e-Commerce Docket Sheet

No CAN-SPAM Claims When ISP
Cannot Show Real Adverse Effects

A private plaintiff that brings claims under the CAN-SPAM Act must show that it is an Internet-access service that has experienced an 'adverse effect' and must make a showing of significant adverse harm to establish standing. Brosnan v. Alki Mortgage, LLC, No. 07-4339 (N.D. Cal. Feb. 13, 2008). The court dismissed the plaintiff's complaint sua sponte for lack of standing, with leave to amend and re-file, commenting that a CAN-SPAM plaintiff cannot 'merely pray for monetary damages to be established at some later point.' The court ruled that these adverse effects must rise to a significant level of harm unique to an Internet-access service beyond 'the inconvenience of having to deal with an inbox full of spam,' including losses related to bandwidth, hardware, Internet connectivity, network integrity and overhead costs.

Court Says Departing Worker's
Computer Access No CFAA Breach

A departing employee who copied proprietary files while he still had full access to his employer's protected computer databases did not tap into information 'without authorization' or otherwise 'exceed authorized access' under the Computer Fraud and Abuse Act ('CFAA'). Shamrock Foods Company v. Gast, 2008 U.S. Dist. LEXIS 15329 (D. Ariz. Feb. 20, 2008). The court granted the defendant's motion to dismiss the CFAA claims and declined to exercise supplemental jurisdiction over other related trade-secret and contract claims. The court found that the employee could not be liable under the CFAA where initial access to the company computers was permitted and the employee's level of authorized access included permission to obtain the specific data in question. The court recognizes a split of authority in the circuits, but nevertheless, rejected the plaintiff's argument based on the Seventh Circuit ruling in International Airport Centers, L.L.C. v. Citrin, 440 F.3d 418 (7th Cir 2006) that an employee exceeds his authorized access under the CFAA when he obtains company information for an improper purpose.

Defendants in a music file-sharing case may not implead their ISP or the peer-to-peer ('P2P') network used for downloading songs by bringing indemnification claims or unrelated-tort claims that are not derivative of or dependant on the outcome
of the plaintiff's copyright-infringement claim. Elektra Entertainment Group v. Santangelo, 2008 U.S. Dist. LEXIS 11845 (S.D.N.Y. Feb. 15, 2008). The court denied the defendant's motion for leave to serve a third-party complaint on the defendant's ISP, based on alleged contractual promises that parental controls blocked illegal music downloading, and upon the operators of the peer-to-peer network Kazaa for computer trespass. The court held that the defendants cannot proceed with their proposed third-party claim of indemnification for copyright infringement because no such right exists under the Copyright Act or federal common law. The court also found that the unrelated-tort claims against the ISP and P2P network went beyond the scope of the plaintiff's copyright claim and added entirely new factual, and legal, issues unrelated to the underlying copyright claim.

A roommate-matching Web site that requires users to answer questions concerning gender, family status and sexual orientation, among other characteristics, is not immune under Section 230 of the Communications Decency Act ('CDA') from claims that it violated the federal Fair Housing Act ('FHA' in this instance). Fair Housing Council of San Fernando Valley v. Roomates.com, LLC, (9th Cir. Apr. 3, 2008) (en banc). The Ninth Circuit, sitting en banc, reversed the district-court ruling that dismissed the FHA claims, noting that the Act provides for liability for asking questions about protected categories. The court concluded that the Web site is a developer, at least in part, of the information provided by subscribers because 'by requiring subscribers to provide the information as a condition of accessing its service, and by providing a limited set of pre-populated answers, Roommate becomes much more than a passive transmitter of information provided by others.' The court noted that Section 230 provides immunity only if the interactive computer service does not 'create or develop' the information in question 'in whole or in part.'

Non-resident entities that purposefully used another entity's trademarks to drive traffic to both their Web sites and other sites are amenable to specific jurisdiction in California, the site of the mark holder's principal place of business. Williams-Sonoma, Inc. v. Online Marketing Services, Ltd., 2008 U.S. Dist. LEXIS 16544 (N.D. Cal. Mar. 4, 2008). In applying the 'effects test' articulated by the U.S. Supreme Court in Calder v. Jones, the court ruled that the plaintiff established jurisdiction over the defendants and granted the plaintiff's motion for a default judgment. The court found that in light of the 'purposeful' activities of the defendants (i.e., intentional acts of trademark infringement, targeting of the plaintiff and the harm suffered in the forum state), the defendants were subject to the court's jurisdiction.

