Memorandum in Support of Motion for Judgment on the Pleadings

In keeping with the "EPIC FAIL" theme of the day, Comcast has also filed this memorandum of law.

Footnote 5 mentions another court decision that is attached. I didn't attach that decision. It is available online

UPDATE: Fun quotes for any reporters wanting a synopsis:

"Plaintiff is a spammer who refers to itself as a “internet marketing company”"

"Through this lawsuit, Plaintiff seeks to hold Comcast liable for legally and effectively managing the amount of spam and junk mail received by its subscribers."

"Indeed, in a nearly identical case, the Fifth Circuit affirmed summary judgment for an ISP in a suit brought by a bulk commercial e-mailer who sent allegedly lawful e-mails that were blocked by the ISP. White Buffalo Ventures, LLC v. University of Texas at Austin ... (CAN-SPAM “does not preclude [defendant] from using technological devices [such as] spam filters to conserve server space and safeguard [its] time and resources.”). Thus, it is clear that Plaintiff’s claim of CAN-SPAM compliance do not require Comcast to pass Plaintiff’s e-mails through without scrutiny."

"By way of analogy, Plaintiff’s allegations can be compared to a telemarketer who calls a phone number and receives no answer. Instead of hanging up, however, the telemarketer stays on the line and allows the phone to ring and ring, then claims that the owner of the telephone number has damaged the telemarketer because he or she was unable to make any other calls during the time the phone continued to ring."

"It is well-established that Comcast, as a private entity, cannot not be liable for violations of the First Amendment."
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IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

E360INSIGHT, LLC,
Plaintiff,

v.

COMCAST CORPORATION,
Defendant.

MEMORANDUM OF LAW IN SUPPORT OF COMCAST CORPORATION’S MOTION FOR JUDGMENT ON THE PLEADINGS
PRELIMINARY STATEMENT

Defendant, Comcast Corporation (“Comcast”), through its subsidiaries, is an Internet Service Provider (“ISP”).1 Plaintiff is a spammer who refers to itself as a “internet marketing company,” and is in the business of sending email solicitations and advertisements to millions of Internet users, including many of Comcast’s subscribers.

[1 In its Complaint, Plaintiff repeatedly alleges that Defendant Comcast Corporation is an ISP. Thus, for purposes of this motion, Comcast will take Plaintiff’s allegations as true and ignore any technical inaccuracies as to Comcast’s corporate form in Plaintiff’s Complaint. Moreover, any inaccuracy is immaterial in that any Comcast entity that Plaintiff could allege has taken any action with respect to its e-mails would qualify as a provider of an “interactive computer service” that is entitled to immunity under the Communications Decency Act and other relevant laws, which are discussed fully below.]

Plaintiff’s business practices clog Comcast’s network and its subscribers’ inboxes. Comcast, like other ISPs, filters email flowing through its servers to manage the resources of its network and prevent objectionable emails from reaching its subscribers.

Through this lawsuit, Plaintiff seeks to hold Comcast liable for legally and effectively managing the amount of spam and junk mail received by its subscribers. Plaintiff advances four theories of liability for Comcast’s alleged blocking of Plaintiff’s emails: (1) tortious interference
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with prospective economic advantage under Illinois common law; (2) violation of the federal Computer Fraud and Abuse Act (“CFAA”); (3) infringement of Plaintiff’s free speech rights in violation of the First Amendment; and (4) deceptive or unfair practices under the Illinois Consumer Fraud Act (“ICFA”).

Plaintiff’s claims are barred by federal law which preempts such attempts to put spammers’ pecuniary interests above those of consumers and the ISPs who endeavor to protect them while effectively manage their networks. Under the Communications Decency Act of 1996 (“CDA”), 47 U.S.C. § 230, Comcast is immune from liability for its actions to block objectionable material like Plaintiff’s mass e-mails. Also, all of Plaintiff’s claims fail as a matter of law.

FACTS

Comcast, through its subsidiaries, is the country’s largest cable-based ISP. Comcast operates tens of millions of unique e-mail addresses on its e-mail servers. As is commonly known, a significant percentage of the e-mails sent to its subscribers are spam or otherwise objectionable.

Providing ISPs with legal tools to control the proliferation of unsolicited email has long been a federal legislative concern. Congress recognized the growing extent of the unsolicited e-mail problem in 2003, finding that “[u]nsolicited commercial electronic mail is currently estimated to account for over half of all electronic mail traffic … and the volume continues to rise.” 15 U.S.C. § 7701(a)(2). Moreover, Congress recognized that “[t]he growth in unsolicited commercial electronic mail imposes significant monetary costs on providers of Internet access services, businesses, and educational and nonprofit institutions that carry and receive such mail,
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as there is a finite volume of mail that such providers, businesses, and institutions can handle without further investment in infrastructure.” 15 U.S.C. § 7701(a)(6).

Congress has also acknowledged that “[t]he problems associated with the rapid growth and abuse of unsolicited commercial electronic mail cannot be solved by Federal legislation alone. The development and adoption of technological approaches … will be necessary as well.” 15 U.S.C. § 7701(a)(12). To maintain the stability and reliability of its network, and to limit the amount of spam and otherwise objectionable e-mail messages that reach its customers’ mailboxes, Comcast has developed a proprietary and highly confidential system of software and programs that identify, filter, and block e-mail messages that have the characteristics of inappropriate or unsolicited commercial e-mails, or spam.

Federal law protects Comcast’s use of these technological tools to filter out objectionable emails like those sent by Plaintiff. Congress enacted the CDA “to encourage the development of technologies which maximize user control over what information is received by individuals, families, and schools who use the Internet and other interactive computer services,” 47 U.S.C. § 230(b)(3), and “to remove disincentives for the development and utilization of blocking and filtering technologies that empower parents to restrict their children’s access to objectionable or inappropriate online material.” 47 U.S.C. § 230(b)(4).

In furtherance of those goals, the so-called Good Samaritan provisions of the CDA, 47 U.S.C. § 230(c), protect ISPs like Comcast for actions taken to prevent access to objectionable content. Indeed, courts interpret the CDA’s immunity provision broadly, and have dismissed claims brought in “attempts to hold [d]efendants liable for decisions relating to the monitoring, screening, and deletion of content from their network.” See, e.g., Langdon v. Google, Inc., 474 F. Supp. 2d 622 (D. Del. 2007) (granting motion to dismiss under Section 230).

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ARGUMENT

I. Plaintiff is Entitled to Judgment on the Pleadings

This Court can dismiss Plaintiff’s claims on the pleadings under Rule 12(c), which is subject to the same standard as a motion to dismiss under Rule 12(b)(6), and is often used as appropriate means of dismissing a case based on an affirmative defense. See Chicago Lawyers Committee for Civil Rights Under the Law, Inc. v. Craigslist, Inc., 461 F. Supp. 2d 681 (N.D. Ill. 2006) (granting Rule 12(c) motion for judgment on the pleadings based on defendant’s Section 230 immunity) (citing McCready v. eBay, Inc., 453 F. 3d 882 (7th Cir. 2006)). In addition, as discussed below, Plaintiff’s Complaint fails to state a claim upon which relief can be granted. See, e.g., Parker v. Google, Inc., 242 Fed. Appx. 833 (3d Cir. 2007) (affirming 12(b)(6) dismissal of state law claims based on defendant’s Section 230 immunity); Green v. America Online, 318 F.3d 465 (3d Cir. 2003) (same); Noah v. AOL Time Warner, Inc., 261 F. Supp. 2d 532 (E.D. Va. 2003) (dismissing claims against ISP under Section 230).

This Court should dismiss each of Plaintiff’s claims since the factual allegations are not sufficient “to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, __ U.S. __, 127 S. Ct. 1955, 1960 (May 21, 2007). Moreover, as noted by the Seventh Circuit, “if a plaintiff pleads facts which show he has no claim, then he has pled himself out of court.” McCready v. eBay, Inc., 453 F.3d 882, 888 (7th Cir. 2006) citing Jefferson v. Ambroz, 90 F.3d 1291, 1296 (7th Cir.1996). Here, not only has Plaintiff alleged causes of action that are deficient as a matter of law, Plaintiff has pleaded the very facts that demonstrate that Comcast is immune from Plaintiff’s claims.

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II. Comcast is Immune From Liability Under the Communications Decency Act

Plaintiff’s Complaint repeatedly (and correctly) asserts that Comcast is an ISP. (Compl. ¶¶ 2, 5, 11.)2 Section 230 immunizes an ISP for blocking objectionable material like Plaintiff’s mass e-mails, and pre-empts all state law causes of action that are inconsistent with its provisions. Section 230(c) of the CDA, entitled “Protection for ‘Good Samaritan’ Blocking and Screening of Offensive Material,” provides in pertinent part:

no provider or user of an interactive computer service shall be held liable on account of – (A) any action taken voluntarily in good faith to restrict access to or availability of material that the provider or user considers to be … objectionable, whether or not such material is constitutionally protected; or (B) any action taken to enable … the technical means to restrict access to material described in paragraph (1) [sic].

47 U.S.C. § 230(c)(2).3

[2 It is beyond question that, as an ISP, Comcast qualifies as an “interactive computer service” under the CDA. The CDA defines an “interactive computer service” as “any information service, system, or access software provider that provides or enables computer access to multiple users to a computer server, including specifically a service or system that provides access to the Internet.” 47 U.S.C. § 230(f)(2).

3 The original text of 47 U.S.C. § 230(c)(2)(B) refers to “paragraph (1),” but it appears that the reference should instead be to subparagraph (A).]

The CDA also states that “[n]o cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this Section.” 47 U.S.C. § 230(e).4 Thus, it is clear that Comcast is immune under Section 230 and that Plaintiff cannot maintain its state law claims arising out of Comcast’s actions to identify and filter Plaintiff’s e-mails that Comcast has deemed objectionable.

[4 In addition to the CDA’s immunity provisions, various state statutes immunize ISPs for filtering and blocking objectionable e-mails. See, e.g., the Illinois Electronic Mail Act, 815 ILCS 511/10(f) (“An electronic mail service provider may, upon its own initiative, block the receipt or transmission through its service of any unsolicited electronic mail advertisement that it reasonably believes is, or will be, sent in violation of this Section”); 815 ILCS 511/10(g) (“No electronic mail service provider may be held liable for any action voluntarily taken in good faith to block the receipt or transmission through its service of any unsolicited electronic mail advertisement which it reasonably believes is, or will be, sent in violation of this Section”).]

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The Seventh Circuit, in addressing an ISP’s liability for allowing content to be posted on its network, recognized in dicta that “[a] web host that does filter out offensive material is not liable to the censored customer.” Doe v. GTE Corp., 347 F.3d 655, 659 (7th Cir. 2003) (affirming 12(b)(6) dismissal based on Section 230).

