Gordon v. Virtumundo Inc et al

Filing 44

RESPONSE, by Defendants Virtumundo Inc, Adknowledge Inc, Scott Lynn, to 42 MOTION for Relief. (Newman, Derek)

Gordon v. Virtumundo Inc et al

Doc. 44

Case 2:06-cv-00204-JCC

Document 44

Filed 11/09/2006

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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 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'; OMNI INNOVATIONS, LLC., a Washington limited liability company, Plaintiffs, No. CV06-0204JCC DEFENDANTS' RESPONSE TO MOTION FOR RELIEF FROM DEADLINE NOTE ON MOTION CALENDAR: November 15, 2006

Defendants Virtumundo, Inc., Adknowledge, Inc., and Scott Lynn (collectively "Defendants") respectfully request this Court deny the motion (Dkt. No. 42) of plaintiffs James Gordon and Omni Innovations, LLC (together, "Plaintiffs") for relief from their November 13, 2006 deadline to file an opposition to Defendants' Motion for an Undertaking (Dkt. No. 38) pursuant to 15 U.S.C. § 7706(g)(4). Instead of responding to Defendants' timely and proper motion, Plaintiffs moved for relief on the ground that they DEFS.' RESP. TO MOT. FOR RELIEF FROM DEADLINE - 1 (CV06-0204JCC)
NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 [phone]

Dockets.Justia.com

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intend to move for summary judgment within thirty (30) days. The two motions are unrelated. Plaintiffs' request that the Court not consider Defendants' pending motion is improper and without basis in fact or law. Plaintiffs propose that they will not have to respond to Defendants' Motion for Undertaking, effectively requesting that the Court strike Defendants' motion. Motions to strike have been abolished in this district. LR 7(g). Defendants respectfully request the Court deny Plaintiffs' motion for relief from a deadline and require that Plaintiffs timely oppose Defendants' motion for an undertaking or waive any response. II. ARGUMENT A. Defendants' motion for an undertaking is not tantamount to a motion for summary judgment.

Plaintiffs' argument that Defendants' motion for an undertaking necessitates a motion for summary judgment is nonsensical. Plaintiffs base their argument entirely on the fact that Defendants "admit" that they sent the six emails analyzed in the motion for the undertaking (three of which were from Adknowledge and three of which were from Virtumundo). This is a non-sequitur. A motion requiring that Plaintiffs post an undertaking to secure fees and costs is wholly independent of a motion for summary judgment. Summary judgment is intended to provide judicial efficiency where no reasonable trier of fact could dispute liability. Fed. R. Civ. P. 56. The principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex, 477 U.S. at 323-24, 106 S. Ct. at 2553. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986) (The moving party bears the burden of showing that there is no evidence which supports an element essential to the non-movant's claim.) On the other hand, a motion for an undertaking has a lower standard and an entirely different purpose. The Court should require an undertaking under 15 U.S.C. § 7706(g)(4) if there is a possibility that the Court will ultimately award the attorneys' fees and costs provided for under CAN-SPAM. See Motion for Undertaking, Dkt. No. DEFS.' RESP. TO MOT. FOR RELIEF FROM DEADLINE - 2 (CV06-0204JCC)
NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 [phone]

