Court Dismisses SMS 'Spam' Lawsuit

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A federal judge has dismissed a computer fraud lawsuit against a company that allegedly sent unwanted text messages, ruling that the messages didn't result in any monetary loss for the recipient.

In the lawsuit, filed earlier this year in federal district court in Minnesota, Brenda Czech of Stearns County alleged that financial information company Wall Street on Demand violated federal law by sending "numerous" SMS messages to her. Czech, who sought class-action status, contended that the unauthorized messages resulted in slowdowns, consumed wireless bandwidth and ate up her device's memory.

But U.S. District Court Judge Donovan Frank found that none of those alleged harms translated into economic losses.

"While this court does not disagree that unwanted text messages, like spam e-mail, are an annoyance, whether receipt of such messages can establish a civil action under the [Computer Fraud and Abuse Act] is, of course, a different question," Frank wrote last week. He added that Czech's complaint "neither references any specific financial charges allegedly incurred ... nor attaches any comparable supporting documentation of such losses she in fact incurred."

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Czech alleged that the messages from Wall Street on Demand started in 2006, soon after she signed up for a new phone plan from Sprint. She said in her lawsuit that she paid $39.95 a month for 1,000 minutes and an additional $5 a month for up to 300 text messages, but didn't allege that the Wall Street on Demand messages pushed her over the limit. Instead, she argued that the "cumulative impact" of the messages and the threat of potential charges "substantially impaired" her use of her mobile phone.

Wall Street on Demand says in its marketing materials that it delivers 7 million alerts each week.

The decision only involved the Computer Fraud and Abuse Act and not federal laws about marketing. In another recent case, the 9th Circuit Court of Appeals held that book publisher Simon & Schuster might have violated federal Telephone Consumer Protection Act by allegedly sending unsolicited text messages promoting Stephen King's "Cell."

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