356 F.3d 393
United States Court of Appeals,
REGISTER.COM, INC., PlaintiffAppellee,
VERIO, INC., DefendantAppellant.
Docket No. 009596.
Argued: Jan. 21, 2001.
Decided: Jan. 23, 2004.
Before: LEVAL, Circuit Judge, and J.F. KEENAN, District Judge.
The Honorable John F. Keenan, United States District Judge for the Southern District of New York, sitting by
designation. The Honorable Fred I. Parker was a member of the panel but died on August 12, 2003. Judge Parker
would have voted to reverse the district court's order. This appeal is being decided by the two remaining members
of the panel, who are in agreement. See Local Rule § 0.14(b).
LEVAL, Circuit Judge.
Defendant, Verio, Inc. ("Verio") appeals from an order of the United States District Court for the Southern District of New
York (Barbara S. Jones, J.) granting the motion of plaintiff Register.com, Inc. ("Register") for a preliminary injunction. The
68 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
court's order enjoined Verio from (1) using Register's trademarks; (2) representing or otherwise suggesting to third parties
that Verio's services have the sponsorship, endorsement, or approval of Register; (3) accessing Register's computers by use
of automated software programs performing multiple successive queries; and (4) using data obtained from Register's
database of contact information of registrants of Internet domain names to solicit the registrants for the sale of web site
development services by electronic mail, telephone calls, or direct mail. We affirm.
Judge Parker was not in agreement with this disposition. Deliberations have followed an unusual course. Judge
Parker initially was assigned to prepare a draft opinion affirming the district court. In the course of preparing the
draft, Judge Parker changed his mind and proposed to rule in favor of the defendant, overturning the injunction in
most respects. Judge Parker's draft opinion, however, failed to convince the other members of the panel, who
adhered to the view that the injunction should be affirmed. Judge Parker died shortly thereafter, prior to the
circulation of a draft opinion affirming the injunction, from which Judge Parker presumably would have dissented.
We attach Judge Parker's draft opinion as an Appendix. We do so for two reasons: One is to expose Judge
Parker's views, which would have been set forth in a dissenting opinion, but for his death; the second is because
his opinion contains an exceptionally thorough, detailed and useful statement of facts, including a comprehensive
description of the functioning of the domain name system. We have stated the facts more briefly, mentioning only
those points necessary to the arguments discussed, inviting the reader to consult Judge Parker's very thorough
fact statement for a more detailed account.
This plaintiff Register is one of over fifty companies serving as registrars for the issuance of domain names on the world
wide web. As a registrar, Register issues domain names to persons and entities preparing to establish web sites on the
Internet. Web sites are identified and accessed by reference to their domain names.
Register was appointed a registrar of domain names by the Internet Corporation for Assigned Names and Numbers, known
by the acronym "ICANN." ICANN is a private, nonprofit public benefit corporation which was established by agencies of
the U.S. government to administer the Internet domain name system. To become a registrar of domain names, Register
was required to enter into a standard form agreement with ICANN, designated as the ICANN Registrar Accreditation
Agreement, November 1999 version (referred to herein as the "ICANN Agreement").
Applicants to register a domain name submit to the registrar contact information, including at a minimum, the applicant's
name, postal address, telephone number, and electronic mail address. The ICANN Agreement, referring to this registrant
contact information under the rubric "WHOIS information," requires the registrar, under terms discussed in greater detail
below, to preserve it, update it daily, and provide for free public access to it through the Internet as well as through an
independent access port, called port 43. See ICANN Agreement § II.F.1.
Section II.F.5 of the ICANN Agreement (which furnishes a major basis for the appellant Verio's contentions on this appeal)
requires that the registrar "not impose terms and conditions" on the use made by others of its WHOIS data "except as
permitted by ICANNadopted policy." In specifying what restrictions may be imposed, the ICANN Agreement requires the
registrar to permit use of its WHOIS data "for any lawful purposes except to: ... support the transmission of mass
unsolicited, commercial advertising or solicitations via email (spam ); [and other listed purposes not relevant to this
appeal]." (emphasis added).
Another section of the ICANN Agreement (upon which appellee Register relies) provides as follows,
No ThirdParty Beneficiaries: This Agreement shall not be construed to create any obligation by either ICANN or
Registrar to any nonparty to this Agreement ....
ICANN Agreement § II.S.2. Third parties could nonetheless seek enforcement of a registrar's obligations set forth in the
ICANN Agreement by resort to a grievance process under ICANN's auspices.
In compliance with § II.F.1 of the ICANN Agreement, Register updated the WHOIS information on a daily basis and
established Internet and port 43 service, which allowed free public query of its WHOIS information. An entity making a
WHOIS query through Register's Internet site or port 43 would receive a reply furnishing the requested WHOIS
information, captioned by a legend devised by Register, which stated,
By submitting a WHOIS query, you agree that you will use this data only for lawful purposes and that under no
circumstances will you use this data to ... support the transmission of mass unsolicited, commercial advertising or
solicitation via email.
The terms of that legend tracked § II.F.5 of the ICANN Agreement in specifying the restrictions Register imposed on the
use of its WHOIS data. Subsequently, as explained below, Register amended the terms of this legend to impose more
stringent restrictions on the use of the information gathered through such queries.
In addition to performing the function of a registrar of domain names, Register also engages in the business of selling web
related services to entities that maintain web sites. These services cover various aspects of web site development. In order
CHAPTER 4: TORTS AND CYBER TORTS 69
to solicit business for the services it offers, Register sends out marketing communications. Among the entities it solicits for
the sale of such services are entities whose domain names it registered. However, during the registration process, Register
offers registrants the opportunity to elect whether or not they will receive marketing communications from it.
The defendant Verio, against whom the preliminary injunction was issued, is engaged in the business of selling a variety of
web site design, development and operation services. In the sale of such services, Verio competes with Register's web site
development business. To facilitate its pursuit of customers, Verio undertook to obtain daily updates of the WHOIS
information relating to newly registered domain names. To achieve this, Verio devised an automated software program, or
robot, which each day would submit multiple successive WHOIS queries through the port 43 accesses of various registrars.
Upon acquiring the WHOIS information of new registrants, Verio would send them marketing solicitations by email,
telemarketing and direct mail. To the extent that Verio's solicitations were sent by email, the practice was inconsistent
with the terms of the restrictive legend Register attached to its responses to Verio's queries.
At first, Verio's solicitations addressed to Register's registrants made explicit reference to their recent registration through
Register. This led some of the recipients of Verio's solicitations to believe the solicitation was initiated by Register (or an
affiliate), and was sent in violation of the registrant's election not to receive solicitations from Register. Register began to
receive complaints from registrants. Register in turn complained to Verio and demanded that Verio cease and desist from
this form of marketing. Register asserted that Verio was harming Register's goodwill, and that by soliciting via email, was
violating the terms to which it had agreed on submitting its queries for WHOIS information. Verio responded to the effect
that it had stopped mentioning Register in its solicitation message.
In the meantime, Register changed the restrictive legend it attached to its responses to WHOIS queries. While previously
the legend conformed to the terms of § II F.5, which authorized Register to prohibit use of the WHOIS information for
mass solicitations "via email," its new legend undertook to bar mass solicitation "via direct mail, electronic mail, or by
telephone." Section II.F.5 of Register's ICANN Agreement, as noted above, required Register to permit use of the WHOIS
data "for any lawful purpose except to ... support the transmission of mass unsolicited solicitations via email (spam)."
Thus, by undertaking to prohibit Verio from using the WHOIS information for solicitations "via direct mail ... or by
telephone," Register was acting in apparent violation of this term of its ICANN Agreement.
