Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-03186/USCOURTS-cand-3_08-cv-03186-8/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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United States District Court

For the Northern District of California

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1 Plaintiff dismissed Defendant Mark Theis on March 2, 2009. 

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ASIS INTERNET SERVICES, et al.,

Plaintiffs,

 v.

RICHARD RAUSCH, et al.,

Defendants.

 /

No. 08-03186 EDL

ORDER GRANTING PLAINTIFFS’

MOTION FOR SUMMARY JUDGMENT,

GRANTING PLAINTIFFS’ MOTION TO

SEVER, DENYING AS MOOT

PLAINTIFFS’ MOTION TO DISMISS

AND GRANTING LEAVE TO FILE

AMENDED COMPLAINT

Plaintiffs Asis Internet Services and Joel Householter, dba Kneeland Engineering, dba

Foggy.net allege that they have received 24,724 unsolicited commercial email advertisements from

Defendants1 Richard Rausch, Kirk Whiting, and Edward Heckerson, who are individuals doing

business as Find a Quote. Plaintiffs allege that Defendants have violated the Controlling the Assault

of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act), 15 U.S.C. § 7701 et

seq., which restricts the transmission of unsolicited commercial email. 

On October 16, 2008, the clerk of the court entered default against Rausch and Whiting. On

March 19, 2009, the clerk entered default against Heckerson. On July 7, 2009, the parties stipulated

to set aside default against Heckerson. Also on July 7, 2009, Plaintiffs withdrew their motion for

default judgment against Rausch, Whiting and Heckerson. On September 3, 2009, the parties

stipulated to set aside the default against Whiting. Rausch remains in default. 

On September 8, 2009, Heckerson and Whiting answered the amended complaint. On October

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28 2 Plaintiffs and Heckerson have consented to this Court’s jurisdiction pursuant to 28 U.S.C.

§ 636(c). 

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30, 2009, Plaintiffs filed a motion for summary judgment against Heckerson, and later filed a proof

of service dated October 30, 2009. The motion was set for hearing on December 22, 2009. When

Heckerson did not file an opposition, the Court continued the hearing and provided another

opportunity for him to oppose. Despite the continuance, Heckerson did not file an opposition to the

Motion for Summary Judgment by the December 29, 2009 deadline. Accordingly, the Court held a

hearing on Plaintiff’s motion for summary judgment on January 19, 2010. At that hearing, the Court

permitted Plaintiffs to file additional briefing on the question of whether Plaintiffs had standing. 

On February 9, 2010, Plaintiffs filed a supplemental declaration of the president of Asis

Internet Services in support of Plaintiff’s standing. Later, on February 18, 2010, Plaintiffs filed a

Motion to Dismiss Defendant Whiting and a Motion to Sever Defendant Rausch. No Defendant

opposed the motions. On March 30, 2010, the Court held a hearing on the Motion to Dismiss and

the Motion to Sever, and a further hearing on the Motion for Summary Judgment. The Court

provided Plaintiffs another opportunity to file additional briefing on the issue of damages under the

CAN-SPAM Act, which Plaintiffs filed on April 2, 2010. 

For the reasons stated at the January 19, 2010 and March 30, 2010 hearings and in this Order,

Plaintiffs’ Motion for Summary Judgment is granted, Plaintiffs’ Motion to Sever is granted, and

Plaintiffs’ Motion to Dismiss is denied as moot because the Court granted Plaintiffs leave to file an

amended complaint. 

Motion for Summary Judgment against Defendant Heckerson2

Facts

Plaintiff Asis Internet Services is an internet access service, in operation since 1995, in

Garberville, California. See White Decl. ¶ 2. Asis owns various domain names used to provide

internet and email services. See id. ¶ 9. Asis provides dial-up and broadband internet and email

service to much of the population of Garberville. See id. ¶ 2. Asis has just under 1,000 internet

access and email customers. See id. Asis provides its services through its own equipment, service

agreements with Postini, Falcon Knight, AT&T and other vendors, and its team of four employees. 

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3

See id. ¶ 7. 

