Computer underground Digest Wed Nov 13, 1996 Volume 8 : Issue 80

Computer underground Digest Wed Nov 13, 1996 Volume 8 : Issue 80
ISSN 1004-042X

Editor: Jim Thomas ([email protected])
News Editor: Gordon Meyer ([email protected])
Archivist: Brendan Kehoe
Shadow Master: Stanton McCandlish
Field Agent Extraordinaire: David Smith
Shadow-Archivists: Dan Carosone / Paul Southworth
Ralph Sims / Jyrki Kuoppala
Ian Dickinson
Cu Digest Homepage: http://www.soci.niu.edu/~cudigest

CONTENTS, #8.80 (Wed, Nov 13, 1996)
File 1--AOL vs Cyber Promotions (fwd)
File 2--Cyber Promotions v. AOL (text of decision)
File 3--Cu Digest Header Info (unchanged since 7 Apr, 1996)

CuD ADMINISTRATIVE, EDITORIAL, AND SUBSCRIPTION INFORMATION ApPEARS IN
THE CONCLUDING FILE AT THE END OF EACH ISSUE.

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Date: Mon, 4 Nov 1996 12:32:40 -0800 (PST)
From: "baby-X @ cyberPOLIS" <[email protected]>
Subject: File 1--AOL vs Cyber Promotions (fwd)

---------- Forwarded message ----------
Date--Mon, 4 Nov 1996 14:16:36 -0500
From--Mike Jarvis <[email protected]>
To--Multiple recipients of list VOXERS-AT-LARGE <[email protected]>

Just a few minutes ago, Judge Weiner handed down a 28 page opinion on the
First Amendment issue in the Cyber Promotions case. He ruled that AOL is
not a state actor and that

"Cyber Promotions does not have a right under the First Amendment to the
United States Constitution or under the Constitutions of Pennsylvania and
Virginia to send unsolicited e-mail advertisements over the Internet to
members of America Online, Inc. and, as a result, America Online, Inc. may
block any attempts by Cyber Promotions to do so."

------------------------------

Date: Wed, 6 Nov 1996 23:20:07 -0600
From: [email protected](Jim Thomas)
Subject: File 2--Cyber Promotions v. AOL (text of decision)

SOURCE - http://www.epic.org/free_speech/cyberp_v_aol.html

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

CYBER PROMOTIONS, INC.
VS.
AMERICA ONLINE. INC.

C.A. NO. 96-2486

_______________________________________________________________

AMERICA ONLINE, INC.
VS.
CYBER PROMOTIONS, INC.

C.A. NO. 96-5213

_______________________________________________________________

MEMORANDUM OPINION AND ORDER

WEINER, J.

NOVEMBER 4, 1996

These cases present the novel issue of whether, under the
First Amendment to the United States Constitution, one private
company has the unfettered right to send unsolicited e-mail
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.

The question is important because while the Internet provides the
opportunity to disseminate vast amounts of information, the
Internet does not, at least at the present time, have any means to
police the dissemination of that information. We therefore find
that, in the absence of State action, the private online service
has the right to prevent unsolicited e-mail solicitations from
reaching its subscribers over the Internet.

The cases have their genesis in a letter dated January
26, 1996, in which America Online, Inc. ("AOL") advised Cyber
Promotions, Inc. ("Cyber") that AOL was upset with Cyber's
dissemination of unsolicited e-mail to AOL members over the
Internet. AOL subsequently sent a number of "e-mail bombs"' to
Cyber's Internet service providers ("ISP").

On March 26, 1996, Cyber filed Civil Action No. 96-2486
in this Court against AOL in response to AOL's "e-mail bombing" of
Cyber's ISPs. The Complaint alleges that as a result of AOL's E-
mail bombing", two of Cyber's ISPs terminated their relationship
with Cyber and a third ISP refused to enter into a contract with
Cyber. The Complaint asserts a claim for violation of the Computer
Fraud and Abuse Act, 18 U.S.C. Sec. 1030, as well as state law
claims
for intentional interference with contractual relations, tortious
interference with prospective contractual relations and unfair
competition. The Complaint seeks certain injunctive relief and
damages.

On April 8, 1996, AOL filed a ten-count Complaint against
Cyber in the United States District Court for the Eastern District
of Virginia, alleging service and trade name infringement, service
mark and trade name dilution, false designation of origin, false
advertising, unfair competition, violations of the Virginia
Consumer Protection Act, the Electronic Communications Privacy Act,
the Computer Fraud and Abuse Act and the Virginia Computer Crimes

-----------footnotes----------

1. In past submissions, Cyber has stated that AOL's "e-mail
bombs" occurred when 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 transmis-
sion to Cyber's ISPs in order to disable the ISPs.

