Setting the rules for ISPs and spammers

Peter Hall's troubles with spam began the week of Aug. 5, 1997, when the New York-based independent film producer learned that his EarthLink account had been shut off without warning.

EarthLink, a leading Internet service provider (ISP), had concluded--incorrectly, it turns out--that Hall was a spammer. The company terminated Hall's e-mail account but chose not to bounce or forward his e-mail messages. It instead quietly stored them in a mail spool. Anyone sending Hall e-mail likely concluded that the message had gone through.

This week, a federal judge in New York is scheduled to hear arguments in a $2 million lawsuit that Hall filed against EarthLink a year later. It claims that EarthLink violated the law and that the missed e-mail resulted in his low-budget film "Delinquent" becoming a flop. (The film, which described a tortured teen's conflict with his abusive father, did manage to score a favorable review from The Village Voice, which dubbed it "raw, restless, contemplative and haunting.")

The lawsuit is worth watching for three reasons. First, it may address whether oft-controversial antispam blacklists like the Mail Abuse Prevention System (MAPS) are legal or not.

Second, it looks at what happens when an ISP fails to neither deliver nor bounce incoming e-mail. Last year, a Canadian woman named Nancy Carter sued her ISP for $110,000 in damages after it held her mail because of unpaid bills. A relatively new California law requires e-mail service providers to give a 30-day notice before terminating accounts. No U.S. court case decision appears to have addressed this practice, which critics say is tantamount to holding e-mail hostage.

Third, it tries to establish the novel--and worrisome--legal principle that ISPs fall into a near-archaic "public interest" category that would prohibit them from giving the boot to subscribers whom they honestly believe to be spamming. Needless to say, this would be a severe blow to our in-boxes and a boon to spammers, who could threaten to sue whenever they got kicked off the Net. The suit also seeks to invent two new torts for conduct that negligently appropriated electronic communications versus conduct that intentionally interfered with electronic communications.

Weighing the "public interest"
EarthLink's subscriber contract in 1997 was a typical one, reserving it the right to terminate subscribers for nearly any reason. Yet Hall's attorneys say that's invalid under a 1964 California case, Tunkl v. Regents of the University of California, which they say shows that EarthLink "cannot escape liability" for negligence, because that would be contrary to the public interest. (That decision is relevant in a New York courtroom, counterintuitively, because both Hall and EarthLink agree that California law applies.)

In that 1964 case, the California court decided that a University of California hospital was liable for the death of a patient that was allegedly caused by negligence--even though all patients were required to sign a waiver (in exchange for reduced fees) that immunized the hospital from precisely that type of lawsuit. A hospital is "part of the social fabric, and prearranged exculpation from its negligence must...necessarily affect the public interest," the court ruled.

For better or for worse, ISPs need wide discretion to give the boot to people who they believe are spamming.

While making nonprofit hospitals liable may make sense, I'm not entirely convinced. But e-mail glitches are hardly the same as killing someone, and as a general rule, ISPs believe that they need to be able to enforce contracts that they make with their users.

"These are precedents that we would believe to be detrimental to the Internet and efforts to fight spam," says Dave McClure, head of the U.S. Internet Industry Association. "We would not like (Hall) to prevail on several points that he has made. EarthLink acted within its policy and within its contract. Maybe it's a scorched-earth policy and they weren't terribly polite about it, but they (had the right to do it). It sounds to me like his indie movie flopped, and he's looking for someone to get money from. I think he should put the movie on the Internet, and we should all watch it and vote."

An EarthLink representative declined to comment Friday.

Hall's attorney, on the other hand, was happy to talk. "We have an ISP that is taking e-mail of a former subscriber and is not forwarding it and not bouncing it back--and is letting it sit in a black hole," says Andrew Grosso, a former federal prosecutor who's now in a private practice in Washington. "We're trying to establish the principle that ISPs have an obligation and duty of care to either forward e-mail to a recipient or bounce it back with instructions, saying 'invalid e-mail address.' Otherwise, you have a situation where e-mail is sent out and the sender thinks it was delivered."

The complaint against EarthLink also alleges that the company violated the Electronic Communications Privacy Act (ECPA) by retaining e-mail, in addition to "libeling" Hall by including his username in a regular report of suspected spammers posted to a Usenet newsgroup.

"The ECPA claim is very weak," says Orin Kerr, a former federal prosecutor who teaches at George Washington University law school. "The plaintiff is apparently claiming that EarthLink wiretapped his account by not delivering his e-mail after his account was terminated. But the Wiretap Act prohibits unauthorized acts of acquiring communications--not failing to deliver communications once acquired."

Libel allegations and blacklists
And what about libel? Grosso, Hall's lawyer, says: "You have an innocent person, Peter Hall, who was accused of being a spammer and was not told why.

If plaintiffs start getting whopping judgments against ISPs, those costs will be passed along to everyone else.

We think ISPs need to know that, even though there is a war on spam, including innocent bystanders is not acceptable." (Grosso says that the reason that Hall was flagged as a spammer in the first place was an incorrect report from UUNet on which EarthLink acted without first investigating.)

Jim Harper, a Washington lawyer and former Hill staffer who specializes in technology policy, offered a viewpoint: "If the cause of action stands, it will communicate to a number of blacklist operators that they are in danger if they're not careful about who's on the list. I do think that libel cause of action has a lot of potential for getting renegade blacklists in line."

All this might sound like a lot of internecine legal wrangling that only lawyers could love. But there is an important point to make here: ISPs should have the right to contract freely with their customers, and courts should uphold those contracts as valid. Over time, some ISPs will offer more rights, and some will offer fewer rights, and consumers will gravitate to the set of services and prices that best fits their needs.

Whether Hall likes it or not, in hindsight, the contract he had with EarthLink gave the company the right to disconnect his account. Nobody forced him to sign on the dotted line, but he chose to do so anyway. True, EarthLink apparently acted too hastily--but that seems to have been a one-time aberration.

Granting Hall $2 million (plus interest, attorney's fees, costs and punitive damages) would surely make him and his lawyers happy, but it would also set a legal precedent that would open the door for actual spammers to file frivolous lawsuits against ISPs in the future. For better or for worse, ISPs need wide discretion to give the boot to people who they believe are spamming.

If U.S. District Judge Richard Owen decides otherwise at Friday's hearing for summary judgment--and if that decision is upheld on appeal--the courts would be substituting tort law for contract law. That would lead ISPs down the same expensive path of tort liability that traditional industries have already experienced. Just ask the physicians who are finding it more and more difficult to get liability insurance, which the American Medical Association calls a "crisis."

Sure, it may be tempting to side with Hall, but remember that if he and other plaintiffs start getting whopping judgments against ISPs, those costs will be passed along to everyone else. A contract is a contract. Remember to always read the fine print. If you don't like what you see, don't sign it in the first place.