “CriminalJustice@vm-mail.com,” “PublicSafetyDegrees@vmadmin.com,” and “TradeIn@vm-mail.com.”

There is of course nothing inherently deceptive in Virtumundo’s use of fanciful domain names. See 15 U.S.C. § 7702(4); S. Rep. No. 108-102, at 3 (recognizing Microsoft’s “msn” and “hotmail” domains used for e-mail services). Gordon agrees that the domains from which these e-mails were sent—e.g., “vmmail.com,” “vmadmin.com,” “vtarget.com,” and “vmlocal.com”—were properly registered to Virtumundo. Gordon further concedes that a WHOIS search, or a similar reverse-look-up database, accurately identifies Virtumundo as the domain registrant and provides other identifying information.22 Gordon complains that in order to ascertain the actual identity of the e-mails’ sender a recipient must either review the message content or consult a WHOIS-type database. He insists that any practice that requires consumers to engage in an extra step violates CEMA.

[22 WHOIS is a publically available online database through which users can access information regarding domains, including the registrant’s name, address, phone number, and e-mail address. See Definitions, Implementation, and Reporting Requirements Under the CAN-SPAM Act, 70 Fed. Reg. 25,426, 25,446 n.233 (proposed May 12, 2005) (to be codified at 16 C.F.R pt. 316). WHOIS data is compiled by registrars from information submitted by registrants.]

[18] Nothing contained in this claim rises to the level of “falsity or deception” within the meaning of the CAN-SPAM
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Act’s preemption clause. Gordon offers no proof that any headers have been altered to impair a recipient’s ability to identify, locate, or respond to the person who initiated the email. Nor does he present evidence that Virtumundo’s practice is aimed at misleading recipients as to the identity of the sender. Cf. Aitken v. Commc’ns Workers of Am., 496 F. Supp. 2d 653, 667 (E.D. Va. 2007) (holding that “it is inappropriate to conclude, as a matter of law, that the misleading header information is immaterial” where the defendant misappropriated identities of managers to send “pro-union” e-mails to employees). As stated by our district court, Gordon’s claim is “for, at best, ‘incomplete’ or less than comprehensive information” regarding the sender. Gordon, 2007 WL 1459395, at *12. Such technical allegations regarding the header information find no basis in traditional tort theories and therefore fall beyond the ambit of the exception language in the CAN-SPAM Act’s express preemption clause.

Gordon further suggests that the only information that could be used in the “from name” field that would not misrepresent is the name of the “person or entity who actually sent the e-mail, or perhaps . . . the person or entity who hired the [sender] to send the email on their behalf.” In other words, he argues that CEMA’s provisions require that “Virtumundo” or a client’s name expressly appear in the “from lines.” The CAN-SPAM Act does not impose such a requirement. To the extent such a content or labeling requirement may exist under state law, it is clearly subject to preemption. See S. Rep. No. 108-102, at 21-22 (“State law requiring some or all commercial e-mail to carry specific types of labels . . . or contain specified content, would be preempted.”); see also Kleffman, 2007 WL 1518650, at *3 (“[T]he claim that the failure to include Vonage’s name in the email is clearly preempted.”).

[19] In sum, Gordon’s alleged header deficiencies relate to, at most, non-deceptive statements or omissions and a heightened content or labeling requirement. Regardless of the merits of his arguments, assuming they are actionable under CEMA,
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such state law claims falter under the weight of federal preemption. Summary judgment was properly entered on Gordon’s CEMA claims.23

[23 The State argues against preemption, citing Beyond Systems, Inc. v. Keynetics, Inc., 422 F. Supp. 2d 523 (D. Md. 2006). The district court there denied defendants’ motion to dismiss, concluding that the CAN-SPAM Act did not preempt Maryland’s Commercial Electronic Mail Act, Md. Code Ann., Com. Law § 14-3001 et seq. (“MCEMA”), a statute modeled after Washington’s CEMA. Id. at 532 n.11 & 537—38. The State, without offering much in the way of independent analysis or explanation, contends that “[b]ecause CEMA is substantially identical to MCEMA, this Court should apply the same preemption analysis and find that CEMA is not preempted by CAN-SPAM.” We decline this invitation.

Notwithstanding the non-precedential nature of a district court opinion from another circuit, see United States v. Ensminger, 567 F.3d 587, 591 (9th Cir. 2009), we find Beyond Systems to be of no persuasive value here. Unlike the Maryland district court, we are reviewing summary judgment on a well-developed record. More significantly, however, we view its preemption analysis as flawed. Without considering the factual allegations underlying the plaintiff’s claims, the court there held that MCEMA was not inconsistent with the goals of the CAN-SPAM Act and that “insofar as a state statute is not inconsistent with CAN-SPAM, it will not be deemed pre-empted.” Beyond Sys., 422 F. Supp. 2d at 537 -38. The Maryland court not only fundamentally misconstrued the legislative purpose of the federal act, its analysis also belies the doctrine of express preemption. Indeed, the sole authority upon which the court relied dealt with field preemption—not, as was the case before it (or as is the case here), express preemption. See Colo. Anti-Discrimination Comm’n v. Continental Air Lines, 372 U.S. 714, 723 (1963) (finding “no express or implied [congressional] intent to bar state legislation in this field” and upholding a state statute barring discriminatory hiring practices by airlines).]

V

Gordon also appeals summary judgment of his claim that
Virtumundo violated the Washington CPA, which generally
prohibits “[u]nfair methods of competition and unfair or
deceptive acts or practices in the conduct of any trade or commerce.”
Wash. Rev. Code. § 19.86.020.24 A plaintiff must typ-
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ically prove five elements to establish a CPA violation: (1) an unfair or deceptive act or practice, (2) in trade or commerce, (3) that impacts the public interest, (4) which causes injury to the party in his business or property, and (5) the injury must be causally linked to the unfair or deceptive act. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531, 535-37 (Wash. 1986). A violation of CEMA, however, likely constitutes a per se CPA violation.25 See Wash. Rev. Code § 19.190.030; Heckel I, 24 P.3d at 407 (“RCW 19.190.030 makes a violation of [CEMA] a per se violation of the [CPA] . . . .” ).

[24 The CAN-SPAM Act does not preempt CPA claims generally. The preemption clause states that the federal act will not preempt the applicability of state laws not specific to commercial e-mail. 15 U.S.C. § 7707(b)(2).

25 Section 19.190.030 states, in relevant part:

(1) It is a violation of the consumer protection act, chapter 19.86 RCW, to conspire with another person to initiate the transmission or to initiate the transmission of a commercial electronic mail message that:

(a) Uses a third party’s internet domain name without permission of the third party, or otherwise misrepresents or obscures any information in identifying the point of origin or the transmission path of a commercial electronic mail message; or

(b) Contains false or misleading information in the subject line.

Wash. Rev. Code § 19.190.030.]

[20] Gordon primarily relies upon alleged CEMA violations to establish his CPA claim. Because his CEMA claims fail as a matter of law, his CPA claims, to the extent grounded in CEMA violations, are likewise inadequate and were properly dismissed.

[21] To the extent that Gordon also brings independent CPA claims, they too fail. Gordon has failed to identify an act or practice that “misleads or misrepresents something of material importance.” Nguyen v. Doak Homes, Inc., 167 P.3d 1162, 1166 (Wash. Ct. App. 2007) (emphasis added); accord Robinson v. Avis Rent A Car Sys., Inc., 22 P.3d 818, 824 (Wash. Ct. App. 2001) (“[K]nowing failure to reveal some-
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thing of material importance is ‘deceptive’ within the CPA.”). Because Gordon’s CPA claims are not predicated on unfair or deceptive conduct that has “the capacity to deceive a substantial portion of the public,” Hangman Ridge, 719 P.2d at 535, summary judgment was appropriate. See Carlile v. Harbour Homes, Inc., 194 P.3d 280, 289 (Wash. Ct. App. 2008) (confirming that whether an act is unfair or deceptive is a question of law).

Additionally, in order to succeed on a CPA claim, “[a] plaintiff must establish that, but for the defendant’s unfair or deceptive practice, the plaintiff would not have suffered an injury.” Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 170 P.3d 10, 22 (Wash. 2007). Here, Gordon seeks only statutory damages and, despite more than adequate opportunity, has made no attempt to show that Virtumundo proximately caused him actual harm. Because Gordon has failed in his burden to provide sufficient evidence to establish an essential element of this cause of action, his CPA claims must also fail as a matter of law. See River City Markets, Inc. v. Fleming Foods West, Inc., 960 F.2d 1458, 1462 (9th Cir. 1992).

VI

We briefly address Gordon’s remaining arguments and assignments of error on appeal. His claim that summary judgment violated the Seventh Amendment is devoid of merit. “As the Supreme Court held, over one hundred years ago, a summary judgment proceeding does not deprive the losing party of its Seventh Amendment right to a jury trial.” In re Slatkin, 525 F.3d 805, 811 (9th Cir. 2008) (citing Fid. & Deposit Co. of Md. v. United States, 187 U.S. 315, 319-21 (1902)). Further, Gordon, dissatisfied with the result in the Western District of Washington, cannot now challenge his initial choice of venue on appeal. See generally Olberding v. Ill. Cent. R.R. Co., 346 U.S. 338, 340 (1953) (noting that the plaintiff relinquishes his right to object to venue by bringing his lawsuit in
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a particular district). Finally, we decline to entertain Gordon’s poorly articulated argument that the CAN-SPAM Act is unconstitutional under the Fourth and Fourteenth Amendments. See Broad v. Sealaska Corp., 85 F.3d 422, 430 (9th Cir. 1996). This constitutional challenge was neither raised before the district court, nor pressed in the reply brief or at oral argument. We reject these and any additional arguments possibly buried in Gordon’s briefing not expressly addressed herein. See Indep. Towers of Wash. v. Washington, 350 F.3d 925, 929 (9th Cir. 2003) (repeating the now familiar maxim:

“[j]udges are not like pigs, hunting for truffles buried in briefs” (quoting United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991))).

VII

In summary, Gordon lacks statutory standing to bring a private action for alleged violations of the CAN-SPAM Act. His state law claims fail as a matter of law because they are precluded by the Act’s express preemption clause and because he has failed to demonstrate that a genuine issue of material fact exists. Accordingly, we affirm the district court’s order of summary judgment.

All parties shall bear their own costs on appeal.

AFFIRMED.

GOULD, Circuit Judge, concurring:

The most pertinent conclusion for me in this case, one that I reach after a careful evaluation of the district court’s comprehensive factual findings and cogent legal analysis, is that Gordon was seeking to use the CAN-SPAM Act to build a litigation factory for his personal financial benefit. For the reasons amply explained by Judge Tallman’s fine opinion, the
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ways in which Gordon inserted himself into legal controversy here require conclusions that he is not an Internet access service (“IAS”) provider and that he was not adversely affected by spam. Each of these conclusions is independently sufficient to deny Gordon statutory standing to assert his claims, and each conclusion requires our affirmance of the district court’s summary judgment order.

I write separately to add this comment. In the long course of Anglo-American law, development of the common law has normally occurred in ways that gave legal remedies to persons who cried out for relief against a perceived injustice. See , e.g., Oliver Wendell Holmes, Jr., The Common Law 37 (Dover Pubs. 1991) (1881) (“[T]he various forms of liability known to modern law spring from the common ground of revenge.”). The body of the common law that we know as contract law developed from the need to provide remedies when certain promises were broken and more ancient common law writs were inadequate. See id. at 274-75 (tracing history of contracts to the writ of “trespass on the case,” which developed because “there were many cases which did not exactly fall within the definition of trespass, but for which it was proper that a remedy should be furnished”). Similarly, tort law has for centuries expanded1 to cover new types of claims where wrong had caused damage. See id. at 162-63 (stating that tort law is “continually adding to its specific rules” based on “[t]he tendency of a given act to cause harm under given circumstances,” rules “which must be determined by experience”).

[1 An example of this expansion is seen in Judge Cardozo’s famous opinion in MacPherson v. Buick Motor Co., 111 N.E. 1050 (N.Y. 1916), which did much to influence the demise of the privity barrier and opened the way for claims by any person injured by a manufacturer’s negligence. See Dan B. Dobbs, The Law of Torts § 353 (2001) (“Judge Cardozo substantially abolished the privity rule for negligence cases in the famous MacPherson case . . . .” ).]

