Gordon v. Virtumundo Inc et al

Filing 30

MOTION to Dismiss by Defendants Virtumundo Inc, Adknowledge Inc, Scott Lynn. Noting Date 9/15/2006. (Attachments: # 1 Proposed Order # 2 Certificate of Service)(Townsend, Roger)

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Gordon v. Virtumundo Inc et al Doc. 30 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 1 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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. 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', Plaintiff, No. CV06-0204JCC DEFENDANTS' MOTION TO DISMISS NOTE ON MOTION CALENDAR: September 15, 2006 NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Dockets.Justia.com Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 2 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFS.' MOT. TO DISMISS - i (CV06-0204JCC) TABLE OF CONTENTS I. II. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 FACTS ALLEGED IN FIRST AMENDED COMPLAINT . . . . . . . 2 A. B. III. A. B. Plaintiffs' CAN-SPAM and CEMA allegations . . . . . . . . . . . . . . . 2 Plaintiffs' alleged actual damages . . . . . . . . . . . . . . . . . . . . . . . . . 3 The first and second causes of action should be dismissed for failure to plead with particularity . . . . . . . . . . . . . . . . . . . . . . 4 The third and fourth causes of action should be dismissed as a matter of law pursuant to Fed. R. Civ. P. 12(b)(6) . . . . . . . . 8 1. 2. 3. IV. Fed. R. Civ. P. 12(b)(6) Standard of Review. . . . . . . . . . . . . 8 Plaintiffs' CPA claims fail because there is no nexus between the alleged violations and alleged damages. . . . . 9 Plaintiffs' claim under RCW 19.170 et seq. fails because Plaintiffs did not allege damages arising out of a promotional advertising of prizes. . . . . . . . . . . . . . . . . 11 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 3 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION Plaintiffs seek statutory damages arising out of emails allegedly received from Defendants (the "Emails"). Plaintiffs are in the business of signing up for lists to receive solicitations by email, refusing to unsubscribe to the lists through the prescribed process, and filing lawsuits under 15 U.S.C. 7705 et seq. ("CAN-SPAM") and the Washington Commercial Electronic Mail Act, RCW 19.190 et seq. ("CEMA"). Plaintiffs have filed dozens of such suits and, upon information and belief, these lawsuits are their sole source of income. In this case, Plaintiffs also allege claims under the Washington Consumer Protection Act, RCW 19.86 ( the "CPA") and the Washington state law governing the promotional advertising of prizes, RCW 19.170 et seq. (the "Prize Statute"). Defendants bring this motion to dismiss on two grounds. First, Plaintiffs fail to plead how each of the Emails allegedly violate CAN-SPAM and CEMA (together, the "Email Statutes"). Plaintiffs are required to plead with particularity because their claims arise under fraud based theories. However, Plaintiffs merely parrot the elements of the Email Statutes and follow that litany with a conclusory sentence stating that Defendants have violated the statutes. These allegations are not enough to provide Defendants a fair opportunity to receive notice and an opportunity to respond to the allegations in this Lawsuit. Furthermore, Plaintiffs have a demonstrated history (in this lawsuit and others) of misrepresenting facts before the Court and refusing to describe the alleged violations of the Email Statutes. This Court has previously warned Plaintiffs that their "tendency to exaggerate claims in its briefing" may give rise to sanctions under Fed. R. Civ. P. 11. (Order, Dkt. No. 24 at p. 3.n5). Requiring that Plaintiffs articulate their theories with particularity will prevent the parties and the Court from engaging in unnecessary and DEFS.' MOT. TO DISMISS - 1 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 4 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 protracted discovery disputes merely to understand Plaintiffs' allegations. Furthermore, Defendants seek an order pursuant to Fed. R. Civ. P. 12(b)(6) dismissing Plaintiffs' third and fourth causes of action with prejudice for failure to state a claim. Both the CPA and the Prize Statute require that the plaintiff be actually damaged from a violation of the statute. Plaintiffs failed to plead any causal link between the alleged conduct and the nature of the alleged damages. Accordingly, Plaintiffs' claims under the CPA and the Prize Statute should be dismissed as a matter of law. II. FACTS ALLEGED IN FIRST AMENDED COMPLAINT