Case Summary and Outcome

The District Court for the Eastern District of Pennsylvania held that an advertising company (Cyber Promotions) did not have the right, under the First Amendment of the Constitution of the United States of America, to send unsolicited emails to the members of American Online (AOL), a private company that provides online services. Cyber brought proceedings against AOL after the latter blocked it from sending emails to its members. In its decision, the Court considered that the First Amendment only provides protection against state interference and argued that AOL was a private company that was not a state actor and did not exercise any municipal powers. Furthermore, the Court said that Cyber had alternative pathways to disseminate its ads. Hence, the Court concluded that AOL had the right to block Cyber from sending emails to its servers.

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Facts

Cyber Promotions was an advertising agency created in 1996 that provided services to individuals and companies wishing to advertise products via e-mail. Cyber sent numerous emails, through the internet, to members of American Online (AOL) —a private company that provides access to the internet and their email system to paid subscribers— and the users of other online services. Many of the ads sent by Cyber included “get-richquick ads, weight loss ads, health aid promises and even phone sex services.” [p. 5]

On 26 January 1996, AOL sent Cyber a letter stating that it was upset with the advertising agency’s dissemination of unsolicited emails to its users. Subsequently, AOL sent several “email bombs” to Cyber’s Internet Service Providers (ISP), i.e “AOL gathered all unsolicited e-mail sent by Cyber to undeliverable AOL addresses, altered the return path of such e-mail, and then sent the altered e-mail in a bulk transmission to Cyber’s ISPs in order to disable the ISPs” [p. 31], thus effectively blocking Cyber from sending emails to AOL’s members. 

On 26 March 1996, Cyber filed a civil action against AOL before the District Court for the Eastern District of Pennsylvania. According to the complaint, two of Cyber’s ISP ended their relationship with the agency and a third one refused to contract with it due to AOL’s email bombing. The plaintiff argued that AOL violated the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and state tort laws. On 8 May 1996, Cyber lodged a First Amendment complaint within the aforementioned civil action, seeking —besides damages compensation— a “declaration that [it] has the right to send to AOL members via the Internet unsolicited e-mail advertisements.” [p. 3]

AOL contended that Cyber has no right to send millions of unsolicited emails each day to its servers free of charge, while Cyber argued that without the right to send these emails to AOL users, it will go out of business. 

AOL filed a Motion for Partial Summary Judgment on First Amendment issues before the Court, which was decided on 4 November 1996.

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Decision Overview

Judge Weiner delivered the opinion for the District Court for the Eastern District of Pennsylvania. The main issue the Court had to decide was whether “under the First Amendment to the United States Constitution, one private company has the unfettered right to send unsolicited email advertisements to subscribers of another private online company over the Internet and whether the private online company has the right to block the e-mail advertisements from reaching its members.” [p. 2]

According to Cyber, “AOL’s conduct has the character of state action.” [p. 8], since in the sole channel to its members’ internet email boxes. Cyber also considered that AOL’s “email accessway performs a public function […] where public discourse, conversations and commercial transactions can and do take place.” [p. 9]

Furthermore, the advertising agency argued that AOL’s internet connection services are an exclusive public function since there are no alternative ways to send emails to AOL members. Cyber also held that sending email ads to AOL’s servers is a practice protected under state constitutional laws, which in some cases afford broader protection than the guarantees provided by the First Amendment. 

For its part, AOL stated that it was not a state actor and that its email servers are not a public fora in which third parties, such as Cyber, have a right to speak. Additionally, the defendant claimed that its restrictions on Cyber are tailored to serve a substantial interest and that Cyber’s right to use its service, free of charge, does not outweigh AOL’s right to speak or not to speak.

The Court began its arguments by defining what is the internet. Following American Civil Liberties Union (ACLU) v. Reno, 929 F. Supp. 824 (E.D.Pa.1996), the Court described this technology as a new global and decentralized medium for worldwide communication that connects “people, institutions, corporations, and governments around the world. This communications medium allows any of the literally tens of millions of people with access to the Internet to exchange information.” [p. 6]

Subsequently, the Court cited Hudgens v. NLRB, 424 U.S. 507, 513, 96 S. Ct. 1029, 1033, 47 L. Ed. 2d 196 (1976) and Hurley v. Irish-American Gay Group of Boston, ___ U.S. ___, ___, 115 S. Ct. 2338, 2344, 132 L. Ed. 2d 487 (1995), to highlight that the First Amendment of the Constitution of the United States only provides protection against State interference “and `erec[t] no shield against merely private conduct.” [p. 8]

The Court recalled that there are three different tests to determine whether private action can be considered state action. According to Blum v. Yaretsky, 457 U.S. 991, 1004, 102 S. Ct. 2777, 2786, 73 L. Ed. 2d 534 (1982), it must be considered whether “the private entity has exercised powers that are traditionally the exclusive prerogative of the state.” [p. 8] If that’s not the case, following McKeesport Hospital v. Accreditation Council for Graduate Medical Ed., 24 F.3d 519, 524 (3d Cir. 1994), it must be analyzed whether the private entity acted in collaboration or with the help of state officials. The final test, as established in Krynicky v. University of Pittsburgh, 742 F.2d 94, 98 (3d Cir.1984), “is whether ‘[t]he State has so far insinuated itself into a position of interdependence with … [the acting party] that it must be recognized as a joint participant in the challenged activity.’” [p. 9]

For the Court, then, it was clear that “AOL exercises absolutely no powers which are in any way the prerogative, let alone the exclusive prerogative, of the State.” [p. 9] Referencing ACLU, the Court underscored the fact that the internet, and its constituent parts, are owned by a myriad of agents, such as private entities and corporations. Thus, the Court held, AOL is one of many private online companies which allow its users to access the internet and communicate through its email system. As such, “The State has absolutely no interest in, and does not regulate, this exchange of information between people, institutions, corporations and governments around the world.” [p. 9].