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In both contract and tort claims for damages, the common law always required a showing of damages proximately caused by the wrong as an element of the claim. See Hadley v. Baxendale, 9 Exch. 341 (1854) (holding that contract damages must either “aris[e] naturally” or “reasonably be supposed to have been . . . the probable result of the breach of [the contract]”); Dan B. Dobbs, The Law of Torts § 377 (2001) (“In personal injury cases, the normal remedy is compensatory damages . . . for all losses that have proximately resulted from the tort and all losses that will so result in the future.”). The branch of the common law known in England as chancery jurisdiction, which also developed in the colonies and in the early United States, was concerned with providing an equitable remedy to injured persons when common law damage remedies were inadequate. See Joseph Story, Chancery Jurisdiction: An Article Written for the North American Review, in 1820, on the Reports of Mr. Johnson, The Miscellaneous Writings of Joseph Story 165 (William W. Story ed., 2000) (1852) (stating that courts of equity are necessary because “[t]here are many cases in which the parties are without remedy at law, or in which the remedy is wholly inadequate to the attainment of justice”).

Thus the common law developed ample remedies for persons who had suffered grievous harms, but, as I understand the history of our common law, it did not develop remedies for people who gratuitously created circumstances that would support a legal claim and acted with the chief aim of collecting a damage award.2 See Charles T. McCormick, Law of
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Damages § 33 (1935) (“[T]he rules for awarding damages should be such as to discourage even persons against whom wrongs have been committed from passively suffering economic loss which could be averted by reasonable efforts, or from actively increasing such loss where prudence would require that such activity cease.”). I believe that the same principles that animated the common law influenced Congress when it enacted the CAN-SPAM Act. That Congress explicitly limited claims to a subset of individuals or entities who were “adversely affected” by the proscribed conduct shows that Congress did not aim to provide a remedy to anyone or any entity who sought out a position where the alleged harm might inevitably occur. But, for a person seeking to operate
a litigation factory, the purported harm is illusory and more in the nature of manufactured circumstances in an attempt to enable a claim. In my view, manufactured claims should not be tolerated absent a clear endorsement from Congress. Such claims would not likely have been recognized at common law, and Congress here wisely excluded them.

[2 Here of course we deal with a statute, the CAN-SPAM Act, and it is sometimes thought that statutory law is separate from the common law. However, on close examination, many distinctions between common law and statutory law disappear. The English common law, for example, was built in part upon ancient statutory law which, even once it was no longer applicable, had created usages and customs from which the common law developed. See , e.g., Sir Matthew Hale, The History of the Common Law of England, ch. 1, (Charles M. Gray ed., 1971) (1713) (“[M]any of those Things that now obtain as Common Law, had their Original by Parliamentary Acts or Constitutions, made in Writing by the King, Lords and Commons; though those Acts are now either not extant, or if extant, were made before Time of Memory . . . .” ); 2 Sir William Searle Holdsworth, A History of English Law 145-46 (3d ed. 1922) (discussing formation of English common law after the Norman Conquest and concluding that “the influence of the civil and canon law is perhaps the most important of all the external influences which have shaped the development of English law”). Similarly, when we consider statutory law, the United States Supreme Court has told us that we are to presume that Congress has acted with knowledge of the prior common law. See Astoria Federal Sav. and Loan Ass’n v. Solimino, 501 U.S. 104, 108 (1991) (“Congress is understood to legislate against a background of common-law adjudicatory principles.”).]

Judge Tallman’s opinion rightly focuses on language in the legislative history stating that only bona fide IAS providers should have statutory standing. I would presume a bona fide requirement even without this legislative history because Congress provided a private right of action for CAN-SPAM
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violations but expressly limited it to certain individuals and entities. Given this limited private right of action, statutory standing should be denied to plaintiffs such as Gordon who purposely structure themselves to look like one of the limited entities eligible to sue but do so for the primary purpose of collecting damages and settlements from litigation. Such individuals trying to game the system do not fall into the limited class to which Congress made available a private remedy, and ordinarily they should be denied statutory standing. That the legislative history specifies bona fide IAS providers strengthens our conclusion that Gordon’s suit should be dismissed, but the legislative history is not necessary to reach this conclusion in light of the common-law antecedents that do not favor manufactured claims.

There are a few areas in which our developing statutory law has embraced the concept of permitting claims by those who insert themselves in the controversy for the express purpose of creating a lawsuit. One of the best examples is that we accord standing to those who “test” for discrimination in housing by feigning interest in a housing site. See, e.g., Havens Realty Corp. v. Coleman, 455 U.S. 363, 373-74 (1982). There may be good reasons for allowing this practice as a way to strengthen the enforcement of housing discrimination laws, and Congress provided a broad standing provision for private actors. In permitting standing for testers, the Supreme Court reasoned that Congress “conferred on all ‘persons’ a legal right to truthful information about available housing” and “plainly omitted” a “bona fide” requirement for standing when it explicitly required one elsewhere in the same section of the fair housing statute. Id.

Similarly, we accord standing to individuals who sue defendants that fail to provide access to the disabled in public accommodation as required by the Americans with Disabilities Act (“ADA”), even if we suspect that such plaintiffs are hunting for violations just to file lawsuits. See Molski v. Evergreen Dynasty Corp., 500 F.3d 1047, 1061-62 (9th Cir. 2007)
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(per curiam) (“For the ADA to yield its promise of equal access for the disabled, it may indeed be necessary and desirable for committed individuals to bring serial litigation advancing the time when public accommodations will be compliant with the ADA.”). There, too, however, Congress provided standing to “any person” subjected to disability discrimination in violation of the ADA, and it also did not expressly require a showing of injury or adverse effect from the discrimination. 42 U.S.C. § 12188(a)(1); accord Molski v. M.J. Cable, Inc., 481 F.3d 724, 730 (9th Cir. 2007).3

[3 Evergreen Dynasty also involved state disability claims under California’s Unruh Civil Rights Act, Cal. Civ. Code § 51 et seq., and the standing provisions under that statute are similarly broad. See Cal. Civ. Code § 52(a) (holding that violators of the Act are liable to “any person denied the rights” guaranteed by the Act); Botosan v. Paul McNally Realty, 216 F.3d 827, 835 (9th Cir. 2000) (holding that under the Unruh Act, “proof of actual damages is not a prerequisite to recovery of statutory minimum damages”); cf. Evergreen Dynasty, 500 F.3d at 1060 n.6 (citing cases suggesting that in general “statutory damages do not require proof of injury”).]

We should not extend the concept of “tester” standing to an area where we do not have confidence that Congress intended to empower anyone to make claims. Unlike the broad standing provisions in the housing discrimination laws and the ADA, here the CAN-SPAM statutory language grants a private right of action not to “all persons” regardless of injury, but only to IAS providers who suffer adverse effect. These requirements make clear that a litigation-seeking party in Gordon’s circumstances has no standing to proceed under the CAN-SPAM Act.

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Newman Declaration in Support

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

JAMES S. GORDON, Jr., a married
individual, d/b/a ‘GORDONWORKS.COM';
OMNI INNOVATIONS, LLC., a
Washington limited liability company,
Plaintiffs,

v.

VIRTUMUNDO, INC, a Delaware
corporation d/b/a
ADNOWLEDGEMAIL.COM;
ADKNOWLEDGE, INC., a Delaware
corporation, d/b/a
ADKNOWLEDGEMAIL.COM; SCOTT
LYNN, an individual; and JOHN DOES,
1-X,
Defendants.

DECLARATION OF DEREK A. NEWMAN IN SUPPORT OF DEFENDANTS’ MOTION FOR ATTORNEYS’ FEES AND COSTS

I, Derek A. Newman, swear under penalty of perjury under the laws of the United States to the following:

1. I am counsel of record for defendants Virtumundo, Inc. (“Virtumundo”) and Adknowledge, Inc. (“Adknowledge”), am over age 18, and competent to be a witness. I am making this Declaration based on facts within my own personal knowledge.

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2. In this case, James Gordon and Omni Innovations, LLC (“Plaintiffs”) raised novel questions of law which had no precedent in the Ninth Circuit Court of Appeals or this judicial district. The allegations were based on highly technical facts and could only have been addressed by counsel familiar with high-technology disputes and Internet-related litigation.

3. Defendants were principally represented by Roger Townsend and myself, Derek Newman. Combined, Mr. Townsend and I devoted a total of 552 hours to defending this case. We made efforts to delegate work to less expensive, junior attorneys where appropriate. The junior attorneys devoted a total of 890.7 hours defending this case.

4. The document analysis attorneys devoted 533.1 hours to the creation of our necessary extensive log of Plaintiffs’ emails.

5. Defendants’ counsel was actively involved in dispositive motion briefing in this case.

6. Defendants’ counsel also filed various discovery motions, including a motion to compel Plaintiffs to produce and segregate their emails and a motion to permit Defendants to depose Plaintiffs’ witnesses disclosed after the discovery cutoff. Each of these discovery motions was either required by court order or was a reasonable expenditure of legal effort in defending the lawsuit.

7. Defendants’ counsel traveled to Chicago, Illinois to take the deposition of Plaintiffs’ expert witness, Pete Resnick and to Kansas City, Missouri to defend Plaintiffs’ depositions of Defendants.

8. Attached hereto as Exhibit A are true and accurate copies of Defendants’ counsel’s invoices for legal services incurred defending Defendants in the above captioned case.

9. Exhibit A also includes summaries of the reasonable and necessary costs billed to Defendants in defending this lawsuit.

10. Attached hereto as Exhibit B is a true and accurate copy of the invoice provided by Defendants’ expert witness, Dr. Neal Krawetz, for his expert services in this case.

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I certify and declare under the penalty of perjury under the laws of the State of
Washington and the United States that to my knowledge the foregoing is true and correct.

Executed on this 19th day of June, 2007, at Seattle, Washington.

Derek A. Newman

Attachment	Date	Size
MotFeesCostsNewmanDec.pdf	06/28/09 1:04 pm	15.33 KB
MotFeesCostsNewmanDecExhA.pdf	06/28/09 1:04 pm	3.19 MB
MotFeesCostsNewmanDecExhB.pdf	06/28/09 1:04 pm	32.48 KB

Blank Declaration in Support

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

JAMES S. GORDON, Jr., a married
individual, d/b/a ‘GORDONWORKS.COM';
OMNI INNOVATIONS, LLC., a
Washington limited liability company,
Plaintiffs,

v.

VIRTUMUNDO, INC, a Delaware
corporation d/b/a
ADNOWLEDGEMAIL.COM;
ADKNOWLEDGE, INC., a Delaware
corporation, d/b/a
ADKNOWLEDGEMAIL.COM; SCOTT
LYNN, an individual; and JOHN DOES,
1-X,
Defendants.

DECLARATION OF ERIC P. BLANK IN SUPPORT OF DEFENDANTS’ MOTION FOR ATTORNEYS’ FEES AND COSTS

I, Eric P. Blank, declare and testify as follows:

1. I am over eighteen years of age, competent to testify to the matters stated in this declaration, and make this declaration based upon personal knowledge.

2. Since 1996, I have been an attorney licensed to practice in Washington State. I am admitted to practice in the Western District of Washington and regularly have cases in this district.

3. I am the principal at Blank Law & Technology P.S. My practice focuses on technology, intellectual property and Internet-related litigation, and I
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routinely represent clients in federal district court on technology matters similar to those at issue in the above-captioned action.

4. I have reviewed the rate sheet from Newman & Newman, LLP attached hereto as Exhibit A and find it to be reasonable and consistent with the prevailing rates for attorneys in this legal community for matters of similar complexity, novelty and legal exposure.

5. The rates charged by Newman & Newman, LLP are consistent with or less than the hourly rates at my law firm, to my understanding, and other comparable attorneys who practice in the same area of law.

6. I am familiar with the skill, expertise, and reputation of the attorneys at Newman & Newman, LLP and believe that they are particularly well qualified to represent parties in complex Internet-related litigation.

7. Furthermore, I recognize that Newman & Newman is well-known in the local legal community for its expertise and skill in representing clients in complex CAN-SPAM, RCW 19.190 et seq. and email-related litigation, and based on that expertise and reputation, it is reasonable that they charge hourly rates of greater than $350 for senior attorneys and $200 per hour for junior attorneys.

I certify and declare under the penalty of perjury under the laws of the State of Washington and the United States that to my knowledge the foregoing is true and correct.

Executed on this 19th day of June, 2007, at Seattle, Washington.

Eric P. Blank

Attachment	Date	Size
MotFeesCostsBlankDec.pdf	06/28/09 1:04 pm	109.24 KB
MotFeesCostsBlankDecExhA.pdf	06/28/09 1:04 pm	5.61 KB

RESPONSE to Motion to Award Fees and Costs

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON, SEATTLE

JAMES S. GORDON, Jr., a married
individual; OMNI INNOVATIONS,
LLC., a Washington limited
liability company;
Plaintiffs,

v.

VIRTUMUNDO, INC, a Delaware
corporation, d/b/a
ADNOWLEDGEMAIL.COM;
ADKNOWLEDGE, INC., a Delaware
corporation, d/b/a
ADKNOWLEDGEMAIL.COM;
SCOTT LYNN, an individual; and
JOHN DOES, I-X,
Defendants.

PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANTS’ MOTION FOR ATTORNEY FEES

Plaintiff James S. Gordon, Jr., by and through his attorney of record, responds to Defendants’ Motion For Attorney Fees as follows:
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At the outset, the Court should note the deep irony and manifest injustice that would result if the Court grants the Defendants’ motion for attorney fees.

In the Court’s May 15 ruling, the Court explicitly stated that the Court never considered the merits of Plaintiff’s claims (hereafter Gordon).1 Rather, the Court held that Gordon did not have standing to bring Gordon’s complaint. The Court included an extensive analysis of Gordon’s standing under the CAN-SPAM Act of 2003, Pub. L. No. 108-187, 117 Stat. 2699 (2003), 15 U.S.C. §§ 7701-7713 (hereafter “CAN SPAM” or the “Act”). The Court allowed that Gordon qualified as an “Internet Access Service” which is specifically authorized to bring claims under the Act.2 However, the Court held that Gordon had not suffered a sufficient “adverse impact” which is also required for standing. The Court’s finding that Gordon had not suffered a sufficient adverse impact thus formed the sole and exclusive basis given by the Court for finding that Gordon lacked standing, and in turn dismissing Gordon’s complaint, under CAN SPAM. As a result, the Defendants are now asking the Court to award them over a half a million dollars, also under CAN SPAM, for the sole reason that the Court previously held Gordon had not endured sufficient adverse impact to bring his claims.

[1 “Because Plaintiffs have no standing, their CAN-SPAM claims must be DISMISSED and the Court has no occasion to reach the parties’ arguments on the merits of those claims.” (Court’s May 15, 2007 Order, Dkt. 121, pg. 15, lines 18-19)

2 “Nevertheless, it is fairly clear that Plaintiffs are, in the most general terms, a “service that enables users to access” Internet content and e-mail, and accordingly, they qualify as an IAS under the statute’s capacious definition.” (Court’s May 15, 2007 Order, Dkt. 121, pg. 13, lines 10-12)]

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If the Court grants the Defendants’ motion, Gordon will be financially ruined. Gordon possesses nowhere near the resources necessary to satisfy such an award. If the Court grants the Defendants’ motion, the Court will thus have ruled in rapid succession that Gordon had not suffered a sufficient adverse impact to bring his claims under CAN SPAM, yet for the mere act of trying, Gordon will have been ordered to pay over a half million dollars and forced into bankruptcy. One can only wonder, if the Court grants the Defendants’ motion and forces Gordon into financial ruin, will the Court then change its mind and agree that Gordon has indeed suffered a sufficient adverse impact to have his claims considered on the merits?

If the Court did, it is clear that Gordon would prevail. There is no question that Gordon has made it crystal clear to the Defendants that he wants them to stop sending him commercial email. Even if the Court ignores Gordon’s repeated requests as set forth in his sworn declarations, this entire lawsuit is irrefutable evidence that the Defendants are on notice that Gordon has made such a request. The Defendants are highly sophisticated multi-million dollar corporations. In the face of this litigation, it is simply inconceivable that the Defendants could have failed to note that Gordon doesn’t want their commercial email. Thus, there is no question whatsoever that the Defendants have both actual and constructive notice that Gordon doesn’t want their spam.

CAN SPAM contains a clear prohibition against sending commercial email to a party who has asked to be left alone. 15 USC 7704(a)(4). Yet the Defendants continue to send Gordon commercial email to this day, on a daily basis. (See Gordon Declaration)

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Since the Court has ruled that Gordon’s receipt of this commercial email is an insufficient “adverse impact” to give Gordon standing to do anything about the Defendants’ ongoing conduct under the Act, Gordon is effectively powerless to stop these ongoing commercial emails. Gordon can only imagine the howls of laughter the Defendants enjoy each and every day at Gordon’s expense, as they send Gordon additional commercial email knowing that their conduct, while plainly contrary to CAN SPAM, is nevertheless completely insulated from any redress by Gordon as a result of this Court’s May 15 ruling.

The awarding of attorney's fees is a matter for the District Court's discretion. To guide that discretion, the Supreme Court endorsed the non-exclusive list employed by the Third Circuit in Lieb v. Topstone Industries, Inc., 788 F.2d 151, 156 (1986) (the so-called "Lieb factors"). Fogerty v. Fantasy, Inc., 510 U.S. 517, 534, n.19, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). The list includes "frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence." Id. Examining these factors in order plainly indicates that it would be an abuse of the Court’s discretion to grant the Defendants attorney fees.

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Frivolousness

As stated by the Court, it never reached the merits of Gordon’s CAN SPAM complaint. Accordingly, Gordon’s claims cannot possibly be termed “frivolous.” Further, it is plain that if the Court had examined Gordon’s CAN SPAM claims on the merits, Gordon would have prevailed. In addition to the other substantive claims, including, but not limited to the “From” name argument asserted in Gordon’s motion for partial summary judgment, and deceptive subject line claims, Gordon has repeatedly asked the Defendants to stop sending Gordon commercial email. The Defendants were and are on actual notice that Gordon wanted them to stop sending Gordon commercial email. CAN SPAM contains a clear prohibition against sending commercial email to a party who has asked to be left alone 15 USC 7704(a)(4). Despite Gordon’s repeated requests, and the Defendants actual notice of those requests, the Defendants continue to send Gordon commercial email on a daily basis (See Gordon Declaration herewith). For Gordon to bring this suit under these conditions cannot be considered “frivolous.”

Nor was it frivolous for Gordon to assume he had standing to bring this suit based on his status as an “Internet Access Service.” As discussed above, the Court itself agreed that Gordon was an “Internet Access Service” under a plain reading of the definition at 15 USC 7702(11) and 47 USC 231(e)(4). The Court also agreed that Gordon had suffered an “adverse impact.” The Court’s rationale for denying standing thus required the Court to reach into the legislative history to make a determination that Congress intended something more than an “adverse impact.” The Court then concluded that
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Gordon was required to show “ISP- or IAS-specific burdens,” that these be burdens be “significant” and held that Gordon had not done so. (Court’s May 15, 2007 Order, Dkt. 121, pg. 13, lines 12-13). However, had Gordon known in advance that the Court would apply this more stringent standard, Gordon easily could have established that he had experienced “ISP- or IAS-specific burdens” and that the cost of these burdens were “significant.” (See Gordon Declaration herewith) For example, the record plainly reflects that due to a continually escalating avalanche of spam, Gordon was forced to migrate his service from a shared server to a dedicated server. Had Gordon known that the Court would apply this standard in advance, all Gordon would have had to do to meet it is to point out to the Court that this forced migration entailed additional costs. However, the point is not to re-litigate the Court’s prior ruling. The point is simply that Gordon’s assumption that he had standing to bring his suit was based on a good faith, and reasonable interpretation of the statutory language. The Court ultimately interpreted that language to be more stringent. Gordon’s complaint cannot be considered “frivolous” merely because he lacked the omniscience to know in advance that the Court would adopt this more stringent standard, and thus an award of attorney fees is unwarranted based upon frivolousness.

Moreover, as the Court has noted, and as Gordon readily acknowledges, Gordon has brought numerous other lawsuits attempting to enforce both Federal and State antispam statutes. In each and every case in which Gordon’s standing as an IAS under Can-Spam was challenged, other courts have found in Gordon’s favor, confirming his status, on the facts as pled, as an IAS. In its decision herein the Court specifically
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noted one such decision by the Eastern District Court of Washington Gordon v Impulse Marketing, et al. where that Court, ruling on a challenge to Gordon’s status as an IAS ruled in Gordon’s favor. Thus, there was certainly nothing frivolous, or otherwise unreasonable in Gordon’s belief that he did have standing as an IAS to bring this action.

Motivation

Gordon’s motivation was to stop the Defendants from sending him spam. He filed his lawsuit after a long and extended effort to stop the spam without resorting to litigation. Unfortunately, that effort failed. The reasons that effort failed are best illustrated by the fact that the Defendants are still sending spam to Gordon. (See Gordon Declaration herewith) Unless the Court is willing to say that Gordon’s simple desire to be left alone is an insufficient basis to bring an action when all else has failed, Gordon’s motivation for bringing the suit does not support an award of attorney fees.

Objective Unreasonableness

In both the factual and the legal components of the case, Gordon’s position is entirely reasonable. Factually, the Defendants were sending spam to Gordon despite his requests that they stop. As noted above, they are legally required to do so under the Act. The questions of standing are, at best, very close questions of first impression that required the Court to review the legislative history to make a determination of Congressional intent. Thus, in no sense was Gordon’s lawsuit “objectively
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unreasonable” either factually or legally, and Gordon’s reasonableness in bringing the suit does not support an award of attorney fees.

The Need to Advance Considerations of Compensation and Deterrence

As with the analysis of Gordon’s motivation, considerations of compensation and deterrence do not support an award of attorney’s fees. Gordon’s intent was to stop the Defendants from sending him spam. He filed his lawsuit only after a long and extended effort to stop the spam without resorting to litigation. Sadly, the Defendants are still sending spam to Gordon. Unless the Court is willing to say that it is the Court’s job to deter Gordon from seeking redress in the Courts against a party who refuses to leave Gordon alone, considerations of compensation and deterrence do not support an award of attorney’s fees.

Conclusion

In light of the foregoing an award of attorney fees to Defendants is not warranted and would create a manifest injustice. Consequently, Defendants’ Motion should be denied.

RESPECTFULLY SUBMITTED this 2nd day of July, 2007.

DOUGLAS E. MCKINLEY, JR
Attorney at Law

/ S/ Douglas E. McKinley, Jr.
Douglas E. McKinley, Jr., WSBA #20806
Attorney for Plaintiffs

/ S/ Robert J. Siegel
Robert J. Siegel, WSBA #17312
Attorney for Plaintiffs

Attachment	Date	Size
MotFeesCostsResponse.pdf	06/28/09 1:04 pm	144.05 KB

REPLY to Response to Motion to Award Fees and Costs

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

JAMES S. GORDON, Jr., a married individual,
d/b/a ‘GORDONWORKS.COM’; OMNI
INNOVATIONS, LLC., a Washington limited
liability company,
Plaintiffs,

v.

VIRTUMUNDO, INC, a Delaware corporation
d/b/a ADNOWLEDGEMAIL.COM;
ADKNOWLEDGE, INC., a Delaware
corporation, d/b/a
ADKNOWLEDGEMAIL.COM; SCOTT
LYNN, an individual; and JOHN DOES, 1-X,
Defendants.

DEFENDANTS’ REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS

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I. INTRODUCTION
In his Response in Opposition to Defendants’ Motion for Attorney Fees (Dkt, #135, the “Response”), James Gordon (“Gordon”) did not address the following arguments in Defendants’ Motion for Attorneys’ Fees and Costs (Dkt. #127, the “Motion”): the rate and hours of Defendants’ attorneys’ fees were reasonable, the fees expended were reasonable, and Defendants’ costs were reasonable. Accordingly, Gordon concedes all of those points.1

[1 Plaintiff Omni Innovations, LLC (“Omni”) failed to file any opposition whatsoever – consequently, Omni concedes an award of fees and costs is appropriate.]

Instead of addressing Defendants’ arguments, Gordon misrepresents both law and fact. He mischaracterizes this Court’s May 15, 2007 order (Dkt. #121 (the “Order”) by claiming, falsely, that the Court “never considered the merits of Plaintiff’s claims”. (Response at 2:4-5.) To the contrary, while the Court dismissed Plaintiffs’ CAN-SPAM claim for lack of standing, the Court rejected Plaintiffs’ frivolous “from line” theory, determined they suffered no actual damages, and emphasized their history of litigation for profit. Gordon also claims, falsely, that “Defendants continue to send Gordon commercial email to this day.” (Response at 3:22-23.) Defendants take this allegation seriously, and have provided supplemental declarations explaining in detail why they did not send (and in fact cannot have sent) the email about which Gordon complains.

Plaintiffs filed a frivolous lawsuit motivated by greed, then caused Defendants’ legal costs to skyrocket by refusing to explain their legal theories until the last minute. Now, they must face the consequences of their own actions. Defendants respectfully request this Court grant their Motion for Attorneys’ Fees and Costs.

II. ARGUMENT

A. Plaintiffs Have Made Deliberate Misrepresentations to This Court

1. Defendants Are Not Sending Email to Plaintiffs.

Gordon’s declaration attaches an email which he claims is a Virtumundo promotion for Charter Communications and calls “spam”. (Dkt. #136 ¶ 4 Ex. B.) In
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truth, none of the Defendants sent the email in question, and for at least one year, both Virtumundo and Adknowledge have directed their email systems not to send any messages to the domain .2

[2 See the Declarations of Scott Moore and Michael Fitzgerald in Support of Defendants’ Motion for
Attorneys’ Fees and Costs which accompany this reply brief.]