The new legend stated:
By submitting a WHOIS query, you agree that ... under no circumstances will you use this data to ... support the
transmission of mass unsolicited ... advertising or solicitations via direct mail, electronic mail, or by telephone.
Register wrote to Verio demanding that it cease using WHOIS information derived from Register not only for email
marketing, but also for marketing by direct mail and telephone. Verio ceased using the information in email marketing,
but refused to stop marketing by direct mail and telephone.
Register brought this suit on August 3, 2000, and moved for a temporary restraining order and a preliminary injunction.
Register asserted, among other claims, that Verio was (a) causing confusion among customers, who were led to believe
Verio was affiliated with Register; (b) accessing Register's computers without authorization, a violation of the Computer
Fraud and Abuse Act, ; and, (c) trespassing on Register's chattels in a manner likely to harm Register's computer systems
by the use of Verio's automated robot software programs. On December 8, 2000, the district court entered a preliminary
injunction. The injunction barred Verio from the following activities:
1. Using or causing to be used the "Register.com" mark or the "first step on the web" mark or any other designation
similar thereto, on or in connection with the advertising, marketing, or promotion of Verio and/or any of Verio's services;
2. Representing, or committing any act which is calculated to or is likely to cause third parties to believe that Verio
and/or Verio's services are sponsored by, or have the endorsement or approval of Register.com;
3. Accessing Register.com's computers and computer networks in any manner, including, but not limited to, by software
programs performing multiple, automated, successive queries, provided that nothing in this Order shall prohibit Verio
from accessing Register.com's WHOIS database in accordance with the terms and conditions thereof; and
4. Using any data currently in Verio's possession, custody or control, that using its best efforts, Verio can identify as
having been obtained from Register.com's computers and computer networks to enable the transmission of unsolicited
commercial electronic mail, telephone calls, or direct mail to the individuals listed in said data, provided that nothing in
this Order shall prohibit Verio from (i) communicating with any of its existing customers, (ii) responding to
communications received from any Register.com customer initially contacted before August 4, 2000, or (iii)
communicating with any Register.com customer whose contact information is obtained by Verio from any source other
than Register.com's computers and computer networks.
. Verio appeals from that order.
Standard of review and preliminary injunction standard
70 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
A grant of a preliminary injunction is reviewed on appeal for abuse of discretion, see , which will be found if the district
court "applies legal standards incorrectly or relies upon clearly erroneous findings of fact," or "proceed[s] on the basis of an
erroneous view of the applicable law," .
Verio advances a plethora of arguments why the preliminary injunction should be vacated. We find them to be without
merit. We address the most substantial of Verio's arguments.
(a) Verio's enforcement of the restrictions placed on Register by the ICANN Agreement
Verio conceded that it knew of the restrictions Register placed on the use of the WHOIS data and knew that, by using
Register's WHOIS data for direct mail and telemarketing solicitations, it was violating Register's restrictions. Verio's
principal argument is that Register was not authorized to forbid Verio from using the data for direct mail and
telemarketing solicitation because the ICANN Agreement prohibited Register from imposing any "terms and conditions" on
use of WHOIS data, "except as permitted by ICANNadopted policy," which specified that Register was required to permit
"any lawful purpose, except ... mass solicitation[ ] via email."
Register does not deny that the restrictions it imposed contravened this requirement of the ICANN Agreement. Register
contends, however, that the question whether it violated § II.F.5 of its Agreement with ICANN is a matter between itself
and ICANN, and that Verio cannot enforce the obligations placed on Register by the ICANN Agreement. Register points to
§ II.S.2 of the ICANN Agreement, captioned "No ThirdParty Beneficiaries," which, as noted, states that the agreement is
not to be construed "to create any obligation by either ICANN or Registrar to any nonparty." Register asserts that Verio, a
non party, is asking the court to construe § II.F.5 as creating an obligation owed by Register to Verio, and that the
Agreement expressly forbids such a construction.
ICANN intervened in the district court as an amicus curiae and strongly supports Register's position, opposing Verio's
right to invoke Register's contractual promises to ICANN. ICANN explained that ICANN has established a remedial
process for the resolution of such disputes through which Verio might have sought satisfaction. "If Verio had concerns
regarding Register.com's conditions for access to WHOIS data, it should have raised them within the ICANN process
rather [than] simply taking Register.com's data, violating the conditions [imposed by Register], and then seeking to justify
its violation in this Court .... [Verio's claim was] intended to be addressed only within the ICANN process."
ICANN asserted that the No ThirdParty Beneficiary provision, barring third parties from seeking to enforce promises
made by a registrar to ICANN through court proceedings, was "vital to the overall scheme of [its] various agreements."
This is because proper expression of the letter and spirit of ICANN policies is most appropriately achieved through the
ICANN process itself, and not through forums that lack the every day familiarity with the intricate technical and policy
issues that the ICANN process was designed to address.
ICANN's brief went on to state:
[E]nforcement of agreements with ICANN [was to] be informed by the judgment of the various segments of the internet
community as expressed through ICANN. In the fastpaced environment of the Internet, new issues and situations arise
quickly, and sometimes the language of contractual provisions does not perfectly match the underlying policies. For this
and other reasons, hardand fast enforcement [by courts] of the letter of every term of every agreement is not always
appropriate. An integral part of the agreements that the registrars ... entered with ICANN is the understanding that
these situations would be handled through consultation and consideration within the ICANN process .... Allowing issues
under the agreements registrars make with ICANN to be diverted from [ICANN's] carefully crafted remedial scheme to
the courts, at the behest of third parties ..., would seriously threaten the Internet community's ability, under the auspices
of ICANN, to achieve a proper balance of the competing policy values that are so frequently involved.
We are persuaded by the arguments Register and ICANN advance. It is true Register incurred a contractual obligation to
ICANN not to prevent the use of its WHOIS data for direct mail and telemarketing solicitation. But ICANN deliberately
included in the same contract that persons aggrieved by Register's violation of such a term should seek satisfaction within
the framework of ICANN's grievance policy, and should not be heard in courts of law to plead entitlement to enforce
Register's promise to ICANN. As experience develops in the fast changing world of the Internet, ICANN, informed by the
various constituencies in the Internet community, might well no longer consider it salutary to enforce a policy which it
earlier expressed in the ICANN Agreement. For courts to undertake to enforce promises made by registrars to ICANN at
the instance of third parties might therefore be harmful to ICANN's efforts to develop wellinformed and sound Internet
Verio's invocation of the ICANN Agreement necessarily depends on its entitlement to enforce Register's promises to
ICANN in the role of third party beneficiary. The ICANN Agreement specified that it should be deemed to have been made
in California, where ICANN is located. Under , a "contract, made expressly for the benefit of a third person, may be
enforced by him." . For Verio to seek to enforce Register's promises it made to ICANN in the ICANN Agreement, Verio
must show that the Agreement was made for its benefit. See . Verio did not meet this burden. To the contrary, the
CHAPTER 4: TORTS AND CYBER TORTS 71
Agreement expressly and intentionally excluded nonparties from claiming rights under it in court proceedings.
