• by Wendy Davis  @wendyndavis, January 6, 2009

In a controversial ruling, a federal judge has dismissed a spam lawsuit filed by four Web users against social networking site Reunion.com because the users did not claim they lost money as a result of e-mails sent by the site.

"Plaintiffs cannot proceed with their claim in the absence of an allegation that each such plaintiff incurred some type of injury or damage," wrote federal district court judge Maxine Chesney.

The case dates back to July 2008, when three California residents and one Texas resident sued Reunion.com for allegedly sending e-mails that appeared to have come from their friends. Reunion.com, like a growing number of social networking sites, asks users to provide their e-mail addresses and passwords when they sign up. The site, which offers both free and paid memberships, then accesses users' contacts and sends e-mails inviting them to join.

In a lawsuit filed in the northern district of California, the plaintiffs alleged that these types of messages are deceptive because they appear to come from people's friends rather than the site itself. The consumers sued the site for violating California's anti-spam law, which prohibits e-mails with false or misleading headers and subject lines and provides for up to $1,000 per violation. The federal CAN-SPAM law preempts most state spam laws, but there's an exception for state laws dealing with fraudulent e-mails.

Reunion.com argued that the messages were not misleading because the site obtained members' permission before e-mailing their friends. Reunion's attorney, Ronald Jason Palmieri of Los Angeles, added that members voluntarily disclosed their e-mail addresses and passwords. "We can't compel anyone to provide a password," he said, adding that any Web users who received an e-mail that turned out to be unwanted could simply delete it.

The site also argued in court papers that the plaintiffs had not alleged "a scintilla of actual harm."

Agreeing with Reunion.com, Chesney ruled late last year that California's state fraud laws only apply when there is a "cognizable injury."

Chesney said the plaintiffs can file an amended complaint by Jan. 16 alleging that the e-mails harmed them. But it's not clear that they will be able to do so. It doesn't appear from the original complaint that the plaintiffs paid money to join the site.

The plaintiffs' lawyer declined to comment through a representative. Reunion.com's lawyer, Palmieri, said he viewed the lawsuit as frivolous and was considering seeking sanctions against the consumers' attorney.

But some outside observers say the judge's decision dismissing the case appears might not hold up if it is appealed. Ethan Ackerman, a lawyer in Washington, D.C., and former legislative and technology counsel in the U.S. Senate, called the ruling "a remarkable outlier."

He said that California's anti-spam statute does not appear to require that plaintiffs allege a monetary loss at a preliminary stage. "The judge is very, very, very far out on a limb with this holding," he said. He added that states enacted spam laws in recognition that misleading e-mails can create broader problems than consumers' monetary loss, including clogged in-boxes and Internet service provider failures.