A. Plaintiffs' CAN-SPAM and CEMA allegations. The gravamen of Plaintiffs' First Amended Complaint (Dkt. No. 15, "FAC"), is for alleged violations of the Email Statutes. However, the allegations are so vague and conclusory that Defendants do not have a reasonable opportunity to present a defense. Plaintiffs merely allege, without elaboration or explanation, that the Emails violate CEMA because they: (i) obscure any information in identifying the point of origin or the transmission path of a commercial electronic mail message; (FAC at ¶ 4.2.1) (ii) (iii) contain false or misleading information in the subject line; (FAC at ¶ 4.2.2) and solicit, request, or take any action to induce a person to provide personally identifying information by means of a web page, electronic mail message, or otherwise using the internet by representing oneself, either directly or by implication, to be another person, without the authority or approval of such other person. (FAC at ¶ 4.2.3). Plaintiffs similarly parrot the elements of CAN-SPAM, alleging that: DEFS.' MOT. TO DISMISS - 2 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 5 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (i) (ii) Plaintiffs have received "hundreds" of commercial electronic mails messages from or on behalf of defendants. (FAC at ¶ 4.1.1); Defendants initiated the transmission of commercial electronic mail "included materially misleading subject lines." (FAC at p. 4.1.4)' and (iii) Some of the Emails failed to include adequate notice of the nature of the communication, a functioning unsubscribe link, a physical postal address. (FAC at ¶ 4.1 et seq.). Plaintiffs do not allege how, which, or how many of the Emails violate either of the Email Statutes. It is not clear whether the Emails allegedly include false and misleading subject lines, have obscured transmission paths, utilize IP address spoofing, or any other theory of liability under the Email Statutes. The FAC did not attach any copies of Emails and, without pleading how each of the Emails violates the Email Statutes, Defendants cannot ascertain the nature of Plaintiffs' allegations. B. Plaintiffs' alleged actual damages. The only actual damages Plaintiffs allege are interference with computer "bandwidth" and the purported loss of computer usage service. (See Dkt. No. 28). The damages allegedly arise out of the mere act of receiving the Emails (and not as a result of the content of the emails themselves). Plaintiffs do not plead that they read any of the Emails, opened the Emails, navigated from the Emails to a website, purchased any products or services offered in the Emails, or otherwise responded to the Emails in any way. Plaintiffs simply had to expend the time to click "delete" on their email program. In regard to the Prize Statute, Plaintiffs do not allege any damages related to the promotional advertising of prizes. Specifically, Plaintiffs do not allege that they attempted to redeem a prize, entered into a contest, attended DEFS.' MOT. TO DISMISS - 3 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 6 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 a promotional seminar, received a prize that was a lower value than represented in the promotion, entered into a contest in which the odds of success were misrepresented, or otherwise responded to a promotional advertising of prizes in any way. Plaintiffs' only contention about the alleged Prize Statute violation is that Plaintiffs received an undisclosed number of Emails that allegedly violate the statute's disclosure requirements. With regard to the CPA, Plaintiffs do not allege any economic loss or any damages that are causally related to violations of CEMA. Plaintiffs do not allege that they were deceived by false and misleading subject lines in the Emails that caused them to respond to the Emails. Plaintiffs do not allege that the allegedly obscured information in identifying the point of origin or the transmission path of the Emails caused them any damages. Plaintiffs do not allege that the purported action to induce Plaintiffs to provide personally identifying information actually caused Plaintiffs to provide such information or otherwise damaged Plaintiffs. III. ARGUMENT A. The first and second causes of action should be dismissed for failure to plead with particularity. Plaintiffs have failed to identify any theory linking any violation of CAN-SPAM and CEMA to any specific emails or conduct. The FAC is so vague that Defendants do not have a fair opportunity to respond. The FAC merely parrots the Email statutes and tacks on a conclusory