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Nicholas Martin, On Behalf of Himself and Others Similarly Situated v. Cch

March 24, 2011


The opinion of the court was delivered by: Judge Robert M. Dow, Jr.


Before the Court are (1) Defendant CCH, Incorporated's ("CCH") motion to dismiss Plaintiff Nicholas Martin's claims that CCH violated the Illinois Electronic Mail Act, 815 ILCS § 511/10(c) ("IEMA") when he received unsolicited spam e-mails from CCH advertising its tax products and (2) Plaintiff's motion for leave to file a surreply [31] in opposition to the motion to dismiss. CCH contends that Plaintiff's IEMA claim is expressly preempted by the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act ("CAN-SPAM Act"). For the following reasons, the Court grants Defendant's motion to dismiss [20] and dismisses Count I of Plaintiff's amended complaint. The Court also grants Plaintiff's motion for leave to file surreply [31].

I. Background

Plaintiff Nicholas Martin is an individual who occasionally assists people with tax preparation services. Defendant CCH sells a variety of tax preparation software, as well as legal treatises explaining how to comply with advertising and marketing laws. On December 29, 2009, CCH sent an e-mail ("Exhibit A") to Plaintiff with the subject line: "Buy now pay Feb.15." The e-mail offered tax software with a deferred payment due on February 15, 2010. On January 7, 2010, CCH sent another e-mail ("Exhibit B") to Plaintiff with the subject line: "Offer extended -- Buy now pay Feb. 15." The e-mail again offered Plaintiff the opportunity to purchase tax software with a deferred payment. Plaintiff maintains that he is not aware of any previous relationship that he might have had with CCH and that the e-mails were unsolicited.

Plaintiff contends that the subject lines of Exhibits A and B do not accurately describe the full content or purpose of the e-mails. According to Plaintiff, Exhibits A and B contain special technological devices that, when the e-mail is opened, permit CCH to surreptitiously monitor plaintiff's actions and location. Specifically, Plaintiff maintains that the e-mails he received were deceptive and misleading because (1) "they contain special tools defendant may use to surreptitiously gather data about where the recipient is when he opens the e-mail, and when the e-mail is opened;" (2) "the subject lines do not state that the e-mails are advertisements;" and (3) "it has the purpose and effect of making the recipient think the e-mails [are] from someone with whom he has a pre-existing relationship." Compl. ¶ 20. Plaintiff contends that CCH uses this information to further its pecuniary interests and to enhance its advertising "profile" for recipients like Plaintiff. Plaintiff claims that because "information harvesting is material," the subject lines were actionable misrepresentations in that they obfuscated the true purpose and content of the e-mails. According to Plaintiff, had the subject line of Exhibits A and B contained some notification that opening the e-mails would provide private information to CCH about Plaintiff, such as his IP address and the time that he opened the e-mails, he would have deleted the e-mails and not opened them.

Plaintiff asserts that Defendant engaged in "online behavioral advertising," "profiling," tracking online activities, placing cookies on his computer, and monitoring access to CCH's website. Defendant contends that Plaintiff's claims are not supported by the allegations in this case, which are limited to whether the subject lines of the e-mails are deceptive or misleading.*fn1

II. Legal Standard On Motion To Dismiss

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint, not the merits of the case.See Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). To survive a Rule 12(b)(6) motion to dismiss, the complaint first must comply with Rule 8(a) by providing "a short and plain statement of the claim showing that the pleader is entitled to relief" (Fed. R. Civ. P. 8(a)(2)), such that the defendant is given "fair notice of what the * * * claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the "speculative level," assuming that all of the allegations in the complaint are true. E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly, 550 U.S. at 563. The Court accepts as true all of the well-pleaded facts alleged by the plaintiff and all reasonable inferences that can be drawn therefrom. See Barnes v. Briley, 420 F.3d 673, 677 (7th Cir. 2005).


The primary issue here is whether the CAN-SPAM Act preempts Plaintiff's state law IEMA claim. The basic principles of preemption law are both relatively straightforward and well-established. The Supremacy Clause of the United States Constitution provides that the laws of the United States "shall be the supreme Law of the Land; * * * any Thing in the Constitution or Laws of any state to the Contrary notwithstanding." Art. VI, cl. 2. Since McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 427 (1819), it has been settled that state law that conflicts with federal law is "without effect." Maryland v. Louisiana, 451 U.S. 725, 746 (1981). When determining if such a conflict exists, the "purpose of Congress" is the ultimate touchstone. Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992).

In general, there are three settings in which a state law conflicts with, and hence is preempted by, federal law: (1) express preemption, in which Congress "define[s] explicitly the extent to which its enactments pre-empt state law;" (2) field preemption, in which state law is pre-empted because "it regulates conduct in a field that Congress intended the federal government to occupy exclusively;" and (3) conflict preemption, in which, for example, complying with both federal and state law is a physical impossibility. English v. General Elec. Co., 496 U.S. 72, 78-79 & n. 5 (1990) (explaining that the three categories are not "rigidly distinct"); see also Gracia v. Volvo Europa Truck, N.V., 112 F.3d 291, 294 (7th Cir. 1997).

Particularly pertinent for present purposes is express preemption. See English, 496 U.S. at 79 ("[W]hen Congress has made its intent known through explicit statutory language, the courts' task is an easy one"). The Supreme Court teaches that the scope of express preemption is informed by (a) the presumption that Congress "does not cavalierly pre-empt state-law causes of action," and (b) the purpose of Congress in enacting the legislation, as revealed by the text, statutory framework and "the reviewing court's reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law." Lohr, 518 U.S. at 485.

The CAN-SPAM Act was enacted in response to the rise of unsolicited commercial e-mail. 15 U.S.C. § 7707(b)(1). Citing the lack of success under the then-current conditions in which many states had attempted to regulate e-mail with different standards and requirements, Congress determined that a national standard for regulating unsolicited commercial e-mail was required. See 15 U.S.C. § 7701(b)(1). The relevant portion of the CAN-SPAM Act for present purposes prohibits the transmission of a commercial electronic message by a person with actual or fairly implied knowledge that the subject heading would be likely to mislead a recipient about a material fact regarding the contents of the message. See 15 U.S.C. § 7704(a)(2);*fn2 see also Asis Internet Services v. Rausch, 2010 WL 1838752, at *3 (N.D. Cal. May 3, 2010). The Act does not provide a cause of action for private citizens; rather, only the FTC, various other federal agencies, a state attorney general on behalf of residents, or providers of Internet access services may bring lawsuits enforcing the CAN-SPAM Act. 15 U.S.C. § 7706; see also Madorsky v. Does, 2006 WL 1587349, at *2 (dismissing complaint because the CAN-SPAM Act does not provide standing for an individual private citizen to file a private cause of action).

In enacting the CAN-SPAM Act, Congress made several findings that are embodied within the first section of the CAN-SPAM Act. Among the findings relevant ...

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