We are not persuaded by the arguments Judge Parker advanced in his draft. Although acknowledging that Verio could not
claim third party beneficiary rights to enforce Register's promises to ICANN, Judge Parker nonetheless found three
reasons for enforcing Verio's claim: (i) "public policy interests at stake," (ii) Register's "indisputable obligations to ICANN
as a registrar," and (iii) the equities, involving Register's "unclean hands" in imposing a restriction it was contractually
bound not to impose. We respectfully disagree. As for the first argument, that Register's restriction violated public policy,
it is far from clear that this is so. It is true that the ICANN Agreement at the time ICANN presented it to Register
permitted mass solicitation by means other than email. But it is not clear that at the time of this dispute, ICANN intended
to adhere to that policy. As ICANN's amicus brief suggested, the world of the Internet changes rapidly, and public policy
as to how that world should be governed may change rapidly as well. ICANN in fact has since changed the terms of its
standard agreement for the accreditation of registrars to broaden the uses of WHOIS information that registrars may
prohibit to include not only mass email solicitations but also mass telephone and fax solicitations. See ICANN Registrar
Accreditation Agreement § 3.3.5 (May 18, 2001). It is far from clear that ICANN continues to view public policy the way it
did at the time it crafted Register's agreement. In any event, if Verio wished to have the dispute resolved in accordance
with public policy, it was free to bring its grievance to ICANN. Verio declined to do so. ICANN included the "No Third
Party Beneficiary" provision precisely so that it would retain control of enforcement of policy, rather than yielding it to
We note in passing, Judge Parker's characterization of the public policythat WHOIS information should be "free
as air"is a rhetorical oversimplification; the public policy as set forth in the ICANN Agreement expressly
contemplated that the WHOIS data not be available for use in mass email solicitation. It also imposed another
restriction not pertinent to this appeal and expressly reserved the possibility that further restrictions might be
imposed if and when "ICANN adopts a different policy." ICANN Agreement § II.F.5.
As for Judge Parker's second argument, Register's "indisputable obligation to ICANN as a registrar" to permit Verio to use
the WHOIS information for mass solicitation by mail and telephone, we do not see how this argument differs from Verio's
claim of entitlement as a third party beneficiary, which § II.S.2 explicitly negates. The fact that Register owed a
contractual obligation to ICANN not to impose certain restrictions on use of WHOIS information does not mean that it
owed an obligation to Verio not to impose such restrictions. As ICANN's brief in the district court indicates, ICANN was
well aware of Register's deviation from the restrictions imposed by the ICANN Agreement, but ICANN chose not to take
steps to compel Register to adhere to its contract.
Nor are we convinced by Judge Parker's third argument of Register's "unclean hands." Judge Parker characterizes
Register's failure to honor its contractual obligation to ICANN as unethical conduct, making Register ineligible for
equitable relief. But Register owed no duty in that regard to anyone but ICANN, and ICANN has expressed no
dissatisfaction with Register's failure to adhere to that term of the contract. Verio was free to seek ICANN's intervention
on its behalf, but declined to do so, perhaps because it knew or suspected that ICANN would decline to compel Register to
adhere to the contract term. Under the circumstances, we see no reason to assume on appeal that Register's conduct
should be considered unethical, especially where the district court made no such finding.
(b) Verio's assent to Register's contract terms
Verio's next contention assumes that Register was legally authorized to demand that takers of WHOIS data from its
systems refrain from using it for mass solicitation by mail and telephone, as well as by email. Verio contends that it
nonetheless never became contractually bound to the conditions imposed by Register's restrictive legend because, in the
case of each query Verio made, the legend did not appear until after Verio had submitted the query and received the
WHOIS data. Accordingly, Verio contends that in no instance did it receive legally enforceable notice of the conditions
Register intended to impose. Verio therefore argues it should not be deemed to have taken WHOIS data from Register's
systems subject to Register's conditions.
Verio's argument might well be persuasive if its queries addressed to Register's computers had been sporadic and
infrequent. If Verio had submitted only one query, or even if it had submitted only a few sporadic queries, that would give
considerable force to its contention that it obtained the WHOIS data without being conscious that Register intended to
impose conditions, and without being deemed to have accepted Register's conditions. But Verio was daily submitting
numerous queries, each of which resulted in its receiving notice of the terms Register exacted. Furthermore, Verio admits
that it knew perfectly well what terms Register demanded. Verio's argument fails.
The situation might be compared to one in which plaintiff P maintains a roadside fruit stand displaying bins of apples. A
visitor, defendant D, takes an apple and bites into it. As D turns to leave, D sees a sign, visible only as one turns to exit,
which says "Apples50 cents apiece." D does not pay for the apple. D believes he has no obligation to pay because he had
no notice when he bit into the apple that 50 cents was expected in return. D's view is that he never agreed to pay for the
72 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
apple. Thereafter, each day, several times a day, D revisits the stand, takes an apple, and eats it. D never leaves money.
P sues D in contract for the price of the apples taken. D defends on the ground that on no occasion did he see P's price
notice until after he had bitten into the apples. D may well prevail as to the first apple taken. D had no reason to
understand upon taking it that P was demanding the payment. In our view, however, D cannot continue on a daily basis to
take apples for free, knowing full well that P is offering them only in exchange for 50 cents in compensation, merely
because the sign demanding payment is so placed that on each occasion D does not see it until he has bitten into the apple.
Verio's circumstance is effectively the same. Each day Verio repeatedly enters Register's computers and takes that day's
new WHOIS data. Each day upon receiving the requested data, Verio receives Register's notice of the terms on which it
makes the data availablethat the data not be used for mass solicitation via direct mail, email, or telephone. Verio
acknowledges that it continued drawing the data from Register's computers with full knowledge that Register offered
access subject to these restrictions. Verio is no more free to take Register's data without being bound by the terms on which
Register offers it, than D was free, in the example, once he became aware of the terms of P's offer, to take P's apples
without obligation to pay the 50 cent price at which P offered them.
Verio seeks support for its position from cases that have dealt with the formation of contracts on the Internet. An excellent
example, although decided subsequent to the submission of this case, is . The dispute was whether users of Netscape's
software, who downloaded it from Netscape's web site, were bound by an agreement to arbitrate disputes with Netscape,
where Netscape had posted the terms of its offer of the software (including the obligation to arbitrate disputes) on the web
site from which they downloaded the software. We ruled against Netscape and in favor of the users of its software because
the users would not have seen the terms Netscape exacted without scrolling down their computer screens, and there was no
reason for them to do so. The evidence did not demonstrate that one who had downloaded Netscape's software had
necessarily seen the terms of its offer.
Verio, however, cannot avail itself of the reasoning of In the users in whose favor we decided visited Netscape's web site
one time to download its software. Netscape's posting of its terms did not compel the conclusion that its downloaders took
the software subject to those terms because there was no way to determine that any downloader had seen the terms of the
offer. There was no basis for imputing to the downloaders of Netscape's software knowledge of the terms on which the
software was offered. This case is crucially different. Verio visited Register's computers daily to access WHOIS data and
each day saw the terms of Register's offer; Verio admitted that, in entering Register's computers to get the data, it was
fully aware of the terms on which Register offered the access.
Verio's next argument is that it was not bound by Register's terms because it rejected them. Even assuming Register is
entitled to demand compliance with its terms in exchange for Verio's entry into its systems to take WHOIS data, and even
acknowledging that Verio was fully aware of Register's terms, Verio contends that it still is not bound by Register's terms
because it did not agree to be bound. In support of its claim, Verio cites a district court case from the Central District of
California, , in which the court rejected Ticketmaster's application for a preliminary injunction to enforce posted terms of
use of data available on its website against a regular user. Noting that the user of Ticketmaster's web site is not required
to check an "I agree" box before proceeding, the court concluded that there was insufficient proof of agreement to support a
We acknowledge that the decision gives Verio some support, but not enough. In the first place, the Ticketmaster court was
not making a definitive ruling rejecting Ticketmaster's contract claim. It was rather exercising a district court's discretion
to deny a preliminary injunction because of a doubt whether the movant had adequately shown likelihood of success on the
But more importantly, we are not inclined to agree with the court's analysis. There is a crucial difference between the
circumstances of where we declined to enforce Netscape's specified terms against a user of its software because of
inadequate evidence that the user had seen the terms when downloading the software, and those of where the taker of
information from Ticketmaster's site knew full well the terms on which the information was offered but was not offered an
icon marked, "I agree," on which to click. Under the circumstances of we see no reason why the enforceability of the
offeror's terms should depend on whether the taker states (or clicks), "I agree."