sentence that Defendants have violated the statute. Plaintiffs respectfully request that the Court require Plaintiffs to articulate, on an email by email basis, which of the Emails violate which component of CAN-SPAM and CEMA. The Ninth Circuit and appellate courts in the State of Washington have yet to address whether the heightened pleading requirements of Fed. R. Civ. P. 9(b) apply to claims under CAN-SPAM or CEMA. In a separate case DEFS.' MOT. TO DISMISS - 4 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 7 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 brought by Plaintiffs against Impulse Marketing Group, Inc. in the Eastern District of Washington, the court held that CEMA was not a fraud-based cause of action and, therefore the heightened pleading requirements of Fed. R. Civ. P. 9(b) did not apply. Gordon v. Impulse Marketing Group, Inc., 375 F. Supp. 2d 1040 (E.D. Wash. 2005). The docket in that case has reached 402 filings and Gordon has still refused to articulate a theory as to why and how many emails violate applicable statutes. A review of the docket indicates that many of those filings reflect efforts by the Defendants to simply understand the allegations against them. Other courts have recognized the peril of permitting anti-spam plaintiffs to proceed based merely on conclusory allegations. The Northern District of California reviewed and rejected the Eastern District of Washington's Gordon decision. Asis Internet Servs. v. Optin Global, Inc., 2006 U.S. Dist. LEXIS 46309 (June 30, 2006 N.Dist.Cal.). In that case, Judge Wilken concluded that "Rule 9(b) does not necessarily apply to Plaintiff's claims." Id. at 13. However, because the Plaintiff "does specifically allege that the contents of the emails themselves, including their headers and subject line information, were fraudulent, and the Court therefore concludes that Rule 9(b) applies to those averments of fraud." Id. at 14. Judge Wilkin found: aspects of Plaintiff's allegations of fraud are not plead with particularity. Plaintiff alleges that Defendants sent email with subject lines that "were false and misleading and would be likely to mislead a recipient," P 36, but does not provide an example or otherwise specify the manner in which the subject lines were false and misleading. In addition, Plaintiff charges "Defendants," collectively, with responsibility for sending the allegedly fraudulent emails. Ascribing to all Defendants the act of sending the allegedly fraudulent email also runs afoul of Rule 9(b). Id. at 15. Similarly, Judge Wilkin applied the heightened pleading requirements of Fed. R. Civ. P. 9(b) to CAN-SPAM because the plaintiff was required to prove that defendants "acted either with actual knowledge, or by DEFS.' MOT. TO DISMISS - 5 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 8 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 consciously avoiding knowing, that the [] Defendants' acts were illegal." Consequently, the Northern District of California granted the motion to dismiss and required that the plaintiff plead its allegations with particularity. This Court should follow the Asis Internet decision. In the present matter, Plaintiffs have alleged violations of the Email Statutes based upon fraudulent "spoofing" of Internet protocol addresses, fraudulently obscuring the point of origin of the Emails, that defendants fraudulently induced a third party to provide personally identifying information, and that the Emails contained false or misleading information in the subject line. (FAC at ¶¶ 4.1 & 4.2). Defendants cannot begin to sort out the scope of the alleged violations and have fair opportunity to marshal a defense in this lawsuit without Plaintiffs articulating how each of the Emails allegedly violate CAN-SPAM and CEMA. The public policy underlying heightened pleading in fraud cases applies here. Without a pleading of particularity, Defendants cannot defend this case or analyze whether they may have violated the Email Statutes. Moreover, from their filings to date, it is clear that Plaintiffs themselves do not have a cognizable theory as to how Emails violate the Email Statutes. The Court has expressly noted "Plaintiffs tendency to exaggerate claims in its briefing." (Order, Dkt. No. 24 at p. 3.n5). The FAC alleges that Plaintiffs received "hundreds" of emails from Defendants. Plaintiff subsequently represented to the Court that there were 6,000 emails that violate the Email Statute. (Id. at p.3; l.3) In their Amended Initial Disclosures (Dkt. No. 28), however, Plaintiffs' claim receipt of 11,000 emails from