e-Commerce Docket Sheet

The Ninth Circuit has ordered an en banc review of the panel opinion in a controversial case involving the application of Section 230 of the Communications Decency Act ('CDA'). Fair Housing Council of San Fernando Valley v. Roommates. com. LLC, 2007 U.S. App. LEXIS 23922 (Ninth Cir. Oct. 12, 2007) (granting rehearing en banc). In the opinion that was withdrawn, the panel ruled that the Roommates.com site was not entitled to immunity under Section 230 for alleged violations of the Fair Housing Act because it was an 'information content provider' with respect to the housing listings posted by users. The court had focused on the 'structured questionnaire' format of the listings, which asked information about roommate preferences, and commented: 'By categorizing, channeling and limiting the distribution of users' profiles, Roommate provides an additional layer of information that it is 'responsible' at least 'in part' for creating or developing.'

An Illinois criminal statute prohibiting the unauthorized sale for profit of sound recordings is preempted by the federal Copyright Act, but a state 'packaging' statute, which requires the listing of the manufacturer on the cover of the recording, is a consumer-protection law that survives preemption. People v. Williams, 2007 Ill. App. LEXIS 995 (Ill. Ct. App. Sept. 10, 2007). The court reversed the defendant's conviction for selling pirated sound recordings, but upheld his conviction under the packaging statute. The court ruled that the state's prohibition of unauthorized reproduction and distribution of sound recordings was preempted by the Copyright Act, rejecting the state's argument that the statute's mens rea requirement was an 'extra element' that saves the state law from preemption. However, the court found that the packaging statute was a consumer-protection statute 'qualitatively different' from the Copyright Act, because a violation involves a deceptive label or cover, irrespective of the protections afforded to the copyright owner under federal law.

An airline Web site's browsewrap agreement that prohibited commercial use is enforceable against a company that repeatedly accessed the site to obtain preferred boarding passes for passengers, where the company had actual knowledge of the agreement's terms. Southwest Airlines Co. v. Boardfirst, L.L.C., No. 3:06-cv-0891 (N.D. Tex. Sept. 12, 2007). The court granted the airline's motion for summary judgment on its breach-of-contract claims, and entered a permanent injunction barring the company from using the airline's site for commercial purposes. Given the company's repeated visits and receipt of several cease-and-desist letters, the court concluded that the company had actual knowledge of the Web site's terms of use and, therefore, was bound to the browsewrap agreement's contractual obligations. The court, however, denied the airline's motion for summary judgment on its Computer Fraud and Abuse Act claims based on the company's violation of the site's terms, finding that the airline failed to offer sufficient evidence that the company accessed its public Web site 'without authorization.'

Written e-mails and faxes exchanged between the parties demonstrating assent to proposed revisions to a software-project agreement, including an arbitration clause, operated as a contract addendum and constituted an enforceable agreement to arbitrate. Orbis, Inc. v. ObjectWin Technology, Inc., 2007 U.S. Dist. LEXIS 69597 (W.D. Va. Sept. 20, 2007). The court granted the defendant's motion to compel arbitration and stay the litigation. The court found that the plaintiff's e-mail and faxed communications expressing acceptance of the new terms demonstrated assent to the inclusion of the arbitration clause, rejecting the plaintiff's claims that his subsequent silence was a withdrawal of his acceptance of the contract revisions.

Bare allegations of gross negligence and willful misconduct against a Web hosting company that temporarily shut down the plaintiff's Web site do not supersede contractual limitations of liability contained in a clickwrap agreement. Whitnum v. Yahoo! Inc., 2007 N.Y. Misc. LEXIS 6247 (N.Y. Sup. Ct. Sept. 7, 2006). The court denied the plaintiff's motion to amend her complaint and dismissed the suit, finding that a valid clickwrap agreement that contained broad limitations of liability bars the plaintiff from recovery via claims relating to a temporary discontinuation of service. The court upheld the agreement's limitations of liability, finding that the plaintiff's proposed second, amended, complaint 'is based upon mere speculation and fails to set forth a claim for either willful misconduct or gross negligence.'