A. Plaintiff’s Mass Emails Are “Objectionable” under the CDA

Given explicit Congressional intent, it is clear that spam or unsolicited or bulk e-mails may be deemed “objectionable” by an ISP. Indeed, numerous courts have found immunity for entities who provide products or services intended to identify or block bulk unauthorized commercial or otherwise objectionable e-mails. For example, in Zango, Inc. v. Kaspersky Lab, Inc., a highly analogous case, a district court granted summary judgment for a defendant software provider against claims that it inappropriately designated plaintiff’s software as potentially malicious, basing its ruling on the provider’s immunity under Section 230. No. C07-0807-JCC, (W.D. Wash. Order Aug. 28, 2007).5 Importantly, in its order dismissing plaintiff’s claims, the Court noted that Section 230(c)(2) “does not require that the material actually be objectionable; rather it affords protection for blocking material ‘that the provider or user considers to be’ objectionable.” Zango at pp. 6-7. See also, Optinrealbig.com, LLC v. Ironport Sys., 323 F. Supp. 2d 1037 (N.D. Cal. 2004) (holding that operator of SpamCop service, which collected and sent user complaints regarding spam e-mails to ISPs, was protected by Section 230 in action by bulk e-mail company); Pallorium v. Jared, No. G036124, 2007 WL 80995 at *7 (Cal. Ct. App. Jan. 11, 2007) (affirming Section 230 immunity for user who created filters to prevent objectionable e-mails from reaching his own servers and distributed block lists to others;
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“whether [defendant’s] filter was over-inclusive is irrelevant so long as he deemed the material to be … otherwise objectionable”).

[5 A copy of the court’s order is attached as Exhibit 1.]

Here, Comcast performs the exact function contemplated by the CDA – restricting access to material it deems objectionable – and uses technical means very similar to those for which defendants have been immunized in the above-cited cases. Comcast uses numerous programs, software, and technologies to identify and filter e-mails that its highly developed systems deem objectionable. It is immaterial whether Comcast’s systems are over-inclusive or under-inclusive; by enacting the Good Samaritan provisions of the CDA, Congress sought to immunize ISPs for any technical measure adopted to filter or block content that is deemed objectionable.

B. Plaintiff’s Alleged CAN-SPAM Compliance is a Red Herring

In the Complaint, Plaintiff touts its alleged compliance with the Controlling the Assault of Non Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM Act”), 15 U.S.C. § 7701 et seq. (See, e.g., Compl. ¶ 4.) CAN-SPAM is another tool available to ISPs to curb mass emailing, but it is not a shield to prevent the use of technologies to block emails deemed objectionable. The CAN-SPAM Act expressly provides that it has no effect on ISP policies to filter or block objectionable e-mails. Specifically, 15 U.S.C. § 7707 states that:

[n]othing in this Act shall be construed to have any effect on the lawfulness or unlawfulness, under any other provision of law, of the adoption, implementation, or enforcement by a provider of Internet access service of a policy of declining to transmit, route, relay, handle, or store certain types of electronic mail messages.

Thus, Plaintiff’s CAN-SPAM compliance is immaterial to Plaintiff’s claims.

Indeed, in a nearly identical case, the Fifth Circuit affirmed summary judgment for an ISP in a suit brought by a bulk commercial e-mailer who sent allegedly lawful e-mails that were blocked by the ISP. White Buffalo Ventures, LLC v. University of Texas at Austin, 420 F.3d 366, 372 (5th Cir. 2005) (CAN-SPAM “does not preclude [defendant] from using technological
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devices [such as] spam filters to conserve server space and safeguard [its] time and resources.”). Thus, it is clear that Plaintiff’s claim of CAN-SPAM compliance do not require Comcast to pass Plaintiff’s e-mails through without scrutiny.

III. Even if Comcast is Not Immune Under the CDA, Each Count Fails to State a Claim Upon Which Relief Could Be Granted

A. Plaintiff Fails to Plead a Claim for Tortious Interference with Prospective Economic Advantage (Count I)

Plaintiff’s first claim, for “Tortious Interference with Prospective Economic Advantage,” must be dismissed because Plaintiff fails to identify a single business relationship with which Comcast allegedly interfered. The elements of tortious interference with prospective economic advantage are: (1) plaintiff must have a reasonable expectancy of a valid business relationship with a third party; (2) defendant must know of the prospective business relationship; (3) defendant must intentionally interfere with the prospective business relationship such that the prospective business relationship never materializes; and (4) the interference must damage the plaintiff. Lynch Ford, Inc. v. Ford Motor Co., Inc., 957 F. Supp. 142, 146 (N.D. Ill. 1997); see also Langlands v. De La Rue Sec. Print, Inc., No. 00 C 2913, 2000 WL 1141574, * 2 (N.D. Ill. Aug. 11, 2000) (dismissing claim for interference with prospective economic advantage because the business relationship was between the defendant and a third party, not plaintiff and a third party). As noted by the Court in Lynch Ford, which Plaintiff cites in Paragraph 26 of the Complaint, a plaintiff “must specifically identify a third party to which it had a potential business relationship.” 957 F. Supp. at 146 (dismissing claim and noting that allegations that defendant “interfered with [Plaintiff’s] ‘customers’ will not suffice, absent the specific identification of one of those customers.”).

Plaintiff variously refers to its business clients and Comcast’s subscribers as the interfered-with customers. In truth, Plaintiff does not allege that it is paid by Comcast
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subscribers to send them emails. Plaintiff’s customers are the “companies that wish to market their products or services using the internet.” (Compl. ¶ 7.) Any alleged “prospective business relationships” with Comcast’s subscribers are non-existent, or far too tenuous to be considered a “reasonable expectation of entering into a valid business relationship.” Langlands, 2000 WL 11141574, at * 2. As the Langlands court noted, “[plaintiff] did not have a contractual or business relationship with [the third party]; only Defendant had a relationship with [the third party], who contracted to purchase goods from Defendant.” Id. at *3. Because Plaintiff cannot actually identify any customers, it necessarily fails to allege, as required, that Comcast knew of any of these prospective business relationships, or that Comcast intentionally interfered with such relationships. The Complaint also is void of any allegation that Comcast’s activities damaged Plaintiff’s relationship with its real customers, that is the “companies that wish to market their products or services using the internet.”

B. Plaintiff Fails to State a Claim for Violation of the Computer Fraud and Abuse Act (Count II)

Plaintiff alleges that Comcast has violated the Computer Fraud and Abuse Act (“CFAA”), specifically 18 U.S.C. § 1030(a)(5)(A)(i) and (iii). Subsection (i) applies to whoever “knowingly causes the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization, to a protected computer.” Subsection (iii) applies to anyone who “intentionally accesses a protected computer without authorization, and as a result of such conduct, causes damage.”

Plaintiff’s allegations are, essentially, that (a) Comcast has delayed the processing or transmittal of Plaintiff’s e-mails sent to Comcast subscribers, which it improperly characterizes as a “denial of service attack,” and (b) as a result of information provided by Comcast through its filtering and blocking of Plaintiff’s e-mails, Plaintiff chooses to delete entries from its database
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of e-mail addresses. It is clear from Plaintiff’s pleadings that Plaintiff cannot establish either that Comcast has intentionally caused damage to Plaintiff’s computers or database, or that Comcast accessed any of Plaintiff’s allegedly protected computers.

Plaintiff’s first allegation that Comcast violated the CFAA is essentially that Comcast, by “slowing process times of [Plaintiff’s] e-mails by hours,” or by delaying e-mails sent by Plaintiff, engaged in a “denial of service attack” on Plaintiff’s computers. (Compl. ¶¶ 18, 40.) Plaintiff’s self-serving characterization grossly misdescribes the operation of e-mail servers. It is obvious from the facts in the Complaint that, in sending e-mails to Comcast users, Plaintiff initiates contact with Comcast’s servers, not vice versa. Comcast’s servers merely respond to Plaintiff’s requests. That Comcast, pursuant to its filtering technologies, has refused to process Plaintiff’s e-mails, or that Plaintiff has not configured its servers to disconnect after periods of unsuccessful attempts to transmit, does not mean that Comcast has “accessed” Plaintiff’s computers.

By way of analogy, Plaintiff’s allegations can be compared to a telemarketer who calls a phone number and receives no answer. Instead of hanging up, however, the telemarketer stays on the line and allows the phone to ring and ring, then claims that the owner of the telephone number has damaged the telemarketer because he or she was unable to make any other calls during the time the phone continued to ring.

Plaintiff’s second CFAA allegation is that it removes addresses from its database based on information received from Comcast in the course of Comcast’s filtering activities. (Compl. ¶ 42.) Taking this to be true, it is clear that Plaintiff, not Comcast, has caused the alleged damage to Plaintiff’s alleged databases of customer information because it, not Comcast, deletes entries from its own database. (Compl. ¶¶ 42, 43.) Nowhere does Plaintiff allege, as required, that Comcast accesses any of Plaintiff’s alleged protected computers with respect to the maintenance
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of its database. Moreover, given its claims that Comcast transmits “fraudulent” or “false” bounce data regarding inactive or non-existent accounts, (Compl. ¶¶ 24, 42), it is nonsensical that Plaintiff relies on such “fraudulent” information to irretrievably delete the e-mail addresses in question. In short, Plaintiff seeks to hold Comcast liable for Plaintiff’s actions taken in reliance (and, from its pleadings, continued reliance) on information it thinks is inaccurate.

C. Plaintiff’s First Amendment Claim (Count III) Fails as a Matter of Law

It is well-established that Comcast, as a private entity, cannot not be liable for violations of the First Amendment. The First Amendment does not provide a cause of action against private actors like Comcast; rather, the First Amendment is “a guarantee only against abridgment by government, federal or state.” Hudgens v. NLRB, 424 U.S. 507, 513, 96 S.Ct. 1029, 47 L.Ed.2d 196 (1976). As the Supreme Court has held, “the guarantees of free speech ... guard only against encroachment by the government and ‘erec[t] no shield against merely private conduct.’” Hurley v. Irish-American Gay Group of Boston, 515 U.S. 557, 115 S.Ct. 2338, 2344, 132 L.Ed.2d 487 (1995) (citation omitted).
Plaintiff does not allege, nor could it, that Comcast is a state actor, that Comcast’s actions constitute state action, or that any of Comcast’s policies with respect to its email filtering and blocking are the result of any government involvement. Courts have repeatedly acknowledged that ISPs and search engines are not state actors. See, e.g., Noah v. AOL Time Warner, Inc., 261 F. Supp. 2d 532 (E.D. Va. 2003) (dismissing First Amendment claim on basis that ISP was not state actor); Cyber Promotions, Inc. v. America Online, Inc., 948 F. Supp. 436 (E.D. Pa. 1996) (ISP was not a state actor); Langdon v. Google Inc., 474 F. Supp. 2d 622 (E.D. Del. 2007) (internet search engine that refused to carry plaintiff’s advertisements is not a state actor). Accordingly, Plaintiff’s First Amendment claim must be dismissed.

