Melaleuca Files Second Lawsuit Following Dismissal of its CAN-SPAM Claims

[Post by Venkat]

Melaleuca v. Hansen, Case 1:10-cv-00553 EJL (D.Idaho) (Nov. 10, 2010)

I recently blogged about the dismissal of a CAN-SPAM case by a federal district court in Idaho. The district judge adopted the magistrate judge’s recommendation, and dismissed the CAN-SPAM claims for lack of standing, a belated assignment of claims, and a finding of no “adverse effect.” The dismissal was without prejudice and the plaintiff appealed the order dismissing the case. (“Another Federal Court Dismisses CAN-SPAM Claims Due to Lack of Standing – Melaleuca, Inc. v. Hansen.”) I expressed surprise that Melaleuca decided to appeal the order dismissing its case.

Not only is Melaleuca appealing the case, it filed a second complaint which appears to be based on the same underlying conduct. You have to just shake your head when companies do stuff like this. One the one hand, it’s trying to remedy the deficiency that got it kicked out in the first place, but on the other hand, you have to wonder if the company is throwing resources at a dispute where the recovery may well eclipse any potential recovery.

In any event, Melaleuca is definitely in a disadvantageous position, procedurally speaking. The Ninth Circuit may decide that the dismissal should have been with prejudice, or that Melaleuca is estopped from arguing certain facts. The district court may stay the case, pending resolution of the Ninth Circuit appeal. The district court may impose a bond requirement. Melaleuca may be bringing claims that are now barred by the statute of limitations. Finally, in the unlikely event that the merits of the case ever see the light of day, IP Applications’ claims may not turn out to be viable either. Of course, all of this presupposes that CAN-SPAM claims are assignable, which is an open question.

Aggressive litigation tactics are one thing, but this has potential to backfire.

Previous posts:

Idaho District Court Dismisses CAN-SPAM Claims Due to Non-ISP Status — Melaleuca, Inc. v. Hansen

Another Federal Court Dismisses CAN-SPAM Claims Due to Lack of Standing – Melaleuca, Inc. v. Hansen

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