Asis receives approximately 200,000 spam emails per day to all of its and its customers; email

accounts, both active and inactive. See White Decl. ¶ 5. It costs approximately $3,000 per month to

process spam emails in both processing and employee costs. See id. Some emails have a higher

cost if they contain viruses or hacker software, or if they result in customer complaints. See id. Asis

occasionally suffers network and server slow downs based on daily receipt of spam emails. See id. 

Between November 16, 2006 and May 5, 2008, Asis received 24,724 emails from Defendants

that are the subject of this case. See White Decl. ¶ 6. Asis received the emails first on its filtering

service operated by Postini, then transferred, processed and stored the emails on its email server, and

then transferred the emails to its attorney where they were stored on a special spam storage and

investigation server. See id.; Ex. C. 

Legal Standard

Summary judgment shall be granted if “the pleadings, discovery and disclosure materials on

file, and any affidavits show that there is no genuine issue as to any material fact and that the movant

is entitled to judgment as a matter of law.” Fed. R. Civ. Pro. 56(c). Material facts are those which

may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 

A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return

a verdict for the nonmoving party. Id. The court must view the facts in the light most favorable to

the non-moving party and give it the benefit of all reasonable inferences to be drawn from those

facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The court must

not weigh the evidence or determine the truth of the matter, but only determine whether there is a

genuine issue for trial. Balint v. Carson City, 180 F.3d 1047, 1054 (9th Cir. 1999). 

A party seeking summary judgment bears the initial burden of informing the court of the basis

for its motion, and of identifying those portions of the pleadings and discovery responses that

demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317,

323 (1986). Where the moving party will have the burden of proof at trial, it must affirmatively

demonstrate that no reasonable trier of fact could find other than for the moving party. On an issue

where the nonmoving party will bear the burden of proof at trial, the moving party can prevail

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3 15 U.S.C. § 7704(a)(1) states: 

(a) Requirements for transmission of messages

(1) Prohibition of false or misleading transmission information 

It is unlawful for any person to initiate the transmission, to a protected computer,

of a commercial electronic mail message, or a transactional or relationship

message, that contains, or is accompanied by, header information that is

materially false or materially misleading. For purposes of this paragraph-- 

(A) header information that is technically accurate but includes an originating

electronic mail address, domain name, or Internet Protocol address the access to

which for purposes of initiating the message was obtained by means of false or

fraudulent pretenses or representations shall be considered materially misleading;

(B) a “from” line (the line identifying or purporting to identify a person initiating

the message) that accurately identifies any person who initiated the message shall

not be considered materially false or materially misleading; and 

(C) header information shall be considered materially misleading if it fails to

identify accurately a protected computer used to initiate the message because the

person initiating the message knowingly uses another protected computer to

relay or retransmit the message for purposes of disguising its origin. 

4

merely by pointing out to the district court that there is an absence of evidence to support the

nonmoving party’s case. Id. If the moving party meets its initial burden, the opposing party “may

not rely merely on allegations or denials in its own pleading;” rather, it must set forth “specific facts

showing a genuine issue for trial.” See Fed. R. Civ. P. 56(e)(2); Anderson, 477 U.S. at 250. If the

nonmoving party fails to show that there is a genuine issue for trial, “the moving party is entitled to

judgment as a matter of law.” Celotex, 477 U.S. at 323. 

Discussion

Plaintiffs move for summary judgment based on 15 U.S.C. §§ 7704(a)(1) and (a)(2) of the

CAN-SPAM Act. The CAN-SPAM Act prohibits such practices as transmitting messages with

“header information that is materially false or materially misleading.” See 15 U.S.C. § 7704(a)(1).3

Further, the CAN-SPAM Act prohibits transmission of a commercial electronic message by a person

with actual or fairly implied knowledge that the subject heading would be likely to mislead a

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4 15 U.S.C. § 7704(a)(2) states:

(2) Prohibition of deceptive subject headings 

It is unlawful for any person to initiate the transmission to a protected computer

of a commercial electronic mail message if such person has actual knowledge,

or knowledge fairly implied on the basis of objective circumstances, that a

subject heading of the message would be likely to mislead a recipient, acting

reasonably under the circumstances, about a material fact regarding the contents

or subject matter of the message (consistent with the criteria used in enforcement

of section 45 of this title). 

