Court Affirms Robust ISP Protection For Blocking Bulk Emails — Holomaxx v. Microsoft/Yahoo

[Post by Venkat Balasubramani]

Holomaxx v. Microsoft, 2011 WL 3740813 (N.D. Cal. Aug, 23, 2011) [pdf]

Holomaxx v. Yahoo, 2011 WL 3740827 (N.D. Cal. Aug, 23, 2011) [pdf]

Eric and I both previously posted on the Holomaxx cases, where Holomaxx sued Yahoo and Microsoft for blocking or filtering bulk emails transmitted by Holomaxx. The court granted motions to dismiss filed against Holomaxx with leave to amend. (“Bulk Emailers (Mostly) Lose Three 47 USC 230(c)(2) Rulings–Holomaxx v. Microsoft/Yahoo & Smith v. TRUSTe.”) Holomaxx filed an amended complaint, but it produced no better results. The second time around, the court permanently shuts the door on Holomaxx’s claims, finding again that Section 230(c)(2)(A) insulates the ISP’s filtering decisions and dismissing without leave to amend.

The result was not terribly surprising, given that the court was initially skeptical of Holomaxx’s vague allegations that the ISPs harbored some sort of bad faith when they blocked Holomaxx’s bulk emails. As Laura Wise notes in her recap of the oral argument, Judge Fogel asked Holomaxx for its “absolute best argument” that Microsoft and Yahoo harbored some sort of bad faith intent, and he was not swayed by what Holomaxx had to offer. Judge Fogel concludes that the Messaging Anti-Abuse Working Group guidelines which Microsoft and Yahoo allegedly deviated from are not an “industry standard,” so Microsoft or Yahoo could be faulted for not following them. He also concludes that the fact that the filtering efforts stopped and re-started is not in any way indicative of bad faith. While he acknowledged some tension between Section 230’s robust grant of immunity and Judge Fisher’s concern (in Zango v. Kaspersky) that a service provider may abuse filtering immunity by blocking content for “anticompetitive purposes or merely at its malicious whim,” the court says that allowing Holomaxx to proceed with only its vague allegation of bad faith would undermine Section 230:

To permit Holomaxx to proceed solely on the basis of a conclusory allegation that [the ISP] acted in bad faith would essentially rewrite the CDA.

The court also dismisses Holomaxx’s claims under the Wiretap Act and the Stored Communications Act based in part on Holomaxx’s failure to articulate how exactly Microsoft and Yahoo violated these statutes in the course of their filtering efforts. (These statutes are excluded from Section 230 so the court deals with them separately.)


As with blocking or filtering decisions targeted at malware or spyware, complaining that the ISP was improperly filtering bulk email (spam) is likely to fall on unsympathetic ears. It would take a lot for a court to allow a bulk emailer to conduct discovery on the filtering processes and metrics employed by an ISP. (Hence the rulings on a 12b motion, rather than on summary judgment.) Here the court reiterates the “good faith” standard for 230(c)(2) is measured subjectively, not objectively. That puts a heavy burden on plaintiffs to show subjective bad faith. Eric’s reaction to the Zango case–where the Ninth Circuit held that anti-spyware company Kaspersky’s decision to classify Zango as adware was protected–largely alludes to this result:

this opinion is terrific news for vendors of anti-spam/anti-spyware/anti-virus services. Although we have long suspected that they would be protected under 230(c)(2), this opinion codifies their immunization as Ninth Circuit law. As a result, these vendors should continue to have a high degree of freedom to make judgments about how to best serve their customers. On the flip side, this opinion confirms that anyone blacklisted by these software vendors can’t use judicial proceedings to change the classification. Fortunately, most reputable vendors offer an extra-judicial mechanism to correct their misclassification errors.

The only difference is that Microsoft and Yahoo are ISPs, and they could use unfettered filtering discretion to block competitive content, links, or maybe even throttle users (or skew search results). Holomaxx’s complaint did not credibly raise any such concerns, so the judge dismisses them.

Previous posts and other coverage:

* Bulk Emailers (Mostly) Lose Three 47 USC 230(c)(2) Rulings–Holomaxx v. Microsoft/Yahoo & Smith v. TRUSTe

* Amendment was futile (Laura Wise)