CompuServe, Inc. v. Cyber Promotions, Inc.

This Court will now address the second aspect of plaintiff's motion in which it seeks to enjoin defendants Cyber Promotions, Inc. and its president Sanford Wallace from sending any unsolicited advertisements to any electronic mail address maintained by CompuServe.

CompuServe predicates this aspect of its motion for a preliminary injunction on the common law theory of trespass to personal property or to chattels, asserting that defendants' continued transmission of electronic messages to its computer equipment constitutes an actionable tort.

Trespass to chattels has evolved from its original common law application, concerning primarily the asportation of another's tangible property, to include the unauthorized use of personal property:

Its chief importance now, is that there may be recovery ... for interferences with the possession of chattels which are not sufficiently important to be classed as conversion, and so to compel the defendant to pay the full value of the thing with which he has interfered. Trespass to chattels survives today, in other words, largely as a little brother of conversion.

The scope of an action for conversion recognized in Ohio may embrace the facts in the instant case. The Supreme Court of Ohio established the definition of conversion under Ohio law in Baltimore & O. R. Co. v. O'Donnell, 49 Ohio St. 489, 32 N.E. 476, 478 (1892) by stating that:

[I]n order to constitute a conversion, it was not necessary that there should have been an actual appropriation of the property by the defendant to its own use and benefit. It might arise from the exercise of a dominion over it in exclusion of the rights of the owner, or withholding it from his possession under a claim inconsistent with his rights. If one take the property of another, for a temporary purpose only, in disregard of the owner's right, it is a conversion. Either a wrongful taking, an assumption of ownership, an illegal use or misuse, or a wrongful detention of chattels will constitute a conversion.

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The Restatement [(Second) of Torts] § 217(b) states that a trespass to chattel may be committed by intentionally using or intermeddling with the chattel in possession of another. Restatement § 217, Comment e defines physical "intermeddling" as follows:

. . . intentionally bringing about a physical contact with the chattel. The actor may commit a trespass by an act which brings him into an intended physical contact with a chattel in the possession of another[.]

Electronic signals generated and sent by computer have been held to be sufficiently physically tangible to support a trespass cause of action. Thrifty-Tel, Inc. v. Bezeneck, 46 Cal.App.4th 1559, 1567 (1996). It is undisputed that plaintiff has a possessory interest in its computer systems. Further, defendants' contact with plaintiff's computers is clearly intentional. Although electronic messages may travel through the Internet over various routes, the messages are affirmatively directed to their destination.

Defendants, citing Restatement (Second) of Torts § 221, which defines "dispossession", assert that not every interference with the personal property of another is actionable and that physical dispossession or substantial interference with the chattel is required. Defendants then argue that they did not, in this case, physically dispossess plaintiff of its equipment or substantially interfere with it. However, the Restatement (Second) of Torts § 218 defines the circumstances under which a trespass to chattels may be actionable:

One who commits a trespass to a chattel is subject to liability to the possessor of the chattel if, but only if,

(a) he dispossesses the other of the chattel, or

(b) the chattel is impaired as to its condition, quality, or value, or

(c) the possessor is deprived of the use of the chattel for a substantial time, or

(d) bodily harm is caused to the possessor, or harm is caused to some person or thing in which the possessor has a legally protected interest.

Therefore, an interference resulting in physical dispossession is just one circumstance under which a defendant can be found liable. . . .

A plaintiff can sustain an action for trespass to chattels, as opposed to an action for conversion, without showing a substantial interference with its right to possession of that chattel. Thrifty-Tel, Inc., 46 Cal.App.4th at 1567 (quoting Zaslow v. Kroenert , 29 Cal.2d 541, 176 P.2d 1 (Cal. 1946)). Harm to the personal property or diminution of its quality, condition, or value as a result of defendants' use can also be the predicate for liability. Restatement § 218(b).

An unprivileged use or other intermeddling with a chattel which results in actual impairment of its physical condition, quality or value to the possessor makes the actor liable for the loss thus caused. In the great majority of cases, the actor's intermeddling with the chattel impairs the value of it to the possessor, as distinguished from the mere affront to his dignity as possessor, only be some impairment of the physical condition of the chattel. There may, however, be situations in which the value to the owner of a particular type of chattel may be impaired by dealing with it in a manner that does not affect its physical condition . . . . In such a case, the intermeddling is actionable even though the physical condition of the chattel is not impaired.