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recipient about a material fact regarding the contents of the message. See 15 U.S.C. § 7704(a)(2).4

Standing

 “[T]he CAN-SPAM standing inquiry involves two general components: (1) whether the

plaintiff is an ‘Internet access service’ provider (‘IAS provider’), and (2) whether the plaintiff was

‘adversely affected by’ statutory violations.” Gordon v. Virtumundo, Inc., 575 F.3d 1040, 1049 (9th

Cir. 2009). As to the first element, the Ninth Circuit noted that the CAN-SPAM Act defines

“Internet access service” by reference to the Communications Act, see 15 U.S.C. § 7702(11), which

provides:

The term “Internet access service” means a service that enables users to access

content, information, electronic mail, or other services offered over the Internet, and

may also include access to proprietary content, information, and other services as part

of a package of services offered to consumers. Such term does not include

telecommunications services.

47 U.S.C. § 231(e)(4). The Ninth Circuit declined to set forth a general test or to define the outer

bounds of what an IAS provider is, but stated generally that: (1) providing email accounts alone is

not sufficient to be an IAS provider; (2) IAS providers are generally distinct from entities that

merely carry or receive such email; and (3) there may be a technical or hardware component implicit

in the definition. Gordon, 575 F.3d at 1051-52. The plaintiff in Gordon was not an IAS provider

because he did not have physical control over or access to the hardware, his service appeared to be

limited to using a control panel via an ordinary Internet connection through an ISP to set up email

accounts and other administrative tasks, he had a nominal role in providing internet services, and he

did not take any precautions to avoid receiving spam. See Gordon, 575 F.3d at 1052. 

Here, by contrast, Plaintiff is a corporation licensed to do business in California that provides

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dial-up, broadband internet and email service to almost 1,000 customers. See White Decl. ¶ 2. It

has been in business since 1995, provides services using its own equipment, has service contracts

with outside vendors, and has four employees. See id. ¶ 7. There is no triable issue of fact as to

whether Plaintiff is an ISP. 

As to the second element, the Gordon court did not provide an outer limit of the meaning of

“adversely affected” in this context, but did define some of its contours. First, the “type of harm

envisioned by Congress did not encompass the ordinary inconveniences experienced by consumers

and end users.” Gordon, 575 F.3d at 1053. Instead, the “harms redressable under the CAN-SPAM

Act must parallel the limited private right of action and therefore should reflect those types of harms

uniquely encountered by IAS providers.” Id. The sorts of harms that may be within the statute

include: (1) “the cost of investing in new equipment to increase capacity and customer service

personnel to deal with increased subscriber complaints;” (2) “maintaining email filtering systems

and other anti-spam technology on their networks to reduce the deluge of spam;” and (3) “network

crashes, higher bandwidth utilization, and increased costs for hardware and software upgrades,

network expansion, and additional personnel.” Id. However, ordinary filtering costs do not

constitute a harm. Id. at 1054 (“We expect a legitimate service provider to secure adequate

bandwidth and storage capacity and take reasonable precautions, such as implementing spam filters,

as part of its normal operations.”). The Gordon court declined to enumerate each and every harm

that might satisfy the adverse affect element, but stated that “at a minimum . . . the harm must be

both real and of the type experienced by ISPs . . . . the harm must be of significance to a bona fide

IAS provider - something beyond the mere annoyance of span and greater than the negligible

burdens typically borne by an IAS provider in the ordinary course of business.” Id. at 1053-54

(citing Hypertouch v. Kennedy-Western Univ., 2006 WL 648688, at *4 (N.D. Cal. Mar. 8, 2006)

(finding evidence of “decreased server response and crashes,” “higher bandwidth utilization,” and

“expensive hardware and software upgrades” sufficient harm for statutory standing)). 

The Gordon court did not decide whether there must be a direct causal link between the

particular emails at issue in litigation and the ISP-type harms, but stated that:

To give the statutory text meaning there must be, at bare minimum, a demonstrated

relationship between purported harms and the type of e-mail practices regulated by

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the Act-i.e., a showing that the identified concerns are linked in some meaningful

way to unwanted spam and, in turn, represent actual harm. The e-mails at issue in a

particular case must, at the very least, contribute to a larger, collective spam problem

that caused ISP-type harms.

