NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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DEFS.’ REPLY RE MOT. FOR

AN UNDERTAKING - 1

(CV06-0204JCC)

The Honorable John C. Coughenour

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

JAMES S. GORDON, Jr., a married

individual, d/b/a

‘GORDONWORKS.COM'; OMNI

INNOVATIONS, LLC., a Washington

limited liability company,

Plaintiffs,

v.

VIRTUMUNDO, INC, a Delaware

corporation d/b/a

ADNOWLEDGEMAIL.COM;

ADKNOWLEDGE, INC., a Delaware

corporation, d/b/a

ADKNOWLEDGEMAIL.COM; SCOTT

LYNN, an individual; and JOHN DOES,

1-X,

Defendants.

NO. CV06-0204JCC

REPLY IN SUPPORT OF

DEFENDANTS’ MOTION FOR AN

UNDERTAKING PURSUANT TO 15

U.S.C. § 7706(g)(4)

NOTE ON MOTION CALENDAR: 

January 12, 2007

CONFIDENTIAL INFORMATION

I. INTRODUCTION

In their Motion for an Undertaking (“Motion”) (Dkt. No. 38), Virtumundo, Inc.,

Adknowledge, Inc., and Scott Lynn (collectively, “Defendants”) argued Plaintiffs are

unlikely to prevail at trial under their CAN-SPAM claims because they are seeking

damages for emails which conform to CAN-SPAM. Plaintiffs did not file an opposition

to the Motion and it should be granted as unopposed. To the extent this Court deems

Case 2:06-cv-00204-JCC Document 92 Filed 01/12/2007 Page 1 of 6

Gordon v. Virtumundo Inc et al Doc. 92

Dockets.Justia.com
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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DEFS.’ REPLY RE MOT. FOR

AN UNDERTAKING - 2

(CV06-0204JCC)

Plaintiffs having responded to the Motion at all, the Court can only rely on Plaintiffs’

motion for partial summary judgment based upon the novel theory that: “The information

the Defendant [sic] placed in the ‘From’ line of these emails does not accurately identify

the sender of the emails.” (Dkt. #53 at 2:13-14.) Plaintiffs allege, without legal support,

the “from” lines in Defendants’ alleged emails violate 15 U.S.C. § 7704(a)(1) (prohibiting

delivery of emails containing “false or misleading transmission information”). (Id. at

14:21 - 15:2.)

Plaintiffs’ motion for partial summary judgment is not sufficient to defeat

Defendants’ Motion for an Undertaking. Plaintiff Gordon’s testimony does not provide

factual support for his legal interpretation of CAN-SPAM. In his deposition testimony

early this week, Gordon testified he was never misled by any “from” lines in any of the

emails produced in this lawsuit, and cannot identify any false information in the email

“from” lines he alleges Defendants sent. This testimony refutes the only substantive

argument Plaintiffs have provided in support of their claims. 

Plaintiffs novel “from line” theory notwithstanding, Plaintiffs have not advanced –

in their motion for Partial Summary Judgment or otherwise – factual support for each of

the elements of a CAN-SPAM claim. For example, Plaintiffs’ do not advance factual

support for their claim that they are an Internet Access Service (IAS). The record

indicates Defendants are reasonably likely to be the prevailing party in Plaintiffs’ CANSPAM claims. Accordingly, Defendants respectfully request this Court grant

Defendants’ unopposed Motion for an Undertaking and require Plaintiffs to post an

undertaking in the amount of $350,000, as security for a potential award of fees and costs

to the prevailing party pursuant to 15 U.S.C. § 7706(g)(4).

II. FACTS AND ARGUMENT

A. Plaintiffs do not provide evidence or arguments concerning any other

alleged violations of CAN-SPAM.

In their Motion, Defendants argued that Plaintiffs had not provided any evidence

of emails which violate any of the five relevant subsections of CAN-SPAM:

Case 2:06-cv-00204-JCC Document 92 Filed 01/12/2007 Page 2 of 6
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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DEFS.’ REPLY RE MOT. FOR

AN UNDERTAKING - 3

(CV06-0204JCC)

1. The email contains false or misleading transmission information. 15

U.S.C. 7704(a)(1);

2. The email contains deceptive subject headings. 15 U.S.C.

7704(a)(2);

3. The email fails to include a return address or comparable

mechanism. 15 U.S.C. 7704(a)(3);

4. The email continues after an objection later than ten (10) days after

made “in a manner specified in the message” 15 U.S.C.

