Fourth Circuit Rejects Anti-Spam Lawsuit–Omega World Travel v. Mummagraphics

By Eric Goldman

Omega World Travel, Inc. v. Mummagraphics, Inc., No. 05-2080 (4th Cir. Nov. 17, 2006)

Wow, what a huge ruling on spam from Judge Wilkinson in the Fourth Circuit! People–even judges–hate spam so viscerally that it’s almost impossible to imagine an email marketer winning a lawsuit. Yet, the Fourth Circuit hands a big win to email marketers with 3 major rulings:

1) CAN-SPAM preempts Oklahoma’s anti-spam law, because the “falsity and deception” exclusion to CAN-SPAM’s preemption only covers fraud or other types of tortious misrepresentation, not garden-variety falsity or deception. Thus, at minimum, state anti-spam laws can’t be used to pursue spammers for immaterial falsity or deception. Dozens of states have reenacted anti-spam laws post-CAN-SPAM relying on the “falsity and deception” standard. This ruling casts significant doubt on the enforceability of most of those reenactments. (See, e.g., this speculation that North Carolina’s anti-spam law is now preempted).

2) Errors in the defendant’s headers were “immaterial” and thus not actionable under CAN-SPAM. Specifically, “the messages’ header information incorrectly indicated that the e-mails originated from the server “FL-Broadcast.net,” and [] the messages’ “from” address read cruisedeals@cruise.com, although that e-mail address was apparently non-functional” but the court says that these mistakes are immaterial because the “e-mails at issue were chock full of methods to “identify, locate, or respond to” the sender or to “investigate [an] alleged violation” of the CAN-SPAM Act.”

3) A common law trespass to chattels claim fails when the plaintiff only alleges nominal damages. Specifically, the court says that “Mummagraphics failed to submit any evidence that the receipt of eleven commercial e-mail messages placed a meaningful burden on the company’s computer systems or even its other resources” (cite to Hamidi). This finding is consistent with the recent trend to reject privacy-related lawsuits for lack of cognizable damages (see, e.g., In re JetBlue, Bell v. Acxiom and Key v. DSW). However, as far as I can recall, this is the first time a court has used Intel v. Hamidi to reject an anti-spam lawsuit for lack of email-attributable damages.

Unquestionably, the defendants benefited from having made a reasonably good faith effort to comply with CAN-SPAM, even if they didn’t dot every i and cross every t. But even if they tried to be good actors, they are still allegedly spammers, which makes this result an amazing hat trick for the defendants–no liability under the Oklahoma state anti-spam law, CAN-SPAM or common law trespass to chattels. As Fourth Circuit precedent, surely this opinion will take some wind out of the sails of anti-spam plaintiffs.

Hat tip to Venkat for catching this. Venkat says:

The decision is important for one simple reason: anti-spam lawyers (and plaintiffs) often advance the exact arguments advanced by the plaintiff in this case. Lawyers on the other side know these arguments lack merit, but do not have any court decisions to back them up. As a result, a vicious settlement cycle results. This case probably represents the start of the tide turning in the other direction.

Check out Venkat’s post for some other interesting analysis of the case.

UPDATE: Dan Solove weighs in, saying “The 4th Circuit holding makes the very narrow and ineffective CAN SPAM law even more narrow and ineffective.”

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