Gordon, 575 F.3d at 1054. The Gordon court rejected the argument that the harm for standing

purposes is merely “the cost of carrying SPAM emails over the [Internet access provider’s]

facilities.” Id. at 1053, n.11. The plaintiff in Gordon had not demonstrated that he was “adversely

affected” because: (1) he had not hired additional personnel; (2) he had not experienced technical

concerns or incurred costs that can be necessarily attributed to commercial email; and (3) he

purposefully refused to implement spam filters or to make any other attempt to block spam. See

Gordon, 575 F.3d at 1055. 

Here, unlike the plaintiff in Gordon, Plaintiffs have made a sufficient showing of adverse

affect. Specifically, Plaintiffs initially stated that they receive 200,000 spam emails per day, that

processing the emails costs approximately $3,000 per month, that some emails have a higher

processing cost, that Asis occasionally experiences network slow downs due to spam, and that Asis’

contract with vendors provides for spikes in bandwidth without additional cost. See White Decl. ¶ 5. 

Plaintiffs also state that the emails at issue in this case were received by Postini, a filtering service,

and then processed and transferred to Asis’s servers, and then transferred to counsel. See White

Decl. ¶ 6. Plaintiffs have further stated that some its clients are local businesses that lack the

resources to adequately screen for spam, and so hire Plaintiffs to do so. See Supp. White Decl. ¶ 3. 

Three of Plaintiffs’ clients complained about the specific spam at issue in this case, and resolution of

those complaints consumed twenty-two hours of Plaintiffs’ staff time. See Supp. White Decl. ¶¶ 4-

8. Plaintiffs lose customers regularly as a result of spam, and would realize over one third more

revenue per year if they did not have to spend money on addressing spam. See id. ¶¶ 9-10. 

Plaintiffs' showing of standing is sufficient under Gordon, which requires “some combination of

operational or technical impairments and related financial costs attributable to unwanted commercial

email.” Gordon, 575 F.3d at 1053-54. 

Merits of Plaintiffs’ claims

Plaintiffs’ motion is based on Heckerson’s failure to answer Requests for Admissions. 

Plaintiffs served the Requests for Admission on September 9, 2009. See Singleton Decl. Ex. A3. 

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Those Requests address the crux of the CAN-SPAM issues in this case. For example, Request

Number 3 stated: “Admit that Defendant Edward Heckerson is, or was in the business of internet

marketing via sending, or having sent, bulk commercial email messages;” Request Number 5 stated:

“Admit that Defendant Edward Heckerson sent bulk commercial email messages for marketing

purposes;” Request Number 6 stated: “Admit that Defendant Edward Heckerson knew that the

Affiliates they were using to acquire leads were sending, or hiring others to send, unsolicited

commercial electronic emails in violation of the CAN-SPAM Act;” Request Number 7 states:

“Admit that Defendant Edward Heckerson knew that the Affiliates they were using to acquire leads

were sending, or hiring others to send, commercial electronic emails with false header information in

violation of the CAN-SPAM Act;” Request Number 9 stated: “Admit that Defendants Edward

Heckerson knew that the Affiliates they were using to acquire leads were sending, or hiring others to

send, commercial electronic email advertisements with misleading information on their behalf;”

Request Number 12 stated: “Admit that even though Defendants Edward Heckerson claims it does

not tolerate SPAM by its Affiliates, Defendant Edward Heckerson has taken no action sufficient to

stop or limit the use of SPAM by its Affiliates;” and Request Number 15 stated: “Admit that

Defendant Edward Heckerson sent or had sent by Affiliates, on Defendant’s behalf, commercial

electronic mail messages advertising insurance that were sent to email addresses at the email server

with domain name of: asis.com, during the period of November 16, 2006 through May 5, 2008.” 

See id. Heckerson did not respond to the Requests for Admission. See Singleton Decl. ¶ 6. On

October 13 and 15, 2009, Plaintiffs sent a letter and email advising Heckerson’s counsel of the

overdue responses. See id. ¶ 6; Ex. B. Heckerson did not respond to the letter or email. See id. ¶ 6. 

 If a party does not respond to Requests for Admission, they are deemed admitted. See Fed. R.