Ninth Circuit Orders En Banc Review of
Controversial Roomates.com CDA Opinion

The Ninth Circuit has ordered an en banc review of the panel opinion in a controversial case involving the application of Section 230 of the Communications Decency Act ('CDA'). Fair Housing Council of San Fernando Valley v. Roommates. com. LLC, 2007 U.S. App. LEXIS 23922 (Ninth Cir. Oct. 12, 2007) (granting rehearing en banc). In the opinion that was withdrawn, the panel ruled that the Roommates.com site was not entitled to immunity under Section 230 for alleged violations of the Fair Housing Act because it was an 'information content provider' with respect to the housing listings posted by users. The court had focused on the 'structured questionnaire' format of the listings, which asked information about roommate preferences, and commented: 'By categorizing, channeling and limiting the distribution of users' profiles, Roommate provides an additional layer of information that it is 'responsible' at least 'in part' for creating or developing.'

An Illinois criminal statute prohibiting the unauthorized sale for profit of sound recordings is preempted by the federal Copyright Act, but a state 'packaging' statute, which requires the listing of the manufacturer on the cover of the recording, is a consumer-protection law that survives preemption. People v. Williams, 2007 Ill. App. LEXIS 995 (Ill. Ct. App. Sept. 10, 2007). The court reversed the defendant's conviction for selling pirated sound recordings, but upheld his conviction under the packaging statute. The court ruled that the state's prohibition of unauthorized reproduction and distribution of sound recordings was preempted by the Copyright Act, rejecting the state's argument that the statute's mens rea requirement was an 'extra element' that saves the state law from preemption. However, the court found that the packaging statute was a consumer-protection statute 'qualitatively different' from the Copyright Act, because a violation involves a deceptive label or cover, irrespective of the protections afforded to the copyright owner under federal law.

An airline Web site's browsewrap agreement that prohibited commercial use is enforceable against a company that repeatedly accessed the site to obtain preferred boarding passes for passengers, where the company had actual knowledge of the agreement's terms. Southwest Airlines Co. v. Boardfirst, L.L.C., No. 3:06-cv-0891 (N.D. Tex. Sept. 12, 2007). The court granted the airline's motion for summary judgment on its breach-of-contract claims, and entered a permanent injunction barring the company from using the airline's site for commercial purposes. Given the company's repeated visits and receipt of several cease-and-desist letters, the court concluded that the company had actual knowledge of the Web site's terms of use and, therefore, was bound to the browsewrap agreement's contractual obligations. The court, however, denied the airline's motion for summary judgment on its Computer Fraud and Abuse Act claims based on the company's violation of the site's terms, finding that the airline failed to offer sufficient evidence that the company accessed its public Web site 'without authorization.'

Written e-mails and faxes exchanged between the parties demonstrating assent to proposed revisions to a software-project agreement, including an arbitration clause, operated as a contract addendum and constituted an enforceable agreement to arbitrate. Orbis, Inc. v. ObjectWin Technology, Inc., 2007 U.S. Dist. LEXIS 69597 (W.D. Va. Sept. 20, 2007). The court granted the defendant's motion to compel arbitration and stay the litigation. The court found that the plaintiff's e-mail and faxed communications expressing acceptance of the new terms demonstrated assent to the inclusion of the arbitration clause, rejecting the plaintiff's claims that his subsequent silence was a withdrawal of his acceptance of the contract revisions.

Bare allegations of gross negligence and willful misconduct against a Web hosting company that temporarily shut down the plaintiff's Web site do not supersede contractual limitations of liability contained in a clickwrap agreement. Whitnum v. Yahoo! Inc. , 2007 N.Y. Misc. LEXIS 6247 (N.Y. Sup. Ct. Sept. 7, 2006). The court denied the plaintiff's motion to amend her complaint and dismissed the suit, finding that a valid clickwrap agreement that contained broad limitations of liability bars the plaintiff from recovery via claims relating to a temporary discontinuation of service. The court upheld the agreement's limitations of liability, finding that the plaintiff's proposed second, amended, complaint 'is based upon mere speculation and fails to set forth a claim for either willful misconduct or gross negligence.'