Next, plaintiff asserts that it has suffered injury aside from the physical impact of defendants' messages on its equipment. Restatement § 218(d) also indicates that recovery may be had for a trespass that causes harm to something in which the possessor has a legally protected interest. Plaintiff asserts that defendants' messages are largely unwanted by its subscribers, who pay incrementally to access their e-mail, read it, and discard it. Also, the receipt of a bundle of unsolicited messages at once can require the subscriber to sift through, at his expense, all of the messages in order to find the ones he wanted or expected to receive. These inconveniences decrease the utility of CompuServe's e-mail service and are the foremost subject in recent complaints from CompuServe subscribers. . . . Defendants contend that CompuServe subscribers are provided with a simple procedure to remove themselves from the mailing list. However, the removal procedure must be performed by the e-mail recipient at his expense, and some CompuServe subscribers complain that the procedure is inadequate and ineffectual.

Many subscribers have terminated their accounts specifically because of the unwanted receipt of bulk e-mail messages. Defendants' intrusions into CompuServe's computer systems, insofar as they harm plaintiff's business reputation and goodwill with its customers, are actionable under Restatement § 218(d).

The reason that the tort of trespass to chattels requires some actual damage as a prima facie element, whereas damage is assumed where there is a trespass to real property, can be explained as follows:

The interest of a possessor of a chattel in its inviolability, unlike the similar interest of a possessor of land, is not given legal protection by an action for nominal damages for harmless intermeddlings with the chattel. In order that an actor who interferes with another's chattel may be liable, his conduct must affect some other and more important interest of the possessor. Therefore, one who intentionally intermeddles with another's chattel is subject to liability only if his intermeddling is harmful to the possessor's materially valuable interest in the physical condition, quality, or value of the or if the possessor is deprived of the use of the chattel for a substantial time, or some other legally protected interest of the possessor is affected as stated in clause (c). Sufficient legal protection of the possessor's interest in the mere involability of his chattel is afforded by his privilege to use reasonable force to protect his possession against even harmless interference .

Under Restatement § 252, the owner of personal property can create a privilege in the would-be trespasser by granting consent to use the property. A great portion of the utility of CompuServe's e-mail service is that it allows subscribers to receive messages from individuals and entities located anywhere on the Internet. Certainly, then, there is at least a tacit invitation for anyone on the Internet to utilize plaintiff's computer equipment to send e-mail to its subscribers.

However, in or around October 1995, CompuServe employee Jon Schmidt specifically told Mr. Wallace that he was "prohibited from using CompuServe's equipment to send his junk e-mail messages." There is apparently some factual dispute as to this point, but it is clear from the record that Mr. Wallace became aware at about this time that plaintiff did not want to receive messages from Cyber Promotions and that plaintiff was taking steps to block receipt of those messages.

Defendants argue that plaintiff made the business decision to connect to the Internet and that therefore it cannot now successfully maintain an action for trespass to chattels. Their argument is analogous to the argument that because an establishment invites the public to enter its property for business purposes, it cannot later restrict or revoke access to that property, a proposition which is erroneous under Ohio law. On or around October 1995, CompuServe notified defendants that it no longer consented to the use of its proprietary computer equipment. Defendants' continued use thereafter was a trespass.

Further, CompuServe expressly limits the consent it grants to Internet users to send e-mail to its proprietary computer system by denying unauthorized parties the use of CompuServe to equipment send unsolicited electronic mail messages. . . . Defendants Cyber Promotions, Inc. and its president Sanford Wallace have used plaintiff's equipment in a fashion that exceeds that consent. The use of personal property exceeding consent is a trespass. It is arguable that CompuServe's policy statement, insofar as it may serve as a limitation upon the scope of its consent to the use of its computer equipment, may be insufficiently communicated to potential third-party users when it is merely posted at some location on the network. However in the present case the record indicates that defendants were actually notified that they were using CompuServe's equipment in an unacceptable manner. To prove that a would-be trespasser acted with the intent required to support liability in tort it is crucial that defendant be placed on notice that he is trespassing.

As a general matter, the public possesses a privilege to reasonably use the facilities of a public utility, but Internet service providers have been held not to be common carriers. The definition of public utility status under Ohio law [contemplates] . . . [first, a] public service characteristic [under which an entity] . . . devotes an essential good or service to the general public which the public in turn has a legal right to demand or receive. CompuServe's network, Internet access and electronic mail services are simply not essential to society. There are many alternative forms of communication which are customarily used for purposes. Further, only a minority of society at large has the equipment to send and receive e-mail messages via the Internet, and even fewer actually do. The second characteristic of a public utility contemplates an entity which conducts its operations in such manner as to be a matter of public concern, that is, a public utility normally occupies a monopolistic or ogopolistic position in the relevant marketplace. Defendants estimate that plaintiff serves some five million Internet users worldwide.