We recognize that contract offers on the Internet often require the offeree to click on an "I agree" icon. And no doubt, in
many circumstances, such a statement of agreement by the offeree is essential to the formation of a contract. But not in all
circumstances. While new commerce on the Internet has exposed courts to many new situations, it has not fundamentally
changed the principles of contract. It is standard contract doctrine that when a benefit is offered subject to stated
conditions, and the offeree makes a decision to take the benefit with knowledge of the terms of the offer, the taking
constitutes an acceptance of the terms, which accordingly become binding on the offeree. See, e.g., ( "[S]ilence and inaction
operate as an acceptance ... [w]here an offeree takes the benefit of offered services with reasonable opportunity to reject
them and reason to know that they were offered with the expectation of compensation."); 2 Richard A. Lord, Williston on
CHAPTER 4: TORTS AND CYBER TORTS 73
Contracts § 6:9 (4th ed. 1991) ("[T]he acceptance of the benefit of services may well be held to imply a promise to pay for
them if at the time of acceptance the offeree has a reasonable opportunity to reject the service and knows or has reason to
know that compensation is expected."); Arthur Linton Corbin, Corbin on Contracts § 71 (West 1 vol. ed. 1952) ("The
acceptance of the benefit of the services is a promise to pay for them, if at the time of accepting the benefit the offeree has a
reasonable opportunity to reject it and knows that compensation is expected."); ( "Where a person, with reasonable
opportunity to reject offered services, takes the benefit of them under circumstances which would indicate, to a reasonable
man, that they were offered with the expectation of compensation, a contract, complete with mutual assent, results.");
(buyer of hats was bound to pay for hats when buyer failed to return them to seller within five days of inspection as seller
requested in clear and obvious notice statement).
Returning to the apple stand, the visitor, who sees apples offered for 50 cents apiece and takes an apple, owes 50 cents,
regardless whether he did or did not say, "I agree." The choice offered in such circumstances is to take the apple on the
known terms of the offer or not to take the apple. As we see it, the defendant in and Verio in this case had a similar
choice. Each was offered access to information subject to terms of which they were well aware. Their choice was either to
accept the offer of contract, taking the information subject to the terms of the offer, or, if the terms were not acceptable, to
decline to take the benefits.
We find that the district court was within its discretion in concluding that Register showed likelihood of success on the
merits of its contract claim.
(c) Irreparable harm
Verio contends that an injunction is not appropriate to enforce the terms of a contract. It is true that specific relief is not
the conventional remedy for breach of contract, but there is certainly no ironclad rule against its use. Specific relief may be
awarded in certain circumstances.
If an injury can be appropriately compensated by an award of monetary damages, then an adequate remedy at law exists,
and no irreparable injury may be found to justify specific relief. . But, irreparable harm may be found where damages are
difficult to establish and measure. . We have found, for example, that injunctive relief is appropriate where it would be
"very difficult to calculate monetary damages that would successfully redress the loss of a relationship with a client that
would produce an indeterminate amount of business in years to come."
The district court found it impossible to estimate "with any precision the amount of the monetary loss which has resulted
and which would result in the future from the loss of Register.com's relationships with customers and co brand partners,"
by reason of Verio's actions. In our view, the district court did not abuse its discretion in finding that, unless specific relief
were granted, Verio's actions would cause Register irreparable harm through loss of reputation, good will, and business
(d) Trespass to chattels
Verio also attacks the grant of the preliminary injunction against its accessing Register's computers by automated software
programs performing multiple successive queries. This prong of the injunction was premised on Register's claim of
trespass to chattels. Verio contends the ruling was in error because Register failed to establish that Verio's conduct
resulted in harm to Register's servers and because Verio's robot access to the WHOIS database through Register was "not
unauthorized." We believe the district court's findings were within the range of its permissible discretion.
"A trespass to a chattel may be committed by intentionally ... using or intermeddling with a chattel in the possession of
another," , where "the chattel is impaired as to its condition, quality, or value," id. ; see also (citing the Restatement
definition as New York law).
The district court found that Verio's use of search robots, consisting of software programs performing multiple automated
successive queries, consumed a significant portion of the capacity of Register's computer systems. While Verio's robots
alone would not incapacitate Register's systems, the court found that if Verio were permitted to continue to access
Register's computers through such robots, it was "highly probable" that other Internet service providers would devise
similar programs to access Register's data, and that the system would be overtaxed and would crash. We cannot say these
findings were unreasonable.
Nor is there merit to Verio's contention that it cannot be engaged in trespass when Register had never instructed it not to
use its robot programs. As the district court noted, Register's complaint sufficiently advised Verio that its use of robots was
not authorized and, according to Register's contentions, would cause harm to Register's systems.
(e) Lanham Act
On Register's claim for trademark infringement and unfair competition under the Lanham Act, the district court enjoined
Verio from using Register's marks, including "Register.com" and "first step on the web," as well as from committing acts
"calculated to or ... likely to cause third parties to believe that Verio" is sponsored, endorsed or approved by Register. By
letter submitted after oral argument, Register agreed to the deletion of the prohibition concerning use of "first step on the
74 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
web." See Letter from William Patry, Counsel for Register, to the U.S. Court of Appeals for the Second Circuit (May 22,
2001). We accordingly direct the district court to modify the preliminary injunction by deleting the prohibition of use of
"first step on the web."
Verio contends there was no adequate basis for the portion of the injunction based on the Lanham Act. We disagree. In our
view, the injunction was within the scope of the court's permitted discretion.
The district court found two bases for the injunction. The first was that in its early calls to recent registrants to solicit the
sale of web site development services, Verio explicitly referred to the registrant's registration with Register. The evidence
showed that a number of registrants believed the caller was affiliated with Register. The evidence further showed that
Verio's marketers, calling registrants almost immediately following their registration, left messages saying they were
calling "regarding your recently registered domain name," and asked to be called back. The district court found that the
script was misleading. It noted that Verio in fact was not calling "regarding the recently registered domain name," but was
rather calling regarding the registrant's establishment of a web site for which Verio wanted to offer services. Evidence
presented to the district court showed that registrants who received such calls were prompted to call back immediately
because the message led them to believe the call indicated some problem with Register's registration of the domain name,
and that they assumed from the nature of the message that the entity calling was affiliated with Register.
We believe Register has shown an adequate basis to support the district court's exercise of discretion in issuing the
injunction. Verio's use of Register's name alone was sufficient basis for the injunction. Notwithstanding that Verio had
agreed, prior to the initiation of the suit, to cease using Register's name, Verio had previously used Register's mark in its
solicitation calls. The fact that it had agreed to cease doing so was a factor that might have led the court to decline to issue
the injunction, but it did not prevent the court from considering Verio's previous infringing behavior as a justification for
The district court was also within its discretion in concluding that Verio's script for the solicitation calls was misleading.
Verio's calls, while prompted by the recent registration of the domain name, were not "regarding your recently registered
domain name." Verio's interest was not in the domain name but in the opportunity to offer web services to the owner of a
new site. The district court was within its discretion in finding that the reference to the recently registered domain name
misleadingly induced registrants to call back, believing the registration of their domain name had encountered a problem,
and that the calling party was affiliated with the registration. Verio could easily change the text of its message so as to
avoid the misleading implication, without detriment to its legitimate efforts to solicit business. We conclude that there was
adequate basis for the issuance of the injunction.