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D. Plaintiff’s Claim for “Unfair Competition and Business Practices” (Count IV) Fails as a Matter of Law

Plaintiff alleges in conclusory fashion that Comcast somehow violated section 815 ILCS 505/2, the Illinois Consumer Fraud Act (the “ICFA”). (Compl. ¶¶ 55-62.) Plaintiff’s allegations are vague, but appear to be that Comcast engaged in some form of “deceptive” or “unfair” trade practice by refusing its e-mails, but transmitting others’ e-mails. (Compl. ¶¶ 58-59.)6 Plaintiff also alleges that Comcast violated its own policies by not delivering Plaintiff’s mass e-mails to Comcast subscribers and that Comcast entered into agreements with other marketers permitting them to send similar e-mails. (Compl. ¶¶ 56-60.) Neither allegation, even if true, could be considered “deceptive” or “unfair” under Illinois law. Further, the ICFA only allows claims by non-consumers where there is a nexus between the Defendant’s conduct and an injury to consumers. Consumer injury is entirely absent here, and Plaintiff cannot, therefore, bring a claim under the ICFA.

[6 815 ILCS 505/2 provides in pertinent part:
Unfair methods of competition and unfair or deceptive acts or practices, including but not limited to the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact … in the conduct of any trade or commerce are hereby declared unlawful whether any person has in fact been misled, deceived or damaged thereby.]

1. Plaintiff Does Not Allege a Deceptive Practice or Act by Comcast that Comcast Intended for Plaintiff to Rely On

To adequately plead a claim based on a deceptive practice or act under the Illinois Consumer Fraud Act, Plaintiff must allege “(1) a deceptive act or practice by the defendant; (2) the defendant’s intent that the plaintiff rely on the deception; and (3) the occurrence of the deception during a course of conduct involving trade or commerce.” Robinson v. Toyota Motor Credit Corp., 201 Ill.2d 403, 417, 775 N.E.2d 951, 960 (Ill. 2002) (affirming dismissal of claims
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under the ICFA where plaintiff cannot identify an unfair or deceptive act); see also Neff v. Capital Acquisitions & Mgmt, 238 F. Supp. 2d 986, 994 (N.D. Ill. 2002) (dismissing claims brought by debtor under the ICFA); Garett v. RentGrow, Inc., No. 04 C 8309, 2005 WL 1563162 (N.D. Ill. July 1, 2005) (granting motion to dismiss claims under the ICFA and applying Robinson). As discussed below, Plaintiff utterly fails to identify a deceptive act or practice by Comcast or allege that Comcast intended for Plaintiff to rely on such deception. (Compl. ¶¶ 55-62.)7 Plaintiff does not allege that he is a customer of Comcast’s, nor a party to any contract with Comcast for any services. Therefore, Comcast owed absolutely no duty to Plaintiff, and Comcast made no representations to Plaintiff that could give rise to liability under the ICFA.

[7 Claims of fraud arising under the ICFA must meet the pleading requirements of Fed. R. Civ. P. 9(b) which requires Plaintiff plead “the who, what, when, where, and how; the first paragraph of any newspaper story.” Conditioned Ocular Enhancement, Inc. v. Bonaventura, 458 F. Supp. 2d 704, 709 (N.D. Ill. 2006). Plaintiff’s claim is that Comcast employed a “false pretense, false promise, or misrepresentation” in connection with its business practices – claims that clearly sound in fraud. (Compl. ¶ 55.) Accordingly, the Complaint “must be pled with the same particularity and specificity as that required under common law fraud.” Neff, 238 F. Supp. 2d at 994; Robinson, 201 Ill.2d at 419, 775 N.E.2d at 961 (“The complaint must state with particularity and specificity the deceptive manner of defendant’s acts or practices, and failure to make such averments requires the dismissal of the complaint.”).]

Plaintiff cannot turn its alleged compliance with Comcast’s online policies into an unfair competition claim. To the contrary, the policies Plaintiff attached to the Complaint, and on which Plaintiff ostensibly relied, specifically permit Comcast to undertake the filtering of which Plaintiff complains and to refuse to transmit material it deems objectionable. For instance, the Comcast High-Speed Internet Acceptable Use Policy (“AUP”) attached to the Complaint by Plaintiff states that “Comcast reserves the right, but not the obligation, to refuse to transmit or post and to remove or block any information or materials, in whole or in part, that it, in its sole discretion, deems to be offensive, indecent, or otherwise inappropriate, regardless of whether
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this material or its dissemination is unlawful.” (Ex. A, pp. 22-23) (emphasis added).8 Thus, Plaintiff’s pleading establishes that Comcast complied with its own policies in filtering or blocking Plaintiff’s e-mails.

[8 The version of Comcast’s AUP attached by Plaintiff does not contain the date on which the policy was retrieved, and does not appear to be the most current version of Comcast’s policy. While Comcast’s current AUP contains highly similar provisions and language, for purposes of this motion, Comcast refers to the language that appears in the version of the AUP attached to the Complaint.]

2. Plaintiff Does Not Identify Any “Unfair” Conduct under the ICFA

Further, Plaintiff does not allege any conduct by Comcast that would be considered “unfair” under the ICFA. An activity or practice is “unfair” under the ICFA only if it “offends public policy,” is “immoral, unethical, oppressive, or unscrupulous,” or it “causes substantial injury to consumers.” Robinson, 201 Ill.2d at 418-19, 775 N.E.2d at 961 (citing Fed. Trade Comm’n v. Sperry & Hutchinson Co., 405 U.S. 233, 92 S.Ct. 898 (1972). None of Comcast’s activities as alleged in the Complaint could be considered “unfair” under Robinson.

The only practices Plaintiff claims to be unfair are that Comcast allegedly refused to “deliver email sent by e360 while allowing its competitors to freely transmit email [to Comcast’s customers]” and that Comcast has allegedly made agreements with other email marketers to send or transmit email without interruption. (Compl. ¶¶ 59, 60.) Even assuming Plaintiff’s allegations to be true, there is nothing unfair about choosing not to do business with a particular company, let alone that it “offend(s) public policy,” is “immoral, unethical, oppressive, or unscrupulous,” or causes “substantial injury to consumers”; as such, Plaintiff’s claim must be dismissed.

3. Plaintiff is Not a Consumer and Has Not Alleged Consumer Injury

Plaintiff does not seek redress as a consumer of Comcast’s services. Because Plaintiff does not fall within the ICFA’s definition of “consumer,”9 its ability to maintain a claim turns on
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“whether plaintiff can plead and prove a nexus between the complained-of conduct and consumer protection; specifically, whether defendant's alleged wrongful [conduct was] addressed to the market generally or otherwise implicate[s] consumer protection concerns.” Pace American, Inc. v. Elixir Inds., No. 06 C 4661, 2007 WL 495302, *4 (N.D. Ill Feb. 13, 2007) (granting motion to dismiss ICFA claim where complaint specifically sought recovery for injury to non-consumer plaintiff, not to consumers). Here, Plaintiff has not alleged injury to consumers; it seeks to recover for its own financial losses. Thus, Plaintiff cannot maintain its claim under the ICFA.

[9 815 ILCS 505/1(e) defines a consumer as “any person who purchases or contracts for the purchase of merchandise not for resale in the ordinary course of his trade or business but for his use or that of a member of his household.”]

CONCLUSION

For all of the above mentioned reasons, Comcast respectfully requests that this Court grant its Motion and dismiss Plaintiff’s Complaint in its entirety.

Dated: March 4, 2008

Respectfully submitted,

LOEB & LOEB LLP

/s/ Douglas N. Masters
Douglas N. Masters (6199010)
Nathan J. Hole (6283099)
321 N Clark Street, Suite 2300
Chicago, IL 60610
Phone: (312) 464-3144
Fax: (312) 464-3111
[email address redacted]
Attorneys for Defendant
Comcast Corporation

e360Insight Response Due

MOTION by Defendant Comcast Corporation for judgment on the pleadings response due by 3/20/2008.

e360's Response to Comcast's Motion for Judgment on the Pleadings

Here's e360's attempt to KEEP HOPE ALIVE! It's full of misdirection and sleight of hand.

They first try to do away with the CDA Section 230 defense by citing the 7th Circuit's decision last week in Chicago Lawyers' Committee for Civil Rights Under Law v. Craigslist, Inc., 2008 WL 681168 (7th Cir. March 14, 2008). I'm not sure how they want to make this case work for them because about all that helps them are a couple of pages of dicta dealing with how Judge Easterbrook just isn't sure if Section 230 is a grant of immunity. And you know you're dealing with dicta when you see such wonderful phrases as "We have questioned whether..." and then quotes dicta from an earlier case with the equally fantastic phrase "If this reading is sound..." Besides, Chicago Lawyers' Committee is a 230(c)(1) case and Comcast is talking about 230(c)(2).

Then they turn to a technical wonderland. Email servers that don't know how to drop connections when attacked. Only they're not really attacked so much as never replied to. But, hey, sometimes ignoring someone is the same as attacking them, right?

Then there's the ever popular "CAN-SPAM defines what spam is and isn't. And we don't violate CAN-SPAM, so we don't send spam." Uh, yeah. That's not what the statute does. That's like saying that the Mann Act makes it okay to transport women for "immoral purposes" just as long as you don't take them across state lines.

They wrap up by wrapping themselves up... in the flag! Those big meanies at Comcast are violating the FIRST AMENDMENT!!!!!eleventy-one!!1! YES!!! YES THEY ARE!! DON'T YOU DARE CLAIM OTHERWISE OR YOU'RE A PINKO!!!! Er, sorry. I was just getting into the spirit of this piece of work. The problem with this is that there is an entire body of law, all of which was quoted by Comcast in its motion, which holds to the contrary.

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS,
EASTERN DIVISION

E360INSIGHT, LLC,
Plaintiff,

v.

COMCAST CORPORATION,
Defendant.

PLAINTIFF’S RESPONSE TO DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS

NOW COMES, Plaintiff, e360Insight, LLC, by and through its attorneys, Carla E. Buterman, Bartly Loethen and Joseph Kish, and for its Response to Defendant’s Motion for Judgment on the Pleadings, states as follows:

INTRODUCTION

E360Insight, LLC (hereafter “e360”) is an email and internet marketing company founded by David Linhardt.1 E360 does not engaging in “spamming” as Defendant alleges in its Motion. In fact, e360 only sends email to persons who first sign-up or “opt-in” to receive its or its partners emails and e360 has a common practice of sending emails that request a person to “double-confirm” that they would like to receive the emails sent by e360. As a matter of practice and business model, e360 does not send unsolicited email and has always complied with or exceeded all federal and state requirements, laws and standards pertaining to the sending of commercial email, including the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, 15 USC § 7701 (CAN-SPAM).