7704(a)(3)(A) & (4); or

5. The email fails to include an identifier, opt-out, and physical address. 

15 U.S.C. 7704(a)(5).

(Motion at 3:21 - 4:1.) Plaintiffs failed to respond to Defendants’ Motion. Instead, they

filed a summary judgment motion limited to a discussion of allegedly misleading “from”

lines. (Dkt. #53.) Accordingly, Plaintiffs have conceded they have no evidence

Defendants ever violated any of the other four subsections listed above. Pursuant to local

rules, this Court may construe Plaintiffs’ failure to oppose Defendants’ arguments as a

concession that those arguments have merit. LR 7(b)(2).

B. Gordon admits he was not misled by any “from” lines and cannot

identify any false information in them.

On January 9, 2007 and January 10, 2007, Defendants deposed Plaintiff Gordon

(on his own behalf and as the Fed. R. Civ. P. 30(b)(6) designee for Plaintiff Omni

Innovations) in the above-captioned lawsuit. (Declaration of Derek A. Newman in

Support of Defendants’ Motion for an Undertaking (“Newman Decl.”) ¶ 2.) Gordon’s

testimony refutes the only alleged factual basis for Plaintiffs’ lawsuit.

At his deposition, Gordon admitted he generally does not look at “from” lines. 

(Newman Decl. ¶ 2 Ex. A at 374:6-8.) Obviously, he could not have been misled by

words he never read in the first place. Moreover, when Gordon reviewed “from” lines at

his deposition, he admitted they did not contain any false or misleading information. For

example, he admitted an email with a “from” line providing “closet organizer” actually

assisted him in his determination that the email advertised a closet organizer. (Id. ¶ 2 Ex.

A at 367:21 - 368:4.) Likewise, Gordon admitted he was able to determine that an email

Case 2:06-cv-00204-JCC Document 92 Filed 01/12/2007 Page 3 of 6
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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DEFS.’ REPLY RE MOT. FOR

AN UNDERTAKING - 4

(CV06-0204JCC)

which had “closet organizer” in the “from” line, was commercial in nature. (Id. ¶ 2 Ex. A

at 370:2-12.) He admitted an email with the “from” line “Best Virus Defense” “doesn’t

look [like a] personal [email].” (Id. ¶ 2 Ex. A at 371:19 - 373:23.) He admitted an email

which mentioned First Premiere Bank in the “from” line was not misleading, since that

email was sent on First Premiere Bank’s behalf. (Id. ¶ 2 Ex. A at 437:17-24.)

Counsel for Defendants asked Gordon the following question: “Did any of the

‘from’ lines in emails that [Defendants] Virtumundo or Adknowledge sent you confuse

you?” (Newman Decl. ¶ 2 Ex. A at 374:18-19.) Initially, Gordon answered “yes”, but he

could not provide any specific examples. (Id. ¶ 2 Ex. A at 375:5-9.) Ultimately, Gordon

conceded he was not misled by any of the “from” lines he identified in this lawsuit. (Id.

¶ 2 Ex. A at 388:5-7.)

C. Gordon’s testimony indicates this lawsuit is frivolous.

Gordon admits he may have “indirectly” subscribed to receive emails from

Defendants. (Newman Decl. ¶ 2 Ex. A at 127:13-17.) However, he also admits he is

unaware of any evidence which supports his claim to have unsubscribed from

Defendants’ mailing lists. (Id. ¶ 2 Ex. A at 402:18 - 403:9.) He even concedes he may

have “inadvertently resubscribed” to Defendants’ mailing lists while “doing

reconnaisance” for this lawsuit. (Id. ¶ 2 Ex. A at 454:10 - 455:12.) In other words,

Gordon seeks damages for allegedly unsolicited commercial email he admits he may have

solicited. He is suing Defendants for failing to remove him from their mailing lists, even

though he may have asked to be on those mailing lists, and has no evidence he ever

requested to unsubscribe from them.

Throughout his deposition, Gordon affirmed his carelessness regarding discovery

matters. He testified he did not conduct a thorough search for relevant documents

because “it could have taken a week or two” and he had “other things to do.” (Newman

Decl. ¶ 2 Ex. A at 403:7 - 404:6.) He concedes he possesses computer disks he has “not

looked at” which may contain relevant emails, and does not “have a clue what’s on” those

disks. (Id. ¶ 2 Ex. A at 403:15 - 405:17.)