2. There Is No Support for the Claim That An Award of Fees and Costs Will “Bankrupt” Gordon”.

The rhetoric about bankruptcy (Response at 3:1; “Gordon will be financially ruined”) is not supported by Gordon’s own declaration (Dkt. #136), and should be disregarded as irrelevant and unauthenticated.

B. The Factors Cited by Plaintiffs Weigh Heavily in Favor of Granting Defendants’ Motion

The only case Plaintiffs cite is Lieb v. Topstone Industries, Inc., 788 F.2d 151, 156 (3rd Cir. 1986) (cited in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n. 19, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994)). That case indicates courts should consider “frivolousness, motivation, objective unreasonableness... and ... considerations of compensation and deterrence” when determining whether to award attorneys’ fees and costs. Id. In this case, all Lieb factors favor Defendants. Plaintiffs’ claims were frivolous, Plaintiffs unreasonably drove up costs, were motivated by profit, and an award of fees and costs will deter a continuing waste of judicial resources.

1. This Court Considered and Rejected Plaintiffs’ Frivolous Claims.

Plaintiffs argue, incorrectly, that the Court “never considered the merits of Plaintiff’s claims.” (Response at 2:4-5.) To the contrary, after Plaintiffs filed a summary judgment motion based on the premise that the “from” lines in Defendants’ emails were misleading (Dkt. #53), the Court considered and rejected Plaintiffs’ meritless theory as a matter of law.3 The Court adopted the reasoning of Omega World Travel v.
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Mummagraphics, Inc., 469 F.3d 348, 353 (5th Cir. 2006) and held as follows:

...the Court cannot find that “from addresses” ending with a domain that facilitates an accurate identification of Defendants could in any sense be found “false” or “descriptive”. Accordingly... Plaintiffs’ claims here – for, at best, “incomplete” or less than comprehensive information – are for immaterial errors that may not be litigated under state law.

(Order at 20:2-6.) The Court also dismissed Plaintiffs’ Washington Consumer Protection Act claim, noting “there is no genuine issue of material fact as to the injury element of Plaintiffs’ CPA claim.” (Id. at 21:3-4.) The Court’s Order repeatedly discusses the absence of any real harm to Plaintiffs and further notes, “Plaintiffs admit to benefitting from spam by way of their research endeavors and prolific litigation and settlements.” (Order at 15:9-10; emphasis original.) The Court found that Plaintiffs “collect spam and... generat[e] lawsuit-fueled revenue.” (Order at 15:12-13.) In sum, the Court rejected all of Plaintiffs’ claims, determined their damages were negligible and found Defendants’ errors (if any) were immaterial. The Court also noted Plaintiffs’ status as professional litigants. This is a classic example of a frivolous lawsuit.

[3 Gordon also admitted he did not read the “from” lines and could not have been misled, which
underscores the meritlessness of Plaintiffs’ arguments. (Declaration of Derek Newman (Dkt. #93) ¶ 2 Ex. A at 377:21 - 378:2.)]

Recently, this Court awarded attorneys’ fees and costs to the prevailing party in a dispute which turned on the losing party’s lack of standing. Sanai v. Sanai, 2007 U.S. Dist. LEXIS 20428, *9-11 (W.D.Wash. Mar. 21, 2007) (awarding attorneys’ fees after dismissing claims based on lack of standing, after finding plaintiffs’ arguments “were inventive, but wholly lacking in merit”). The Court should award them to the Defendants in this case as well. In this case, as in Sanai, Plaintiffs lost – but only after they imposed substantial and unnecessary costs on Defendants. Gordon spends considerable time speculating about what might have been had he prevailed. (Response at 5:4-6.) But as this Court expressly determined, Gordon did not prevail. “As the prevailing parties, Defendants may file a motion for attorneys fees...” (Order at 24:23-24.)

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2. Plaintiffs Unreasonably Increased Plaintiffs’ Attorneys’ Fees and Costs.

Now that Defendants are the prevailing parties, Gordon attempts to re-brand his aggressive opportunism as “the mere act of trying” to “bring his claims under CAN SPAM.” (Response at 3:4-5.) However, Plaintiffs did more than “try”. They made vague claims which they refused to clarify, and dumped massive overproductions of documents on Defendants, forcing Defendants to sift through and analyze them. Had Defendants known about Plaintiffs’ frivolous “from line” theory at the beginning, they could have filed a motion to dismiss pursuant to FED. R. CIV. P. 12(b)(6) and incurred significantly lower expenses.

Defendants’ Motion provided details concerning Plaintiffs’ unfair litigation tactics, specifically their long-term refusal “to commit to any statutory provision which was allegedly violated.” (Motion at 3:10-11.) Plaintiffs waited until the last possible day – the deadline for their filing summary judgment motion – before revealing their case was based on a frivolous “from line” theory. Until that date, Plaintiffs refused to explain why they believed Defendants’ alleged emails generated liability. As a result, Defendants were forced to hire a team of lawyers to analyze thousands of emails in light of many different legal theories, in preparation for whichever claims Plaintiffs might later make. (Motion at 3:6-18.) Plaintiffs also failed to make reasonable efforts to comply with Defendants’ discovery requests, and Gordon admitted the files he did not search might have contained emails confirming he subscribed to Defendants’ mailing lists. (Newman Decl. ¶ 2 Ex. A at 405:7-25.) Plaintiffs’ business model was to file a lawsuit seeking millions in damages, then pass through their own costs of discovery and legal analysis to Defendants. Plaintiffs’ tactics were unreasonable and increased Defendants’ legal costs tremendously.

3. Plaintiffs’ Motivation Was To Profit from Litigating Their Frivolous Claims.

Gordon admitted he profits handsomely from the business of litigating, which confirms Plaintiffs’ improper motive in filing this lawsuit:

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Q. During these years when you were unemployed, how did you pay your bills?
A. ...During the course of the last maybe two and a half years, the lawsuits that I have been involved with yielded settlements.

*****

Q. Have you obtained any income or revenue in the year 2006 or 2007 other than from settlements and disputes?
A. No.

(Declaration of Derek Newman (Dkt. #93) ¶ 2 Ex. A at 32:16-21; 46:20-22.)

4. Granting Defendants’ Motion Will Deter Plaintiffs From Further Improper Actions.

As Gordon admits, Plaintiffs are in the litigation business. (Newman Decl. ¶ 2 Ex. A at 32:16-21; 46:20-22; see also Motion at 5:2-7.) In this lawsuit alone, Plaintiffs have wasted hundreds of hours of time forcing Defendants’ counsel to interpret their vague claims. They have required Defendants to respond to a summary judgment motion based on allegedly misleading emails which, Plaintiffs concede, did not mislead them. They have made every effort to keep their own costs down, which included neglecting their discovery obligations to Defendants.

Plaintiffs threaten to repeat their improper behavior in numerous other lawsuits. Accordingly, Defendants request this Court give thought to “considerations of compensation and deterrence” as discussed in Lieb, supra, 788 F.2d at 156. An award of attorneys’ fees and costs to Defendants will compensate for the needless expenses Plaintiffs repeatedly imposed on them. It will also deter Plaintiffs from viewing this Court as a profit center rather than a public tribunal addressing legitimate grievances.

C. Plaintiffs Concede Defendants’ Attorneys’ Fees and Costs Were Reasonable

Omni and Gordon conceded the reasonableness of Plaintiffs’ attorneys’ fees and costs by neglecting to address that issue. LR 7(b)(2); see also Lexington Ins. Co. v. Swanson, 2007 U.S. Dist. LEXIS 37620, *29 n. 9 (W.D.Wash. May 23, 2007) (“The Court may consider Lexington’s failure to respond to Swanson’s argument on these two issues as an admission that Swanson's argument has merit” (citing LR 7(b)(2)).

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III. CONCLUSION

Plaintiffs’ claims were frivolous. This Court’s Order rejected all of Plaintiffs’ claims and held their damages were negligible and their claims were based on “immaterial errors.” Further, Plaintiffs inflated Defendants’ legal costs considerably by unreasonably refusing to explain their legal theories until the last minute, were motivated by pure profit, and threaten to repeat the process over and over again until this Court deters them from doing so. Omni did not oppose Defendants’ Motion, thereby conceding Defendants are entitled to an award of attorneys’ fees and costs against Omni pursuant to LR 7(b)(2), and Gordon is equally responsible. Defendants respectfully request this Court put an end to Plaintiffs’ blatant waste of resources by granting their Motion for Attorneys’ Fees and Costs.

DATED this 6th day of July, 2007.

NEWMAN & NEWMAN,
ATTORNEYS AT LAW, LLP

By:

Derek A. Newman, WSBA No. 26967
Roger M. Townsend, WSBA No. 25525
Attorneys for Defendants

Attachment	Date	Size
MotFeesCostsReply.pdf	06/28/09 1:04 pm	122.94 KB

ORDER on Motion to Award Fees and Costs

Here's a practice note for the attorneys out there that I know are reading this site: When you win and think you're going to get fees and costs, don't get greedy and double-check your math.

Why? Because there are some things that you don't really want a judge to say about you in a decision. Among those are these gems all of which are found in this Order granting the Defendants $111,440.00 in attorneys' fees and costs of court:

"the Court begins by expressing serious doubts about the accuracy with which Defendants’ attorneys recorded and billed both costs and fees in this litigation."

"Furthermore, the prospect that ... well over 1,000 hours—was spent on the Linke Log is absurd."

"Having seen the results of this project, the Court finds that spending the equivalent of over thirteen 40-hour weeks on this process is far more than was reasonable."

"Moreover, the inaccurate documentation presented with the instant motion reinforces the Court’s separate conclusion that the hours requested exceed the reasonable time spent on this case. Given that in making the instant motion Defendants have inexplicably inflated the total hours for which they request compensation by almost 27% beyond what was even recorded in their own billing records, the Court finds it entirely appropriate to cut their requested senior attorney hours by at least that much to account for other inflation that likely occurred in daily billing and overcharges to their clients, which may or may not have been partially balanced out by bill cuts and discounts."

"it appears to the Court that Defendants have deliberately doubled the requested compensation"

"It is unclear how Defendants arrived at the total of $26,338.01 requested in their motion. Moreover, as discussed, the individual expense requests that total $28,839.36 here also are inexplicably inflated when compared with the actual billing records submitted to the Court."

There are, in fact, more of those sprinkled through the Order. It's ironic that Gordon is getting ripped for being greedy, and now here are the attorneys for Virtumundo and Adknowledge apparently trying to show him how it's really done.

===============================

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

JAMES S. GORDON, Jr., a married individual,
d/b/a ‘GORDONWORKS.COM’; OMNI
INNOVATIONS, LLC., a Washington limited
liability company,
Plaintiffs,

v.

VIRTUMUNDO, INC., a Delaware Corporation,
d/b/a ADNOWLEDGEMAIL.COM;
ADKNOWLEDGE, INC., a Delaware
Corporation, d/b/a
ADKNOWLEDGEMAIL.COM; SCOTT LYNN,
an individual; and JOHN DOES, 1-X,
Defendants.

ORDER

This matter comes before the Court on Defendants’ Motion for Attorneys’ Fees and Costs (Dkt.
No. 127), Plaintiff Gordon’s Opposition1 (Dkt. No. 135), and Defendants’ Reply (Dkt. No. 137). This
Court, having reviewed the materials submitted by the parties, as well as the complete record, and
determined that oral argument is not necessary, hereby finds and rules as follows.

[1 Plaintiff Omni did not file an opposition or join in the brief filed by Plaintiff Gordon.]

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I. BACKGROUND

Plaintiffs James S. Gordon (“Gordon”) and Omni Innovations, LLC (“Omni”) brought this action for alleged violations of the Federal CAN-SPAM Act of 2003, 15 U.S.C. §§ 7701–7713 (First Cause of Action); the Washington Commercial Electronic Mail Act (“CEMA”), WASH. REV. CODE §§ 19.190.010–.110 (Second Cause of Action); the Washington Consumer Protection Act (“CPA”), WASH. REV. CODE §§ 19.86.010–.920 (Third Cause of Action); and the Washington “Prize Statute,” WASH. REV. CODE §§ 19.170.010–.900 (Fourth Cause of Action). (Am. Compl. (Dkt. No. 15).)

As the Court has previously noted, (May 15, 2007 Order (Dkt. No. 121)), Gordon is a Washington resident and registrant of the internet domain gordonworks.com (“Gordonworks”). Omni is Gordon’s business, which involves (1) software development and other endeavors and (2) a “spam business,” which entails “[n]otifying spammers that they’re violating the law” and filing lawsuits if they do not stop sending e-mails to the Gordonworks domain. Defendants Virtumundo, Inc. (“Virtumundo”) and Adknowledge, Inc. (“Adknowledge”) are non-Washington resident businesses that provide online marketing services to third-party clients. Virtumundo is a Delaware corporation with its principal place of business in Kansas. Adknowledge is also a Delaware corporation with its principal place of business in Missouri. Virtumundo and Adknowledge market products for their clients by transmitting e-mails to interested consumers. Defendant Scott Lynn (“Lynn”) is a Missouri citizen and serves as Chief Executive Officer of Adknowledge. He is also the sole shareholder of both companies. (See id. at 2–3.)