[1 Mr. Linhardt has over twelve years of experience in internet marketing including excutive-level management positions at large Fortune 100 companies. Ironically, Mr. Linhardt while working as Vice President of Marketing of the Telecommunications, Energy & Cable division of Experian worked closely with Defendant Comcast in developing its direct marketing solutions to help Comcast acquire and manage its customers more efficiently.]

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Electronic mail, commonly referred to as email, is an extremely important and popular means of communication, relied on my millions of Americans everyday for personal and commercial purposes. 15 USC §7701(a)(1). E360, as well as Comcast, recognizes that unsolicited email, commonly called “spam,” is a serious problem that inhibits the flow of email communication. This is precisely the reason e360 never sends unsolicited email.

E360 is required to use internet service providers (“ISPs”) such as Comcast to deliver its emails to the persons who have signed up to receive such emails. Comcast is an ISP that provides email service to its customers and who has agreed to act as an intermediary in delivering and receiving emails on behalf of its customers.

In its zeal to control spam, Comcast has taken draconian steps to prevent e360 from being able to send any email to its subscribers despite being repeatedly told by e360 that it only sends email to Comcast subscribers who have requested, and in some cases double-confirmed, that they wish to receive e360 or its partner’s emails. As early as 2005, Comcast began indiscriminately blocking e360’s emails but would release such block after being advised by e360 of the nature of its emails to Comcast subscribers. However, by 2007, Comcast would no longer release the block on e360’s emails and in fact, all but refused to communicate with e360.

Comcast has also engaged in ‘denial-of-service’ attacks on e360’s network and computer system. Such attacks overwhelm and disable e360’s network and prevent them from sending or receiving emails from e360’s consumers in an attempt to halt e360’s business. Comcast has transmitted fraudulent bounce information to e360’s email servers specific to email addresses contained on e360’s opt-in marketing list. Such conduct causes significant damage to e360’s business.

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Comcast’s unilateral and unreasonable blocking of all of e360’s email messages has nearly cost e360 its business, good will and reputation and millions of dollars in revenue. Thereby, leaving e360 with no recourse but to file this proceeding before the Court. Comcast’s response to e360’s complaint is simply that “Plaintiff is a spammer.” Comcast then goes on to incorrectly claim immunity under Communications Decency Act. Similarly, as a last ditch effort, Comcast then seeks to dismiss the counts of the complaint as having failed to state a claim upon which relief can be granted. Such defenses utterly fail when the actions of the Defendant are examined.

ARGUMENT

I. Standard of Review

A motion for judgment on the pleadings under FRCP Rule 12(c) is subject to the same standard as a motion to dismiss under Rule 12(b)(6). Craigs, Inc. v. Gen. Elec. Capital Corp., 12 F.3d 686, 688 (7th Cir. 1993). Thus, a court must view the facts of the complaint in the light most favorable to the nonmoving party and cannot grant the motion unless it appears beyond doubt that the plaintiff cannot prove any facts that would support his claim for relief. Thomason v. Nachtrieb, 888 F.2d 1202, 1204 (7th Cir. 1989). All that is required under Rule 8(a) is that Plaintiff set forth factual allegations sufficient to raise a right to relief above the speculative level. Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007). E360 has clearly set forth factual allegations in every count of its complaint sufficient to give notice of its claim to relief and to support such claims to relief.

II. Comcast Not Entitled to Immunity under The Communications Decency Act

Comcast’s reliance on the Communications Decency Act for immunity is misplaced. The Communications Decency Act (hereafter “CDA”) and its Good Samaritan provision were
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enacted by Congress with the specific purpose of overruling Stratton-Oakmont v. Prodigy Services Co., 1995 N.Y. Misc. LEXIS 229 (NY Sup. Ct. 1995). Stratton-Oakmont had held that an internet access provider that used filtering technology could be held liable for libelous thirdparty statements. Id. Congress did not intend to grant a “vast, limitless immunity” to internet providers. Chicago Lawyers’ Committee, 461 F. Supp.2d 681 (N.D.Ill. 2006) affirmed by the Seventh Circuit in Case No. 07-1101 decided 3-14-08.

The Court in Chicago Lawyers’ Committee relied on the Seventh Circuit’s opinion in Doe v. GTE Corp, 347 F.3d 655 (7th Cir. 2003) in holding that previously court opinions that held that Section 230 (c)(1) provided ICSs with broad, robust immunity as Comcast relies on in this case were incorrect. Instead, the Seventh Circuit in Doe, called into question such immunity. Id. at 659-60. The Seventh Circuit held that if there was immunity under Section 230(c)(1) it likely depended on the ISP acting a publisher. “Limiting the immunity afforded under Section 230 to those claims that require “publishing” as an essential element—as opposed to any cause of action—gives effect to the” entire statute. Chicago Lawyers’ Committee at 697. This is consistent with both the intent of statute and other court’s holding that ISPs could not be held liable for third-party content placed on message boards or other forums provided by the ISP. It was not meant to cover the actions of an ISP such as blocking of emails.

The Seventh Circuit recently restated it objections to various courts interpretations of immunity in affirming Judge St. Eve’s holding in Chicago Lawyers’ Committee. Case no. 07-1101 decided March 14, 2008.

While Plaintiff was unable to find a case on point with equivalent facts to the case at hand, Comcast’s actions in blocking e360’s emails can in no way be considered equal to that of a publisher. Similarly, e360 is not seeking to hold Comcast liable for the actions or statements of a
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third-party, rather e360 is seeking to hold Comcast liable for its own actions: Comcast’s indiscriminate and improper blocking of e360’s emails.

Additionally, Defendant’s caselaw is either irrelevant or has been called into question by courts in this circuit. Several of Defendant’s cited cases and their reliance on the CDA were specifically rejected by a Court in this Circuit. See Chicago Lawyers’ Committee, at 694. (Judge St. Eve rejected Noah and Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997) progeny). Others are simply irrelevant. For example, all of Comcast’s caselaw regarding emailers involve unsolicited email or spam.2 As noted numerous times both in e360’s complaint and Dave Linhardt’s affidavit attached to e360’s Motion for Preliminary injunction, e360 does not and has never sent unsolicited email. Thus, Comcast’s caselaw is irrelevant.

[2 Many of Defendant’s cited cases do require the ICS to be acting as publisher to be granted immunity under the CDA even for cases involving spam.]

Even if Comcast is correct in its belief that it has the ability, with immunity, to block spam, which it deems objectionable, it does Comcast no good in this case. This case does not involve spam. E360 does not send unsolicited emails to anyone. E360 has information including opt-in dates as well as names and other information on all of the people to whom it send email. Comcast has been notified of this important piece of information on numerous occasions. In fact, until 2007, Comcast usually removed the block on e360’s emails based on this fact.

The fact that all of Comcast’s caselaw involves spam implies that like Plaintiff, Comcast could find no caselaw that would allow it to block solicited and in many cases double-confirmed solicited emails with immunity. The case is truly one of first impression. To allow Comcast to dictate and in fact overrule the decision of its subscribers it simply unfair both to Comcast’s subscribers and to e360.

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Comcast’s statements that e360’s compliance with CAN-SPAM is a red herring is not only incorrect it is a red herring in itself. E360’s compliance with the Controlling the Assault on Non Solicited Pornography and Marketing Act of 2003,[3] 15 USC §7701, is material to showing that e360 does not send spam and follows all laws regarding the sending of email. Comcast’s disregard for e360’s compliance shows that Comcast’s indiscriminate blocking of e360’s emails has little to do with controlling spam and more to do with Comcast’s belief that it knows better than its subscribers what its subscribers want to receive in their inboxes.

[3 CAN-SPAM effectively provides guidelines for email marketing and what must be contained in emails to ensure that customers and subscribers are only receiving emails that they want in their inboxes.]

Finally, exemption for the CDA requires Comcast to act in good faith, and as Plaintiff has alleged in its Complaint, Comcast has not acted in good faith. Comcast allows numerous other companies to send bulk emails in greater volume and with greater frequency. Comcast has not acted in good faith by singling out Plaintiff when others behaving in a like manner are not treated in a like fashion. Plaintiff’s complaint, which is to be taken as true, alleges the action to be contrary to a good faith action, thus the exemption cannot apply.

III. Plaintiff Has Plead Each Count of Its Complaint Properly

A. Plaintiff Has Properly Plead Its Claim for Tortious Interference with Prospective Economic Advantage

Plaintiff has properly pled its claim for Tortious Interference with Prospective Economic Advantage. Under Illinois law, “the tort of interference with prospective economic advantage has four elements: (1) plaintiff must have a reasonable expectancy of a valid business relationship with a third party; (2) defendant must know of the prospective business relationship; (3) defendant must intentionally interfere with the prospective business relationship such that the prospective business relationship never materializes; and (4) the interference must damage the
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plaintiff. Cook v. Winfrey, 141 F.3d 322 (7th Cir. 1998). Here, Plaintiff has properly alleged each of these elements sufficiently to meet Rule 8 notice pleading requirements.

Defendant argues that Plaintiff must allege a specific third party with which Comcast interfered. This is incorrect. “The Federal Rules do not require that [a] complaint allege [a] specific third party.” Id. at 328. Rather, Plaintiff can simply allege a “class” of third-parties with whom it had a business expectancy. Id. citing River Park, Inc. v. City of Highland Park, 281 Ill.App.3d 154 (Ill.App. 1996). See also, Celex Group, Inc. v. Executive Gallery, Inc., 877 F.Supp. 1114 (N.D.Ill. 1995) (Ct recognized that a showing of a class of prospective customers might be sufficient to survive a motion to dismiss). Thus, Plaintiff must only identify a class of prospective business customers.

However, Defendant is also incorrect when it argues that Plaintiff failed to “identify a single business relationship with which Comcast interfered.” D. memo p. 8. Plaintiff stated in Complaint that it “only sends emails to consumers who: a) purchase goods and services from its proprietary company owned website; or b) sign-up to receive emails either through E360 or through one of its marketing partners.” Comp. ¶27. While Plaintiff did not identify each individual customer that had purchased from its websites or signed up to receive its emails, the Plaintiff did sufficiently identify such individuals.4

[4 As Plaintiff has almost 843,597 customers and individuals who have signed up to receive their emails that utilize Comcast, it would be burdensome and wasteful to require Plaintiff to specifically identify each individual as Comcast demands.]

Defendant’s argument that it didn’t know of e360’s prospective business relationship with anyone and that it never intentionally interfered with any such relationship is outrageous and completely false. First, e360 has notified Comcast of its business relationships with its subscribers on numerous occasions for multiple years since Comcast starting blocking e360’s
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emails. Secondly, as Comcast blocks e360’s emails from reaching Comcast subscribers it seems obvious that Comcast would know exactly who e360 was trying to contact. Finally, as Comcast states that it uses various filters to filter emails and screens based on content, it is also obvious that Comcast knew exactly what was in each email it was blocking. Comcast knew exactly whom e360 was attempting to contact and exactly why e360 was attempting to contact such people. To argue otherwise is absurd and flies in the face of Comcast’s own statements.