Civ. P. 36(a)(3). Rule 36 is self-executing; a matter that is admitted under this rule is conclusively

established unless the court permits the admission to be withdrawn or amended. See Fed. R. Civ. P.

36(b). Unanswered requests for admissions may be relied on as the basis for granting summary

judgment. See Conlon v. U.S., 474 F.3d 616, 621 (9th Cir. 2007), citing O’Campo v. Hardisty, 262

F.2d 621, 624 (9th Cir. 1958); United States v. Kasuboski, 834 F.2d 1345, 1350 (7th Cir.1987)

(“Admissions made under Rule 36, even default admissions, can serve as the factual predicate for

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summary judgment.”); Cereghino v. Boeing Co., 873 F.Supp. 398, 403 (D. Or. 1994) (resulting

admissions not improper merely because they relate to ultimate fact or prove dispositive of entire

case).

By failing to respond to Plaintiffs’ Requests for Admission, Heckerson has admitted liability

under the CAN-SPAM Act. Specifically, with respect to the violation of § 7704(a)(1), Heckerson

admits that he was in the business of internet marketing via sending or having sent bulk commercial

email messages, that he contracted with one or more affiliates to send bulk commercial email

messages and that he sent or had his affiliates send commercial electronic email messages containing

false header information (Request Numbers 3, 4, 7). In addition, with respect to § 7704(a)(2),

Heckerson admits that he knew that his affiliates were sending or hiring others to send commercial

electronic mail advertisements with misleading information (Request Number 9). 

Further, Heckerson’s admissions satisfy the additional knowledge requirement when an action

is brought by an ISP. Specifically, § 7704(a) prohibits the “initiation” of certain types of misleading

email messages. Initiate is defined by the CAN-SPAM Act as: “. . . to originate or transmit such

message or to procure the origination or transmission of such message, but shall not include actions

that constitute routine conveyance of such message.” 15 U.S.C. § 7702(9). “Procure,” in turn, is

defined to mean: “. . . intentionally to pay or provide other consideration to, or induce, another

person to initiate such a message on one's behalf.” 15 U.S.C. § 7702(12). Further, when an ISP

brings an action under the CAN-SPAM Act, a special definition of “procure” applies:

In any action brought under paragraph (1), this chapter shall be applied as if the

definition of the term “procure” in section 7702(12) of this title contained, after

“behalf” the words “with actual knowledge, or by consciously avoiding knowing,

whether such person is engaging, or will engage, in a pattern or practice that violates

this chapter”. 

15 U.S.C. § 7706(g)(2). Pursuant to the Requests for Admission, Heckerson admitted that he knew

that his affiliates were sending or hiring others to send unsolicited commercial electronic emails in

violation of the CAN-SPAM Act, that he knew that the affiliates were sending emails with false

header information, misleading subject lines, and misleading information, and that he has

established a pattern and practice of using spammers to acquire sales leads (Request Numbers 6, 7,

8, 9, 14). 

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Accordingly, there is no triable issue of fact as to whether Heckerson violated the CAN-SPAM

Act, and Plaintiffs’ Motion for Summary Judgment is granted. 

Damages

In an action brought by an Internet service provider, statutory damages are available:

For purposes of paragraph (1)(B)(ii), the amount determined under this paragraph is

the amount calculated by multiplying the number of violations (with each separately

addressed unlawful message that is transmitted or attempted to be transmitted over

the facilities of the provider of Internet access service, or that is transmitted or

attempted to be transmitted to an electronic mail address obtained from the provider

of Internet access service in violation of section 7704(b)(1)(A)(i) of this title, treated

as a separate violation) by-- 

(i) up to $100, in the case of a violation of section 7704(a)(1) of this title; or 

(ii) up to $25, in the case of any other violation of section 7704 of this title. 

15 U.S.C. § 7706(g)(3)(A). Courts have discretion to award treble damages if the court finds that

the defendant acted willfully and knowingly or the unlawful activity included one or more of the

aggravated violations in § 7704(b). See 15 U.S.C. § 7706(g)(3)(C). Aggravated violations

contained in § 7706(b) include directory harvesting and automated creation of multiple email

accounts, both of which Plaintiffs argue occurred here. In assessing damages, courts may consider

whether the defendant has established and implemented commercially reasonable practices and

procedures to prevent CAN-SPAM Act violations or the violation occurred despite commercially

reasonable efforts to maintain compliance with the CAN-SPAM Act. See 15 U.S.C. §

7704(g)(3)(D). Courts may also award attorneys’ fees and costs. See 15 U.S.C. § 7706(g)(4). 