Defendants (and claim only statutory damages and no actual damages). Similarly, Plaintiffs have filed conflicting declarations (Compare Dkt. No. 12, ¶ 4 with Dkt. No. 16, ¶ 4), but failed to notify the Court of the significant change in the declarations and its relevance to the motion then before the DEFS.' MOT. TO DISMISS - 6 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 9 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Court. (See Dkt. No. 11). The majority of Emails in the record were from third parties wholly unrelated to Defendants. (See Dkt. Nos. 12, 16 & 17). If the Court declines to apply Fed. R. Civ. P. 9(b) to the present matter, Plaintiffs' FAC nonetheless fails to comply with the liberal pleading requirements under Fed. R. Civ. P. 8(a). Plaintiffs' allegations merely parrot the prohibitions in CEMA and Plaintiffs do not articulate how any of the specific Emails actually violate the Email Statutes. This is plainly inadequate under Fed. R. Civ. P. (8)(a). Gen-Probe, Inc. v. Amoco Corp., 926 F. Supp. 948, 961 (D. Cal. 1996) (providing that, "Even under liberal notice pleading, the plaintiff must provide facts that `outline or adumbrate' a viable claim for relief, not mere boilerplate sketching out the elements of a cause of action."). Judge Lasnik recently held that Fed. R. Civ. P. 8(a) requires that the complaint must give notice of the basic events and circumstances giving rise to plaintiffs' claims to afford defendants a meaningful opportunity to respond. In re Network Commerce Secs. Litig., 2006 U.S. Dist. LEXIS 30945, *15 (W.D.Wash. May 16, 2006) (Lasnik, J.) (concluding that plaintiffs' bald assertions were "so vague that defendants cannot meaningfully respond"); see also United States ex rel. Karvelas v Melrose-Wakefield Hosp., 360 F.3d 220 (1st Cir. 2004) cert den 543 US 820 (2004). In the Karvelas decision, the First Circuit noted that, Even under liberal pleading requirements of Fed. R. Civ. P. 8(a), plaintiff must set forth factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory; simply parroting language of statutory cause of action, without providing some factual support, is not sufficient to state claim. Id. at 226; see also 5 Charles Alan Wright et al., Federal Practice and Procedure § 1216 at 156-59 (1990) (a complaint must contain "either direct allegations on every material point necessary to sustain a recovery on any legal theory . . . or allegations from which an inference may fairly be drawn DEFS.' MOT. TO DISMISS - 7 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 10 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 that evidence on these material points will be introduced at trial"). It is a fundamental matter of due process that a defendant cannot defend himself against allegations that the plaintiff refuses to articulate. Cleveland Board of Education v. Loudermill, 470 U.S. 532, 546 (1985) (providing that the "essential requirements of due process" are "notice and an opportunity to respond."); see also State of Cal. ex rel. Lockyer v. FERC, 329 F.3d 700, 710 (9th Cir. 2003) (same). Defendants request that the Court require Plaintiffs to articulate their theories and identify the manner and form each of the Emails violates which statutes in order to afford Defendants a fair opportunity to understand the allegations made against them. B. The third and fourth causes of action should be dismissed as a matter of law pursuant to Fed. R. Civ. P. 12(b)(6). 1. Fed. R. Civ. P. 12(b)(6) Standard of Review. A complaint should be dismissed for failure to state a claim upon which relief may be granted under Federal Rule of Civil Procedure 12(b)(6) if it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). When the legal sufficiency of a complaint's allegations are tested with a motion under Rule 12(b)(6), "[r]eview is limited to the complaint." Cervantes v. City of San Diego, 5 F.3d 1273, 1274 (9th Cir. 1993). All factual allegations set forth in the complaint are taken as true and construed in the light most favorable to the plaintiff. Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996). However, "[w]hile a court must accept all material allegations in the complaint as true and construe them in the light most favorable to the nonmoving party, conclusory allegations of law or unwarranted inferences of fact urged by the nonmoving party are insufficient to defeat a motion to dismiss." Segal Co. v. Amazon, DEFS.' MOT. TO DISMISS - 8 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 11 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 280 F. Supp. 2d 1229, 1232 (W. D. Wash. 2003) (Coughenour, J.). 