Affirming dismissal of a lawsuit challenging hundreds of thousands of spam e-mails, the Fourth U.S. Circuit Court of Appeals said the plaintiff company could not recover because it actually invited the spam.
Beyond Systems sued Kraft after allegedly receiving 600,000 e-mails regarding Gevalia coffee, claiming violations of both California and Maryland state law. Many of the messages at issue were the same as those that provided the basis for a 2005 Hypertouch lawsuit against Kraft.
Maryland-based Beyond Systems, Inc., is an Internet service provider that houses its servers in the basement of the owner’s parents’ house. The company—and a sister operation based in California, Hypertouch—both have histories of suing alleged spammers.
The companies developed Web pages with e-mail addresses embedded in code discoverable only by “spam crawlers” that operated as spam traps. Beyond Systems also made no efforts to block or filter spam e-mail, even increasing its storage capacity to archive large volumes of messages.
At trial, a jury found that the plaintiff was not a “bona fide” ISP and the court then declined to award any damages based on a finding that Beyond Systems had invited its own injury.
The federal appellate panel agreed. The common law doctrine of volenti non fit injuria precluded recovery under either the California or Maryland anti-spam statutes, the court said. Both laws created private rights of action in the nature of a tort and neither statute suggests that common law principles do not apply. Both states abide by the doctrine, translated to mean, “to a willing person it is not a wrong,” the court added.
Given the “overwhelming” evidence that Beyond Systems consented to the harm it claims it suffered, the panel affirmed that the application of volenti non fit injuria was appropriate.
“Beyond Systems created fake e-mail addresses, solely for the purpose of gathering spam. It embedded these addresses in websites so that they were undiscoverable except to computer programs that serve no other function than to find e-mail accounts to spam,” the court wrote. “Beyond Systems increased its e-mail storage capacity to retain a huge volume of spam, by which it hoped to increase its eventual recovery under anti-spam statutes. And it intentionally participated in routing spam e-mail between California and Maryland to increase its exposure to spam and thereby allow it to sue under both states’ laws.”
“Beyond Systems’ consent to—and indeed its solicitation of—the harm at issue in this case prohibits Beyond Systems from recovering under the Maryland and California anti-spam statutes,” the panel concluded.
To read the opinion in Beyond Systems, Inc. v. Kraft Foods, click here.
Why it matters: The Fourth Circuit’s decision draws a line in the sand regarding the behavior of plaintiffs in spam lawsuits. Legitimate ISPs that have their businesses impacted by deceptive spam may gather and retain the e-mails, and can even set spam traps to identify responsible parties, without a court invoking the doctrine of volenti non fit injuria. However, plaintiffs like Beyond Systems, that “gratuitously created circumstances that would support a legal claim and acted with the chief aim of collecting a damage award”—will be denied any recovery. The panel noted that 90 percent of the company’s income was derived from spam-trap-based litigation.