Case 2:06-cv-00204-JCC Document 92 Filed 01/12/2007 Page 4 of 6
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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DEFS.’ REPLY RE MOT. FOR

AN UNDERTAKING - 5

(CV06-0204JCC)

Gordon’s testimony indicates that for years his sole source of income has been the

settlement of lawsuits (and before that, he received state unemployment benefits). 

(Newman Decl. ¶ 2 Ex. A at 31:12 - 32:21; 45:21-23; 46:20-22.) He currently has at least

seven (7) active CAN-SPAM lawsuits in this district alone. (Motion at 7 n. 1.) Given his

clear intent to profit from the receipt of allegedly unsolicited emails, it is not surprising

that he refuses to block those emails even though he admits he has the ability to do so. 

(Newman Decl. ¶ 2 Ex. A at 413:5 - 414:10.) Gordon’s utter disregard of his discovery

obligations, combined with his status as a professional plaintiff and the frivolousness of

this lawsuit, provide a substantial justification to grant the requested undertaking.

D. Gordon admits he does not provide email services, and therefore the

plaintiffs cannot be an Internet access service.

The plaintiffs lack standing to sue under CAN-SPAM unless they qualify as an Internet

access service. 15 U.S.C. § 7706. The plaintiffs’ motion for summary judgment claims that

status arises out of providing free email accounts to nine people. However, Gordon admitted in

his deposition that he and Omni do not provide any email accounts. (Newman Decl. ¶ 2 Ex. A

at 466:24-25 (“I don’t provide e-mail accounts.”).) Rather, his domain name registrar,

GoDaddy.com provides the email services to these nine individuals:

Q. Does anybody currently, otherthan yourself, regularly use e-mail accounts at any

domain that you provide?

A. Okay, the problem I'm having that the distinction of what Omni provides as

opposed to what Godaddy provides, and that's not clear in my mind when you're

asking about provides.

Q. Do you know the distinction between what Omni provides and what Godaddy

provides?

A. A lot of it's blurred.

* * *

Q. And in connection with your role as an Internet access service, do you provide

e-mail accounts?

A. Okay. Domain names -- the answer about e-mail accounts, as I understand

your question, is no, I don't provide e-mail accounts. Domain names are not

provided by me. I'm not their registrar of domain names.

(Newman Decl. ¶ 2 Ex. A at 465:20-467:1 [emphasis added].) Since the plaintiffs admit

Case 2:06-cv-00204-JCC Document 92 Filed 01/12/2007 Page 5 of 6
NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610

Seattle, Washington 98104

(206) 274-2800

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DEFS.’ REPLY RE MOT. FOR

AN UNDERTAKING - 6

(CV06-0204JCC)

they do not provide the email accounts upon which their claim as an Internet access service is

based, the plaintiffs lack standing and cannot prevail under CAN-SPAM.

III. CONCLUSION 

Plaintiffs did not respond to Defendants’ Motion for an Undertaking, and the

Court should conclude Plaintiffs concede pursuant to LR 7(b)(2). Plaintiffs’ claims are

frivolous and unlikely to prevail at trial. Their silence with respect to four of the five

subsections of 15 U.S.C. § 7704(a) confirms their inability to support their claims based

upon those statutory requirements. Gordon admitted in his deposition there is no factual

support for the sole remaining claim, and that he does not provide the email accounts that

allegedly qualify him for standing to sue. All available evidence indicates Plaintiffs are in

the business of filing lawsuits solely for their settlement value, and are unwilling to honor

their discovery obligations under the Federal Rules of Civil Procedure. Requiring

Plaintiffs to post a bond will ensure payment of Defendants’ attorney fees and costs in the

likely event this Court determines that Defendants are the prevailing party. Accordingly,

Defendants respectfully request this Court order Plaintiffs to post a bond for $350,000.00

as security in the event this Court awards Defendants their reasonable attorney fees and

costs.

DATED this 12th day of January, 2007.

NEWMAN & NEWMAN,

ATTORNEYS AT LAW, LLP

By:

Derek A. Newman, WSBA No. 26967

Roger M. Townsend, WSBA No. 25525

Attorneys for Defendants

Case 2:06-cv-00204-JCC Document 92 Filed 01/12/2007 Page 6 of 6