Nor does the mere fact that Verio's representatives identified themselves as "calling from Verio" preclude a finding of
misleading practice. The statement that the solicitor was "calling from Verio" did not prevent customers from assuming
that Verio was connected with the registrar of their domain names. Compare (presentation of a mark in conjunction with a
house mark may lessen the likelihood of confusion); (same), limited on other grounds by ; (same), superseded by rule on
other grounds as stated in , with (citing ) (the addition of a house mark or trade name may aggravate the likelihood of
confusion if "a purchaser could well think [one party] had licensed [the other] as a second user").
We reject Verio's contention that the district court had no adequate basis for the Lanham Act injunction.
(f) Other claims
The rulings outlined above justify the affirmance of the preliminary injunction, without need to discuss the other
The ruling of the district court is hereby AFFIRMED, with the exception that the court is directed to delete the reference to
"first step on the web" from paragraph one of its order.
(Cite as: 183 F.3d 770)
Harold MARTIN, Appellee,
CHAPTER 4: TORTS AND CYBER TORTS 75
WALMART STORES, INC., Appellant.
United States Court of Appeals,
Submitted: April 21, 1999.
Filed: July 7, 1999.
Rehearing and Rehearing En Banc Denied Aug. 17, 1999.
BEAM, Circuit Judge.
WalMart appeals the district court's denial of its motion for a directed verdict, or in the alternative, motion for a new
trial, following a jury trial on Harold Martin's slip and fall action. WalMart asserts that Martin failed to establish that
WalMart had either actual or constructive notice of the hazard on the floor; that the jury instructions failed to accurately
state Missouri law; and that the jury was prejudiced by improper comments by Martin's counsel during closing arguments.
We present the facts in a light most favorable to the verdict. Harold Martin was shopping in the sporting goods
department of WalMart on the afternoon of September 16, 1993. In front of the sporting goods section, in the store's main
aisle, called the "action alley," there was a large display consisting of several pallets stacked with cases of shotgun shells.
On top of the cases were individual boxes of shells. As Martin walked past the display with his shopping cart, he slipped
on some loose shotgun shell pellets [FN2] and fell to the floor. Martin lost both feeling and control of his legs. Sensation
and control soon returned. However, during the following week, he lost the use of his legs several times, and the paralysis
would last for ten to fifteen minutes. Following the last paralytic episode, sensation and control did not return to the front
half of his left foot. Martin's doctors have diagnosed the condition as permanent and can offer no treatment.
FN2. Shotgun shells fire a quantity of pellets, or "shot," that resemble small BB's.
Just prior to Martin's fall, a WalMart employee walked past the display in the same area where Martin fell. At the time,
the sporting goods department should have been staffed with two people, however, only one was in the department. Martin
had been in the sporting goods department for ten to fifteen minutes prior to his fall and did not notice anyone handling or
tampering with the shotgun shells.
After Martin's fall, the sporting goods clerk searched for the source of the pellets and found a box of shells with one shell
missing, and a single shell sitting on top of the display with some of the pellets missing. *772 These were given to his
manager. However, WalMart lost the shell and it was unavailable as an exhibit at trial.
 A United States District Court sitting in diversity jurisdiction applies the substantive law of the forum state, in this
case, Missouri. See First Bank of Marietta v. Hogge, 161 F.3d 506, 510 (8th Cir.1998). The parties dispute the proper
interpretation and application of Missouri law pertaining to slip and fall cases. Prior to 1989, Missouri followed the
traditional rule that required a plaintiff in a slip and fall case to establish that the defendant store had either actual or
constructive notice of the dangerous condition. See, e.g., Ward v. Temple Stephens Co., 418 S.W.2d 935, 938 (Mo.1967).
The defendant store is deemed to have actual notice if it is shown that an employee created or was aware of the hazard.
See id. Constructive notice could be established by showing that the dangerous condition had existed for a sufficient length
of time that the defendant should reasonably have known about it. See id.
In 1989, the Missouri Supreme Court decided Sheil v. T.G. & Y. Stores Co., 781 S.W.2d 778 (Mo.1989) (en banc). In Sheil,
the court followed the example of Ciminski v. Finn Corp., 13 Wash.App. 815, 537 P.2d 850 (1975), and carved out an
exception for slip and fall cases in selfservice stores. See Sheil, 781 S.W.2d at 780. In Sheil, a customer was injured when
he tripped over a box left in an aisle. There was no evidence regarding what was in the box (other than it seemed heavy for
its size), who left the box there, or how long it had been in the aisle. The defendant store asserted that the plaintiff had not
made a submissible case because the plaintiff could not establish that an employee placed the box in the aisle (actual
notice), or that the box had been there long enough so that the store should have been aware of it (constructive notice). See
id. at 77980. The court held that the plaintiff, because of the nature of the selfservice method of operations used by the
store, had made a submissible case.
The Sheil court noted that retail store operations have evolved since the traditional liability rules were established. In
modern selfservice stores, customers are invited to traverse the same aisles used by the clerks to replenish stock, they are
invited to retrieve merchandise from displays for inspection, and to place it back in the display if the item is not selected for
purchase. Further, a customer is enticed to look at the displays, thus reducing the chance that the customer will be
76 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
watchful of hazards on the floor. See id. at 78081. "The storeowner (sic) necessarily knows that customers may take
merchandise into their hands and may then lay articles that no longer interest them down in the aisle.... The storeowner,
therefore, must anticipate and must exercise due care to guard against dangers from articles left in the aisle." Id. at 780.
The risk of items creating dangerous conditions on the floor, previously created by employees, is now created by other
customers as a result of the store's decision to employ the selfservice mode of operation. Therefore, " '[a]n owner of a self
service operation has actual notice of these problems. In choosing a selfservice method of providing items, he is charged
with the knowledge of the foreseeable risks inherent in such a mode of operation.' " Id. at 781 (quoting Ciminski, 537 P.2d
at 853.) Thus, in slip and fall cases in selfservice stores, the inquiry of whether the danger existed long enough that the
store should have reasonably known of it (constructive notice) is made in light of the fact that the store has notice that
certain dangers arising through customer involvement are likely to occur, and the store has a duty to anticipate them.
Because of this selfservice exception, the court held that, contrary to previous cases, "the precise [amount of] time [a
dangerous substance has been on the floor] will not be so important a factor. More *773 important will be the method of
merchandising and the nature of the article causing the injury." Id. at 780. The amount of time is even less important if
there is evidence that employees of the store were regularly in the area where the accident occurred. See Georgescu v. K
Mart Corp., 813 S.W.2d 298, 302 (Mo.1991) (en banc).
 Based upon Missouri law as stated in Sheil, the district court charged the jury in instruction ten that it could find for
the plaintiff only if it found that:
First, there were shotgun pellets on the floor of defendant's store and, as a result, the floor was not reasonably safe, and
Second, defendant knew or by using ordinary care could have known of this condition, and
Third, defendant failed to use ordinary care to remove the shotgun pellets or warn of them, and
Fourth, as a direct result of such failure, plaintiff sustained damage.
The court further instructed the jury that:
In a "self service store" [FN3] as that phrase is used in these instructions, the "self service store" is deemed to have actual
notice of foreseeable risks of dangers created by merchandise and other foreign substances on the floor whether those
dangers are created by store employees or customers.
FN3. It was conceded that WalMart is a selfservice store for purposes of Missouri law.
 WalMart argues that the jury instructions did not accurately reflect Missouri law regarding slip and fall cases. "We
review the district court's jury instructions for abuse of discretion and on review must determine simply whether the
instructions, taken as a whole and viewed in light of the evidence and applicable law, fairly and adequately submitted the
issues in the case to the jury." Kramer v. Logan County Sch. Dist., 157 F.3d 620, 625 (8th Cir.1998) We will reverse only if
we find that the error affected the substantial rights of the parties. See id.