Plaintiffs seek statutory damages in the maximum amount of $100 per email for each violation

of § 7704(a)(1), and in the maximum amount of $25 per email for each violation of § 7704(a)(2), for

a total of $3,090,500.00. Because there is no evidence that Heckerson has a practice or procedure in

place to prevent CAN-SPAM Act violations, and he has admitted that he has taken no action

sufficient to stop or limit the use of spam by his affiliates, the statutory bases for reducing damages

under § 7704(g)(3)(D) have not been met here. 

At the hearing on March 30, 2010, the Court expressed doubt that Plaintiffs would be entitled

to the maximum amount of statutory damages on the facts of this case, and provided Plaintiffs leave

to file supplemental briefing on the issue of damages, and in particular, to address the approach

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taken by Facebook, Inc. v. Wallace, 2009 WL 3617789 (N.D. Cal. Oct. 29, 2009). In Facebook, the

plaintiff sought a default judgment of over $7 billion in statutory damages under the CAN-SPAM

Act and California Business and Professions Code section 22948.3 against an individual who

engaged in a phishing and spamming scheme that compromised the accounts of a substantial number

of Facebook users. The court found that statutory damages were justified because the defendant

“willfully violated the statutes in question with blatant disregard for the rights of Facebook and the

thousands of Facebook users whose accounts were compromised by his conduct,” and willfully

violated the TRO and preliminary injunction issued in that case. Facebook, 2009 WL 3617789, at

*2. Even so, and not ruling on the question of whether the award would violate due process, the

Facebook court was not persuaded that an award of over $7 billion was proportionate to the

defendant’s offenses. Id. at *2. The court exercised its discretion to decline to award all of the

damages requested by the plaintiff, and instead awarded $50 for each of the 14,214,753 violations of

the CAN-SPAM Act, and a set amount for one violation of the state law, for a total award of

$711,237,650.00. Id. Given the magnitude of the award, the Facebook court declined to award

treble damages. Id. 

Statutory damages are warranted in this case given Heckerson’s violations of the CAN-SPAM

Act. However, as in Facebook, the Court is not persuaded that an award of $3 million is

proportionate to Heckerson’s offenses, even without reaching the issue of whether the award would

violate due process. This case involves far fewer emails than in Facebook, so the misconduct was

less pervasive and widespread. Further, Heckerson did not willfully violate an injunction in this

case. Heckerson simply did not engage in the same level of misconduct as the Facebook defendant,

so an award of the maximum statutory damages is not warranted. 

Instead, this case is more similar to Tagged, Inc. v. Does 1 through 10, 2010 WL 370331 (N.D.

Cal. Jan. 25, 2010). There, the defendant initiated a total of 6,079 spam emails to users of a social

networking site seeking to fraudulently entice users of that website to click on hyperlinks in those

spam messages that would take the user to an adult dating website. Tagged, 2010 WL 370331, at *

1. The court entered default judgment in favor of the plaintiff for, among other things, violations of

several provisions of the CAN-SPAM Act. Id. at * 6. With respect to damages, however, the court

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concluded:

It is true that defendant's violations, from what plaintiff has alleged, were intentional

and willful, and statutory damage awards are justified to punish defendant and to

deter future violations. That does not justify an award of nearly two million dollars

under the CANSPAM Act to plaintiff. A court has wide discretion to determine the

amount of statutory damages between the statutory maxima and minima. In

calculating statutory damage, some courts have looked to estimates of actual

damages. Here, plaintiff gives no estimates of actual damages to itself nor how much

defendant profited from his actions. Plaintiff cites to three other default judgment

orders to supports its position that it is entitled to nearly two million dollars in this

instant action. In Facebook v. Guerbuez, No. C08-03889 (N.D.Cal. decided Nov. 21,

2008), Facebook was awarded $873 million against a defendant who had sent four

million spam emails to other Facebook users. In Myspace v. Wallace, 2008 U.S. Dist.

