Technology Law Column

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Published in the Chicago Daily Law Bulletin, February 13, 1997 at page 6.

"Spam" Factory's Junk E-Mail Gets Stamped

Copyright 1997 by David Loundy

Unsolicited "junk mail" can be an inconvenience, but most people are resigned to processing a certain amount of it. Junk faxes were considered to be enough of an inconvenience-- and expense-- that federal law now prohibits them (see 47 U.S.C. Section 227(b)(1)(C)). Similarly, people are now finding junk e-mail to be a problem.

One source of quite a bit of junk e-mail, or "spam," has been Sanford Wallace and his company Cyber Promotions, Inc. In fact, Cyber Promotions' delivery of millions of unwanted pieces of e-mail every day to many on-line services, and the resulting complaints and attempts at retribution, have resulted in a number of lawsuits. Worth discussing here are two of the cases in which court decisions have been entered against Mr. Wallace and his company.

An e-mail message contains a "header" which lists information such as the name and address of the message sender, the address of the recipient, the time and date of the message, and the route the message took to reach its destination. Often a message header will contain additional information, such as a "reply to" address. However, it is not difficult to "forge" or alter these message headers.

By forging the headers, someone can send "fakemail" that appears to come from a different source than that which originated the message. Thus a skillful forgery can make a message's source hard to trace. In addition, a forgery may prevent a response-- thus producing undeliverable mail which then bounces back to the sender attempting to respond to the forgery. Forging headers to prevent replies is a standard operating procedure for "spammers" because of the ill feelings many have for such unsolicited e-mail. In some cases, a header will be forged to appear to come from someone the spammer does not like; thus any negative responses will bombard the spammer's enemy.

In America Online v. Cyber Promotions, Inc., C.A. No. 96-5213 (E.D. Penn., Nov. 4, 1996), America Online gained a victory in a long series of conflicts with Cyber Promotions. The series of suits and countersuits have ranged from antitrust, to computer fraud and computer crime, to trademark infringement and dilution (resulting from forged headers misattributing the source of the messages), to First Amendment claims, and more.

In the November 4 Cyber Promotions decision, the U. S. District Court for the Eastern District of Pennsylvania addressed Cyber Promotions' claim that America Online's blocking of its messages addressed to AOL subscribers constituted an infringement of Cyber Promotions' right to free speech. Cyber Promotions argued that, even though there is no question that America Online is a private company with private computer systems, AOL qualifies as a state actor, and therefore is limited by the First Amendment in its ability to block Cyber Promotions' messages.

The court looked at three possible tests to support Cyber Promotions' argument, and found none of them met. The court did not find America Online exercised "powers that are traditionally the exclusive prerogative of the state" (citing Blum v. Yaretsky, 457 U.S. 991, 1004 (1982)).

Secondly, the court did not find that AOL "has acted with the help of or in concert with state officials," as required by the test in McKeesport Hospital v. Accreditation Council for Graduate Medical Ed., 24 F.3d 519, 524 (3d Cir. 1994).

Finally, the court found that the State had not so insinuated itself into such a position of interdependence with AOL that the two must be recognized as joint participants in excluding Cyber Promotions' messages, as would be required by the test the 3d U.S. Circuit Court of Appeals enunciated in Krynicky v. University of Pittsburgh, 742 F.2d 94, 98 (3d Cir. 1984).

Thus, the court explicitly rejected the argument that, even though America Online is private property, Cyber Promotions should still be allowed to speak "on" America Online's "property."

One of AOL's competitors, CompuServe, also took Wallace and his spam factory to court. In CompuServe, Inc. v. Cyber Promotions, Inc., No. C2-96-1070 (S.D. Ohio, Feb 3, 1997) the court, in essence, took the America Online case one step further. The U.S. District Court for the Northern District of Ohio held that not only can CompuServe exclude Cyber Promotions from its property, but when Cyber Promotions insists on making use of CompuServe's resources after being instructed to stop, such further actions constitute trespass to chattels.

CompuServe subscribers pay for the time they spend connected to CompuServe's system. Thus, deleting unwanted e-mail costs subscribers time and money-- enough so that CompuServe has received many complaints from users who have threatened to quit unless CompuServe blocks the unwanted mail.

Furthermore, CompuServe has limited storage and processing capacity to handle mail, which is partly filled by millions of junk e-mail messages generated by Cyber Promotions. Thus, the unwanted mail has a negative impact on the performance of CompuServe's system. CompuServe explicitly notified Cyber Promotions that Cyber Promotions is prohibited from using CompuServe's computer system to process and store unsolicited e-mail. CompuServe also ordered Cyber Promotions to stop sending e-mail to CompuServe subscribers.