WalMart argues that the selfservice instruction essentially eliminated the second paragraph of instruction tenthat Wal
Mart knew or by using ordinary care could have known of the pellets on the floorand directed a verdict for Martin because
it allowed the jury to find that WalMart had actual notice of the shot shell pellets on the floor as a matter of law. Martin
on the other hand, claims that Sheil does in fact charge store owners with actual notice of dangerous conditions on the floor
created by customers or employees as long as the condition was foreseeable. Neither is correct.
 A closer review of Sheil is required to resolve this issue. The court in Sheil stated that in a selfservice type of store:
It is much more likely that items for sale and other foreign substances will fall to the floor. Clerks replenish supplies by
carrying them through the area the customer is required to traverse when selecting items. Customers are naturally not as
careful in handling the merchandise as clerks would be. They may pick up and put back several items before ultimately
selecting one. Not unreasonably they are concentrating on the items displayed, which are usually arranged specifically to
attract their attention. Such conditions are equally typical of selfservice restaurants and the most common selfservice
operation, the modern supermarket. An owner of a selfservice operation has actual notice of these problems. In choosing
a selfservice method of providing items, he is charged with the knowledge of the foreseeable risks inherent in such a mode
Sheil, 781 S.W.2d at 781 (emphasis added). Sheil does not state that the store, as a matter of law, has actual notice of a
particular dangerous condition simply because it is caused by merchandise on the floor. Rather, the store has the more
general *774 actual notice that dangerous conditions are often created by both customers and employees in foreseeable
ways. Actual notice of a particular existing hazard creates an immediate duty to protect or warn customers of that hazard.
See Hayes v. National Super Markets, Inc., 612 S.W.2d 819, 822 (Mo.App.1981). In contrast, the actual notice imposed by
Sheil, creates an affirmative duty to anticipate and, exercising due care, prevent or seek out those dangerous conditions,
then protect or warn customers once the particular danger is found. See Sheil, 781 S.W.2d at 780.
Though the selfservice store instruction may not be a model of clarity, we find that the instructions, taken as a whole,
adequately charged the jury under Missouri law. The instructions do not state that the store has actual notice of a
CHAPTER 4: TORTS AND CYBER TORTS 77
particular danger, or even dangers in general. Rather, it states that the store "is deemed to have actual notice of
foreseeable risks of dangers." Although this phrase could be read to mean "risks caused by foreseeable dangers," a less
strained reading is "foreseeable risks that can give rise to dangerous conditions," that is to say the store knows that
merchandise is likely to wind up on the floor and constitute a danger. This second reading is entirely consistent with Sheil.
This "knowledge of foreseeable risks" imposed by Sheil does not impact whether the store has actual notice of the shotgun
pellets on the floor. This knowledge instead informs the degree of vigilance or effort necessary to constitute the due care
described in the second paragraph of instruction ten whether or not WalMart exercised ordinary care when, knowing
that that type of danger was likely to occur, it failed to detect a dangerous condition. Thus a store's liability, absent actual
notice of a specific danger, "is predicated on the foreseeability of the risk and the reasonableness of the care extended
toward business invitees, which, in Missouri, is now a question of fact to be determined by the totality of the
circumstances." Spencer v. Kroger Co., 941 F.2d 699, 703 (8th Cir.1991).
Viewing the instructions together, the jury had to find that: it was foreseeable that the contents of a shot shell could wind
up on the floor; that the pellets created an unsafe condition; that WalMart knew of the pellets or, using ordinary care,
and knowing that that type of danger is likely to occur, should have discovered them; that WalMart did not remove them
or warn Martin of the danger; and that Martin suffered injury as a result. This is an accurate statement of Missouri law
and we find no error in the jury instructions.
 WalMart next claims that Martin failed to present a submissible case because he failed to establish that WalMart had
actual or constructive notice of the pellets in the action aisle. We disagree. We find there is substantial evidence of
constructive notice in the record. Martin slipped on shotgun shell pellets on the floor which were next to a large display of
shotgun shells immediately abutting the sporting goods department. The chance that merchandise will wind up on the
floor (or merchandise will be spilled on the floor) in the department in which that merchandise is sold or displayed is
exactly the type of foreseeable risk described in Sheil. Under Sheil, WalMart has notice that merchandise is likely to find
its way to the floor and create a dangerous condition, and it must exercise due care to discover this hazard and warn
customers or protect them from the danger. Watching for hazards on the floor is part of the job duties of every WalMart
employee. They are trained to anticipate and protect customers from these hazards. The sporting goods department was
understaffed at the time. Five minutes before Martin fell, the sporting goods clerk had walked through the same part of
the aisle where the fall occurred. Just before Martin fell, a WalMart employee walked through the same area and did not
notice the hazard, or did nothing about it. The sporting goods clerk testified that the pellets could have been *775 on the
floor for up to an hour. The department was not extremely busy, and though the clerk had inspected and straightened up
the exercise equipment area, he had not inspected the display in the action aisle. The black pellets were scattered on a
white tile floor with gray stripes. The display and the pellets were in the action alley, the highest traffic area of the store,
where the risk was presumably greatest, thus calling for greater vigilance in order to meet the standard of ordinary care.
Even assuming that the hazard was created by a customer, a jury could easily find, given that it had notice that
merchandise is often mishandled or mislaid by customers in a manner that can create dangerous conditions, that, had Wal
Mart exercised due care under the circumstances, it would have discovered the shotgun pellets on the floor. [FN4] See
Georgescu, 813 S.W.2d at 302.
FN4. Although WalMart presented evidence that the halfempty shell that was found appeared to be pried open,
presumably by a customer, Martin demonstrated that a shell could also have been cut open by an employee when cutting
open cases to build the display. If that were the case, the traditional rule would apply and WalMart would have actual
notice of that particular dangerous condition because it was created by one of its agents. See Ward, 418 S.W.2d at 938;
Prier v. Smitty's Supermarkets, Inc., 715 S.W.2d 579, 580 (Mo.App.1986).
WalMart also claims the district court committed reversible error by allowing allegedly improper examination of two
witnesses, and inflammatory and improper argument by Martin's counsel during closing arguments. We have carefully
reviewed the record and find any error to be harmless.
For the foregoing reasons, the judgment of the district court is affirmed.
78 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
9 Cal.Rptr.3d 142
Cal.App. 1 Dist.,2004.
Court of Appeal, First District, Division 2, California.
Stephen J. BARRETT et al., Plaintiffs and Appellants,
Ilena ROSENTHAL, Defendant and Respondent.
Jan. 21, 2004.
Appellants Barrett and Polevoy are physicians primarily engaged in combating the promotion and use of "alternative" or
"nonstandard" healthcare practices and products. Appellants have allegedly achieved national renown as consumer
advocates; each maintains Web sites that expose "health frauds and quackery" and provide guides for consumers to make
intelligent health care decisions. In their writings, appellants attack "products, services and theories that are marketed
with claims that [are] false, unsubstantiated, and/or illegal," and their work has assertedly "aroused great concern among
promoters of such methods," many of whom believe that destroying appellants' reputations "would increase [the promoters']
success in the marketplace." Although he is an American citizen, appellant Polevoy resides and practices medicine in
Respondent Rosenthal directs the Humantics Foundation for Women, and participates in two Usenet "newsgroups," which
focus on "alternative medicine." According to appellants, Rosenthal is a particularly active distributor of information via
the Internet. During a two year period ending on May 21, 2001, she assertedly "posted 10,900 messages to newsgroups
an average of 15 per calendar day." Appellants contend that one or both of them were mentioned in more than 200 of these
messages, all of which were intended to injure their reputations.