However, there are a number of major Internet service providers that have very large subscriber bases, and with a relatively minor capital investment, anyone can acquire the computer equipment necessary to provide Internet access services on a smallest scale. Furthermore, Internet users are not a "captive audience" to any single service provider, but can transfer from one service to another until they find one that best suits their needs. Finally, the Ohio Supreme Court made clear that a party asserting public utility status is required to support that assertion with evidence going to the relevant aforementioned factors. Defendants have not argued that CompuServe is a public utility, much less produced evidence tending to support such a conclusion. Therefore, CompuServe is not a public utility as that status is defined under Ohio law and defendants can not be said to enjoy a special privilege to use CompuServe's proprietary computer systems.

In response to the trespass claim, defendants argue that they have the right to continue to send unsolicited commercial e-mail to plaintiff's computer systems under the First Amendment to the United States Constitution. The First Amendment states that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press." The United States Supreme Court has recognized that "the constitutional guarantee of free speech is a guarantee only against abridgement by government, federal or state." Hudgens v. NLRB, 424 U.S. 507, 513 (1976). . . .

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In the present action, CompuServe is a private company. Moreover, the mere judicial enforcement of neutral trespass laws by the private owner of property does not alone render it a state actor. Defendants do not argue that CompuServe is anything other than a private actor. Instead, defendants urge that because CompuServe is so intimately involved in this new medium it might be subject to some special form of regulation. . . . No such legislation yet exists that is applicable to CompuServe. . . .

. . . [A]llowing the First Amendment to trump private property rights is unwarranted where there are adequate alternative avenues of communication. . . .

Defendants in the present action have adequate alternative means of communication available to them. Not only are they free to send e-mail advertisements to those on the Internet who do not use CompuServe accounts, but they can communicate to CompuServe subscribers as well through online bulletin boards, web page advertisements, or facsimile transmissions, as well as through more conventional means such as the U.S. mail or telemarketing. Defendants' contention, referring to the low cost of the electronic mail medium, that there are no adequate alternative means of communication is unpersuasive. There is no constitutional requirement that the incremental cost of sending massive quantities of unsolicited advertisements must be borne by the recipients. . . .

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In the present case, plaintiff is physically the recipient of the defendants' messages and is the owner of the property upon which the transgression is occurring. As has been discussed, plaintiff is not a government agency or state actor which seeks to preempt defendants' ability to communicate but is instead a private actor trying to tailor the nuances of its service to provide the maximum utility to its customers.

Defendants' intentional use of plaintiff's proprietary computer equipment exceeds plaintiff's consent and, indeed, continued after repeated demands that defendants cease. Such use is an actionable trespass to plaintiff's chattel. The First Amendment to the United States Constitution provides no defense for such conduct.

Plaintiff has demonstrated a likelihood of success on the merits which is sufficient to warrant the issuance of the preliminary injunction it has requested.

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Normally, a preliminary injunction is not appropriate where an ultimate award of monetary damages will suffice. However, money damages are only adequate if they can be reasonably computed and collected. Plaintiff has demonstrated that defendants' intrusions into their computer systems harm plaintiff's business reputation and goodwill. This is the sort of injury that warrants the issuance of a preliminary injunction because the actual loss is impossible to compute.

Plaintiff has shown that it will suffer irreparable harm without the grant of the preliminary injunction.

It is improbable that granting the injunction will cause substantial harm to defendant. Even with the grant of this injunction, defendants are free to disseminate their advertisements in other ways not constituting trespass to plaintiff's computer equipment. Further, defendants may continue to send electronic mail messages to the tens of millions of Internet users who are not connected through CompuServe's computer systems.

Finally, the public interest is advanced by the Court's protection of the common law rights of individuals and entities to their personal property. Defendants raise First Amendment concerns and argue that an injunction will adversely impact the public interest. High volumes of junk e-mail devour computer processing and storage capacity, slow down data transfer between computers over the Internet by congesting the electronic paths through which the messages travel, and cause recipients to spend time and money wading through messages that they do not want. It is ironic that if defendants were to prevail on their First Amendment arguments, the viability of electronic mail as an effective means of communication for the rest of society would be put at risk. In light of the foregoing discussion, those arguments are without merit. Further, those subscribing to CompuServe are not injured by the issuance of this injunction. Plaintiff has made a business decision to forbid Cyber Promotions and Mr. Wallance from using its computers to transmit messages to CompuServe subscribers. If CompuServe subscribers are unhappy with that decision, then they may make that known, perhaps by terminating their accounts and transferring to an Internet service provider which accepts unsolicited e-mail advertisements. That is a business risk which plaintiff has assumed.

Having considered the relevant factors, this Court concludes that the preliminary injunction that plaintiff requests is appropriate.

V.