On May 24, 2006, this Court denied Defendants’ motion to dismiss for lack of personal jurisdiction (Order (Dkt. No. 24)) and on December 8, 2006, this Court granted in part and denied in part Defendants’ motion to dismiss various claims for pleading deficiencies (Order (Dkt. No. 51)), granting leave to Plaintiffs to further amend their Amended Complaint to cure the identified defects. Plaintiffs never did so. Accordingly, the Prize Statute claims (Fourth Cause of Action) were never revived, and the parts of the Second and Third Causes of Action corresponding with Plaintiffs’ “personally identifying information” CEMA claim, WASH. REV. CODE § 19.190.080, also remained dismissed. Defendants then
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moved for summary judgment on all of Plaintiffs’ remaining claims—which included CAN-SPAM claims (First Cause of Action), CEMA claims (Second Cause of Action), and CPA claims (Third Cause of Action) as they related to surviving CEMA claims—and Plaintiffs moved for partial summary judgment on the merits of some of their CAN-SPAM claims. On May 15, 2007, the Court granted Defendants’ motion for summary judgment, denied Plaintiffs’ motion for partial summary judgment, and disposed of a number of other motions. (May 15, 2007 Order (Dkt. No. 121).) Specifically, the Court dismissed Plaintiffs’ CAN-SPAM claims (First Cause of Action) for lack of statutory standing (id. at 4–15), dismissed Plaintiffs’ Washington CEMA claims (Second Cause of Action) as preempted by CAN-SPAM (id. at 15–20), and dismissed Plaintiffs’ Washington CPA claims (Third Cause of Action) for lack of a viable CEMA foundational claim and alternatively for failure to allege injury to business or property (id. at 20–21). Defendants now move for attorneys’ fees and costs as the prevailing parties.

II. ANALYSIS

Federal Rule of Civil Procedure 54(d) governs motions for attorneys’ fees and costs. Defendants have made a timely motion for attorneys’ fees pursuant to Rule 54(d)(2). Defendants request attorneys’ fees and costs pursuant to 15 U.S.C. § 7706(g)(4) (CAN-SPAM) as well as Washington Revised Code section 19.190.090(3) (CEMA). Because this Court’s May 15, 2007 Order disposing of the remainder of Plaintiffs’ claims turned on application of CAN-SPAM, and because federal law governed both the standing and preemption analyses, the Court will not separately consider the issue of fees and costs under Washington state law.

CAN-SPAM provides that in a private CAN-SPAM action, “the court may, in its discretion, require an undertaking for the payment of the costs of such action, and assess reasonable costs, including reasonable attorneys’ fees, against any party.” 15 U.S.C. § 7706(g)(4). Because CAN-SPAM authorizes costs and attorneys’ fees “against any party,” the Court must determine (1) the correct standard to be applied in deciding whether to award attorneys’ fees to a prevailing CAN-SPAM defendant and (2) if fees and costs are warranted, what constitutes a reasonable award in this case.

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A. Legal Standard Governing Whether to Award Attorneys’ Fees to Prevailing CAN-SPAM Defendants

As an initial matter, Gordon argues that the Court “never reached the merits” of Plaintiffs’ CAN-SPAM claims. (Opp’n 5.) Accordingly, though he does not frame the question as such, he appears to be objecting to a characterization of Defendants as “prevailing” in this litigation. In light of the fact that the Court dismissed all of Plaintiffs’ claims and entered judgment in Defendants’ favor (Dkt. No. 122), any suggestion that Defendants have not prevailed is meritless. More to the point, the statute provides that the Court may award attorneys’ fees and costs against any party in any private action. Congress made no mention of any requirement that the Court also reach the merits of particular claims.

A more pressing question is whether, in deciding whether to award attorneys’ fees and costs to
the prevailing defendant in a CAN-SPAM action, the Court should apply the “dual standard” typically
applied in civil rights cases and articulated in Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422 (1978) (holding that “a [Title VII] plaintiff should not be assessed his opponent’s attorney’s fees unless a court finds that his claim was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so”); see also Davis v. City and County of San Francisco, 976 F.2d 1536, 1541 n.1 (9th Cir. 1992) (noting that the same body of United States Supreme Court and Ninth Circuit caselaw governs the reasonableness of attorneys’ fees in Title VII cases as well as actions brought pursuant to 42 U.S.C. §§ 1981–1986 and Titles VI and IX of the Civil Rights Act of 1964), vacated in part on other grounds by 984 F.2d 345. Under Christiansburg, a Court may only award fees and costs to a prevailing defendant if it finds that the plaintiff’s case demonstrated frivolousness, unreasonableness, or groundlessness. Thus, this dual standard tips the scale in favor of plaintiffs both when they win and when they lose.

The alternative to the dual standard is the “evenhanded” approach applied in Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994). In contrast to the threshold requirement under the dual standard—that a losing plaintiff may be assessed fees and costs only if the original suit was “frivolous or brought in bad
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faith”—the evenhanded approach treats prevailing defendants and prevailing plaintiffs alike. Id. at 520–21. In Fogerty, an action brought under the Copyright Act,2 the Supreme Court rejected the dual standard and held that the discretionary question of whether to award fees to a prevailing defendant must be evaluated no differently than the question of whether to award fees to a prevailing plaintiff. Id. at 534.

[2 As here, the Copyright Act provides that a court may award fees but does not require such an award under any circumstance. Id. at 519; see also 17 U.S.C. § 505.]

The Supreme Court concluded by noting “several nonexclusive factors to guide courts’ discretion” in making that decision. Id. As enumerated in Lieb v. Topstone Industries, Inc., 788 F.2d 151, 156 (3d Cir. 1986), such factors include “frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Fogerty, 510 U.S. at 534 n.19. The Supreme Court endorsed application of these factors, so long as they remained “faithful to the purposes of the Copyright Act and are applied to prevailing plaintiffs and defendants in an evenhanded manner.” Id.

Neither the Supreme Court nor the Ninth Circuit has determined which of the foregoing tests should govern in CAN-SPAM cases. Both Defendants and Gordon, in briefing the instant motion, have applied the Fogerty–Lieb test, which is more favorable to Defendants. Thus, it appears that Gordon agrees that this is the proper standard. The Court also finds Fogerty’s standard more appropriate in this case, for the following reasons.

The Fogerty Court discussed at length the reasons for the Christiansburg standard in civil rights cases. Among these are the “important policy objectives of the Civil Rights statutes, and the intent of Congress to achieve such objectives through the use of plaintiffs as private attorneys general.” Fogerty, 510 U.S. at 523 (internal quotations and alterations omitted). In Christiansburg, the United States Supreme Court had found that those important policy objectives were “not at work in the case of a prevailing civil rights defendant.” Fogerty, 510 U.S. at 523 (also discussing Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400 (1968)). Accordingly, prevailing defendants could be treated less
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favorably than prevailing plaintiffs. However, the factors compelling the Christiansburg dual standard were “absent in the case of the Copyright Act.” Id. The Fogerty Court carefully considered the goals of the Copyright Act in reaching its conclusion. Id. at 523–33. This Court will do the same.

The purpose of the CAN-SPAM Act, as stated in the statute itself, as well as in the Senate Report, is to curb false or misleading unsolicited commercial e-mail. 15 U.S.C. § 7701 (“Congressional findings and policy”); S. REP. NO. 108-102, at 1 (2003) (Comm. Rep. on CAN-SPAM Act of 2003 (S. 877)) (“Purpose of the Bill”). Specifically, Congress intended to prohibit deception as to the source or subject matter of e-mail messages, to require an opt-out provision regarding continued receipt of e-mails, to enforce consumers’ choices to opt out, to require inclusion of valid physical addresses in messages and notice of advertising or solicitation content, and to prohibit knowingly false and misleading advertising.

See 15 U.S.C. § 7701; S. REP. NO. 108-102, at 1. While Congress intended to protect consumers and to promote honest advertising, Congress clearly did not intend to obliterate all commercial e-mail, to ban email marketing, or to thwart legitimate business practices. For example, Congress acknowledged the legitimacy of a significant segment of e-mail marketing traffic in its commentary on economic impact in the Senate Report. Id. at 12. Thus, in enforcement, businesses which are likely CAN-SPAM defendants have an interest in establishing that their practices are legitimate, just as potential plaintiffs have an interest in challenging particular practices. The twin purposes of protecting consumers and imposing a regulatory structure on businesses with which they reasonably can comply lend themselves well to the Fogerty–Lieb test. Moreover, as in Fogerty, this Court finds that the weighty considerations in civil rights cases—which led to the formulation of the Christiansburg dual standard favoring both prevailing and losing plaintiffs—are not present in CAN-SPAM cases.

The available means of CAN-SPAM enforcement underscore this conclusion. This Court has already extensively considered Congressional intent with respect to the private right of action conferred by CAN-SPAM. (May 15, 2007 Order.) For instance, it is clear that the CAN-SPAM Act’s primary enforcement provisions empower the Federal Trade Commission and other federal agencies to pursue
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violators of the Act. 15 U.S.C. § 7706(a), (b). State attorneys general may bring civil enforcement
actions. Id. § 7706(f). A limited private right of action also exists for a provider of Internet access service adversely affected by various violations. (See May 15, 2007 Order 4–5, 11–15.) In moving for summary judgment, Defendants argued that Plaintiffs lacked standing to bring this private right of action because (1) they are not “Internet access service” (“IAS”) providers as defined by the Act and (2) they have not been “adversely affected” by the violations they have alleged, as required by § 7706(g)(1). This Court found that, regardless of Plaintiffs’ ability to establish the former, they could not establish the latter. (May 15, 2007 Order 13–15.)

This Court’s determination that Plaintiffs had no statutory standing relied on the fact that the most significant harms enumerated by Congress were “ISP- or IAS-specific, going well beyond the consumer-specific burden of sorting through an inbox full of spam.” (Id. at 12.) This Court found that “even if an entity could meet the ill-defined and broad definition of an IAS, the ‘adverse effect’ to that entity must be both real and of the type uniquely experienced by IASs for standing to exist. Any other reading would expand the private right of action beyond what Congress intended.” (Id.) The Court then found that the “only harm Plaintiffs have alleged is the type of harm typically experienced by most e-mail users” and that the “fact that Congress did not confer a private right of action on consumers at large means that ‘adverse effect’ as a type of harm must rise beyond the level typically experienced by consumers—i.e., beyond the annoyance of spam.” (Id. at 14.) The Court also concluded that because “adverse effect” is a textual prerequisite to claiming statutory damages, Congress clearly intended that harm be significant. (Id. at 14–15.) Thus, “permitting private parties with no harm to invoke CAN-SPAM to collect millions of dollars surely is not what Congress intended when it crafted this ‘limited’ private right of action.” (Id. at 15.)

The foregoing findings are not only relevant to the actual standing analysis in which they were made, but also to the question of fee-shifting now before the Court. Where, as here, a private right of action is so much more limited than, for example, the expansive private right of action in civil rights
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cases, it follows that protecting plaintiffs’ role as “private attorneys general” does not weigh as heavily into the decision about which standard to apply.3 Promotion of prolific private CAN-SPAM litigation is not what Congress intended. Instead, Congress conferred only a limited private right of action, unavailable to parties with no (or very little) harm. Moreover, Congress’s acknowledgment of legitimate e-mail traffic suggests that preventing abuse of this limited private right of action is entirely appropriate.

[3 The Court notes that the Christiansburg standard has also been held to apply in environmental cases. Marbled Murrelet v. Babbitt, 182 F.3d 1091 (9th Cir. 1999). The contrast between environmental cases and CAN-SPAM cases is similar to the contrast between civil rights cases and CAN-SPAM cases. Thus, such application of Christiansburg beyond the civil rights context does not change the analysis here.]

Accordingly, the Court finds that plaintiffs and defendants in CAN-SPAM cases should be treated alike, and therefore Fogerty should govern this Court’s determination of whether to grant attorneys’ fees.

B. Whether to Award Attorneys’ Fees to Defendants in this Case

Again, the Fogerty Court endorsed consideration of the Lieb factors, including “frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Fogerty, 510 U.S. at 534 n.19. Here, the balance of these factors tips in favor of awarding attorneys’ fees to Defendants, for the following reasons.