"The Usenet has been described as a worldwide community of electronic BBSs [bulletin board servers] that is
closely associated with the Internet and with the Internet community. [¶ ] The messages in Usenet are organized
into thousands of topical groups, or 'Newsgroups'.... [¶ ] As a Usenet user, you read and contribute ('post') to your
local Usenet site. Each Usenet site distributes its users' postings to other Usenet sites based on various implicit
and explicit configuration settings, and in turn receives postings from other sites. Usenet traffic typically consists
of as much as 30 to 50 Mbytes of messages per day. [¶ ] Usenet is read and contributed to on a daily basis by a
total population of millions of people.... [¶ ] There is no specific network that is the Usenet. Usenet traffic flows
over a wide range of networks, including the Internet and dialup phone links." quoting Dern, The Internet Guide
for New Users (1994) at pp. 196197; see also discussion, post, at p. 163, fn. 16.)
"Newsgroups," like automatic mailing list service ("mail exploders" or "listservs"), chat rooms, and Web sites, are
among the various communication and information retrieval methods that can be used by anyone with access to
the Internet. "Newsgroups also serve groups of regular participants, but these postings may be read by others as
well. There are thousands of such groups, each serving to foster an exchange of information or opinion on a
particular topic running the gamut from, say, the music of Wagner to Balkan politics to AIDS prevention to the
Chicago Bulls. About 100,000 new messages are posted every day. In most newsgroups, postings are
automatically purged at regular intervals." The communication that takes place via newsgroups is similar to that
which takes place in "chat rooms," in which two or more individuals engage in realtime dialogue, and on the
World Wide Web.
Appellants commenced this civil action for damages action against Rosenthal and others, claiming libel, libel per se, and
conspiracy. Christopher E. Grell, appellants' attorney at trial and in this court, was also a named plaintiff. On May 31,
2001, Grell moved to dismiss his action as against Rosenthal only, and this dismissal was entered on June 4, 2001.
The other defendants, who are not parties to this appeal, are Hulda Clark, described in the complaint as "an
unlicensed naturopath who resides in California and operates a clinic in California and Mexico .... [who] claims
that all cancers and many other diseases are caused by 'parasites, toxins, and pollutants' and can be cured within
a few days by administering a lowvoltage electric current, herbs and other nonstandard modalities"; the Dr.
Clark Research Association, a corporation which allegedly "[p]rovides news and other information about Hulda
Clark and her activities, ... [d]escribes and promotes Dr. Clark's theories and methods," and promotes and sells her
products and instructional materials; David P. Amrein, the founder and president of the Dr. Clark Research
Association; and Tim and Jan Bolen, who allegedly "do business as JURIMED, an entity whose purpose is to assist
'alternative' health practitioners faced with regulatory action, criminal prosecution, or other matters that threaten
CHAPTER 4: TORTS AND CYBER TORTS 79
their financial wellbeing and/or license to practice."
As the trial court noted, the complaint does not specify which of the several defendants posted the many allegedly libelous
online statements it describes, and specifically identifies Rosenthal as the poster of only five such statements, which are
(1) On or about August 14, 2000, Rosenthal commenced distributing on two Usenet newsgroups an email message she
received from another defendant, Timothy Bolen. According to the complaint, the message accused Dr. Polevoy of "stalking
women" and urged " 'health activists ... from around the world' to file complaints to government officials, media
organizations, and regulatory agencies." Bolen described "THE FACTS" as follows: "Polevoy, police reports show,
STALKED Canadian Radio Personality Christine McPhee, until, terrified, she called in police. He followed her around,
affecting disguises, for monthsthen further terrified her by emailing her the details of his stalking actions. Police
agencies felt it necessary to assign armed uniformed officers to protect McPhee from Polevoy. Reports show that McPhee
was not the only female Polevoy stalked." Bolen described Polevoy's conduct as part of a "criminal conspiracy" and urged
readers to bring this and other unspecified "criminal" acts to the attention of various governmental agencies and officials,
urging them to use their influence to see that "a criminal investigation" of Polevoy's "subversive" activities "begins
The proceedings below were completed before the recent opinion of the Ninth Circuit in which held that the
federal statutory immunity available to Internet intermediaries under applies only when "a reasonable person in
the position of the service provider or user would conclude that the information was provided for publication on the
Internet or other 'interactive computer service.' " Neither the parties nor the trial court addressed the question
whether a reasonable person in Rosenthal's position would conclude that Bolen's statement was provided for
publication on the Internet, and we think it inappropriate for us to do so. Moreover, as will be seen, our analysis of
the federal immunity differs from that of the court. (See discussion, post, at pp. 150167.)
(2) Shortly after she first republished Bolen's message, appellants informed Rosenthal it was false and defamatory, asked
that it be withdrawn, and threatened suit if it was not. Rosenthal refused to withdraw the message and, on unspecified
dates, posted 32 additional messages on specified Internet newsgroups describing appellants' threat accompanied by a copy
of Bolen's allegedly defamatory message or a reference back to that message and referring to appellants as, among other
things, "quacks." The title of these messages contained the words: "Slea[z]y 'Quackbuster' Scam."
(3) On June 28, 2000, Rosenthal posted to a specified Internet newsgroup a message referring to Dr. Barrett and "falsely
stating that 'there are bunches of coming to him to run that PROAMA anti alt.med website. PR pays well, and surely he
takes in more than $25K per year.' "
(4) On August 18, 2000, Rosenthal posted to a specified newsgroup "a message falsely stating that 'Quackwatch appears to
be a powerhungry, misguided bunch of pseudoscientific socialist bigots'; is an 'industry funded organization'; and is being
sued by many doctors and health organizations."
(5) On October 9, 2000, Rosenthal posted to a specified newsgroup a message entitled "Re: Quackbuster Barrett *is* a
quackby his own definition," which repeatedly referred to Drs. Barrett and Polevoy as "quacks."
After she answered the complaint, Rosenthal filed a special motion to strike the complaint as to her, claiming it was a
"strategic lawsuit against public participation" under . In a 27page written order, the trial court granted Rosenthal's
motion to strike finding that her publications of the foregoing statements were acts "in furtherance of [her] right of petition
or free speech under the United States or California Constitution in connection with a public issue" (, subd. (b)(1)), and
therefore covered by the antiSLAPP statute. The court also determined appellants could not establish a probability of
prevailing on their claims, as the statute requires. This latter determination rested on the conclusions that, with one
exceptionthe statements alleging that appellant Polevoy had engaged in criminal conduct Rosenthal's alleged libels were
not demonstrably false statements of facts. The trial court also found Rosenthal immune from liability for the reposting of
Bolen's statements under of the Communications Decency Act (CDA) of 1996 ( (, viewing the statute as protecting her from
liability even if the republished charge that Polevoy had engaged in criminal conduct was false and defamatory.
Additionally, the court found that appellants could not make a prima facie showing that Rosenthal reposted Bolen's
statements with "actual malice," as they would need to do in order to establish a probability of prevailing on the merits of
their defamation claims, because they were both public figures. Finally, the court found that appellants' claims failed
because appellants had not produced competent evidence they suffered any actual monetary damage as a result of
Rosenthal's publications. The court denied appellants' request to conduct discovery for the purpose of producing such
In the published portion of this opinion we discuss the standard of review (part I), find that the trial court correctly
concluded that the anti SLAPP statute applies to this case (part II), and that appellant Barrett failed to make out a case of
defamation, but that the court erred in finding appellant Polevoy could not do so due to application of the federal immunity
80 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS
(parts III and III.A). In the unpublished portion we further conclude that the trial court also erred in finding that Polevoy
could not prevail because he could not show "actual malice" or actual monetary loss. The court should not have decided the
question of malice without allowing discovery as to that issue; and, because the defamatory language is libelous on its face,
Polevoy need not allege and prove special damages (parts III.B and III.C). For these reasons we vacate the order granting
the special motion to strike pursuant to insofar as it relates to appellant Polevoy and remand the matter for further
proceedings. In the unpublished portion we also affirm the ruling that appellants' counsel was subject to an order
requiring payment of attorney fees (part IV), and direct the trial court to recalculate the amount of fees respondent is
entitled to receive (part V).
