Update on CAN-SPAM Complaint Mills' Tenuous Legal Posture

In our entry CAN-SPAM Complaint Mills - Time For A New Business Model? pointing to our advisory on the Ninth Circuit’s decision in Gordon v. Virtumondo, Inc., we noted the court’s holding that private suits to enforce the CAN-SPAM Act are limited to bona fide Internet access service providers who genuinely suffer “adverse affects” attributable to email that violates the law, its recognition of non-misleading commercial email as a legitimate marketing tool, and its concerns about a CAN-SPAM “cottage industry” that has been set up “to profit from litigation.” Yesterday, the Ninth Circuit built on that foundation, issuing its decision in Asis Internet Services v. Azoogle.com, Inc., which affirmed dismissal of a similar plaintiff’s CAN-SPAM claims, and an award of costs against it. Citing Gordon v. Virtumondo for the proposition that Asis did not meet the requirement of being adversely affected by the unsolicited emails it received, the court held “the mere cost of carrying SPAM emails over Plaintiff’s facilities does not constitute a harm as required by the statute.” It also held that while Plaintiff also spent money on email filtering, the cost of email filtering did not increase due to the emails at issue, reinforcing that “such ordinary filtering costs do not constitute a harm.” The case thus maintains the high bar to CAN-SPAM complaints set in Gordon.