First, it is obvious that Plaintiffs are testing their luck at making their “spam business” extraordinarily lucrative by seeking statutory damages through a strategy of spam collection and serial litigation. Plaintiffs are parties to ten additional cases similar to the instant case in the Western District of Washington alone, see Case Nos. C06-1118-MJP, C06-1129-JCC, C06-1210-TSZ, C06-1284-TSZ, C06-1348-MJP, C06-1350-JCC, C06-1469-MJP, C06-1537-JCC, C07-222-RSM, and C07-386-MJP, as well as at least one “spam” case in the Eastern District of Washington, see Case No. C05-5079-FVS. The Court is not merely speculating on Plaintiffs’ motives or assessment of potential profits. In analyzing Plaintiffs’ CAN-SPAM standing, this Court noted that Gordon testified that the “benefits” of receiving
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spam can be quantified in terms of his dissertation research, as well as “settlement agreements for people who have said that they wouldn’t spam me any longer.” (May 15, 2007 Order 7.) The Court recounted the lists of Gordon and Omni “clients,” more than half of whom share the “Gordon” surname. (Id. at 6–7.) The Court recognized that Gordon took over control of e-mail accounts for “gordonworks” clients in order to continue collecting spam. (Id. at 7.) The Court noted that none of the Omni or Gordon clients has paid Plaintiffs for their services. (Id.) Gordon testified that all of Plaintiffs’ income or revenue for 2006 and 2007 has been from settlements and disputes. (Id. at 7–8.) Gordon also testified regarding the “time-consuming process” of collecting, sorting, and compiling spam regarding these and other defendants. (Id. at 8.) Clearly, Plaintiffs are assembling a litigation factory, which, if successful, could net millions of dollars in profit, at least theoretically.

Moreover, after assessing the utter lack of evidence going to any technical impact or financial harm due to the alleged illegal spam, this Court found it significant that Gordon did not seek actual damages in the instant litigation, because none exist, and that he is instead seeking solely statutory damages for each e-mail sent. (Id. at 8.) Plaintiffs admitted that they benefit from receiving spam, and this Court concluded that “Plaintiffs’ continued use of other people’s e-mail addresses to collect spam and their undisputed ability to separate spam from other e-mails for generating lawsuit-fueled revenue directly contradicts any hint of adverse effect that otherwise might exist.” (Id. at 15.) Not only are Plaintiffs “not the type of entity that Congress intended to possess the limited private right of action it conferred on adversely affected bona fide Internet access service providers” (id. at 15), they are not the type of plaintiff that should be allowed to pursue the strategy outlined above without financial cost.

The Court finds that Plaintiffs’ instant lawsuit is an excellent example of the ill-motivated,
unreasonable, and frivolous type of lawsuit that justifies an award of attorneys’ fees to Defendants under Fogerty. The context of this litigation and the context of Plaintiffs’ overall litigation strategy, involving at least a dozen federal actions, indicate that Plaintiffs are motivated by the prospect of multi-milliondollar statutory damages awards in exchange for their relatively paltry spam-collection and spam
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litigation costs. Plaintiffs have alleged no actual damages in this action. Under these circumstances, compensation to Defendants for defending this lawsuit is warranted. Similarly, the Court finds that the goal of deterrence is particularly relevant here. Plaintiffs should be deterred from further litigating their numerous other CAN-SPAM lawsuits now that they are aware their lack of CAN-SPAM standing.

Further, while the Court did not reach the merits of Plaintiffs’ CAN-SPAM claims, the Court did
have occasion to consider the substance of Plaintiffs’ CEMA claims. The results of that inquiry confirm that Plaintiffs did not present a viable theory of recovery. Specifically, Plaintiffs alleged that Defendants’ headers violate both CAN-SPAM and CEMA because the “from line” does not include Defendants’ company names or the names of company personnel. However, this Court held that “from addresses” ending with a domain that facilitates an accurate identification of Defendants could not “in any sense be found ‘false’ or ‘deceptive.’” (May 15, 2007 Order 20.) The Court therefore concluded that “while claims actually alleging falsity or deception under CEMA would not be preempted, Plaintiffs’ claims here—for, at best, ‘incomplete’ or less than comprehensive information—are for immaterial errors that may not be litigated under state law.” (Id.) Because Plaintiffs did not raise any issues of material fact that could prove Defendants’ e-mails were materially “false or deceptive” as those terms are used in the CAN-SPAM Act, their CEMA claims were held to be preempted by CAN-SPAM. (Id.) While this analysis went to the preemption holding, it also indicates that the merits of Plaintiffs’ CAN-SPAM “from line” theory are lacking. Thus, contrary to Gordon’s conclusory assertion that this case involved meritorious claims brought in good faith, the evidence suggests otherwise.

C. Reasonable Hourly Attorneys’ Fees4

[4 While Gordon generally objected to an award of fees, Plaintiffs have not objected to Defendants’ calculations or to specific attorneys’ fees requested here, either by challenging the hours claimed or the rates requested. Though Plaintiffs’ failure to object may be construed as a waiver of any objection to the actual amount awarded, the Court has an independent duty to assess the reasonableness of any award of fees.]

While varying standards may govern the determination of whether to award attorneys’ fees in
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different types of cases, once the Court has established that fees should be awarded, a single standard governs how the Court arrives at a reasonable fee award. Blum v. Stenson, 465 U.S. 886, 893 (1984) (holding that the amount of fees awarded in a civil rights case is “governed by the same standards which prevail in other types of equally complex Federal litigation”). The initial determination of a reasonable amount of attorneys’ fees is the “number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Regarding the reasonable number of hours worked, the party seeking fees

should submit evidence supporting the hours worked and rates claimed. Where the documentation of hours is inadequate, the district court may reduce the award accordingly.

. . . . Cases may be overstaffed, and the skill and experience of lawyers vary
widely. Counsel for the prevailing party should make a good faith effort to exclude from a
fee request hours that are excessive, redundant, or otherwise unnecessary.

Hensley, 461 at 433–34; see also Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210 (9th Cir. 1986).

After the reasonable number of hours expended is established, the Court must determine a “reasonable hourly rate considering the experience, skill, and reputation of the attorney requesting fees.” Chalmers, 796 F.2d at 1210. The “lodestar” amount—the reasonable hours multiplied by the reasonable hourly rate—is only a “starting point,” however. Hensley, 461 at 433; Benton v. Oregon Student Assistance Comm’n, 421 F.3d 901, 904 (9th Cir. 2005).

In Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1976), the Ninth Circuit adopted
the twelve-factor test found in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), to guide determining both the number of hours reasonably spent and a reasonable hourly rate. Chalmers, 796 F.2d at 1211. The twelve factors are:

(1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3)
the skill requisite to perform the legal service properly, (4) the preclusion of other
employment by the attorney due to acceptance of the case, (5) the customary fee, (6)
whether the fee is fixed or contingent, (7) time limitations imposed by the client or the
circumstances, (8) the amount involved and the results obtained, (9) the experience,
reputation, and ability of the attorneys, (10) the ‘undesirability’ of the case, (11) the nature
and length of the professional relationship with the client, and (12) awards in similar cases.

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Kerr, 526 F.2d at 70. Not all Kerr factors must be separately analyzed, as long as the Court discusses the factors most germane to the particular case and explains how it reached the fee awarded. Quesada v. Thomason, 850 F.2d 537, 539 (9th Cir. 1988) (citing Kessler v. Associates Fin. Servs. Co. of Hawaii, Inc., 639 F.2d 498, 500 (9th Cir. 1981)). The Kerr factors may also justify increasing or decreasing the “lodestar” amount. Benton, 421 F.3d at 904. However, in Hensley, the Supreme Court noted that most of these factors are “subsumed within the initial calculation of reasonable hours expended at a reasonable hourly rate, rather than the subsequent determination of whether to adjust the fee upward or downward.” Chalmers, 796 F.2d at 1212 (citing Hensley, 461 U.S. at 434 n.9). Thus, because the initial lodestar amount is presumptively reasonable, Blum, 465 U.S. at 897, particular justification is required where the Court finds “exceptional circumstance[s]” warranting adjustment of the lodestar either up or down, Quesada, 850 F.2d at 539.

1. Lodestar

a. Hours Reasonably Expended

Defendants have requested compensation for a total of 1,975.8 hours of attorney time. Defendants have broken this time down into three categories: 533.1 hours spent reviewing documents and making the “Linke Log,” 552 hours spent by senior attorneys on the case, and 890.7 hours spent by junior attorneys on the case. Defendants have submitted raw billing records involving entries for eight different attorneys with varied billing rates. (Defs.’ Mot., Newman Decl. (Dkt. No. 128) Ex. A.) The time billed starts in February 2006 and continues through May 2007. No paralegal or administrative time is billed; all time is attorney time. Monthly bills range from fewer than one hour (May 2006) to over 250 hours (January 2007). According to the billing records, the total hours actually logged as worked totals 1,444, prior to cuts and discounts.5 Remarkably, it appears that Defendants’ total request for
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compensation for 1,975.8 hours overstates the hours worked by 531.8 hours, which amounts to about
27% of the total hours requested. This troubling discrepancy is discussed in further detail below.
Combined with a similar inexplicable inflation of the requested costs, also discussed in further detail below, the Court begins by expressing serious doubts about the accuracy with which Defendants’ attorneys recorded and billed both costs and fees in this litigation. Given such large discrepancies in the materials submitted to this Court—over which Defendants’ counsel had complete control and responsibility—the Court begins the reasonableness analysis by finding that substantial cuts to the claimed hours are justified. While the Court has already found that attorneys’ fees and costs should be assessed against Plaintiffs in this matter, equally important is avoiding overcompensation. Congress surely could not have intended for CAN-SPAM defendants (or their attorneys) to collect a windfall via the attorneys’ fees provision. More importantly, while Defendants did give discounts and cut both time and dollar amounts from various bills, the Court finds that the 1,444 hours reflected in the billing records far exceeds the reasonable amount of time spent on this litigation, as follows.

[5 The Court notes that, of the chronological bills submitted as part of the Newman Declaration (Dkt. No. 128), several pages are duplicate submittals. Specifically, the bill dated September 30, 2006 (49.9 hours) was submitted twice (compare Ex. A at 31–34, with id. at 35–38), and the bill dated February 28, 2007 (91.05 hours) was submitted twice (compare Ex. A at 65–68, with id. at 69–72). The Court STRIKES the duplicates and has not considered them in the calculations herein.]

i. “Linke Log” Hours

The “Linke Log” request is for 533.1 hours. The Court finds that 533.1 hours of document review and data entry, essentially to the end of creating a lengthy spreadsheet, is excessive. From the billing records, it is apparent that the primary person working on the Linke Log was Derek Linke. Derek Linke billed a total of 590.5 hours in October 2006, November 2006, December 2006, January 2007, and February 2007. While a few of these hours were cut or spent on other matters, it appears from his daily time entries that the vast majority of his time was spent on the Linke Log and therefore that the 533.1 Linke Log hours may be attributed to him. Though the billing records contain references to “contract attorneys” and indicate that a $40,000 flat fee was billed to the client for “seven lawyers” who “reviewed and created a log” (Defs.’ Mot., Newman Decl. Ex. A at 50, 56), Defendants have not submitted any
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billing records that actually reflect the purported hours worked by these contract attorneys. Nor have Defendants identified these attorneys or substantiated the 533.1 hours claimed for this project as exclusive of Derek Linke’s time. If the 533.1 hours requested for document review and creation of the Linke Log does not account for almost all of Derek Linke’s time, the Court is hard pressed to figure out what does, given that most of his time entries reference that project. Conversely, if Derek Linke did not expend almost all of his recorded time on the Linke Log, it is unclear how Defendants arrived at their 533.1 figure, as there is no documentation anywhere in the billing records reflecting an additional 533.1 hours contracted out to any “team of newly admitted lawyers.” (Defs.’ Mot. 3.) Furthermore, the prospect that almost all of Derek Linke’s time plus 533.1 hours spent by unidentified attorneys—totaling well over 1,000 hours—was spent on the Linke Log is absurd. Accordingly, the Court finds that Derek Linke’s time records are the only viable source for the 533.1 hours claimed for the Linke Log.

Having seen the results of this project, the Court finds that spending the equivalent of over thirteen 40-hour weeks on this process is far more than was reasonable. Having carefully considered the Kerr factors, particularly factor 1 (time and labor required), the Court will allow a total of 40 hours in this category as a reasonable number of hours expended on document review and creation of the Linke Log.

ii. Senior Attorney Hours

Defendants request 552 hours for senior attorney compensation. Defendants request that the time spent by Derek Newman and Roger Townsend be considered “senior attorney” time. The billing records reflect that Derek Newman spent 258.9 hours and Roger Townsend spent 294.4 hours, which totals 553.3 hours. The Court presumes that the 552 hours requested approximates this total. The Court finds that, considering the Kerr factors, particularly factors 1 (time and labor required), 2 (novelty and difficulty of the questions involved), 3 (skill requisite to perform the service), 8 (the amount involved and the results obtained), and 9 (experience, reputation, and ability of the attorneys), this request is quite high. 552 hours represents approximately 20% of the time spent by a single lawyer billing around 2050
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hours per year in the time period for which billing records were submitted (16 months). Split roughly between two lawyers, it would amount to about 10% of one caseload. It is true that this case presented relatively novel legal issues, which required the Court to consider issues of first impression. However, as a consequence, while these issues required creativity to address, the body of legal authority with which the attorneys had to be familiar was relatively limited. The amount of discovery and the motions practice were moderate, and at least some discovery motions practice was unnecessary. It is well documented that the statutory damages demanded in this action were significant and the stakes were potentially high for Defendants. Given the disposition of the case, the results obtained by Defendants’ counsel were excellent. Nevertheless, the Court finds that on the whole, this case was not all that complex and should not have required 552 senior attorney hours.