LEXIS 75752 (C.D.Cal. May 28, 2008), Myspace was awarded $223 million against

a defendant who had sent nearly 400,000 messages and posted 890,000 comments

from 320,000 "hijacked" Myspace.com user accounts. 

In contrast, in this instant action, defendant Vogeler sent 6,079 individual emails to

6,079 Tagged users. Accordingly, this order concludes that it is just to award

statutory damages of $25 per violation, amounting to a total of $151,975. These

damages along with permanent injunction will adequately serve the purpose of

punishment and deterrence.

Id. at *11-12 (internal citations omitted). Accordingly, the Court awards statutory damages of $25

per violation of § 7704(a)(1), and $10 per violation of § 7704(a)(2), for a total statutory damages

award of $865,340.00. 

Plaintiffs argue that they are entitled to treble damages. Although Plaintiffs did not seek treble

damages in the original summary judgment motion, Plaintiffs raised the treble damages issue at the

hearing and in the supplemental briefing. Plaintiffs have provided persuasive evidence that

Heckerson engaged in conduct that warrants aggravated damages, and the total amount of trebled

damages is less than the award sought in Plaintiffs’ motion.

The CAN-SPAM Act provides that: 

(C) Aggravated damages 

The court may increase a damage award to an amount equal to not more than three

times the amount otherwise available under this paragraph if-- 

(i) the court determines that the defendant committed the violation willfully and

knowingly; or 

(ii) the defendant's unlawful activity included one or more of the aggravated

violations set forth in section 7704(b) of this title. 

15 U.S.C. § 7706(g)(3)(C). Plaintiffs argue that Heckerson engaged in aggravated violations by

conducting a directory harvest, which is prohibited under § 7704(b)(1)(A), and using automated

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scripts to acquire email accounts, which is prohibited under § 7704(b)(2). 

Directory harvest

The CAN-SPAM Act states that a directory harvest is an aggravated violation of the Act:

(1) Address harvesting and dictionary attacks-- 

It is unlawful for any person to initiate the transmission, to a protected computer, of a

commercial electronic mail message that is unlawful under subsection (a) of this

section, or to assist in the origination of such message through the provision or

selection of addresses to which the message will be transmitted, if such person had

actual knowledge, or knowledge fairly implied on the basis of objective

circumstances, that-- 

(i) the electronic mail address of the recipient was obtained using an automated

means from an Internet website or proprietary online service operated by another

person, and such website or online service included, at the time the address was

obtained, a notice stating that the operator of such website or online service will not

give, sell, or otherwise transfer addresses maintained by such website or online

service to any other party for the purposes of initiating, or enabling others to initiate,

electronic mail messages; or 

(ii) the electronic mail address of the recipient was obtained using an automated

means that generates possible electronic mail addresses by combining names, letters,

or numbers into numerous permutations. 

15 U.S.C. § 7704(b)(1)(A). According to Plaintiffs’ president, Nella White, a directory harvest can

be demonstrated by looking at the actual emails which all contain both the “sent to” email account

and the actual name of the customer owning the account in the header information in the email. 

White Decl. in Support of Brief re: Aggravated Damages ¶ 4; Ex. A. Ms. White testified that many

of the email accounts that received the spam emails at issue in this case are closed and have been

closed for some time. Id. ¶ 5; Ex. B. However, the emails identify the actual consumer who owned

the email accounts. Id. According to Ms. White, the only way someone could have obtained the

customer information is through a directory harvest because the information does not exist anywhere

else and the owners of the accounts no longer have access to the email accounts to solicit emails. Id.

¶ 6. Further, Ms. White states that Plaintiffs provide an Acceptable Use Policy on its servers, which

has been in place for a number of years. Id. ¶ 7; Ex. C. Ms. White’s declaration is persuasive and

undisputed evidence that Heckerson conducted a directory harvest that justifies treble damages

under § 7706(g)(C). 

Automated scripts

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The CAN-SPAM Act states that use of automated scripts is an aggravated violation of the Act:

(2) Automated creation of multiple electronic mail accounts 

It is unlawful for any person to use scripts or other automated means to register for

multiple electronic mail accounts or online user accounts from which to transmit to a

protected computer, or enable another person to transmit to a protected computer, a

commercial electronic mail message that is unlawful under subsection (a) of this

section.

