Stanford Center for Internet and Society

In a recent decision, a U.S. District Court set standards that would indicate what on-line activities would and would not constitute racketeering under RICO, the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c). The United States District Court for the District of Maine held on a motion for summary judgment that a group of individuals who published allegedly defamatory criticism of plaintiff The Gentle Wind Project (“GWP”) on-line did not qualify as an “association-in-fact” under RICO. Having dismissed the RICO-related federal claims over which it had original jurisdiction, the court declined to exercise supplemental jurisdiction over the plaintiff’s state claims and dismissed them without prejudice.GWP is a non-profit organization “dedicated to education and research aimed at alleviated [sic] emotional and mental human suffering and trauma.” As part of GWP’s mission, its members manufacture objects which they describe as “healing instruments that are designed to restore human beings to a natural state of existence.” GWP then sells these objects to the public in return for a “donation.”

The United States District Court for the District of Massachusetts, in a case of apparent first impression, held that an email sent from the domain name of a company was not enough, standing alone, to cloak an agent in apparent authority that would allow him to bind that company to a contract. In the case, defendant Recovery Express, Inc. (Revovery Express) moved for summary judgment after plaintiff CSX Transportation, Inc. (CSX), a seller of out-of-service railcars and parts, brought an action alleging breach of contract, account stated, unjust enrichment, and quantum meruit. The claims arose from an arrangement CSX had entered into with Albert Arillotta (Arillotta), a partner at Interstate Demolition and Environmental Corp. (IDEC). Arillotta sent an email to CSX from the Recovery domain, recoveryexpress.com, in which he claimed to be from IDEC and Recovery Express and offered to buy rail cars. IDEC and Recovery Express shared offices and email services but were distinct companies. Recovery denies that Arillotta ever worked for them. Based on the email and subsequent telephone conversations, CSX agreed to sell the rail cars to Arillotta. After delivery of the goods and a bounced check from Arillotta in the amount of $115,757.36, Recovery refused to pay CSX, who subsequently brought suit against Recovery Express and IDEC.

The Court of Special Appeals of Maryland reinstated the Maryland Commercial Electronic Mail Act (MCEMA), reversing a Circuit Court ruling holding that MCEMA violated the Commerce Clause of the United States Constitution. The Court also reversed the lower court’s holding that Maryland lacked personal jurisdiction over defendant First Choice Internet, Inc. (First Choice), a New York-based Internet marketing company, and its holding that defendant Joseph Frevola, a New York resident and president of First Choice, could not be held personally liable for First Choice’s alleged MCEMA violations. Plaintiffs MaryCLE, LLC (MaryCLE), a Maryland-registered consumer protection company based in Washington, D.C., and defendant NEIT Solutions, its interactive computer Internet service provider, brought an action under MCEMA against First Choice and Frevola. Over the course of two months, MaryCLE received 83 unsolicited emails from First Choice, all containing misleading information as defined in MCEMA. MaryCLE alleged that it opened all these emails in Maryland. The company replied to each email asking First Choice to remove it from its mailing list. These attempts were unsuccessful until MaryCLE sent a letter via postal mail to Frevola notifying him of the MCEMA violation, at which point the emails ceased. MaryCLE subsequently commenced this action.

The United States District Court for the District of Nevada granted Defendant Google, Inc.’s motions for summary judgment, finding Defendant did not infringe Plaintiff web site author’s copyright by maintaining a copy of Plaintiff’s works in its online cache and allowing search engine users access to the cached copy. Defendant uses an automated program (“Googlebot”) to crawl the Internet, analyzing and cataloging web pages. The Googlebot also makes a copy of the pages it finds and stores them in a temporary cache on Defendant’s servers. Web site owners can include a “meta-tag” in the computer code for their web pages to tell Defendant not to cache their pages (“no-archive meta-tag”). These meta-tags are an industry standard. When a user’s search results are displayed, Defendant shows a large link to relevant web pages and a smaller link to its cached copy of each page (unless the web page owner opted out through the use of meta-tags). The cached copy is useful when the web page is inaccessible, the web page has changed, or when users are having trouble finding their search terms (which Defendant highlights in the cached copy). The cached copy has a disclaimer at the top of the page stating it is Defendant’s copy of the page and providing two links to the actual website.