Not only were CompuServe's demands unmet, but the volume of unsolicited e-mail sent by Cyber Promotions increased. CompuServe then employed technological means to try to block the unwanted mail. However, Cyber Promotions simply forged the message headers to circumvent CompuServe's blocking software.

The court held that under Ohio law, it may constitute a conversion to use, detain, or otherwise exert control wrongfully to the exclusion of the owner of a party's chattels. Furthermore, trespass to chattels occurs, according to the Restatement (Second) of Torts, Section 217, when someone "intermeddles" with a chattel in the possession of another. Intermeddling is defined in the Restatement (Second) as ". . .intentionally bringing about a physical contact with the chattel. The actor may commit a trespass by an act which brings him into an intended physical contact with a chattel in the possession of another." The court then went on to point out that the defendant's actions were clearly intentional. The court pointed out that other cases have treated the sending of electronic signals as being sufficiently tangible contact to support a finding of trespassing, and thus there was sufficient "physical contact."

The court then continued its analysis by looking to Section 218 of the Restatement (Second) of Torts, which defines when a trespass to chattels becomes an actionable offense. Section 218 reads:

"One who commits a trespass to chattel is subject to liability to the possessor of the chattel if, but only if, . . . (b) the chattel is impaired as to its condition, quality, or value, or . . . (d) bodily harm is caused to the possessor, or harm is caused to some person or thing in which the possessor has a legally protected interest."

The court found that the chattel's value to CompuServe was the computer system's ability to serve CompuServe subscribers. By needing to devote system resources to blocking Cyber Promotions' attempts to evade the blocking software, and by tying up processing power and storage space, resources were being taken away from CompuServe's subscribers. Therefore, the value of the equipment was diminished, even though it was not physically damaged.

Moreover, the receipt of unwanted junk e-mail causes subscribers to need to spend resources processing the unwanted mail. This, in turn, has generated numerous complaints. Also, as the court pointed out, "[m]any subscribers have terminated their accounts specifically because of the unwanted receipt of bulk e-mail messages. . . Defendants' intrusions into CompuServe's computer systems, insofar as they harm plaintiff's business reputation and goodwill with its customers, are actionable under Restatement Section 218(d)."

The court acknowledged that Section 252 of the Restatement allows the owner of personal property to grant consent to would-be trespassers to use the property. Furthermore, CompuServe, by making Internet e-mail available to its customers, invites outsiders to send e-mail to CompuServe subscribers. However, Cyber Promotions had exceeded any such privilege to send e-mail to CompuServe subscribers after a CompuServe employee reportedly told Wallace that he and his company were prohibited from sending junk e-mail messages to or from the CompuServe system. Wallace's and Cyber Promotions' continued spamming thus constituted an actionable trespass.

Finally, the court rejected the defendants' First Amendment argument. The court followed the logic of the America Online case discussed earlier. In holding that any free speech rights do not trump a property owner's rights in its property, the court pointed out the irony that if Cyber Promotions' argument were to succeed, then Cyber Promotions would, in essence, have won the right to make its chosen means of communication unusable for the purpose for which it desired to use the medium.

The outcome in the America Online case is not a surprise. As much as many people would like to think of on-line environments as isolated communities, they are not the same as "company towns" or states. America Online is a for-profit corporation which is one competitor in an industry of many. The idea that it has the right to control use of its own property should not be a shock.

On the other hand, the idea that a communication provider may exclude people in the manner allowed by the CompuServe court has some profound implications. In my view, the CompuServe decision is appropriately limited by one, and perhaps two, comments included in the opinion.

First, the opinion stated that it is doubtful that a notice posted generally on-line would be adequate notice to inform "outsiders" that they are "trespassing." In the CompuServe case, Sanford Wallace knew in no uncertain terms that his conduct was unwelcome. The Court found it important that, not only did Wallace continue in his actions, but he also worked to circumvent CompuServe's technological attempts to prevent further "intrusions."

This brings us to the second, but more questionable, limiting comment where the "Court notes that the implementation of technological means of self-help, to the extent that reasonable measures are effective, is particularly appropriate in this type of situation and should be exhausted before legal action is proper." In one it appears that the court was saying that a thief cannot be punished for stealing if you leave your door unlocked. However, another possible interpretation is that CompuServe has created a situation resembling an "attractive nuisance" and thus must take reasonable precautions to protect its property before resorting to the courts.

Without a doubt, other courts will have an opportunity to examine these interpretations further as on-line usage continues to expand.

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