Furthermore, the Court stated that the provision of internet access through email does not entail the exercise of municipal powers or public services traditionally associated with the state. In Marsh v. Alabama, 326 U.S. 501 (1946), as the Court noted, it was held that a private company performed municipal powers since it owned the streets, sidewalks, and business blocks, paid the sheriff, managed and owned the sewage system and even owned the building where the post office was. 

Nevertheless, the Court considered that the conditions under which the internet services are provided by AOL are not analogous to the Marsh case since “Cyber has numerous alternative avenues of sending its advertising to AOL members. An example of another avenue Cyber has of sending its advertising to AOL members over the Internet is the World Wide Web which would allow access by Internet users, including AOL customers, who want to receive Cyber’s e-mail.” [p. 11] Additionally, Cyber could also advertise through non-internet avenues like the mail, newspapers, cable, television or leaflets. AOL’s decision to block Cyber’s email ads, the Court said, “does not prevent Cyber from sending its e-mail advertisements to the members of competing commercial online services, including CompuServe, the Microsoft Network and Prodigy.” [p. 11]

In light of this, the Court concluded that since AOL was not a state actor and there was no government involvement in its business decisions, Cyber failed to satisfy any of the three tests previously described. Hence, the Court concluded that “Cyber has no right under the First Amendment to the United States Constitution to send unsolicited e-mail to AOL’s members. It follows that AOL, as a private company, may block any attempts by Cyber to do so.” [p. 13]

The Court then proceeded to analyze whether AOL’s actions violated state constitutions. It referred to PruneYard Shopping Center v. Robins, 447 U.S. 74, 100 S. Ct. 2035, 64 L. Ed. 2d 741 (1980) to ratify the notion that state constitutions’ provisions regarding freedom of expression “may afford broader rights than similar provisions of the United States Constitution.” [p. 14] Such is the case of the state of Pennsylvania, according to its supreme court in the case of Western Pennsylvania Socialist Workers 1982 Campaign v. Conn. Gen. Life Ins. Co., 512 Pa. 23, 515 A.2d 1331, 1333-34 (1986).

In the case of Commonwealth v. Tate, 495 Pa. 158, 432 A.2d 1382 (1981), for example, the Supreme Court of Pennsylvania overturned convictions against protesters who refused to cease distributing politically oriented materials on a private college campus. The Supreme Court of Pennsylvania’s rationale, in that case, was that “the college had created a public forum by opening the campus to the public to hear the director of the FBI to speak in a campus building.” [p. 14]

However, the Court found that Tate, which was mentioned by the plaintiff in a memorandum, was not similar to the case at hand because “AOL’s email servers are certainly not a traditional public forum such as a street, park or even the college in Tate.” [p. 15] Moreover, AOL’s servers, the Court argued, are privately owned and only available to paid subscribers and the company has not presented its email servers to the public at large for the dissemination of messages in general or of political nature.

The Court also considered, contrary to what Cyber pleaded, that the advertising agency had no right to send unsolicited messages under the Constitution of Virginia. According to the Court, none of the decisions referenced by Cyber, issued in the aforementioned state, were helpful to its case. Thus the Court held that “Cyber has no right under the First Amendment of the United States Constitution or under the Constitutions of Pennsylvania or Virginia to send unsolicited e-mail to members of AOL.” [p. 16] 

Accordingly, the Court granted AOL’s motion and said that AOL has the right to block any attempts from Cyber to send unsolicited email advertisements to its members. 

After issuing the aforementioned summary judgment, Cyber filed a motion for reconsideration on 4 November 1996. The Court considered that the motion intended to relitigate the First Amendment issues previously discussed due to the fact that Cyber hired new counsel. Nonetheless, although the Court considered that the grounds for reconsideration were not proper, it studied them “in order to have a complete record.” [p. 18]

According to Cyber’s motion, AOL voluntarily chose to participate in a system of communication where users can send and receive emails. For the advertising company, other avenues for information transmission and dissemination, such as traditional mail, telemarketing, television, cable, and newspapers, are not adequate alternatives since they don’t have the “unique attributes of e-mail as a communications medium.” [p. 25] Furthermore, Cyber contended that AOL had an exclusive control over this pathway of information.

In considering Cyber’s arguments, the Court stated that the internet, and the access provided to it by AOL, do not constitute, or involve the exercise of municipal powers associated with the State. Subsequently, the Court agreed that AOL may have invited its users to send emails to subscribers but that “it has never invited another private company such as Cyber to overload AOL’s e-mail servers with as many as 1.9 million e-mail advertisements each day without paying AOL any fee whatsoever for the imposition.” [p. 25]

The Court then noted that AOL did not exclude Cyber from using its system: “Cyber is continuing to send its e-mail advertisements to AOL’s servers. By implementing its PreferredMail system, AOL has given its own subscribers the option of viewing Cyber’s e-mail without them having to sift through and erase the e-mail every time they go online. Thus, Cyber is only being denied the access to AOL’s subscribers in a manner which it prefers.” [p. 26] 

For the Court, Cyber could also create its own servers or its own commercial online service to serve its purposes. Thus the Court denied Cyber’s motion and concluded that “the First Amendment does not prevent AOL from using its PreferredMail System to protect its private property rights by blocking Cyber’s mass email advertisements from clogging AOL’s system and damaging AOL’s reputation while at the same time not receiving any compensation whatsoever from Cyber.” [p. 30]

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