Omni Innovations LLC et al v. Smartbargains.com LP et al, No. 2:2006cv01129 - Document 16 (W.D. Wash. 2007)

Court Description: REPLY, filed by Defendant Smartbargains.com LP, TO RESPONSE to 13 MOTION to Stay Pending a Final Judgment in a Related Case, or Dismiss CAN-SPAM Claims for Failure to State a Claim (Attachments: # 1 Certificate of Service)(Townsend, Roger)

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Omni Innovations LLC et al v. Smartbargains.com LP et al Case 2:06-cv-01129-JCC Doc. 16 Document 16 1 Filed 02/23/2007 Page 1 of 4 The Honorable John C. Coughenour 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 9 10 11 OMNI INNOVATIONS, LLC, a Washington limited liability company; and JAMES S. GORDON JR. 12 Plaintiffs, 13 14 15 No. CV06-1129JCC REPLY IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS OR TO STAY THIS LITIGATION v. SMARTBARGAINS.COM, LP, a Delaware Limited Partnership; Defendant. 16 17 18 I. INTRODUCTION 19 In the motion at bar, Defendant SMARTBARGAINS.COM, LP (“SmartBargains”) 20 moved to dismiss or stay this litigation. Plaintiffs’ fail to address the arguments advanced 21 by SmartBargains in support of its motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). 22 SmartBargains asserts that Plaintiffs have failed to allege facts sufficient to confer 23 standing under CAN-SPAM Act of 2003, 15 U.S.C. § 7701 et seq. ("CAN-SPAM"), 24 because they are not an Internet access service adversely affected by emails from 25 SmartBargains. The grounds for SmartBargains’ argument are not addressed by Plaintiffs 26 and, therefore, should be granted. 27 28 Additionally and in the alternative, the Court should enter a stay pending a final judgment in the related action before this Court, Gordon v. Virtumundo, NO. REPLY IN SUPPORT OF MOTION TO DISMISS OR STAY - 1 (CV06-1129JCC) 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-01129-JCC Document 16 Filed 02/23/2007 Page 2 of 4 1 CV06-0204JCC, W.Dist.Wa (Coughenour, J.). Plaintiffs do not oppose the stay. (See 2 Response, Dkt. # 14.) Accordingly, the stay should be granted. LR 7(b)(2) (providing 3 that “If a party fails to file papers in opposition to a motion, such failure may be 4 considered by the court as an admission that the motion has merit.”) 5 6 II. ARGUMENT 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A. The Court should Dismiss Plaintiffs’ CAN-SPAM Claims because Plaintiffs do not have standing. The parties agree that, in order to have standing under CAN-SPAM, Plaintiffs must be “provider(s) of Internet access service” who are “adversely affected by a violation of section 7704 (a)(1), (b), or (d) of [the Act], or a pattern or practice that violates paragraph (2), (3), (4), or (5) of section 7704 (a).” 15 U.S.C. § 7706(g)(1). However, Plaintiffs have not alleged sufficient facts to satisfy the CAN-SPAM standing requirement. Plaintiffs seek to characterize SmartBargains’ arguments as form over substance. (See Response at 4). In fact, the opposite is true. SmartBargains asserts that Plaintiffs do not have standing because they do not allege facts which support their allegation that they are providers of (i) Internet access service (“IAS”), or (ii) that they were adversely affected by a violation of CAN-SPAM. The IAS standing requirement in CAN-SPAM is a barrier to filing claims under CAN-SPAM. The Act does not provide for a private right of action merely from the receipt of email or from showing friends an interesting website. Rather, CAN-SPAM provides a right of action to the FTC, state attorneys’ general and providers of an IAS that is adversely affected by violative emails. Under CAN-SPAM, it is not sufficient to confer standing merely because Plaintiffs allegedly “enabled computer access for multiple users to a computer server that provides access to the Internet.” (See First Amended Complaint (Dkt. #4) at ¶ 7.) As stated in SmartBargains’ moving papers, Plaintiffs’ broad allegation effectively confers standing on any anti-spam plaintiff and renders CANREPLY IN SUPPORT OF MOTION TO DISMISS OR STAY - 2 (CV06-1129JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-01129-JCC 1 Document 16 Filed 02/23/2007 Page 3 of 4 SPAM’s standing requirement a meaningless limitation to a private right of action. 2 Plaintiffs misstate SmartBargains’ argument as somehow making a distinction 3 between the number of Internet servers that Plaintiffs to which the Plaintiffs provide 4 access. In fact, SmartBargains’ emphasis on the use of the article “a” when referencing 5 the adversely affected computer server is that the allegations does not require that 6 Plaintiffs have ownership or control over the computer server. Because Plaintiffs merely 7 provide access to a computer server, rather than their computer server, the allegation does 8 not satisfy the standing requirement. If the Plaintiffs do not own or control the server that 9 enables computer access for users, then the allegedly improper emails could not have 10 caused Plaintiffs any material adverse affect. In fact, the alleged adverse effect would be 11 incurred by Plaintiffs’ Internet service provider (e.g., GoDaddy) that manages the Internet 12 server in question and, therefore, is required to incur the effort to increase their Internet 13 bandwidth to accommodate the emails in question. If Plaintiffs’ CAN-SPAM claims 14 survive, then any individual that shows two friends a website is an IAS because that 15 individual has “enabled computer access for multiple users to a computer server that 16 provides access to the Internet.” 17 18 B. 19 SmartBargains moved the Court stay this litigation pending resolution of a related Plaintiffs do not Oppose a Stay of this Litigation. 20 case brought by Plaintiffs testing their theories under CAN-SPAM and the Washington 21 Commercial Email Act. There is no case law supporting many, if not all, of Plaintiffs’ 22 novel arguments. A stay is in all parties’ interests and, therefore, it is not surprising that 23 it is unopposed by Plaintiffs. After the Court enters a final judgment in the related cases 24 brought by Plaintiffs before this Court and other United States District Courts in this 25 State, then there is likely to be collateral estoppel/issue preclusion effect on this case. To 26 avoid litigating the same unsettled questions of law in separate cases, it is in the best 27 interests of the Court and the litigants to stay the present lawsuit pending final judgment 28 REPLY IN SUPPORT OF MOTION TO DISMISS OR STAY - 3 (CV06-1129JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800 Case 2:06-cv-01129-JCC 1 Document 16 Filed 02/23/2007 Page 4 of 4 in Gordon v. Virtumundo. 2 3 4 III. CONCLUSION For the foregoing reasons, this Court should dismiss Plaintiffs’ CAN-SPAM 5 claims as a matter of law for failure to assert facts sufficient to confer standing on 6 Plaintiffs. Additionally, the Court should stay all claims brought by Plaintiffs pending a 7 final judgment in Gordon v. Virtumundo. 8 9 DATED this 23rd day of February, 2007. 10 NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 11 12 13 By: 15 Derek A. Newman, No. 26967 derek@newmanlaw.com Roger M. Townsend, No. 25525 roger@newmanlaw.com 16 Attorneys for SMARTBARGAINS.COM, LP 14 17 18 19 20 21 22 23 24 25 26 27 28 REPLY IN SUPPORT OF MOTION TO DISMISS OR STAY - 4 (CV06-1129JCC) NEWMAN & NEWMAN, ATTORNEYS AT LAW, LLP 505 Fifth Ave. S., Ste. 610 Seattle, Washington 98104 (206) 274-2800

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