15 U.S.C. § 7704(b)(2). According to Josh Mohland, a programmer/analyst for Plaintiffs’ counsel’s

firm, the emails in this case demonstrate use of an automated script. Mr. Mohland stated that there

were 4,408 unique email addresses in the “From” headers of the 24,724 emails at issue in this case. 

Mohland Decl. ¶ 3. The majority of the emails followed the pattern: 

name@subdomain.domain.com. Mohland Decl. in Support of Brief re: Aggravated Damages ¶ 3;

Ex. A. The “name” portion was either related to the product being advertised (e.g., lower

mortgage@), or a common name (e.g., joe@). Id. ¶ 4. The subdomains used in the emails usually

contained a word and a number (e.g., mail1). Id. ¶ 5. The pattern of emails also involved sending

emails from multiple subdomains and domains using the same “name,” such as

jesse@mx7.greenthe.com, jesse@mx11.greenthe.com, jesse@m15.oilca.com and

jesse@vmx15.penintatt.com. Id. ¶ 6. Mr. Mohland opined that it is common practice for spammers

to acquire thousands of email accounts and domain names through automated scripts because the

current technology identifies the spammer fairly quickly and puts the sending email account, domain 

name and IP address on blacklists and reputation-based lists used by spam filtering services used by

the sending and receiving ISPs to block additional further spam from those addresses. Id. ¶ 8; Ex. B.

Mr. Mohland provides persuasive and undisputed evidence that Heckerson used automated scripts,

which constitutes an aggravated violation under the statute and justifies treble damages. 

Accordingly, the Court exercises its discretion to treble the statutory damages award of

$865,340.00, for a total award of $2,596,020.00. 

Motion to Sever Defendant Rausch

Provided no substantial right will be prejudiced, particular parties may be severed on the

grounds that joinder is improper under Federal Rule of Civil Procedure 20. See William Schwarzer,

et al., Federal Civil Procedure Before Trial, § 16:161 (Rutter Group 2009) (citing Coughlin v.

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Rogers, 130 F.3d 1348 (9th Cir. 1997)). Rule 20 provides for joinder of defendants if the right to

relief is asserted against them jointly, severally, or alternatively with respect to or arising out of the

same transaction or occurrence, and there is a common question of law or fact among defendants. 

See Fed. R. Civ. P. 20. Here, joinder of Rausch was not improper because Plaintiffs allege that he

was involved, along with the other Defendants, in the business that caused the spam at issue in this

case. 

However, even where joinder is proper, a court may order severance under Federal Rule of

Civil Procedure 21 to prevent delay or prejudice. See Schwarzer, Federal Civil Procedure Before

Trial, § 16:162 (citing Coleman v. Quaker Oats Co., 232 F.3d 1271, 1296 (2000)). Here, Rausch is

in default and has filed for bankruptcy. He has not consented to this Court’s jurisdiction under 28

U.S.C. § 636(c). His presence in this lawsuit prejudices Plaintiffs because the Court is prevented

from ruling on the summary judgment motion as to Heckerson, who has appeared, answered and

consented. Accordingly, there is good cause to sever Rausch, and Plaintiffs’ motion to sever Rausch

is granted. 

Motion to Dismiss Defendant Whiting

The Court lacks authority to rule on Plaintiffs’ motion to dismiss because Defendant Whiting

has not consented to this Court’s jurisdiction pursuant to 28 U.S.C. § 636(c). See Nasca v.

Peoplesoft, 160 F.3d 578, 578-79 (9th Cir. 1998). As stated at the hearing, however, the Court

granted Plaintiffs leave to file an amended complaint pursuant to Federal Rule of Civil Procedure 15

to remove Whiting as a Defendant. Plaintiffs filed their amended complaint on April 2, 2010. 

Accordingly, Plaintiffs’ Motion to Dismiss Defendant Whiting is denied as moot. 

IT IS SO ORDERED.

Dated: May 3, 2010 

ELIZABETH D. LAPORTE

United States Magistrate Judge

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