Judge Susan Illston could not simply Tweet her decision with 140 characters in Twitter, Inc. v. Skootle Corp.
Twitter sued the Defendants on numerous causes of action for the Defendants’ alleged spamming activity, including breach of contract, tortious interference with contract, fraud, and unfair or deceptive business practices. Twitter, Inc. v. Skootle Corp., 2012 U.S. Dist. LEXIS 87029 (N.D. Cal. June 22, 2012).
The alleged facts of the suit involved the Defendants operating over 129,000 automated Twitter accounts that used “deceptive language” that directed Twitter users to websites that provided “online payment services of questionable legitimacy.” Twitter, at *6.
The Plaintiff alleged the Defendants’ actions included violating the Terms of Service Agreement by:
(a) Spamming users;
(b) Creating serial accounts for disruptive or abusive purposes;
(c) Tweeting misleading links; and
(d) Posting the same message from multiple accounts.
Twitter, at *6.
The Plaintiff claimed they spent at least $75,000 in anti-spam measures and sought multiple remedies against the Defendants. Id.
One Defendant, acting pro se, brought a motion to dismiss based on subject matter jurisdiction and personal jurisdiction, plus other traditional civil procedure challenges. Twitter, at *1-2.
The Court’s holding could have been a very short Tweet: Denied.
Civil Procedure Review
Judge Illston first addressed the challenge of lack of subject matter jurisdiction.
The Defendant challenged diversity jurisdiction on the grounds the Plaintiff stated their anti-spam costs were “at least $75,000” and not “exceeds the sum or value of $75,000.” Twitter, at *7.
The Defendant also claimed that contract law is a state law issue that should not be litigation in Federal Court. Twitter, at *7-8.
Finally, the Defendant claimed the use of the term “spam” did not meet the definition of the CAN-SPAM Act of 2003. Twitter, at *8.
The Court held that the Defendant failed to meet his burden that subject matter jurisdiction was improper.
First, Twitter’s anti-spam expenses were only one expense they incurred from the Defendant’s actions. The complaint also sought compensatory, statutory, punitive, and exemplary damages, in addition to restitution and disgorgement of profits to be established in trial. Twitter, at *8-11.
As the Court held in 796 characters:
Here, [Defendant] has not met his burden. He has not presented any facts that would support his position that the amount in controversy cannot exceed the jurisdictional minimum. It is only disputed, not implausible, that the amount sought by plaintiff, including the value of the injunctive relief, is over $75,000. Further, it is well-established that a federal district court may hear a breach of contract claim, among other matters of state law, in diversity jurisdiction. Finally, the definition of “spam” in the CAN-SPAM Act is irrelevant to the present case because the complaint does not concern that Act but a breach of the TOS contract, which defines “spam” for the purposes of the agreement. Defendant Harris’s motion to dismiss for lack of subject matter jurisdiction is, therefore, DENIED.
Twitter, at *10-11.
The Court rejected the Defendant’s personal jurisdiction challenge, because there was a valid form selection clause in the Twitter Terms of Service Agreement. Twitter, at *12-13.
Forum selection clauses are prima facie valid. Twitter, at *12. A party must show the clause was “unreasonable under the circumstances” in order to be set aside. Id. Further, “hardship” in having to travel to California does not make a clause unreasonable when a defendant was both aware of a clause and able to negotiate it. Id.
The Defendant was from Florida and failed to show any evidence regarding his ability to litigate in California. Twitter, at *12-13. The Defendant’s arguments of personal jurisdiction truly ran aground when the Court cited the law school favorite Carnival Cruise Lines, Inc. v. Shute:
The Supreme Court has held that cruise ticket purchasers were bound by a forum selection clause in a standard contract when “conclusory reference to the record provides no basis for this Court to validate the finding of inconvenience.”
Twitter, at *13, citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 594 (1991).
The Court held that enforcement of the forum selection clause was not unreasonable, based on the allegations in the complaint that the Defendant:
1) Offered “online payment services” and attempts to profit from his alleged Twitter “spam;”
2) That Twitter has spent $75,000 to counteract the Defendant’s 129,000 automated Twitter Accounts; and
3) The Defendant did not submit any evidence regarding his ability or inability to litigate in California.
Twitter, at *13.
Bow Tie Thoughts
This case literally sounds like a first year Civil Procedure exam. The Court reviewed each element of subject matter jurisdiction, personal jurisdiction, venue, service of process and pleading. The Court even cited a first year case: Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991).
Online businesses and traditional rules of Civil Procedure have been an entertaining issue since the mid-1990s (Well, for people who like Civ Pro and e-Commerce). Moreover, the impact of forum selection clauses are always interesting to review in online disputes, because they can be unreasonable in certain situations and valid in others (See, Dix & Smith v. ICT Group, Inc., and AOL, 161 P.3d 1016, 1020 (Wash., 2007), where a forum selection clause was found unreasonable because it denied the plaintiffs relief under the Washington Consumer Protection Act).
This is a solid opinion that I predict will be in future Civil Procedure classes.