Finally, Comcast states that the Complaint is void of allegation of damage caused by their actions. Comcast apparently failed to read paragraphs 31, 32 and 34 of the Complaint, all of which specifically allege damages caused by Comcast’s unreasonable behavior. Plaintiff has properly pled its allegations of tortious interference with economic advantage.

B. E360 Has Properly Pled Its Claims for Violations of the Computer Fraud and Abuse Act

E360 has properly pled allegations of violations of the Computer Fraud and Abuse Act (hereafter “Act”). 18 U.S.C. § 1030(a)(5)(A)(i) and (iii). Plaintiff alleges that Comcast violated the Act by 1) engaging in denial of service attacks against e360 that cause tremendous damage to e360’s servers and 2) providing false information regarding active and inactive email accounts.

Defendant argues that it: 1) it did not access e360’s computers or servers and did not intentionally cause damage; and 2) that it is e360’s fault for believing and relying on Comcast to provide accurate data regarding its subscribers’ active email accounts. Defendant’s argument fails not only because they are misguided but because they show Comcast’s willful disregard for e360 and their subscriber’s right to transact business.

Comcast states that e360 has improperly characterized Comcast’s actions as a “denial of service attack.” According to Carnegie Mellon University’s Cert Coordination Center (hereafter “Cert”), a “denial of service attack” is characterized by an explicit attempt by someone to
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prevent legitimate users of a service from using that service. Further, the type of attack committed by Comcast is specifically detailed by Cert as a “consumption of scarce resources” attack. Such attacks work by using up all available resources of an entity by establishing a connection with a victim’s server and preventing the victim from breaking the connection; thereby using up all the victim’s bandwidth, memory, CPU time and other resources and preventing the victim from operating. This is exactly what e360 alleged in its Complaint.

Further, Comcast’s statements and analogy that e360 could simply drop the connection or disconnect after a period of time is blatantly false. E360 and the email software it uses follow standard protocols that do not allow a connection to be dropped or disconnected when the servers are communicating like they are when a “denial of service attack” is underway. Comcast knows this and this is why it engages in such attacks.

Plaintiff also alleges that Comcast provides it false bounce data regarding the activity of subscribers accounts, essentially that Comcast lies about whether an account is actually active when it responds to e360’s email requests. Comcast’s argument is that it is e360’s fault that it believes Comcast or relies on the information Comcast provides regarding its subscribers and deletes entries to database based on such information. This is absurd. E360 must rely on Comcast for accurate information regarding its subscribers. It has no other source to get such information. Further, under its operating guidelines and in accordance with industry standard, it must delete entries from its database when informed that they are no longer active. Additionally, because high bounce rates are an indication of “spammer” activity, e360 always deletes emails when told they are no longer active. As e360 must delete emails from its database, Comcast should be liable for providing false information.

C. E360’s Emails Are Entitled to First Amendment Protection
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Whether they admit it or not, Comcast and other ISPs are conduits for the communication between 21st century Americans. Although Comcast is not a traditional “state actor”, its private conduct can, and in this case does, constitute “state action” which makes Comcast accountable for violating citizens’ constitutional rights. See e.g. Adickes v. S.H. Kress & Co., 389 U.S. 144, 224 (1970). In this case, Comcast’s refusal to deliver messages intentionally sent from one citizen to another citizen who requested the message be sent deprives both actors of their First Amendment rights and falls outside of Comcast’s traditional private actor protections.

Delivering mail is traditionally a state action carried out by a quasi-governmental agency, the United States Postal Service. Currently, however, more mail is sent to American citizens through ISPs to Internet addresses than is sent through the U.S. mail.5 American citizens have turned to the digital world to receive information previously obtained through the U.S. mail service. In situations like this, courts have found that private parties can be state actors. See Ridlen v. Four County Counseling Center, 809 F. Supp. 1343, 1346-47 (N.D. Ind. 1992) (holding that private conduct can constitute state action where the state and the private party maintain a sufficiently interdependent or symbiotic relationship; where the state requires, encourages, or is otherwise significantly involved in nominally private conduct; and where the private person or entity exercises a traditional state function).

Comcast’s conduct in this case constitutes state action. Comcast’s conduct in this case is unconstitutional because Comcast is blocking emails that senders want to send and receivers want to receive. This case is clearly distinguishable from cases that have held that non-solicited emails are not entitled to unfettered First Amendment protection. See Cyber Promotions, Inc. v. 5 (See http://www.usps.com/communications/newsroom/postalfacts.htm stating that the United States Postal Services processes and delivers approximately 703 million pieces of mail everyday; compare to http://www2.sims.berkeley.edu/research/projects/how-much-info-2003/execs... citing the International Data Corporation’s 2003 report stating that approximately 31 billion emails were being sent a day and that number was expected to double by 2006).
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American Online Inc., 948 F. Supp. 436 (E.D.P.A. 1996). Unlike in Cyber Promotions, where the emails were unsolicited, here, Comcast is blocking emails requested by the Comcast customer. No court has held that requested emails are not entitled to First Amendment protection where the information carrier is an ISP, who is only authorized to act as the mail carrier because of power bestowed upon it by the United States government, and where the ISP is acting in the traditional state role of a United States postal carrier. These emails are entitled to First Amendment protection.

The special treatment awarded ISPs and the exception made for ISPs from certain US laws is a result of the lawmakers understanding that an ISP is a conduit for information, and not the originator of such information. ISPs have been given special treatment in the Digital Millennium Copyright Act, the Communications Decency Act (the “CDA”, as referenced in Defendant’s motion pleadings), and CAN-SPAM to name but a few. See 17 U.S.C. §512 et seq.; 47 U.S.C. §230(c); and 15 U.S.C. §7701 respectfully; see also Doe v. GTE Corp., 347 F.3d 655 (7th Cir. 2003). The protection by the government of ISPs is a benefit conferred by the government with the assumption that requested information would flow freely through ISPs and that the Internet is a place where free speech remains unfettered. In the instant case, Comcast has acted through its own accord and has made an overt decision to not allow the free flow of information but rather to censor the communication sent from one citizen of the United States to another. As an integral part of the mechanism by which most Americans communicate, and as recognized by the United States Government, Comcast must adhere to the Constitutional principles inherent in the First Amendment in order to treat all parties in a manner that is fair and consistent with those Constitutional principles.

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In summary, Comcast, as an ISP exempted from litigation pertaining to various laws regarding communication over the Internet, is a state actor as a result of the protection and benefit conferred on Comcast by the government for its role as a conduit for the free flow of information. The government has recognized that any non-objectionable information is to flow freely and Comcast has decided, on its own accord, to intercept the mail sent from one citizen to another. This is not acceptable behavior for a state sanctioned conduit of public communication over a state owned series of internet protocol addresses and this censorship should not be tolerated. Plaintiff should have its opportunity to further prove the state action component and to show the improper censorship and the damage caused Plaintiff by such action of Comcast.

D. E360 Has Properly Pled Unfair Competition and Business Practices

E360 has properly pled claims of unfair competition and business practices based on Comcast’s misfeasant behavior. In Illinois, it is unlawful for any business to use unfair methods of competition and business practices, including but not limited to the use or employment of any false pretense, false promise or misrepresentation, in the conduct of trade or business. 815 ILCS 505/2. The elements of a claim are: 1) deceptive act or practice by defendant; 2) the defendant’s intent that the plaintiff rely on such act or practice; and 3) the occurrence of the act or practice during a course of conduct involving trade or commerce. Cripe v. Leiter, 184 Ill.2d 185, 191 (1998). Recovery may be had for unfair as well as deceptive conduct. Robinson v. Toyota Motor Credit Corp., 201 Ill.2d 403 (2002).

Here, Plaintiff has alleged that Comcast engaged in deceptive and unfair practices in acting as an intermediary delivering email to its subscribers from e360. Comcast clearly posts their email deliver policies on its websites. See Exhibit A to the Complaint. Comcast by posting such policies clearly expects both its subscribers and persons or entities emailing its subscribers
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to follow the policies set forth. It is also reasonable for one to expect that if such policies are complied with that Comcast will act accordingly as a non-bias intermediary. However, Comcast not only fails to follow its own policies, it discriminately targets entities without cause, blocks emails and causes significant damage. Comcast does not seem to contest that such conduct occurs within the course of trade or business. Thus, Comcast’s conduct fails squarely under the Illinois Consumer Fraud Act (hereafter “ICFA”).

1. Comcast Did Expect E360 to Rely On Their Unfair and Deceptive Conduct and Plaintiff Has So Alleged.

E360 relied on Comcast’s posted policies to be a fair and accurate statement of its operating procedure and expected Comcast to act in an unbiased manner as an intermediary delivering email to its subscribers. Comcast publishes, and according to Defendant’s brief frequently updates, its policies because it expects people to rely on them. D. memo p. 14. This is simply common sense. If Comcast did not expect anyone to rely on their policies, why post them and why update them?

E360 has also alleged, despite Defendant’s claims, that Comcast acted in an unfair and deceptive manner by 1) not delivering emails in accordance with its own policies and 2) by discriminately allowing other companies, whom Plaintiff alleges have agreements with Comcast, to send emails to Comcast subscribers. Comp. ¶ 57-60.

Comcast’s claim that it owed no duty to Plaintiff is meritless. As an intermediary, Comcast owes a duty not only to its subscribers but also to individuals communicating with subscribers. Comcast has voluntarily and for profit taken on this duty by assuming the job of an intermediary. This is especially true because entities, such as e360, have no other means of communication with subscribers. Comcast simply should not be allowed to disrupt the only means of communication between two parties based on its own biased opinions or actions.

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Comcast’s argument that its Acceptable Use Policy gives it the right to “refuse to transmit or post and to remove or block any information or materials, in whole or in part, that it, in its sole discretion, deems to be offensive, indecent, or otherwise inappropriate, regardless of whether this material or its dissemination is unlawful” is a red herring. Def. memo p.14. Defendant neglects to inform the Court of the title of the section the quote came from, namely “Inappropriate Content and Transmissions.” Such statement of disclaimer is intended to allow Comcast to delete inappropriate content or block inappropriate emails. This has no relevance to e360’s emails that are completely proper. Nor can Comcast use this statement as a blanket disclaimer that it can simply hide behind to allow it act in any manner it chooses.

