Anti-Spam Nuisance's Court Dismissal Upheld
By Ken Magill
The anti-spam litigation industry received another well-deserved setback last week when an appeals court affirmed the dismissal of a $600 million spam lawsuit brought by “Internet service provider” Beyond Systems against Kraft Foods and Connexus Corp.
The U.S. Court of Appeals for the Fourth Circuit upheld a judgment from the United States District Court for the District of Maryland that Beyond Systems was precluded from recovering damages related to the email marketing in its complaint because it had “consented” to receive the messages.
According to the ruling, Beyond set up spam traps that only “spam crawlers,” or computer programs designed to harvest email addresses from the Internet, can find.
“As a result, spam-trap-based litigation has accounted for 90% of Beyond Systems’ income in recent years,” the ruling said.
Beyond also made no attempt to filter or block spam, the ruling said.
“Further, Beyond Systems has increased its storage capacity to archive large volumes of spam messages, retaining them specifically to provide grounds for litigation,” the ruling said.
By setting up the spam traps, failing to use filters and increasing its storage for the resulting emails, Beyond effectively consented to the behavior and, therefore, could not recover damages, the ruling affirmed.
“We agree with the district court that the evidence was ‘overwhelming’ that Beyond Systems consented to the harm it claims it suffered,” the ruling said.
“Beyond Systems created fake e-mail addresses, solely for the purpose of gathering spam. It embedded these addresses in websites so that they were undiscoverable except to computer programs that serve no other function than to find e-mail accounts to spam.
“Beyond Systems increased its e-mail storage capacity to retain a huge volume of spam, by which it hoped to increase its eventual recovery under anti-spam statutes. …
“…Beyond Systems’ consent to—and indeed its solicitation of—the harm at issue in this case prohibits Beyond Systems from recovering under the Maryland and California anti-spam statutes.”
In an article on Lexology.com, David O. Klein, an attorney at Klein, Moynihan, Turco, LLP called the ruling a positive one for email marketers in that a prominent federal court has set an upper limit on acceptable behavior from spam-trapping plaintiffs.
But he cautioned: “It must be noted, however, that the Circuit Court did not preclude the future possibility that a legitimate Internet Service Provider can bring suit and recover damages when its business has been impacted by deceptive spam, even in those scenarios where it has gathered and retained deceptive email, and even set ‘spam traps’ to help identify those responsible.”
Translation: Just because litigation factory Beyond Systems got a well-deserved smack in the head for setting up spam traps for the sole purpose of filing lawsuits does not mean a legitimate ISP can’t employ the same tactic and prevail in court.