Court Opinion

ID: 868596
Source: CourtListenerOpinion
Date Created: 2013-05-21 20:10:44.743331+00
Date Added: 2024-06-11T09:06:54.738255
License: Public Domain

FILED
                             NOT FOR PUBLICATION                            MAY 21 2013

                                                                        MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                      U .S. C O U R T OF APPE ALS

                             FOR THE NINTH CIRCUIT

MELALEUCA, INC.,                                 No. 11-35403

               Plaintiff - Appellant,            D.C. No. 1:10-cv-00553-EJL

  v.
                                                 MEMORANDUM *
DARYL HANSEN,

               Defendant - Appellee.

                    Appeal from the United States District Court
                              for the District of Idaho
                     Edward J. Lodge, District Judge, Presiding

                              Submitted May 14, 2013 **

Before:        LEAVY, THOMAS, and MURGUIA, Circuit Judges.

       Melaleuca, Inc. appeals from the district court’s judgment dismissing its

action alleging federal and state law claims related to unsolicited and misleading

commercial spam email. We have jurisdiction under 28 U.S.C. § 1291. We review

de novo a dismissal on the basis of the doctrine of collateral estoppel. McQuillion

          *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
          **
             The panel unanimously concludes that this case is suitable for
decision without oral argument. See Fed. R. App. P. 34(a)(2).
v. Schwarzenegger, 369 F.3d 1091, 1096 (9th Cir. 2004). We affirm in part, vacate

in part, and remand.

      The district court properly dismissed Melaleuca’s claim under the federal

Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003

(“CAN-SPAM Act”) because the issue of whether Melaleuca had statutory

standing to bring this claim was actually litigated in a prior action between the

same parties as a critical and necessary part of the judgment in that action. See id.

(setting forth factors for collateral estoppel to apply under federal law); see also

Deutsch v. Flannery, 823 F.2d 1361, 1364 (9th Cir. 1987) (collateral estoppel can

apply to a dismissal without prejudice if the determination being given preclusive

effect was essential to the dismissal). Melaleuca’s amendments did not cure its

failure to allege that, even standing in the shoes of its assignor, it suffered the type

of harm necessary to pursue a CAN-SPAM Act claim. See Gordon v. Virtumundo,

Inc., 575 F.3d 1040, 1048, 1054 (9th Cir. 2009) (type of harm necessary to assert

CAN-SPAM Act claims excludes costs incurred by Internet access provider to take

reasonable precautions against spam as part of normal operations); see also

Deutsch, 823 F.3d at 1364-65 (where amendments in a second action render the

doctrine of issue preclusion inapplicable, they must be independently examined).

      However, Melaleuca’s new assertion that the court has diversity jurisdiction

                                            2                                     11-35403
over the action under 28 U.S.C. § 1332 was not actually litigated as a critical and

necessary part of the judgment in the prior action, and, therefore, should not be

given preclusive effect. See McQuillion, 369 F.3d at 1096. Accordingly, we

vacate only the district court’s conclusion that its decision in the prior action to

deny Melaleuca leave to allege diversity jurisdiction has preclusive effect on the

court’s consideration of whether Melaleuca properly invoked diversity jurisdiction

over its state law claims in the present action. On remand, the parties should

address whether Melaleuca has asserted good faith damages in excess of the

federal amount-in-controversy, including based on statutorily available attorney’s

fees under state law claims to the extent that such claims are not preempted. See

Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994, 998, 1000 (9th Cir. 2007)

(explaining different tests that apply to evaluating the amount-in-controversy

requirement depending on whether the plaintiff alleges a damages amount, and

when statutory attorney’s fees can be included in the jurisdictional minimum); see

also Gordon, 575 F.3d at 1054-64 (discussing when state law claims are preempted

under the CAN-SPAM Act).

      The parties shall bear their own costs on appeal.

      AFFIRMED in part, VACATED in part, and REMANDED.

                                            3                                     11-35403