2. Defendant’s Conduct Relating to E360 is Unfair under the ICFA

Plaintiff’s allegations that Comcast conduct in refusing to allow its email to be transmitted to Comcast subscribers while allowing other companies exactly like e360 to conduct business using its systems is patently unfair under the ICFA. Factors in determining whether an activity is unfair include: 1) whether the practice offends public policy; 2) whether it is immoral, unethical, oppressive or unscrupulous; 3) whether it causes substantial injury to consumers. Federal Trade Commission v. Sperry & Hutchinson Co., 405 U.S. 233 (1972). All three criteria do not need to be satisfied to support a finding of unfairness. Robinson v. Toyota Motor Credit Corp., 201 Ill.2d 403 (2002). Here, Defendant’s conduct offends public policy and causes substantial injury to consumers by preventing them from freely conducting business with whomever they choose.

The court in Robinson upheld the dismissal of the ICFA claims based on the plaintiff’s ability to contract with other companies and its knowledge of the contract it signed. Here, e360 has no ability to deal with any other company other than Comcast when its customers are
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Comcast subscribers. Further, e360’s customers are completely unaware of the failure of e360 to be able to communicate with them regarding orders or other advertising. Clearly, Comcast’s conduct in failing to allow parties to freely transact business and communicate causes substantial injury, especially in light of the fact that consumers are completely unaware of the harm perpetrated against them. Such conduct and Plaintiff’s allegations in the Complaint fall squarely within the parameters of the ICFA.

3. Plaintiff Need Not Be A Consumer to Allege Violations of the ICFA

As Plaintiff’s allegations directly relate to its and consumers ability to communicate and transact business, Plaintiff claims are within the ICFA. “The Consumer Fraud Act is a regulatory and remedial statute intended to protect consumers, borrowers, and business persons against fraud, unfair methods of competition, and other unfair and deceptive business practices. It is to be liberally construed to effectuate its purpose.” Robinson at 416 citing Cripe v. Leiter, 184 Ill.2d 185, 191 (1998). Defendant states that e360’s ability to maintain this action “turns on ‘whether plaintiff can plead and prove a nexus between the complained-of conduct and consumer protection.” D. memo pg. 15. Here, Plaintiff’s allegations directly relate to its and consumer’s ability to freely communicate and transact business. Electronic mail, commonly referred to as email, is an extremely important and popular means of communication, relied on my millions of Americans everyday for personal and commercial purposes. 15 USC §7701(a)(1). This important component of business and communication must be afforded the protection that allows the parties to be free of unfair practices such as Defendant’s. Thus, Defendant should not be allowed to practice unfair and deceptive business practices as those alleged by Plaintiff in its Complaint.

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CONCLUSION

WHEREFORE, E360Insight, LLC respectfully requests this Court deny Defendant’s Motion for Judgment on the Pleadings, enter a preliminary injunction, as requested by e360 in its motion, prohibiting Comcast from engaging in behavior such as indiscriminately blocking e360’s emails and engaging in ‘denial of service’ attacks against e360, and require Comcast to answer the Complaint filed in this case.

Date: March 20, 2008

Respectfully submitted,
/s/ Carla E. Buterman
One of the attorneys for Plaintiff

Comcast Reply Due

MOTION by Defendant Comcast Corporation for judgment on the pleadings response due by 3/20/2008. Reply due by 3/27/2008.

Comcast's Reply to e360's Response to Comcast's Motion for Judgment on the Pleadings

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

E360INSIGHT, LLC,
Plaintiff,

v.

COMCAST CORPORATION,
Defendant.

COMCAST CORPORATION,
Counterclaimant,

v.

E360INSIGHT, LLC,
Counterdefendant,
DAVID LINHARDT,
MAVERICK DIRECT MARKETING
SOLUTIONS, INC.,
BARGAIN DEPOT ENTERPRISES, LLC,
d/b/a bargaindepot.net and
bargainshoppecorp.com,
NORTHSHORE HOSTING COMPANY, LLC
d/b/a ROCKY MOUNTAIN INTERNET
SERVICES, LLC and BAY CITY HOSTING,
LLC,
RAVINIA HOSTING COMPANY, LLC,
NORTHGATE INTERNET SERVICES, LLC,
and
JOHN DOES 1-50,
Third-Party Defendants.

COMCAST’S REPLY IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS

Comcast’'s Motion relies chiefly on a straightforward application of Section 230(c)(2) of
the Communications Decency Act (“CDA”), 47 U.S.C. § 230. It is remarkable, then, that e360
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never even mentions that relevant section of the CDA in its six page discussion of the statute.
Nor can e360 “find a case on point.” (Pl.’s Resp. p. 4).

The law is clear Comcast is not liable for filtering any of e360’'s e-mail solicitations, regardless of their content, why they are sent, or their alleged compliance with CAN-SPAM. Congress has rejected the notion that an ISP such as Comcast is required by law to facilitate email solicitations like e360’'s. This Court, following the plain language of the CDA, should enter judgment on the pleadings for Comcast.

I. COMCAST IS IMMUNE UNDER 230(C)(2).

The CDA contains two provisions applicable to Internet Service Providers such as Comcast, namely:

Section 230(c)(1): “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider;” and

Section 230(c)(2): “no ... provider of an interactive computer service shall be held liable
on account of ... any action voluntarily taken in good faith to restrict access to or
availability of material that the provider ... considers to be ... objectionable.”

47 U.S.C. § 230. e360 focuses entirely on Section 230(c)(1), inapplicable here, and completely disregards Section 230(c)(2), which is applicable and which is discussed at length in Comcast’s Memorandum (Def.’s Mem. pp. 5-8).

Ignoring both the plain text of 230(c)(2) and numerous cases applying it, e360 inexplicably argues that the CDA “was not meant to cover the actions of an ISP such as blocking of e-mails.” (Pl.’s Resp. p. 4). To the contrary, in discussing Section 230(c)(2), the Seventh Circuit has stated that “[a] web host that does filter out offensive material is not liable to the censored customer.” Doe v. GTE Corp., 347 F.3d 655, 659 (7th Cir. 2003). The Seventh Circuit affirmed this view in its recent opinion in Chicago Lawyers Committee For Civil Rights Under
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the Law, Inc. v. Craigslist, Inc., Case No. 07-1101 (7th Cir. Mar. 14, 2008), confirming the clear
meaning of the statute’'s plain text.

e360'’s only argument is that, because it has informed Comcast that it is legally compliant with CAN-SPAM, Comcast cannot rely on CDA immunity in filtering e-mails using Comcast’'s independent technologies and criteria.1 As discussed in Comcast’'s Memorandum, CAN-SPAM, by its own terms, has no effect on an ISP’'s policy of declining to transmit certain categories of messages; it cannot be used as a sword as e360 seeks to do. Moreover, e360’'s argument turns the CDA on its head. Accepting e360’s arguments, an ISP is immune under the CDA only for filtering out e-mails it correctly identifies as unlawful under CAN-SPAM. Such immunity is no immunity at all. Forcing an ISP to litigate each instance where it filters an e-mail to determine immunity would provide enormous disincentives for an ISP to filter or block objectionable content. Likewise, allowing a speculative and implausible allegation of bad faith to eviscerate an ISP'’s Congressionally granted immunity would provide the same disincentives. Either result would be not only contrary to stated public policy and Congressional intent, it is not the law. In a world where 90% of e-mails sent to consumers are spam, Congress has stepped in to ensure the viability of ISPs as “conduits for the communication between 21st century Americans” (Pl.’s Resp. p. 10), to ensure that ISPs can, without fear of litigation, develop and implement technological measures that help protect their subscribers and their inboxes.

[1 Throughout its Response, e360 implies that the CAN-SPAM Act provides the sole litmus test for whether an e-mail is objectionable. Contrary to e360’'s characterizations, e-mails that violate CAN-SPAM are only a subset of what consumers reasonably consider objectionable.]

II. EVEN IF COMCAST IS NOT IMMUNE UNDER THE CDA, E360’S CLAIMS FAIL.

Even if the Court finds that Comcast is not immune under Section 230(c)(2) of the CDA, e360 has failed to allege any claim on which it is entitled to relief.

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A. e360 Fails to Plead Tortious Interference.

e360 claims that it “can simply allege a ‘class’ of third-parties with whom it had a business expectancy.” (Pl.’s Resp. p. 7). Yet, e360 has not alleged any existing business relationships with Comcast’'s subscribers. e360’'s Complaint states that it is an “email marketing company” (Compl. ¶ 4) who “is hired by and partners with companies that wish to market their products or services using the internet.” (Compl. ¶ 7). Thus, the relationships with which e360 alleges Comcast has interfered are those with e360’'s marketing clients and partners, not Comcast’'s customers. Further, Comcast’'s Memorandum clearly demonstrates that any alleged relationships between e360 and Comcast’'s subscribers are far too attenuated to be viewed as reasonable” to support a claim.2

[2 While some courts in the Seventh Circuit have recognized that alleging a “class” of prospective
customers is sufficient to survive a motion to dismiss a tortious interference claim under Rule 12(b)(6), none involved a class of potential customers as tenuous as that alleged here. See generally Cook v. Winfrey, 141 F.3d 322 (7th Cir. 1998) (plaintiff’s allegation that defendant interfered with certain third parties interested in purchasing the rights to publication of his experiences was sufficient to survive a motion to dismiss where defendant’s actions were directed at those third parties); River Park, Inc. v. City of Highland Park, 281 Ill.App.3d 154, 667 N.E. 2d 499 (Ill. App. Ct. 2d. Dist. 1996) (noting that plaintiff’s expectation of a business relationship was “reasonable” where plaintiff alleged the existence of some contracts and an expectation of entering into more); Celex Group, Inc. v. Executive Gallery, Inc., 877 F. Supp. 1114 (N.D. Ill. 1995) (granting summary judgment for defendant where plaintiff failed to identify a specific third party with whom it had a reasonable expectation of entering into a business relationship).]

e360'’s argument is the equivalent of holding a newspaper liable for refusing to run an offensive advertisement because the newspaper “interfered” with a prospective business relationship with its own subscribers. Such an argument is not supported by law or reason.

B. e360 Fails to Plead a Violation of the Computer Fraud and Abuse Act.

Comcast'’s filtering technologies do nothing more than react, in accordance with industry standards, to objectionable e-mails sent to its network. Mislabeling Comcast’'s responses to e360’'s bulk e-mails as a “denial of service attack” does not turn Comcast’'s reaction into the type
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of “access” to a protected computer system required to establish a violation of the CFAA. e360 claims a “denial of service attack” involves “establishing a connection with a victim'’s server and preventing the victim from breaking the connection.” (Pl.’s Resp. p. 9). Yet, in reacting to e360'’s e-mail solicitations, Comcast’'s filtering technologies neither establish the connection with e360 nor prevent e360 from breaking the connection. By e360’'s own description, it is e360'’s systems not Comcast’'s that prevent any servers or connections from disengaging. (Pl.’s Resp. p. 9).