Burden of Proof and Standard of Review
provides, as material, that "[a] cause of action against a person arising from any act of that person in furtherance of the
person's right of petition or free speech under the United States or California Constitution in connection with a public issue
shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a
probability that the plaintiff will prevail on the claim." (, subd. (b)(1).) This language necessitates a twostep process for
determining whether an action is a SLAPP.
In the first step, "the court decides whether the defendant has made a threshold showing that the challenged cause of
action is one arising from protected activity. The moving defendant's burden is to demonstrate that the act or acts of which
the plaintiff complains were taken 'in furtherance of the [defendant]'s right of petition or free speech under the United
States of California Constitution in connection with a public issue'...." If the defendant meets this burden, the burden
shifts to the plaintiff to demonstrate a probability he or she will prevail on the claim. "[I]n order to establish the requisite
probability of prevailing [citation], the plaintiff need only have ' "stated and substantiated a legally sufficient claim." '
[Citations.] 'Put another way, the plaintiff "must demonstrate that the complaint is both legally sufficient and supported
by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is
credited." ' [Citations.]"
"Whether applies and whether the plaintiff has shown a probability of prevailing are both reviewed independently on
appeal. disapproved on another point in "
Applies to This Case
The trial court's conclusion that respondent's statements were protected by the antiSLAPP statute explicitly rested on
subdivisions (e)(3) and (e)(4) of , which declare that " 'an act in furtherance of a person's right of petition or free speech
under the United States or California Constitution in connection with a public issue' includes ... (3) any written or oral
statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4)
or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free
speech in connection with a public issue or an issue of public interest." The order granting the motion to strike focused
upon the public nature of the issue the parties disputed and to which Rosenthal's allegedly libelous statements related:
"the validity or invalidity of alternative medicine." The court determined that this was "a highly controversial matter
which is of significant public importance and interest, affecting the health of millions of people involving billions of dollars."
Appellants do not challenge this determination. Implicitly conceding Rosenthal's statements relate to "an issue of public
interest," they instead contend that the Internet sites on which Rosenthal posted her statements were not "a place open to
the public or a public forum," as the trial court assumed, and Rosenthal therefore did not post the statements allegedly
defaming appellants in furtherance of her right of free speech. This novel contention is difficult to take seriously.
Appellants' argument rests entirely on the recent opinion in The plurality opinion in that case, which has nothing to do
with , reads a state action requirement into the free speech clause of the California Constitution. The court held that the
actions of a private property owner constitute state action under the free speech clause only if the property is freely and
openly accessible to the public. involved a privately owned apartment complex whose owner carefully limited access to the
complex to residential tenants and their invitees. Since the owner's refusal to permit the tenants' association to distribute
its newsletter in the private hallways of the complex did not constitute state action, the association did not have a right
under California's free speech clause to distribute its newsletter in the complex.
So far as the record shows, neither Usenet nor any other interactive computer service on which Rosenthal posted her
allegedly defamatory statements ever sought to enjoin her from doing so or to impose any material restriction on her use of
the site or that of the public. Moreover, the Internet is not a separate physical place, like a hallway in an apartment
building, but "a decentralized, global medium of communicationsor 'cyberspace'that links people, institutions,
corporations and governments around the world." affd. sub nom. The Internet "provides relatively unlimited, lowcost
CHAPTER 4: TORTS AND CYBER TORTS 81
capacity for communication of all kinds.... This dynamic, multifaceted category of communication includes not only
traditional print and news services, but also audio, video, and still images, as well as interactive, realtime dialogue.
Through the use of chat rooms, any person with a phone line can become a town crier with a voice that resonates farther
than it could from any soapbox. Through the use of Web pages, mail exploders, and newsgroups, the same individual can
become a pamphleteer."
Nor, for plaintiffs' purposes, would it matter much if Rosenthal had violated a valid use restriction. One who
drives a car bearing a political message on a bumper sticker is not constitutionally unprotected merely because the
private agency from which the vehicle was rented barred the use of bumper stickers. The rental agency might
have a remedy for breach of the rental agreement, but those who viewed the message while traveling on the public
streets and found it objectionable could not complain on that basis.
Considering that the Internet provides "the most participatory form of mass speech yet developed" it is not surprising that
courts have uniformly held or, deeming the proposition obvious, simply assumed that Internet venues to which members of
the public have relatively easy access constitute a "public forum" or a place "open to the public" within the meaning of .
(See, e.g., provides no reason to ignore this selfevident truth.
The trial court correctly determined that Rosenthal made the necessary threshold showing that the act or acts of which
appellants complain were taken "in furtherance of [her] right of petition or free speech under the United States or
California Constitution in connection with a public issue" (, subd. (b)(1)), and were therefore within the ambit of the
protection afforded by . Thus we turn to the question whether appellants established a probability they will prevail on
their defamation claims.
The Trial Court Erroneously Concluded Appellant Polevoy Could Not Establish a
Probability He Will Prevail on His Defamation Claim
With respect to all but one of the publications attributed to Rosenthal, the trial court's finding that appellants failed to
establish a probability they will prevail rested on the conclusion that the statements contained therein could not
reasonably be interpreted as stating actual facts, and thus could not support any of appellants' claims for libel. Rosenthal's
statements that appellants are "quacks," that appellant Barrett is "arrogant" and a "bully," and that Barrett tried to
"extort" her "are not actionable," the court stated, "because they do not contain provably false assertions of fact, but rather
are expressions of subjective judgment." Insofar as it relates to Barrett, appellants do not seriously refute this
determination, which we find to have been correct. Accordingly, we shall affirm the ruling granting the motion to strike
the complaint as to appellant Barrett.
The single statement the court determined was a provably false statement of fact was that originated by codefendant Bolen
"accusing Dr. Polevoy of stalking women and urging 'health activists ... from around the world' to file complaints to
government officials, media organizations, and regulatory agencies." This statement specifically asserted that Polevoy
stalked Christine McPhee, a "Canadian radio personality" whose program supported "alternative medicine," as part of a
"criminal conspiracy" designed to intimidate McPhee. According to the republished statement, "police reports show" that
Polevoy "terrified" McPhee by stalking her "for months" and that he also stalked other unidentified females. The
statement urged readers to bring this information to the attention of various governmental authorities, as well as the
medical association that regulated Polevoy's practice of medicine, and to ask that they initiate a "criminal investigation" or
professional disciplinary proceedings.
The trial court found that although the assertion that Polevoy was guilty of criminal conduct was a provably false
statement of fact, Rosenthal's republication was not actionable for three independent reasons: first, because Rosenthal did
not originate but merely republished the defamatory statement, she was immune from suit under of the CDA; second,
because appellants, who are public figures, failed to produce sufficient prima facie evidence of "actual malice"; and, third,
because appellants could not establish that they suffered monetary damage of any kind.
We find that the immunity available under does not bar the imposition of liability in this case, that the trial court's denial
of Polevoy's request for discovery of evidence pertaining to "actual malice" was an abuse of judicial discretion requiring us
to set aside the determination that he cannot show such malice, and that Polevoy was not required to plead special
damages, as the republished statement was libelous per se. (
The Federal Immunity Does Not Apply
was incorporated by Congress into the final version of the CDA, which amended Title V of the Telecommunications Act of
1996 ( (Feb. 8, 1996) 110 Stat. 56). The central question in this case is the extent to which this statute abrogated the
common law of defamation.
Under the common law, those who publicize another's libel may be treated in one of three ways: as primary publishers