Is AOL entitled to partial summary judgment on liability against a bulk e-mail advertiser under the Computer Fraud and Abuse Act, the Virginia Computer Crimes Act, and Virginia common law claims for trespass to chattels, civil conspiracy, and unjust enrichment for unsolicited bulk e-mail sent through AOL's network by its contract e-mailers, where genuine disputes of fact remain on damage and on whether the e-mailers were its agents?

America Online, Inc. (AOL), a Delaware corporation based in Virginia, provides e-mail and Internet services to members through computers located in Virginia. National Health Care Discount, Inc. (NHCD), an Iowa corporation, sells discount dental and optical plans and sought sales leads through unsolicited bulk e-mail (UBE). NHCD's vice president, Hermann Wilms, arranged with contract e-mailers, chiefly Forrest Dayton of Georgia, to send UBE using a script NHCD supplied, paying about $1.00 per lead with no written agreement. Dayton harvested AOL members' addresses, used software that falsified 'From' headers to defeat AOL's filters, and sent hundreds of millions of messages, perhaps 75% to AOL members. AOL's Terms of Service, Rules of the Road, and UBE policy prohibited UBE and address harvesting. AOL members forwarded 152,805 complaints about NHCD's UBE, from which AOL estimated 76.4 million messages at about $.00078 each. AOL sent cease-and-desist letters in July and August 1998; NHCD's lawyer said NHCD would forward the July letter to its e-mailers, and Wilms said he phoned Dayton, who assured him no law was being broken. NHCD paid $612,577.75 for 393,260 e-mail leads and says it did not control the e-mailers' methods.

AOL filed a seven-count complaint on December 18, 1998, in the United States District Court for the Northern District of Iowa, alleging violations of the Computer Fraud and Abuse Act (CFAA), federal service mark dilution, the Virginia and Iowa Computer Crimes Acts, Washington's Commercial Electronic Mail Act and Consumer Protection Act, trespass to chattels, civil conspiracy, and unjust enrichment. NHCD answered on March 24, 1999, denying liability, asserting affirmative defenses that third parties and independent contractors caused any harm, and counterclaiming for libel per se and interference with contractual relations. The parties consented to a magistrate judge's jurisdiction. AOL moved for partial summary judgment on liability on the CFAA, Virginia Computer Crimes Act, trespass to chattels, civil conspiracy, and unjust enrichment claims. NHCD resisted and cross-moved for summary judgment on April 13, 2000. After the April 17, 2000 hearing, the court denied NHCD's cross-motion and found Dayton's conduct constituted trespass to chattels, which NHCD conceded for purposes of AOL's motion. The court then ruled on AOL's motion.

(Zoss, J.)

No. AOL's motion for partial summary judgment is denied because genuine issues of material fact remain on several claims, and NHCD's liability for its contract e-mailers' acts has not been established as a matter of law.

Choice of law: Following Iowa's 'most significant relationship' test under Restatement (Second) of Conflict of Laws §§ 6 and 145, Virginia law governs the non-statutory claims. No state has a clearly demonstrable locus of the conduct, but Virginia is where AOL's computers sit and where AOL sustained its injury.

CFAA: NHCD's e-mailers 'accessed' AOL's computers by sending e-mail through them. Whether that access was 'without authorization' under § 1030(a)(5)(C) presents unresolved mixed questions of fact and law about whether AOL members are 'insiders' or 'outsiders.' The facts appear to fit § 1030(a)(2)(C), but under either subsection AOL must show that NHCD's UBE impaired the 'integrity or availability' of AOL's system and caused at least $5,000 in damage. NHCD's messages were only a fraction of the UBE AOL received, so causation of cognizable damage is a disputed fact for trial.

Virginia Computer Crimes Act: The statute defines 'without authority' to include sending UBE in violation of an e-mail provider's policies, and Dayton and the other e-mailers violated it. But they are not parties, so liability turns on NHCD's responsibility for their acts.

Trespass to chattels: Under Virginia law, unauthorized interference with another's personal property is actionable. Dayton's trespass was conceded, so this claim, like the Virginia statutory claim, also depends on whether NHCD is liable for Dayton's acts.

Civil conspiracy: If the e-mailers were NHCD's agents, no conspiracy is legally possible because a principal and its agents are not separate entities. If they were independent contractors, AOL has not shown that NHCD knowingly engaged in concerted action toward an unlawful purpose.

Unjust enrichment: AOL has not shown by clear and convincing evidence that it is entitled to a constructive trust, and the doctrine is unavailable where AOL has other remedies at law.

Agency: Under Virginia law, agency is never presumed, and AOL bears the burden of proving that the e-mailers acted subject to NHCD's control. The evidence strongly suggests agency, but AOL fell slightly short, leaving a disputed question of fact for trial.