With respect to the allegedly false bounce information, e360 admits that it is complaining about how it chooses to react to information generated by Comcast’'s servers in response to e360’'s e-mails. Apparently, even though e360 believes the bounce notifications to be false, e360 irretrievably deletes allegedly valid and valuable e-mail addresses in response to such notifications (as opposed to, say, putting the entries in a separate database until it can independently confirm the accuracy of the information). (Pl.’s Resp., p. 9). It is clear from the complaint that Comcast does not, as required to trigger liability under the CFAA, access e360’'s computers.

C. Comcast Is Not A State Actor.

Because it is not a state actor, Comcast cannot violate e360’'s First Amendment rights, and e360 cites no case finding an ISP to be a state actor for purposes of the First Amendment.

Both of the theories e360 advances for finding Comcast to be a state actor fail. First, the “public function” test is applied narrowly by the courts: only when an entity performs an activity or function that is traditionally and exclusively performed by the government, such as governing a city, managing an election, or eminent domain, does it constitute state action. See e.g. Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974) (providing electric utility power services not reserved exclusively to the state).

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Internet and e-mail services have always been provided primarily by non-governmental entities, including private corporations, educational institutions, and non-profit organizations. e360’'s argument that e-mail is akin to “snail mail” by virtue of the government’s operation of the United States Postal Service is not the law.3 Just as courts have found that America Online, CompuServe, Google, and other ISPs do not engage in a traditionally exclusive public function, neither does Comcast. See, e.g., CompuServe v. Cyber Promotions, Inc., 925 F. Supp. 1015 (S.D. Ohio 1997); Cyber Promotions, Inc. v. America Online, Inc., 948 F. Supp. 436 (E.D. Pa. 1996) (“AOL is merely one of many private online companies which allow its members access to the Internet....The State has absolutely no interest in, and does not regulate, this exchange of information between people, institutions, corporations and governments around the world.”).4

[3 Notably, the only case e360 cites for this proposition found no state action because a privately held hospital did not operate a traditionally exclusive public function. See Ridlen v. Four County Counseling Center, 809 F. Supp. 1343, 1351 (N.D. Ind. 1992).

4 In any event, the government is not the exclusive provider of mail delivery services as many private entities, such as UPS or Federal Express, also provide such services. By e360'’s rationale, these private entities’ services would also constitute state action since they provide a service that the U.S. government also provides.]

e360 further misses the point with its attempt to distinguish the instant case from Cyber Promotions by arguing that, unlike the sender in Cyber Promotions, its e-mails are solicited. Neither the Cyber Promotions court, nor any other court, has relied on the fact that the senders’ communications were unsolicited in holding that an ISP was not a state actor. See Cyber Promotions, Inc., 948 F. Supp. at 445; see also Langdon v. Google, Inc., 474 F. Supp. 2d 622 (E.D. Del. 2007); Noah v. AOL Time Warner, Inc., 261 F. Supp. 2d 532 (E.D. Va. 2003); CompuServe Inc., 962 F. Supp. 1015. Whether an e-mail that Comcast filters is solicited or unsolicited has absolutely no bearing on whether Comcast is a state actor.

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e360 also argues that Comcast is a state actor by virtue of the “special treatment” afforded to it under federal law, namely, that it is immune from liability for certain of its activities. By this logic, any entity that receives a government subsidy, license, immunity, or other benefit is a state actor. This is not the law. As the Second Circuit, among other courts, has held: “a finding of state action may not be premised on the private entity’'s creation, funding, licensing, or regulation by the government.” Loce v. Time Warner Entm’t Advance/Newhouse P’ship, 191 F.3d 256, 266 (2d Cir. 1999); see also Wilcher v. City of Akron, 498 F.3d 516, 520 (6th Cir. 2007).

Privately owned television and radio stations, as well as cable providers, are not state actors because the federal government grants them a license to use the public airways, nor because state law allows them to implement and enforce policies banning programs they deem obscene or otherwise objectionable; thus, they can refuse to air certain programs or advertisements in their discretion. See Columbia Broad. Sys. v. Democratic Nat’l Comm., 412 U.S. 94, 93 S. Ct. 2080 (1973) (radio station’s refusal to air antiwar group’s messages not state action); Loce, 191 F.3d at 267-8 (Time Warner’s refusal to air programming it deemed indecent not state action). Likewise, Comcast is not a state actor because the government has provided it immunity to filter out e-mails it deems objectionable; like television and radio stations as well as cable providers, Comcast can refuse to “air” certain advertisements (in the form of commercial e-mails its filtering technologies deem objectionable) in accordance with its policies.5

[5 Although Comcast is not a state actor subject to the restraints of the First Amendment, Comcast supports the free speech principles of the First Amendment and believes in the free flow of information. Comcast believes this interest is served by protecting the integrity of its ISP and e-mail services through filtering out commercial solicitations that are a nuisance or degrade the services offered to its subscribers.]

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D. e360 Fails to Identify Any Unfair or Deceptive Trade Practices Conducted By Comcast.

e360'’s arguments that Comcast violated its own policies or delivered e-mail from other companies do not support a claim under the ICFA.6

[6 Plaintiff ignores the numerous cases cited by Comcast requiring dismissal of its ICFA claim. (Mov. Br. 12-13.) Plaintiff only cites Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 775 N.E. 2d 951 (Ill. 2002), a case affirming dismissal of a complaint where the plaintiff could not identify an unfair or deceptive act under the ICFA.]

The plain language of Comcast’'s AUP could not be clearer – Comcast may “refuse to transmit or post and to remove or block any information or materials, in whole or in part, that it in its sole discretion, deems to be offensive, indecent, or otherwise inappropriate, regardless of whether this material or its dissemination is unlawful.” (Def’s. Mem. p. 13-14). e360 alleges that the “posting” of its “e-mail deliver [sic] policies” amounted to an agreement that if e360 followed such policies, its “completely proper” e-mail would be delivered to Comcast’s subscribers.7 Such an interpretation of the AUP is at odds with the very provisions e360 cites. Accordingly, the AUP (and Comcast’s compliance with it) cannot support a claim for unfair or deceptive trade practices.

[7 e360 does not address its failure to plead its claims sounding in fraud (Comcast’s alleged misrepresentations of its policies) with particularity under Fed. R. Civ. P. 9(b). (Def.’ Mem. p. 13.) Thus, Comcast and the Court can assume that e360 has conceded the failure.]

e360 cites absolutely no authority for its claim that “as an intermediary, Comcast owes a duty not only to its subscribers but also to individuals communicating with its subscribers.” (Pl.’s Resp. p. 13). Comcast’'s AUP and related policies provide guidance as to what is considered an acceptable use of Comcast’'s network, but nowhere do they create an obligation on behalf of Comcast to “deliver” e360’'s e-mail to its subscribers. The fact that Comcast permits, either through agreements or otherwise, certain e-mail to reach its consumers is irrelevant.

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Congress has expressly recognized the important public policy behind controlling the massive amounts of junk e-mail received by consumers. The extensive legislative and judicial history addressing this problem confirm that, far from “offending” public policy, Comcast’'s conduct is manifestly consistent with it.

Under well-established Illinois and Seventh Circuit law, because e360 is not a “consumer” as defined by the ICFA, it must “plead and prove a nexus between the complained-of conduct and consumer protection....” Pace American, Inc. v. Elixir Inds., No. 06 C 4661, 2007 WL 495302, * 4 (N.D. Ill. Feb. 13, 2007), citing Athey Products Corp. v. Harris Bank Roselle, 89 F.3d 430 (7th Cir. 1996); see also New Freedom Mortgage Corp. v. C& R Mortgage Corp., No. 03 C 3027, 2004 WL 783206 (N.D. Ill. Jan. 15, 2004) (granting motion to dismiss where the complaint did not allege any public injury or injury to consumers). Tellingly, here, as in Pace American, e360 seeks no relief on behalf of consumers, but rather solely damages payable to it and injunctive relief permitting it to send e-mail solicitations. (Compl. ¶¶ 35, 46, 53, 62).

Ignoring the long line of cases in this court addressing this issue, e360 states in a conclusory manner that “e360'’s allegations directly relate to its and consumer’s ability to freely communicate and transact business.” (Pl.’s Resp. p. 15).8 e360 can cite no law or set of facts supporting its position. Try as it may, e360 cannot cloak its own financial interest in sending email solicitations as a public-spirited act of consumer protection. Indeed, the Complaint speaks only of harm to e360 and its business, not to consumers. (Compl. ¶¶ 54-62). Notably, e360
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makes no allegations of consumer complaints, and, still further, e360 concedes that its intended recipients, who allegedly have “opted-in” to receive e360’'s solicitations, never even notice they are not receiving them.

[8 Throughout its Response, e360 suggests that “e360'’s customers are completely unaware of the
failure of e360 to be able to communicate with them regarding orders or other advertising.” (Pl.’s Resp., p. 15). e360 does not allege to have “orders” from any of Comcast’s subscribers and is merely trying to avoid the inevitable dismissal. As discussed in Comcast’'s Memorandum, e360’s customers are the companies it is sending e-mail on behalf of, not Comcast’'s subscribers.]

Dated: March 27, 2008

Respectfully submitted,

LOEB & LOEB LLP

/s/ Douglas N. Masters
Douglas N. Masters
Nathan J. Hole
321 N Clark Street, Suite 2300
Chicago, IL 60610
Phone: (312) 464-3144
Fax: (312) 464-3111
dmasters@loeb.com
Attorneys for Defendant
Comcast Corporation

Hearing on Motion for Judgment on the Pleadings

MOTION by Defendant Comcast Corporation for judgment on the pleadings response due by 3/20/2008. Reply due by 3/27/2008. Motion hearing set for 4/15/2008 at 12:30 PM

Memorandum Opinion and Order GRANTING Motion for Judgment on the Pleadings

Well, we predicted this would happen. And so it has. Comcast has § 230 immunity from liability on everything. Even if they didn't, e360 failed to file any CREDIBLE claims against Comcast. They've been pretty much laughed out of court.

The first paragraph sets the tone. If you were pulling for e360 on this one then it doesn't get any better from there.

Don't forget, though, that the Countersuit/3rd Party Complaint against Linhardt and his corporate sock puppets remain until or unless Comcast decides to dismiss. This case has suddenly transformed into Comcast v. e360Insight.

[UPDATE: I just noticed that the case is marked as "CLOSED" in PACER. I'll post more as I get more information, but if the whole case is closed then the Countersuit/3rd Party Complaint may not be moving forward either.

UPDATE 2: I found the following minute entry in PACER today (4/18/2008):

MINUTE entry before Judge Honorable James B. Zagel: Judgment entered on 4/10/2008 is hereby vacated. Entered in error. Case reopened as to the counterclaim and third party complaint.

Thus, the Counterclaim/3rd Party Complaint is ON and the matter is re-opened as to this part of the case ONLY.]

===============================
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

E360INSIGHT, LLC,
Plaintiff,

v.

COMCAST CORPORATION,
Defendant.

