Friday, February 10, 2006

Single email held insufficient to give Utah personal jurisdiction over spammer

Fenn v. Mleads Enterprises, Inc., 2006 UT 8

Brittney Fen received an unsolicited email from Mleads that did not comply with Utah’s Unsolicited Commercial and Sexually Explicit Email Act (“the Act”). The Act permitted her to sue Mleads for $10 plus attorneys fees and costs, which she did. The district court dismissed the case for lack of personal jurisdiction. The court of appeals reversed, and the supreme court granted cert to consider this question: whether asserting personal jurisdiction over a foreign corporation based on a single email sent into Utah satisfied due process?

As the court noted, the problem with analyzing personal jurisdiction based on contact via the internet is that the “a defendant, like Mleads, is generally unaware of the geographic location to which it sends an email.” In such cases, the purposeful availment test and the effects test are unhelpful because they require either intent or knowledge of the contact with the forum state.

So the court turned to a sliding scale test used in Zippo Manufacturing Company v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1124—25 (W.D. Penn. 1997). Under that test, the court must determine “whether the defendant corporation actually engages in knowing ad repeated transmission of computer files over the Internet.” At one end of the scale are “passive” web sites that merely display information that anyone can access. These do not create personal jurisdiction. At the other end of the scale are companies that knowingly and repeatedly transmit computer files over the internet into the forum state. These companies are subject to personal jurisdiction. “The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.” The court looks to the type of activity and the level of exchange that occurs.

Fenn failed to show that Mleads email was sufficiently interactive to allow personal jurisdiction. The email did not create a business transaction with Fenn, it merely provided her with information. She never responded to the email and never contacted Mleads through any other means. Thus, Utah could not assert personal jurisdiction over Mleads.

Coincidentally, one month after Fenn filed her complaint against Mleads, Utah repealed the Unsolicited Commercial and Sexually Explicit Email Act. It did so because the feds passed Controlling the Assault of Non-solicited Pornography and Marketing (CAN-SPAM). CAN-SPAM pre-empts state law and sets a national standard for spam.

Really, the problem in this case isn’t personal jurisdiction, or the lack thereof. State’s just shouldn’t be trying to regulate what happens on the internet. The federal government is much better suited. Near the end of the opinion, the court points out the problem with states asserting personal jurisdiction over companies that violate their email laws:
Practically speaking, companies would be required to know the laws of each state and to be prepared to litigate in all fifty of them. Precisely because of this complication, the federal government preempted the Act and those similar in other states with CAN-SPAM, which state: “[t]here is a substantial government interest in regulation of commercial electronic mail on a nationwide basis.” The federal statute goes onto explain that state legislation regarding spam has been ineffective, “in part because, since an electronic mail address does not specify a geographic location, it can be extremely difficult for law abiding businesses to know with which of these disparate statutes they are required to comply.”


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