September 22, 2005
Second Anti-Adware Class Action Filed--Simios v. 180Solutions
By Eric Goldman
This is the second anti-spyware class action lawsuit initiated by David Fish of Collins Law Firm. The first target was DirectRevenue; this time it's 180Solutions. I've critiqued the merits of many of the claims in my review of the judge's first substantive ruling in Sotelo v. DirectRevenue. In this post, I'm going to principally critique some of the differences between that lawsuit and this one.
In the Sotelo case, the plaintiffs sued in state court. To avoid the Class Action Fairness Act, which mandates that most class action lawsuits are heard in federal court, the plaintiffs tried two techniques: (1) the proposed class covered only Illinois residents who had DirectRevenue's software on their machines, and (2) the complaint named some Illinois-based defendants in an attempt to destroy diversity.
Those techniques failed, and the Sotelo case is in federal court. This time, the plaintiffs didn't even try any of the venue-manipulation techniques and instead originated the lawsuit in federal district court. I'm not entirely clear why being in Illinois state court was desirable, but skipping ahead to federal court seemed like a smart move to me. Among other things, it creates the opportunity to plead some new causes of action.
In the DirectRevenue case, the plaintiffs sued DirectRevenue, its holding company, an advertiser and an ad serving network. The diversity of defendants created some complexity and increased the paperwork, as each of the defendants are in different legal positions.
This time, the plaintiffs are suing just 180Solutions. However, it's possible that additional defendants will be added. In particular, I expected the plaintiffs to name some of 180Solutions' advertisers because the DirectRevenue advertiser was not able to get out of the lawsuit on the first try.
New Cause of Action--Computer Fraud & Abuse Act
Because the Sotelo plaintiffs tried to keep their lawsuit in state court, they did not plead any federal claims. Now, freed from that restriction, the plaintiffs bring a Computer Fraud & Abuse Act claim for the first time. The CFAA is a complex law, and I'm not entirely sure that the plaintiffs can establish a prima facie violation. However, I teach my Cyberlaw students that they should always plead common law trespass to chattels and CFAA together (if they can do so within ethical constraints), so adding the CFAA claim made complete sense here.
New Cause of Action--Electronic Communication Privacy Act
Another new federal claim, this time under the ECPA. I'm pretty skeptical about the ECPA claim. The lawsuit alleges that the 180 software "intercepts" communications and "discloses" the contents to third parties. These are the appropriate words under the statute, but I'll be interested to see if the plaintiffs can marshal the right facts to support the claim.
Trespass to Chattels
The complaint has cleaned up some of the damage allegations in support of the trespass to chattels claim (see, in particular, Para. 27), so the claim has an even better chance of surviving a motion to dismiss.
The plaintiffs, however, continue to plead some damages (such as user "frustration") that a court following Intel v. Hamidi simply will ignore. The plaintiffs also kept in some of their silly damages allegations (the software "utilizes pixels and screen-space on monitors"; the software slows performance, which causes the computer to stay on longer, which results in additional electrical consumption). I think the plaintiffs do themselves a disservice by mixing some legitimate and substantive allegations with some trivial and de minimis "harms."
New Cause of Action--Invasion of Privacy
The plaintiffs allege that the software invades their privacy under the common law. I think the plaintiffs intend to fit under the "intrusion to seclusion" tort. While this appears to have been appropriately pled, it's a stretch and, I think, has a low likelihood of success.
I understand that some plaintiffs' lawyers like to use rhetorical tricks, but I thought calling 180Solutions' software a "virus" and referring to computers as "infected" undermined the plaintiffs' credibility. Aside from that (and some other gratuitous allegations that have zero legal significance but were apparently made simply to smear 180Solutions), this complaint is noticeably more tightly drafted than the Sotelo complaint. I expect this tighter drafting gives it even better odds of surviving a motion to dismiss. Whether the lawsuit can survive summary judgment, however, is a much different story!