MEMORANDUM OPINION AND ORDER

Plaintiff e360Insight, LLC is a marketer. It refers to itself as an Internet marketing company. Some, perhaps even a majority of people in this country, would call it a spammer.

e360 sends e-mail solicitations and advertisements, for a fee, to millions of e-mail users. More than a few of those users are subscribers to Comcast, an Internet service provider. Many e-mail users do not want to see (or delete unread) the messages sent by e360. Even if every user wanted these e-mails, Comcast might well have its network overloaded by the mailings. Comcast, like the federal judiciary and other enterprises, uses filters to control the volume of its e-mail and to block e-mails its users don’t want to see.

It can fairly be said that there is a national discussion about blocking unwanted messages of all sorts. In 2004, Congress noted that unsolicited commercial e-mail is currently estimated to account for over half of all e-mail traffic and noted, too, that these e-mails imposed significant costs on those who carry and receive such e-mail. 15 U.S.C. § 7701 (a)(2), (6) (2004). This is the context of this case. There is a “do not call list” designed to stop unsolicited phone calls and faxes. Many, if not most, large companies, block messages to their own employees. On the other hand, there are no laws which facilitate the blocking of direct mail solicitations through the
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post office or package carriers, perhaps because the cost of physical delivery of a paper solicitation significantly limits its use. The idea of blocking seems at odds in some way with free speech protection, even though there are limits imposed on the free speech protection of commercial speech, which is, I infer, the principal, if not the only, business of e360. None of the larger policy issues, though, is particularly relevant to the decision of Comcast’s motion for judgment on the pleadings.

The claims here are four: (1) a federal law claim for violation of the Computer Fraud and Abuse Act (CFAA); (2) a claim of infringement of free speech in violation of First Amendment rights; (3) a state law claim for tortious interference with prospective economic advantage; and (4) a claim for deceptive or unfair practices barred by the Illinois Consumer Fraud Act (ICFA). The motion for judgment on the pleadings argues that the Communications Decency Act of 1996 (CDA) protects Comcast from these claims even if they would otherwise be valid.

It is clear that Congress understood that it would not be enough to pass a law against mass electronic mailings. It knew that servicers like Comcast would create software to identify, filter, and block e-mail messages that were unwanted. It knew, too, that the details of such software could not be publicly disclosed, so as to prevent them from being easily evaded. The policy was to make it easier for e-mail recipients to control the information they receive, particularly the material received by minors at home and in schools.

Congress, and, I think, everyone else who studied the issue understood that blocking software would probably block too much. To insure that you or your child will not receive unwanted or inappropriate e-mails, your Internet service may wind up preventing you from receiving some e-mails that are neither unwanted nor inappropriate. Such Internet service
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providers feared they might be held liable for blocking too much, or even too little, and this was, as Congress recognized, “[a] disincentive[ ] for the . . . utilization of blocking and filtering technologies.” 47 U.S.C. § 230(b)(4) (1998). So, Congress passed the so-called Good Samaritan provision of the CDA to protect providers who take actions to prevent access to objectionable content:

No provider or user of an interactive computer service shall be held liable on account of –

(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be . . . objectionable, whether or not such material is constitutionally protected; or

(B) any action taken to enable . . . the technical means to restrict access.

§ 230(c)(2). The Act of Congress expressly pre-empted state or local laws inconsistent with its grant of immunity. § 230(e).1

[1 In this case, Congressional policy does not differ, much, if at all, from Illinois law. See 815 ILCS 511/10 (Electronic Mail Act) which permits providers to block receipt or transmission of unsolicited advertisements on their own initiative and states that providers shall not be held liable for such actions taken in good faith.]

The claim that a suit is barred by federal statute may be properly raised in a motion for judgment on the pleadings. See McCready v. eBay, Inc., 453 F.3d 882 (7th Cir. 2006); Chicago Lawyers Comm. for Civil Rights v. Craigslist, Inc., 461 F.Supp.2d 681 (N.D. Ill. 2006), aff’d, 2008 WL 681168 (7th Cir. 2008) (claim for failure to block).

The initial question is whether the kind of unsolicited and bulk e-mails (whether you call them spam or mass marketing mailings) are the sort of communications an entity like Comcast could deem to be objectionable. A few courts have addressed the issue and answered “yes.” See Optinrealbig.com, LLC v. Ironport Systems, Inc., 323 F.Supp.2d 1037 (N.D. Cal. 2004) (company that forwarded spam complaints to ISPs entitled to immunity). Indeed, section 230
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imposes a subjective element into the determination of whether a provider or user is immune from liability. Zango, Inc. v Kaspersky Lab, Inc., No. 07-0807, slip. op. at 6-7 (W.D. Wash. Aug. 28, 2007) (noting that section 203(c)(2) only requires that the provider subjectively deems the blocked material objectionable); Pallorium v. Jared, 2007 WL 80955, at *7 (Cal. Ct. App. Jan. 1, 2007) (same). This standard furthers one of section 230's goals “to encourage the development of technologies which maximize user control over what information is received by individuals, families, and schools who use the Internet and other interactive computer services.” § 230(b)(3). Here, there is no question that Comcast, through the use of its numerous programs, software, and technologies, considers the material sent by e360 via e-mail objectionable.

e360 argues that § 230(c) has a narrower ambit than the one claimed by Comcast. e360 insists that a broad immunity was enacted, but not so broad as to protect Comcast. It relies on Chicago Lawyers’ Committee, but it is difficult to determine what language in Chicago Lawyers’ Committee favors e360. 461 F.Supp.2d 681. The problem the Court of Appeals confronted in that case and in Doe v. GTE, 347 F.3d 655 (7th Cir. 2003), was the problem of the service provider who did not block anything, or anything much. The question before the Courts there was how to read a statute which seemed to offer protection to providers who did block, a protection which was intended to be an incentive to block. Should the statute be extended to protect those who choose to do nothing? Implicit in both decisions is the conclusion that the statute does provide fairly absolute protection to those who choose to block. This was the choice Comcast made.

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The validity of that choice is attacked by the claim, presumed true, that e360 is in compliance with another federal act, 15 U.S.C. §§ 7701-7713 (2004) (Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003) (CAN-SPAM).

e360 rejects the spammer characterization, saying that it sends e-mails only to persons who opt-in with e360 (or its partners) to receive e-mails. It has a common practice of sending emails to request a second confirmation of willingness to receive e-mails. Beginning in 2005, Comcast began a program of indiscriminate blocking of e360 e-mails, which is a significant problem for e360 because, for the majority of its addressees, it has no other way to deliver its goods. e360 protested and, sometimes, Comcast would release a block after hearing from e360 that it was mailing to people who were willing recipients. By 2007, Comcast refused any further releases and showed little interest in discussing the matter with e360.2

[2 e360 says, in its brief, that Comcast has also engaged in “denial of service” attacks on
their system which acts overwhelm e360's system and prevent it from sending or receiving emails. e360 also claims that Comcast sends incorrect bounce information to their system with respect to e-mail addresses of those on e360's opt-in list. I do not understand what is being alleged. If e360 means that Comcast is refusing to transmit the e-mails and communicates this fact to e360 by bouncing them back, then it is e360's choice to submit very large numbers of emails for transmission which, after the first Comcast block, it should have known of this possibility and been prepared for it (perhaps by altering its protocols to allow for a connection to be disconnected). It is hard to see that sending e-mails back, in this context, is a denial of service “attack” when it is designed to prevent legitimate users of a service from using the service. It is not an “attack” to prevent users not believed to be legitimate from using a service. It is also impossible to see the allegations here as stating that Comcast intentionally accesses a computer without authorization. Unless these computers operate in non-standard ways, the initiation of access is laid at e360's door, not at Comcast's.]

But compliance with CAN-SPAM, Congress decreed, does not evict the right of the provider to make its own good faith judgment to block mailings. Section 7707 of the Act says that nothing in the Act shall “have any effect on the lawfulness . . . under any other provision of
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law, of the adoption, implementation, or enforcement by a provider of Internet access service of a policy of declining to transmit, route, relay, handle or store certain types of electronic mail messages.” See White Buffalo Ventures, LLC v. University of Texas, 420 F.3d 366, 371 (5th Cir. 2005); § 7707(c).

Under the law, a mistaken choice to block, if made in good faith, cannot be the basis for liability under federal or state law. To force a provider like Comcast to litigate the question of whether what it blocked was or was not spam would render § 230(c)(2) nearly meaningless.

What is left for e360 is to claim that Comcast has not acted in good faith. It argues that claim in this way: “Comcast has not acted in good faith. Comcast allows numerous other companies to send bulk emails in greater volume and with greater frequency . . . singling out Plaintiff when others behaving in a like manner are not treated in a like fashion.” Pl.’s Resp. to
Def.’s Mot. for J. on the Pleadings.3

[3 Comcast argues that, absent its statutory protection, e360 has failed to state claims on all of its Counts.

(A) I agree that the Tortious Interference with Prospective Economic Advantage Count is difficult to understand. I have found no cases in which refusal to allow a plaintiff to run an advertisement in a medium with wide circulation (and thus reducing sales) of plaintiff’s products or those from whom he is selling constitutes such tortious interference. Usually the prospective economic advantage is far more concrete than selling to public which consists of people on a very, very long opt-in list. It is illegal to interfere with a fair number of prospects, but usually they are a class of easily identified individuals and usually the interference is that of the defendant interacting directly with the prospective buyers.

(B) The claim under CFAA under the “denial of service” theory fails for the reasons stated above.

(C) Comcast is a private enterprise and has no obligation to honor the free speech rights of e360. C.B.S. v. Democratic Nat’l Comm., 412 U.S. 94 (1973). Comcast provides services traditionally performed by private enterprises, not the government. The government does not, with very few exceptions, connect people with one another through the Internet. Jackson v. Metropolitan Edison, 419 U.S. 345 (1974) (publicly regulated utility). The fact that an enterprise is regulated, licensed, or funded by the government does not make the enterprise part of the state. Wilcher v. City of Akron, 498 F.3d 516 (6th Cir. 2007).

(D) The state law claim for unfair competition is weightless. Comcast did not deceive e360 since Comcast told e360 that Comcast reserved the right to refuse service, besides which e360 is not a consumer under Illinois law.]

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The issue is whether e360 has pled an absence of good faith. Under the standards of Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007), e360 has not done so. The affidavit of the President of e360 does not attest to Comcast’s alleged policy of allowing others to do what it denies e360. And Comcast does not claim that the reason it refuses to transmit e360's electronic mails is their volume and their frequency. The absence of good faith is not adequately pled.

I grant judgment on the pleadings with respect to the complaint as a whole on the grounds that § 230(c) precludes proceeding on any of the claims. Alternatively, I dismiss the remainder of the claims for the reasons stated above.

ENTER:
James B. Zagel
United States District Judge
DATE: April 10, 2008