Stephen Sotelo has brought a class action complaint alleging trespass to personal property, consumer fraud, unjust enrichment, negligence, and computer tampering against a cluster of spyware producers: DirectRevenue LLC, DirectRevenue Holdings, BetterInternet LLC (collectively known as “Direct Revenue”), Byron Udell & Associates Inc. doing business as AccuQuote, and aQuantitive Inc. The complaint alleges that spyware deceptively installs itself on users’ computers by being surreptitiously bundled with legitimate software, reports tracking data to defendants which causes users’ computers to be "bombarded" with pop-up advertisements, parasitically exhausts system resources, and is difficult for the user to remove.The court denied defendant Direct Revenue and AccuQuote’s motion to stay litigation in favor of arbitration because the End User License Agreement (EULA) containing the arbitration agreement was not displayed to the user before or upon installation of spyware. Direct Revenue claimed that users could not download software without viewing the EULA, but plaintiff alleged that he downloaded Direct Revenue’s software from a third-party distributor and was never presented with the EULA. This was adequate to survive a motion to dismiss. The court also rejects defendant’s claim that each advertisement sent to the plaintiff contains another fair opportunity to view the EULA because the opportunity consists of “a small button with a question mark in the corner of the pop-up advertisements” and “does not indicate that it links to information regarding the source of advertisements or to any kind of user agreement.”
The court allowed plaintiff’s cause of action for trespass to personal property/chattels because surreptitious installation of spyware may be sufficient intentional intermeddling and causation of damage. The court extended this recently revived cause of action from email spam lawsuits initiated by internet service providers (ISPs) to apply to individual users and held that the elements of trespass do not depend on the identity of the plaintiff. Defendants claim the proper cause of action would be conversion, but the court rejected this argument because plaintiff does not allege defendant ever took possession of his property.
AccuQuote and aQuantive disputed that plaintiff ever received ads from them and thus should not be subject to the trespass to personal property cause of action. The court held that defendants’ status as mere “ad servers” is sufficient for liability because the complaint alleges that defendant or their agents committed the trespass. Defendants also deny intent to cause harm by trespass and the court noted that trespass only relies on the intent to actually commit the trespass and does not depend on intent to cause harm. The court rejected defendants’ claim that pop-up ads do not cause damage because each can be individually closed by the user as “ignor[ing] the reality of computer and Internet use” because pop-up ads cause a cumulative harm by their frequency and quantity.
The court allowed plaintiff’s claim that defendants violated the Illinois Consumer Fraud and Deceptive Practices Act, 815 ILCS 505/1 et seq., as the act applies to instances of deception that do not constitute actual fraud. Plaintiff alleged that defendants violated this act by representing software as free that was actually bundled with spyware.
The court rejected plaintiff’s claim of unjust enrichment because plaintiff failed to allege he was entitled to the advertising fees generated by the pop-up ads created by the spyware. The court also rejected plaintiff’s argument that spyware companies profiting from pop-up ads is analogous to companies profiting on sales inspired by false advertising.
The court allowed plaintiff’s claim that Direct Revenue breached duties of care not to harm plaintiff’s computer and ensure that spyware distributors secured consent to install spyware. The court rejected defendants’ argument that alleging both intentional torts and negligence for the same action is failure to state a claim, noting that at the pleadings stage, plaintiff may plead alternatives. The court rejected defendants’ argument that spyware distributors are independent contractors and thus Direct Revenue should not be liable for their negligence because the nature of Direct Revenue’s distribution scheme was not included in the complaint and cannot be considered in defendants’ motion to dismiss.
The court also allowed the claim of criminal computer tampering and rejected defendants’ argument that since the user authorized the download of spyware to his computer, there was no tampering. The court rejected this argument because plaintiff alleged that the installation of the spyware was surreptitious and part of the software he intentionally downloaded.