2. Plaintiffs' CPA claims fail because there is no nexus between the alleged violations and alleged damages. In order to make a claim under the Washington Consumer Protection Act, Plaintiffs must allege they have incurred injury to business or property caused by a statutory violation. RCW 19.86.090. To establish a claim under the Washington Consumer Protection Act, a plaintiff must prove each of the following five elements: (1) an unfair or deceptive act or practice, (2) in trade or commerce, (3) that impacts the public interest, (4) which causes injury to the party in his business or property, and (5) which injury is causally linked to the unfair or deceptive act. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 784-85 (1986). CEMA states, as a matter of law, emails which violate the CEMA requirements are "an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying the consumer protection act, chapter 19.86 RCW." 19.190.100. This provision of CEMA, however, only satisfies the first element of the five Hangman Ridge elements. A violation of CEMA is not a per se violation of the CPA. Rather, Plaintiffs must also plead the other four CPA elements, including that the violations of CEMA caused Plaintiffs economic injury to Plaintiffs' business or property. Without such a link, the CPA (and its heightened damages) does not apply to the present matter. Washington Courts are clear that "[d]amages under the CPA depend on facts relevant to the CPA violations." Smith v. Behr Process Corp., 113 Wn. App. 306, 337 (Wash. Ct. App. 2002); see also Sign-O-Lite Signs v. Delaurenti Florists, 64 Wn. App. 553 (Wash. Ct. App. 1992) ("The case law is clear that treble [under the CPA] damages may only be based upon actual damages."); Edmonds v. Scott Real Estate, 87 Wn. App. 834, 850 (Wash. Ct. App. 1997) DEFS.' MOT. TO DISMISS - 9 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 12 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (the CPA "award must be based on the party's actual damages"). Similarly, this Court has previously held that there must be a causal link between and amongst the Hangman Ridge factors to sustain a CPA claim. Segal Co. v. Amazon, 280 F. Supp. 2d 1229, 1233 (D. Wash. 2003) (Coughenour, J.) (re: connection between violation and effect on public interest). Plaintiffs fail to so plead because they incurred no actual damages as a result of the alleged CEMA violations. Even assuming that the Emails do somehow violate CEMA's precepts, Plaintiffs do not ­ and cannot ­ plead a causal relationship between the CEMA violation and Plaintiffs' alleged actual CPA damages. In order to bring a claim under CEMA and CPA, Plaintiffs would have to plead that the obscuring of transmission paths, false and misleading subject lines, etc. were the cause of Plaintiffs' alleged actual damages. However, Plaintiffs only alleged damages result from the receipt of the Emails and the annoyance resultant from the receipt of Emails. Mere annoyance and inconvenience are insufficient to survive a claim under the CPA. See e.g., Keyes v. Bollinger, 31 Wn. App. 286 (1982) (providing that, "the reasoning of the federal decisions and the language of RCW 19.86.090 persuade us that `mental distress, embarrassment, and inconvenience,' without more, are not compensable under the Consumer Protection Act"); see also White River Estates v. Hiltbruner, 134 Wn.2d 761, 765 n.1 (1998); Wash. State Physicians Ins. Exch. & Ass'n v. Fisons Corp., 122 Wn.2d 299, 318 (1993). Plaintiffs failure to allege that they read the Emails or responded to the Emails in any way is fatal to their Third Cause of Action. Plaintiffs have not pled that the Emails caused injury to their business and property and that the injury is causally linked to the allegedly false and deceptive nature of the Emails. Accordingly, Plaintiffs' CPA claims must be dismissed as a matter of Law. DEFS.' MOT. TO DISMISS - 10 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 13 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3. Plaintiffs' claim under RCW 19.170 et seq. fails because Plaintiffs did not allege damages arising out of a promotional advertising of prizes. Plaintiffs baldly allege that some of the Emails do not comply with the disclosure requirements in RCW 19.170.0301. (See FAC at ¶ 4.3.2). Like the CEMA claims, Plaintiffs' allegations are a mere parroting of the disclosure requirements set forth in the statute without any analysis, application to Plaintiffs, or otherwise allege a consequence from the alleged violation. Plaintiffs cannot bring a cause of action