While Defendants have submitted declarations in support of the rate requested to compensate senior attorney time, little support is offered to justify the total hours spent. Moreover, the inaccurate documentation presented with the instant motion reinforces the Court’s separate conclusion that the hours requested exceed the reasonable time spent on this case. Given that in making the instant motion Defendants have inexplicably inflated the total hours for which they request compensation by almost 27% beyond what was even recorded in their own billing records, the Court finds it entirely appropriate to cut their requested senior attorney hours by at least that much to account for other inflation that likely occurred in daily billing and overcharges to their clients, which may or may not have been partially balanced out by bill cuts and discounts.

Accordingly, considering the circumstances of this case and the record before the Court in light of
the Kerr analytical structure, the Court finds that 225 hours of senior attorney time was reasonably expended on this matter. This number of hours is in sync with the moderate complexity and novelty of the case, the level of skill of the lawyers involved, and the relatively constrained universe of factual data and legal authority in play. While not overcompensating, this number of hours also acknowledges that the case required substantial effort and thought.

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iii. Junior Attorney Hours

Defendants have requested compensation for a total of 890.7 hours of time spent by junior attorneys on this matter. In reviewing the billing records, however, it appears that this amount accounts for all 590.5 hours logged by Derek Linke, as well as the hours of five additional junior attorneys. After subtracting from the 1,444 total hours reflected in the billing records both the 553.3 senior attorney hours logged and the 590.5 hours logged by Derek Linke, the leftover number of junior attorney hours logged in the billing records is 300.2. These 300.2 hours may be broken down between five attorneys: Tara Borelli (12.5), John Du Wors (62.8), Randall Moeller (50.8), S. Christopher Winter (169.1), and Michael Spain (5).

The 590.5 hours billed by Derek Linke present a problem as they are included in the 890.7 junior
attorney hours request. Because no other obvious source of the “Linke Log” hours exists in the billing records, the Court already considered almost all of these hours supra subsection II.C.1.a.i. Thus, in comparing the billing records to the instant motion, and in light of the lack of any documentation whatsoever showing that attorneys other than Derek Linke contributed 533.1 Linke Log hours, it appears to the Court that Defendants have deliberately doubled the requested compensation for the lion’s share of Derek Linke’s time. Moreover, as the Court has already noted, the discrepancy between the 1,444 recorded hours and the 1,975.8 hours claimed in the instant motion is 531.8. This number coincides almost exactly with the 533.1 hours requested for the “Linke Log.” Therefore, the Court has little choice but to conclude that 533.1 (or possibly 531.8) of the 590.5 hours worked by Derek Linke have been requested both as “Linke Log” hours and as “junior associate” hours.

Accordingly, the Court must begin by subtracting those 533.1 hours from the requested 890.7 junior attorney hours. This leaves 357.6 hours billed by junior associates that have not been accounted for elsewhere. In addition to the five junior attorneys’ hours listed supra, the additional 57.4 hours reflected in this new total correspond to the only non-Linke Log hours worked by Derek Linke.

Beginning with 357.6 hours of junior attorney time, and considering the Kerr factors, particularly
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factors 1 (time and labor required), 2 (novelty and difficulty of the questions involved), 3 (skill requisite to perform the service), 8 (the amount involved and the results obtained), and 9 (experience, reputation, and ability of the attorneys), the Court finds that this request is unreasonably high. For the same reasons the Court cut the senior attorney hours, the Court finds it appropriate to cut junior attorney time. Accordingly, the Court finds that a reasonable number of junior attorney hours spent on this litigation is 150.

b. Reasonable Hourly Rates

In determining a reasonable rate, the Court “should be guided by the rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation.” Chalmers, 796 F.2d at 1210–11 (citing Blum, 465 U.S. at 895 n.11). The rate actually billed does not necessarily govern, particularly in cases litigated by public interest lawyers or where hourly rates in accordance with the market have not been established by the attorneys. Blum, 465 U.S. at 895.

However, such circumstances are not present in the instant case. On the contrary, Defendants’ attorneys have very established billing rates and different rates for almost all of the eight lawyers who worked on this case. Defendants’ attorneys are not operating out of a fledgling, nonprofit, or hybrid law firm and they have not represented that they charged other than their normal billing rates to Defendants in this litigation, hours cuts and discounts notwithstanding. Defendants’ attorneys’ actual rates are presumptively reasonable market rates, because nothing here indicates that the actual legal market would sustain higher rates by this firm, even if other firms may charge more for the same or similar work.

Accordingly, Defendants’ regular billing rates, as billed in the instant case, will be presumed to be in line with the going market rates in Seattle for this type of legal work performed by attorneys with the range of experience levels employed here. Defendants have requested compensation at various rates, depending on the attorneys who expended the hours. As with the hours requested, Defendants have requested that the Court order attorneys’ fees at three different rates.

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i. “Linke Log” Rate

For the document review and “Linke Log,” Defendants request compensation at a rate of $125 per hour. However, it is clear from the billing records that Derek Linke’s time was billed out at $115 per hour. He is the only attorney at or below the $125 rate, and the Court presumes that the entire “Linke Log” sum is to be attributed to him. Defendants have not justified the bump in Derek Linke’s rate by anything more than a conclusory statement that a “reasonable hourly rate for the document analysis attorneys is $125 per hour.” (Defs.’ Mot. 3.) The Court finds that $115 is a reasonable rate, particularly because Defendants were able to and did bill that rate to regular clients. Accordingly, the lodestar for the Linke Log attorneys’ fees is 40 hours multiplied by $115 per hour, which totals $4,600.00 in reasonable attorneys’ fees for Linke Log time.

ii. Senior Attorney Rate

Defendants request that the hours spent by the two senior attorneys on this matter—Derek Newman and Roger Townsend—be compensated at a rate of $350 per hour. In support of this request, Defendants have submitted an assortment of attorney declarations (Dkt. Nos. 129, 130, 131, 132, and 133) stating that $350 for senior attorneys is reasonable in the market for the skill and experience level of senior attorneys at this law firm. However, Derek Newman’s actual billing rate is $300 per hour (with the exception of the last 5.5 hours billed in May 2007 at a rate of $325) and Roger Townsend’s actual billing rate is $250 (with the exception of the last 8.6 hours billed in May 2007 at a rate of $275). The Court finds that $300 is a reasonable rate for Derek Newman and that $250 is a reasonable rate for Roger Townsend, because those are the rates that these attorneys were actually able to draw in this market for all but a handful of the hours spent on this litigation.

Because the Court cut the total hours spent by these attorneys down to a reasonable number, the Court will prorate the lodestars for each. The billing records reflect that Derek Newman logged 258.9 hours and Roger Townsend logged 294.4 hours. This is approximately a 47%–53% split. The Court cut the senior attorney total to 225 hours as a reflection of the reasonable number of hours spent by these
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attorneys. Of that compensable total, 106 hours (47%) will be attributed to Derek Newman and compensated at a rate of $300 per hour, and 119 hours (53%) will be attributed to Roger Townsend and compensated at a rate of $250 per hour. Multiplying 106 hours by $300 per hour ($31,800.00), multiplying 119 hours by $250 per hour ($29,750.00), and adding the two together nets a lodestar for senior attorneys’ fees of $61,550.00.

iii. Junior Attorney Rate

Defendants request that the hours spent by the various junior attorneys on this matter be compensated at an across-the-board rate of $200 per hour. In support of this request, Defendants have submitted an assortment of attorney declarations (Dkt. Nos. 129, 130, 131, 132, and 133) stating that $200 for junior attorneys is reasonable in the market for the skill and experience level of such attorneys at this law firm. However, the actual billing rates for the junior attorneys vary both above and below this amount. Tara Borelli’s and John Du Wors’s time was billed out at $195 per hour, Randall Moeller’s time was billed out at $225 per hour (with the exception of the last .2 hours billed in May 2007 at $235 per hour), S. Christopher Winter’s time was also billed out at $225 per hour, Michael Spain’s time was billed out at $175 per hour, and as noted supra, Derek Linke’s time was billed out at $115 per hour. Given that these were the rates actually billed and supported by the market, the Court finds that the 150 hours that the Court found to be reasonably spent on this litigation by junior attorneys should be compensated at a combination of these rates, and in proportion to the time logged by the various junior attorneys.

As noted supra, the hours logged by junior attorneys broke down in the billing records as follows: Tara Borelli (12.5), John Du Wors (62.8), Randall Moeller (50.8), S. Christopher Winter (169.1), Michael Spain (5), and Derek Linke (57.4 hours beyond the Linke Log hours already compensated supra subsection II.C.1.b.i). The proportions, grouped by rate, are roughly as follows: Tara Borelli and John Du Wors (21%), Randall Moeller and S. Christopher Winter (62%), Michael Spain (1%), and Derek Linke (16%). Therefore, of the 150 hours approved as reasonably spent by these junior attorneys, 31.5 hours (21%) will be attributed to Tara Borelli and John Du Wors and compensated at a rate of $195 per
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hour, 93 hours (62%) will be attributed to Randall Moeller and S. Christopher Winter and compensated at a rate of $225 per hour,6 1.5 hours (1%) will be attributed to Michael Spain and compensated at a rate of $175 per hour, and 24 hours (16%) will be attributed to Derek Linke and compensated at a rate of $115 per hour. Multiplying 31.5 hours by $195 per hour ($6,142.50), multiplying 93 hours by $225 per hour ($20,925.00), multiplying 1.5 hours by $175 per hour ($262.50), multiplying 24 hours by $115 per hour ($2,760.00), and adding the four together nets a lodestar for junior attorneys’ fees of $30,090.00.

[6 The twelve minutes billed out at $235 per hour by Randall Moeller are not sufficient to change the $225 rate.]

* * *

Having calculated three separate lodestar amounts for the three separate categories of fees, the Court finds that the total of the lodestar amounts for Linke Log fees ($4,600.00), senior attorneys’ fees ($61,550.00), and junior attorneys’ fees ($30,090.00) amounts to a total lodestar hourly attorneys’ fees award in this matter of $96,240.00.

2. Multiplier

Defendants request that the Court apply a 20% multiplier to increase the lodestar. In support of
this request, Defendants cite their status as prevailing parties, the novelty and difficulty of the questions involved and the technical knowledge required to provide legal representation, and the circumstances of the litigation wherein Plaintiffs sought huge statutory damages. (Defs.’ Mot. 10–11.)

As noted supra, the initial lodestar amount determined by the Court is presumptively reasonable. Blum, 465 U.S. at 897. Moreover, while some of the Kerr factors may justify an upward or downward adjustment, the Supreme Court has held that the novelty and complexity of the issues (factor 2), the special skill and experience required (factors 1, 3, and 9), the quality of representation (factors 3 and 9), and the results obtained (factor 8) may not serve as independent bases for adjusting the lodestar. Blum, 465 U.S. at 898–901; see also Jordan v. Multnomah County, 815 F.2d 1258, 1262 n.6 (9th Cir. 1987). It is the fee-seeker who must carry the burden of justifying an upward departure from the lodestar. Blum,
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465 U.S. at 898. Where no upward adjustment is necessary to provide fair and reasonable compensation, none shall be given. Id. at 901.

Defendants have completely failed to carry their burden regarding application of a multiplier. Instead, the reasons they cite have been specifically held to be impermissible bases for increasing the lodestar. Accordingly, the Court will not adjust upward the lodestar amount of $96,240.00.

D. Costs

Defendants request a variety of costs, including deposition costs ($10,383.70), the deposition attendance fee for Plaintiffs’ expert witness ($1,350.00), a pro hac vice fee ($75.00), mediator fees ($2,759.37), telecommunications fees ($207.29), travel expenses for depositions ($2,343.32), photocopying expenses ($10,224.94), electronic legal research expenses ($1,010.20), and mailing and messenger expenses ($485.54).7 Defendants also seek reimbursement of their own expert fees ($5,875.00). Gordon has only generally objected to an award of attorneys’ fees and costs, but he has not objected to any particular costs requested by Defendants.