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38, at p.2-3. The purpose of an undertaking is to protect against litigants asserting frivolous claims or defenses for nuisance or settlement value. Id. Congress enacted CAN-SPAM to include an undertaking to protect parties against vexatious litigants. This case is the quintessential case meriting an undertaking. Plaintiffs have filed a frivolous lawsuit over emails that comply with CAN-SPAM and refuse to articulate a theory of liability1. Resolution of Defendants' motion for an undertaking will not resolve Plaintiffs' proposed summary judgment motion, nor will resolution of Plaintiffs' summary judgment motion resolve the motion for an undertaking. In its motion for an undertaking, Defendants assert that Plaintiffs cannot make a prima facie case of liability. The emails Plaintiffs proffer are either unrelated to Defendants or, on their face, comply with CANSPAM. On this basis alone, the Court should require that Plaintiffs post an Undertaking. In contrast, to grant Plaintiffs' proposed motion for summary judgment, the Court must consider substantially more questions of law and fact at a higher standard. For example, Plaintiffs must authenticate each of the 17,000 emails in dispute and connect those emails to Defendants. The Court must engage in an email-by-email analysis of the 17,000 messages in dispute. Plaintiffs must prove, as a matter of law, that (i) they were damaged by the emails; and (ii) that they are an "Internet access service." 15 U.S.C. § 7706(g)(1) (providing that "A provider of Internet access service adversely affected by a violation" may bring a civil action). Plaintiffs must demonstrate that each email contains false and misleading transmission information, subject headings, or that each included a "return address or comparable mechanism" that permitted Plaintiffs to opt-out from receiving future emails. 15 U.S.C. § 7704. As described in Defendants' Motion for an Undertaking, Plaintiffs claims are unlikely to prevail at trial. Plaintiffs have grossly over-pled this lawsuit alleging that Defendants' emails violate every provision of CAN-SPAM. Defendants emails are fully CAN-SPAM compliant. Defendants, through motion practice and discovery, have inquired why Plaintiffs' believe that Defendants' emails violate CAN-SPAM; but Plaintiffs refuse to advance any theory in support of their case. DEFS.' RESP. TO MOT. FOR RELIEF FROM DEADLINE - 3 (CV06-0204JCC)
NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 [phone]
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Furthermore, Plaintiffs must establish that Defendants' affirmative defenses cannot prevail as a matter of law. Plaintiffs' actions amount to statutory entrapment, namely Plaintiffs opted-in to receive emails from Defendants for the purpose of establishing a cause of action under CAN-SPAM and Washington State law. Plaintiffs did not unsubscribe "in a manner specified" in any of the messages which they received. CANSPAM, 15 U.S.C. § 7704(a)(3)(A) & (4). Defendants will certainly prove these facts, but until discovery is complete the issues remain in contention and prevent either party from preparing a successful summary judgment motion. Indeed, Defendants have sixteen (16) affirmative defenses, and most cannot be resolved without some discovery. Summary judgment requires a substantial effort and expense by the parties because they must present all evidence in support of their case and demonstrate that no reasonable trier of fact would not rule in their favor. In contrast, Defendants' Motion for Undertaking requires a narrow determination whether there is a reasonable likelihood that Defendants will be the prevailing party in Plaintiffs' CAN-SPAM claims. Defendants' motion for an undertaking is not equal procedurally nor substantially to Plaintiffs' proposed motion for summary judgment. B. Summary judgement is not ripe. The discovery cutoff in this case is December 15. Fed. R. Civ. P. 16(f). No depositions have been taken. (See Townsend Decl at ¶ 2). Expert witness reports have not been exchanged. (See Townsend Decl at ¶ 2). The expert witness's report will be based upon a consideration of Plaintiffs' deposition testimony, which has not been established. Plaintiffs' claim that summary judgment is ripe is disingenuous. Plaintiffs have not deposed Defendants' witnesses, have no knowledge regarding Defendants' efforts to comply with CAN-SPAM, their unsubscribe process, or the merits of any of Defendants' affirmative defenses. Likewise, Plaintiffs have not been subject to a deposition to determine whether they were legitimately damaged by Defendants' alleged emails, whether they even received the emails, whether they are proffering duplicate emails to DEFS.' RESP. TO MOT. FOR RELIEF FROM DEADLINE - 4 (CV06-0204JCC)
NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 [phone]

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increase damages, whether Plaintiffs are an "Internet access service" provider, whether Plaintiffs were mislead by the subject matter of Defendants' emails, or whether any of the other elements of a CAN-SPAM violation can be satisfied as a matter of law. Plaintiffs assert that the only disputed question of fact is whether Virtumundo or Adknowledge initiated the transmission of "at least a portion" of the emails alleged by Plaintiffs. (See Motion, Dkt. No. 42, at 3:6-8). Their argument is specious because a claim under CANSPAM requires analysis of several factors more than whether a Defendant initiated a portion of the emails in question. C. Plaintiffs proposed relief will not increase judicial economy. Plaintiffs make the present motion waving the flag of judicial economy. In truth, granting Plaintiffs' proposed relief will increase the costs on the parties and the court. Due to the timing of Plaintiffs' proposed motion for summary judgment, the motion would be filed at the end of the discovery period so that the parties will nonetheless have to incur the expense of preparing for and taking depositions. Additionally, the legal expenses (and the magnitude of the Court's involvement) are substantially greater in filing, opposing, and resolving a motion for summary judgment. The motion for an undertaking only pertains to Plaintiffs' claims under CANSPAM. Even if the Court resolves the CAN-SPAM issues, Plaintiffs' state law claims remain. The state law claims have different elements and defenses. The motion for an undertaking is narrow and intended by Congress to resolve before the parties expend substantial resources in a frivolous CAN-SPAM lawsuit. Plaintiffs' effort to expand a narrow motion into a full-blown resolution of Plaintiffs' claims under CAN-SPAM under the guise of judicial economy should be rejected. D. The Court should forbid multiple attempts at summary judgment. Even if Plaintiffs could prevail at some juncture, they do not have the evidence to sustain the summary judgment standard at this time. Consequently, after their summary judgment motion is denied, presumably they will file a second summary judgment motion once discovery is complete. The Court should not allow for duplicative litigation that DEFS.' RESP. TO MOT. FOR RELIEF FROM DEADLINE - 5 (CV06-0204JCC)
NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 [phone]

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consumes unnecessary resources. Plaintiffs' instant motion for relief is based on the pretense that an early summary judgment motion would increase judicial economy. Any purported benefit in conserving resources would be wiped out if Plaintiffs are later permitted to file a second motion for summary judgment. The Court should not permit two attempts at a summary judgment motion on the same issues. III. CONCLUSION Plaintiffs' proposed summary judgment motion is not germane to Defendants' pending motion for an undertaking. If Plaintiffs believe they can prevail as a matter of law, then they can file for summary judgment at any time in this litigation without regard for the Defendants' pending motion. Plaintiffs should not be permitted to use their contemplated motion for summary judgment as a mechanism for striking Defendants' legitimate motion for an undertaking. Accordingly, this Court should deny Plaintiffs' motion for relief (Dkt. No. 42) and require Plaintiffs to file a timely response to Defendants' pending motion for an undertaking (Dkt. No. 38) or waive any response. DATED this 9th day of November, 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

DEFS.' RESP. TO MOT. FOR RELIEF FROM DEADLINE - 6 (CV06-0204JCC)

NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP

505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 [phone]