No CAN-SPAM Claims When ISP
Cannot Show Real Adverse Effects

A private plaintiff that brings claims under the CAN-SPAM Act must show that it is an Internet-access service that has experienced an 'adverse effect' and must make a showing of significant adverse harm to establish standing. Brosnan v. Alki Mortgage, LLC, No. 07-4339 (N.D. Cal. Feb. 13, 2008). The court dismissed the plaintiff's complaint sua sponte for lack of standing, with leave to amend and re-file, commenting that a CAN-SPAM plaintiff cannot 'merely pray for monetary damages to be established at some later point.' The court ruled that these adverse effects must rise to a significant level of harm unique to an Internet-access service beyond 'the inconvenience of having to deal with an inbox full of spam,' including losses related to bandwidth, hardware, Internet connectivity, network integrity and overhead costs.

Court Says Departing Worker's
Computer Access No CFAA Breach

A departing employee who copied proprietary files while he still had full access to his employer's protected computer databases did not tap into information 'without authorization' or otherwise 'exceed authorized access' under the Computer Fraud and Abuse Act ('CFAA'). Shamrock Foods Company v. Gast, 2008 U.S. Dist. LEXIS 15329 (D. Ariz. Feb. 20, 2008). The court granted the defendant's motion to dismiss the CFAA claims and declined to exercise supplemental jurisdiction over other related trade-secret and contract claims. The court found that the employee could not be liable under the CFAA where initial access to the company computers was permitted and the employee's level of authorized access included permission to obtain the specific data in question. The court recognizes a split of authority in the circuits, but nevertheless, rejected the plaintiff's argument based on the Seventh Circuit ruling in International Airport Centers, L.L.C. v. Citrin , 440 F.3d 418 (7th Cir 2006) that an employee exceeds his authorized access under the CFAA when he obtains company information for an improper purpose.

Defendants in a music file-sharing case may not implead their ISP or the peer-to-peer ('P2P') network used for downloading songs by bringing indemnification claims or unrelated-tort claims that are not derivative of or dependant on the outcome
of the plaintiff's copyright-infringement claim. Elektra Entertainment Group v. Santangelo, 2008 U.S. Dist. LEXIS 11845 (S.D.N.Y. Feb. 15, 2008). The court denied the defendant's motion for leave to serve a third-party complaint on the defendant's ISP, based on alleged contractual promises that parental controls blocked illegal music downloading, and upon the operators of the peer-to-peer network Kazaa for computer trespass. The court held that the defendants cannot proceed with their proposed third-party claim of indemnification for copyright infringement because no such right exists under the Copyright Act or federal common law. The court also found that the unrelated-tort claims against the ISP and P2P network went beyond the scope of the plaintiff's copyright claim and added entirely new factual, and legal, issues unrelated to the underlying copyright claim.

A roommate-matching Web site that requires users to answer questions concerning gender, family status and sexual orientation, among other characteristics, is not immune under Section 230 of the Communications Decency Act ('CDA') from claims that it violated the federal Fair Housing Act ('FHA' in this instance). Fair Housing Council of San Fernando Valley v. Roomates.com, LLC, (9th Cir. Apr. 3, 2008) (en banc). The Ninth Circuit, sitting en banc, reversed the district-court ruling that dismissed the FHA claims, noting that the Act provides for liability for asking questions about protected categories. The court concluded that the Web site is a developer, at least in part, of the information provided by subscribers because 'by requiring subscribers to provide the information as a condition of accessing its service, and by providing a limited set of pre-populated answers, Roommate becomes much more than a passive transmitter of information provided by others.' The court noted that Section 230 provides immunity only if the interactive computer service does not 'create or develop' the information in question 'in whole or in part.'

Non-resident entities that purposefully used another entity's trademarks to drive traffic to both their Web sites and other sites are amenable to specific jurisdiction in California, the site of the mark holder's principal place of business. Williams-Sonoma, Inc. v. Online Marketing Services, Ltd., 2008 U.S. Dist. LEXIS 16544 (N.D. Cal. Mar. 4, 2008). In applying the 'effects test' articulated by the U.S. Supreme Court in Calder v. Jones, the court ruled that the plaintiff established jurisdiction over the defendants and granted the plaintiff's motion for a default judgment. The court found that in light of the 'purposeful' activities of the defendants (i.e., intentional acts of trademark infringement, targeting of the plaintiff and the harm suffered in the forum state), the defendants were subject to the court's jurisdiction.