[7 The subtotal (without the additional $5,875.00 requested for Defendants’ expert fee) of these requests is $28,839.36. It is unclear how Defendants arrived at the total of $26,338.01 requested in their motion. (Defs.’ Mot. 7.) Moreover, as discussed infra, the individual expense requests that total $28,839.36 here also are inexplicably inflated when compared with the actual billing records submitted to the Court.]

Various sources exist for this Court’s authority to assess costs against Plaintiffs in this matter.
Federal Rule of Civil Procedure 54(d)(1) provides that “costs other than attorneys’ fees shall be allowed as of course to the prevailing party unless the court otherwise directs.” This rule creates a presumption in favor of awarding certain costs to the prevailing party, which can only be overcome when the Court exercises its discretion to disallow costs for specific reasons, which may include punishing misconduct by the prevailing party or nonpunitive but compelling equitable justifications. Ass’n of Mexican-Am. Educators v. Cal., 231 F.3d 572, 591–93 (9th Cir. 2000). Moreover, the Court’s Local Rules circumscribe standard allowable costs. Local Rules W.D. Wash. CR 54(d). In addition to the costs listed
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in Local Rule 54(d), the provisions of 28 U.S.C. §§ 1920 and 1923 are relevant to standard costs. Id. CR 54(d)(3)(D). In a civil case, taxation of fees and costs is provided for by federal statute, as follows:

A judge or clerk of any court of the United States may tax as costs the following:
(1) Fees of the clerk and marshal;
(2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and copies of papers necessarily obtained for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.

A bill of costs shall be filed in the case and, upon allowance, included in the judgment or
decree. 28 U.S.C. § 1920. The Ninth Circuit has specifically held that explicit enumeration in § 1920 is not a prerequisite to allowance of a cost, reasoning that “courts are free to interpret what constitutes taxable costs” under the statute. Alflex Corp. v. Underwriters Laboratories, Inc., 914 F.2d 175, 177 (9th Cir. 1990).

It is clear that many of Plaintiffs’ claimed “costs” are not § 1920 costs, even under Alflex. However, the Court is not constrained by § 1920. Because the CAN-SPAM Act provides that this Court may assess “reasonable costs, including attorneys’ fees,” 15 U.S.C. § 7706(g)(4), this Court may assess litigation costs that may not otherwise be claimed under § 1920, under the rubric of attorneys fees, and not as § 1920 costs. See Alvarez v. IBP, Inc., 2001 U.S. Dist. LEXIS 25341 at *30–41 (E.D. Wash. 2001). This Court follows the example set by its sister court in the Eastern District of Washington and finds that all costs which normally would be billed to a paying client may be justifiably included in the computation of reasonable attorney fees and costs in this matter. This rule shall govern where costs are not otherwise authorized by § 1920. The Court will address Defendants’ costs requests individually.

1. Deposition Costs

Defendants request $10,383.70 in deposition costs. Upon review of Defendants’ billing records, the Court finds that the maximum allowable for depositions, stenographic services, and court reporters is $8,503.10. (See Defs.’ Mot., Newman Decl. Ex. A at 57, 67, 85.) Because the extra $1,880.60 is not
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supported by the record, the Court will subtract this from Defendants’ request.8 This reduced total
corresponds to all of the itemized costs of court reporters and preparation of deposition transcripts billed to the client from December 2006 through May 2007. Such expenses are taxable under § 1920(2). Accordingly, the Court finds that Defendants are entitled to recover $8,503.10 in deposition costs.

[8 Coincidentally, as noted supra note 5, the bill for February 2007 was submitted twice. It contains a court reporter cost for $1,880.60. As with hourly attorneys’ fees, the Court is unimpressed with Defendants’ counsel’s sloppy recordkeeping, imprecise calculations, and consequent misrepresentations to the Court regarding these and other costs.]

2. Deposition Attendance Fee for Plaintiffs’ Expert

Defendants request $1,350.00 to reimburse the expense of paying Plaintiffs’ expert’s deposition attendance fee. A portion of this fee is taxable pursuant to 28 U.S.C. § 1821, by way of Local Rule 54(d)(3)(A). The maximum allowed for a witness attendance fee, under these provisions, is $40 per day. The Court finds that Defendants are also entitled to the amount of the attendance fee above and beyond that provided by rule or statute because such a cost normally would be billed to a paying client, as it actually was here (see Defs.’ Mot., Newman Decl. Ex. A at 82). Accordingly, Defendants may recover the full $1,350.00.

3. Pro Hac Vice Fee

Defendants’ modest request for reimbursement of the $75.00 pro hac vice fee required for one of Defendants’ in-house counsel to appear in this action is reasonable. It is a cost incident to litigation normally billed to a client, it was billed to the client here, and Defendants may recover it under the rubric of attorneys’ fees.

4. Mediator Fees

Defendants seek $2,759.37 in mediator fees, which were billed to the client. (Defs.’ Mot., Newman Decl. Ex. A at 75–77.) While § 1920 does not contemplate taxation of mediation fees as statutory “costs,” the Court finds that this is a component of a reasonable attorneys’ fee, and therefore is
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an allowable cost in that respect. Moreover, this Court encourages alternative dispute resolution
procedures. Local Rules W.D. Wash. CR 39.1. Accordingly, the Court finds that Defendants may
recover their mediator fees.

5. Telecommunications Fees

Defendants seek $207.29 in telecommunications fees. While telecommunications fees are not
typically allowable under § 1920, they are typically passed onto paying clients and therefore may be recovered as part of attorneys’ fees. A review of the billing records in this case confirms, however, that only $190.54 in such fees were passed on to Defendants. (See Defs.’ Mot., Newman Decl. Ex. A at 33, 43, 50, 67.) The reason for the discrepancy between Defendants’ request and the billing records is unclear. However, the Court notes that itemized costs for a separate matter (“Hodgell”) are included throughout the billing records, and this could be a potential source of the error.9 Whatever the reason, the Court subtracts the extra $16.75 requested and finds that Defendants may recover a maximum of $190.54 in telecommunications costs as an element of attorneys’ fees.

[9 “Hodgell” costs totaling $295.51 appear on the bills for February, March, April, July, August, September, October, November, and December 2006, as well as January 2007. (See Defs.’ Mot. Newman Decl. Ex. A passim.) These may or may not also account for a portion of the inflated requests noted infra for photocopying, electronic legal research, and mailing and messenger costs.]

6. Deposition Travel Expenses

Defendants seek $2,343.32 in deposition travel costs. Again, these costs are not statutorily allowed, but may be included in reasonable attorneys’ fees. Depositions in this matter took place in Kansas and Illinois, and the billing records show a total of $2,342.32 billed to the client for these expenses. (Defs.’ Mot., Newman Decl. Ex. A at 57, 75, 82.) The Court presumes the extra $1.00 is a mathematical error. Because they are the type of cost normally passed on to a paying client, Defendants are entitled to recover a maximum of $2,342.32 for travel costs as part of their attorneys’ fees.

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7. Photocopying Expenses
Defendants request $10,224.94 in photocopying expenses. Copying expenses are allowable pursuant to § 1920(4), as long as copies were necessarily obtained. While this is the type of cost typically passed on to the client, a review of the billing records supports “printing,” “copying,” and “photocopies” costs in the amount of $8,328.52, at the most.10 (Defs.’ Mot., Newman Decl. Ex. A passim.) Thus, the Court must begin by subtracting the extra $1,896.42 from Defendants’ $10,224.94 request because it is completely unsupported by the record. It appears that copying and printing costs were passed on to Defendants at a rate of $.15 per page for small jobs and at an outsourced bulk cost in some instances.

[10 Again, the Court notes its dismay at Defendants’ failure to provide an accurate accounting in
support of this motion. Moreover, the actual amount billed to the client, $8,334.28, indicates an
overcharge of $5.76 due to a mathematical error corresponding with the entry for $159.19 in January
2007. (Defs.’ Mot., Newman Decl. Ex. A at 63 (19179 x .008 = $153.43, not $159.19).)]

These are generally reasonable practices. However, because there is no documentation to support the claimed “Outside Copying Fee” of $3,689.23 (id. at 57), the Court will subtract as unrecoverable this amount from the $8,328.52 listed on the bills. Accordingly, Defendants’ may recover at most $4,639.29 for copying costs. While the total is still quite large, this Court has first-hand knowledge of the volume of exhibits utilized in this case. In context, the total is not all that surprising. The Court finds that Defendants may recover $4,639.29 in photocopying expenses.

8. Electronic Legal Research Fees

Defendants seek $1,010.20 in electronic legal research fees. Electronic research expenses are “properly rejected out of hand” when the inquiry is one determining an award of costs under § 1920. Sea Coast Foods, Inc. v. Lu-Mar Lobster & Shrimp, Inc., 260 F.3d 1054, 1061 n.2 (9th Cir. 2001).

However, under the rubric of reasonable attorney fees, electronic research expenses are a more than reasonable component of such fees. Nevertheless, the Court again finds that Defendants’ request is inflated and no justification is apparent for an extra $71.14. The maximum amount supported by the billing records in this category (billed out as “Lexis/Westlaw,” “public access to court records,” and
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“PACER”) is $939.06. (Defs.’ Mot., Newman Decl. Ex. A passim.) The Court finds that $939.06 is reasonable. Accordingly, Defendants may recover these legal research fees.

9. Mailing and Messenger Fees
Defendants request $485.54 in mailing and messenger fees. Such expenses are a reasonable component of attorneys’ fees. However, the billing records indicate a maximum total of $278.63 for “courier expenses,” “postage,” and “shipping.” Defendants do not account for the extra $206.91 requested. Accordingly, the Court finds that Defendants are entitled to recover only $278.63 in mailing and messenger fees.

10. Defendants’ Expert Witness Fees

Defendants request reimbursement of their own expert’s $5,875.00 fee. It is clear that this cost was passed on to the clients. (Defs.’ Mot., Newman Decl. Ex. B.) However, generally speaking, costs associated with expert witnesses are not recoverable under federal law. See Davis, 976 F.2d at 1549.

While such costs may be recoverable under Washington state law, see Panorama Vill. Condo. Owners
Ass’n Bd. of Dirs. v. Allstate Insur. Co., 26 P.3d 910 (Wash. 2001), this Court has already determined that federal law governed the disposition of this case and that federal law shall govern assessment of attorneys’ fees and costs. Accordingly, Defendants are not entitled to recover their own expert witness fees.

* * *

Having considered all of Defendants’ requested costs, the Court hereby finds that they are entitled to a maximum total of $21,077.31 in costs, either as taxable by statute or as part of their attorneys’ fees.

Such costs include deposition costs ($8,503.10), the deposition attendance fee for Plaintiffs’ expert witness ($1,350.00), a pro hac vice fee ($75.00), mediator fees ($2,759.37), telecommunications fees ($190.54), travel expenses for depositions ($2,342.32), photocopying expenses ($4,639.29), electronic
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legal research expenses ($939.06), and mailing and messenger expenses ($278.63).11 However, Defendants are not entitled to the additional cost of their own expert’s fee ($5,875.00).

[11 The Court notes that all costs that appear in the billing records are accounted for by the
foregoing analysis except for $3.00 for parking (Defs. Mot., Newman Decl. Ex. A at 18) and $1,277.76 for “file conversion and indexing” (id. at 27). Because Defendants did not itemize or justify these costs or specifically indicate their inclusion in the total amount requested, the Court will not allow them to be assessed against Plaintiffs.]

Determining the maximum costs allowable does not end the inquiry, however. Because of the inaccuracy, disorganization, and miserable accounting with which the foregoing costs requests were presented to the Court, and because a majority of the allowable costs are allowable as a component of discretionary attorneys’ fees, but not otherwise provided for by statute, the Court finds a flat reduction in the costs award justified. The difference between the $28,839.36 requested and the $21,077.31 supported by the record is $7,762.05. As with attorneys’ fees, this seemingly artificial enlargement represents approximately 27% of the total costs requested. The Court finds ample reason to cut the $21,077.31 maximum by at least that much to account for the lack of itemization, lack of clear accounting, absence of synthesized presentation, and overall haphazard way in which even the $21,077.31 in trackable costs were requested in this action. The Court has little confidence that even the $21,077.31 that the Court was able to tally is uninflated. As with hourly attorneys’ fees, while a costs award is justified in this case, Congress could not have intended that costs awarded under the rubric of attorneys’ fees would provide a windfall to CAN-SPAM defendants. Accordingly, the Court will award a total of $15,200.00 in costs.

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III. CONCLUSION

For the foregoing reasons, Defendants’ motion for attorneys’ fees and costs is GRANTED IN PART and DENIED IN PART. The Court ORDERS that Defendants are entitled to a total award of attorneys’ fees and costs in the amount of $111,440.00. This sum is equal to the hourly attorneys’ fees award of $96,240.00, plus costs in the amount of $15,200.00. The Clerk is DIRECTED enter an amended judgment consistent with the foregoing.

SO ORDERED this 1st day of August, 2007.

John C. Coughenour
United States District Judge

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