under RCW 19.170 et seq. because Plaintiffs do not allege damage from the alleged promotional advertising of prizes. Plaintiffs do not allege that they entered a contest, responded to the promotional advertising of prizes, or even read the Emails allegedly including promotional advertising of prizes. Plaintiffs only allege that some of the Emails included promotional offers that did not comply with the disclosure requirements of the Prize Statute. The standing requirement to bring a private cause of action under the Prize Statute is specific and does not permit bringing a claim merely because the plaintiff received a promotion. Pursuant to the Prize Statute, "A person who suffers damage from an act of deceptive promotional advertising may bring an action against the sponsor or promoter of the advertising, or both." RCW 19.170.060 (1) (emphasis added). The plain language of the standing requirement under the Prize Statute requires that the plaintiff be damaged from the prize offering.2 In the present matter, Plaintiffs do not allege that Plaintiffs' allegations under the Prize Statute, like the allegations under the Email Statutes, suffer from a fundamental failure to afford Defendants a fair opportunity to understand and defend against the allegations. Plaintiffs do not articulate how any single email violates any provision of the Prize Statue. In the event that the Court denies Defendants Motion to Dismiss claims under the Prize Statute, Defendants respectfully request that the Court order Plaintiffs to plead allegations under the Prize Statue with particularity and identify which of the Emails violate which provisions of the Prize Statute. Counsel was able to locate only two cases citing the Washington promotional advertising of prizes act, Wascisin v. Olsen, 90 Wn. App. 440, 444 (Wash. Ct. App. 1997) and Gordon v. DEFS.' MOT. TO DISMISS - 11 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 2 1 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 14 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 they suffered any actual damages as a result of the allegedly deceptive promotional advertising. Plaintiffs did not attempt to "claim a prize, attend a sales presentation, meet a promoter, sponsor, salesperson, or their agent, or conduct any business in this state." RCW 19.170.010. To the contrary, Plaintiffs merely allege that they received the Emails. The Prize Statute provides a private right of action for damages only to those individuals injured by a violation of the law's substantive provisions. The statute does not provide a broad reaching claim to sue for damages merely because the Plaintiffs received or viewed a promotion that did not comply with the disclosure requirements. Rather, Plaintiffs must pursue the offered prize and be damaged as a result failure to comply with the disclosure requirements (e.g., that the prize had a lesser value, that the odds of winning were not accurately stated, etc.). Damages in a private cause of action cannot be realized merely from viewing an email or other promotional offer; there must be some additional step taken to redeem the offer. IV. CONCLUSION For the foregoing reasons, Defendants respectfully request that the Court dismiss Plaintiffs' First Amended Complaint. Plaintiffs' allegations are merely bald recitations of the elements of CAN-SPAM and CEMA and do not afford Defendants a fair and reasonable opportunity to respond. Plaintiffs should be required to identify how each Email violates CAN-SPAM and CEMA. Furthermore, Plaintiffs' claims under the CPA and the Prize Statute should be dismissed pursuant to Fed. R. Civ. P. 12(b)(6) because Plaintiffs Impulse Mktg. Group, Inc., 2006 U.S. Dist. LEXIS 32005 (D. Wash. 2006). The later case is another spam litigation case brought by Plaintiffs in this case. However, none of the cases provide any substantive analysis of RCW 19.170 et seq. DEFS.' MOT. TO DISMISS - 12 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-00204-JCC Document 30 Filed 08/24/2006 Page 15 of 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 have not plead any causal connection between the alleged violations under and any actual damages incurred. DATED this 24th day of August, 2006. Respectfully Submitted, NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP By: Derek A. Newman, WSBA No. 26967 Roger M. Townsend, WSBA No. 25525 Attorneys for Defendants Virtumundo, Inc. Adknowledge, Inc. Scott Lynn DEFS.' MOT. TO DISMISS - 13 (CV06-0204JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800

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