--------end footnotes---------

Act. AOL seeks various injunctive relief and damages.

On May 8, 1996, Cyber filed a First Amended Complaint in
Civil Action No. 96-2486 in which it asserted the same four claims
it asserted in its original Complaint and added a declaratory
judgment claim (Count V). Cyber seeks, inter alia, a "declaration
that [it] has the right to send to AOL members via the Internet
unsolicited e-mail advertisements." Amended Complaint at p. 21.
Cyber also asks the Court to "permanently enjoin[] AOL ... from ...
directly or indirectly preventing AOL members from receiving
[Cyber's] e-mail messages." Id.

On June 17, 1996, AOL filed a First Amended Complaint in
the Virginia action in which it added claims for misappropriation,
conversion, and unjust enrichment.

By Order dated July 24, 1996, the judge in the Eastern
District of Virginia to whom AOL's action was assigned, transferred
that action to this Court, finding that it arises from "the same
nucleus of operltive facts" as Cyber's action and that therefore
"the two cases should be consolidated for trial." Upon transfer to
this Court, AOL's action was assigned Civil Action No. 96-5213. The
parties have agreed that the First Amended Complaint in that action
will be treated as setting forth AOL~s counterclaims in Civil
Action No. 96-2486.

AOL has vehemently argued throughout the brief history of
these suits that Cyber has no right to send literally millions of
e-mail messages each day to AOL's Internet servers free of charge
and resulting in the overload of the e-mail servers. Indeed, the
court has received a plethora of letters from disgruntled AOL
members who object to having to receive Cyber's unsolicited e-mail
whenever they sign on to AOL despite repeated attempts to be
removed from Cyber's lists. Cyber, on the other hand, has contended
that without the right to send unsolicited e-mail to AOL members,
it will go out of business.

Recognizing that Cyber's contention that it has the right
to send unsolicited e-mail to AOL members over the Internet
implicates the First Amendment and therefore is a threshold issue,
the Court directed the parties to brief the following issue:
Whether Cyber has a right under the First Amendment of the United
States Constitution to send unsolicited e-mail to AOL members via
the Internet and concomitantly whether AOL has the right under the
First Amendment to block the e-mail sent by Cyber from reaching AOL
members over the Internet. In response, AOL has filed a document
entitled "Motion for Partial Summary Judgment of America Online,
Inc. on First Amendment issues." Specifically, AOL seeks summary
judgment on Cyber's declaratory judgment claim asserted in Count V
of Cyber's First Amended Complaint. Cyber has filed a document
entitled "Plaintiff's Memorandum in Support of its First Amendment
Right to Send Internet E-Mail to Defendant's Members."

The Court also directed the parties to enter into a
Stipulation of Facts solely for the purpose of resolving the First
Amendment issue. Pursuant to the Court's directive, the parties
have stipulated to the following facts:

1. Cyber is a corporation organized and existing under
the laws of the Commonwealth of Pennsylvania, having a place of
business at 1255 Passmore Street, 1st Floor, Philadelphia,
Pennsylvania 19111.

2. AOL is a corporation organized and existing under the
laws of the State of Delaware with its principal place of business
at 22000 AOL Way, Dulles, Virginia 20166.

3. AOL was and is a private online company that has
invested substantial sums of its own money in equipment, name,
software and reputation. AOL is not owned in whole or in part by
the government.

4. AOL is owned by shareholders, and its stock trades on
the New York Stock Exchange.

5. AOL is not a government entity or political subdivision.

6. AOL's members or subscribers pay prescribed fees for
use of AOL resources, access to AOL and access and use of AOL's e-
mail system and its connection to the Internet.

7. AOL's e-mail system operates through dedicated
computers known as servers, which consist of computer hardware and
software purchased, maintained and owned by AOL. AOL's computer
servers have a finite, though expandable, capacity to handle e-
mail. All Internet e-mail from non-AOL members to AOL customers or
members and from AOL customers or members to non-AOL members
requires the use of AOL's computer hardware and software in
combination with the hardware and software of the Internet and the
hardware and software of the non-AOL members.

8. Private companies compete with AOL in the online business.

9. There has been no government involvement in AOL's
business decision to institute or reinstitute a block directed to
Internet e-mail sent by Cyber to AOL members or subscribers.

10. Although the Internet is accessible to all persons
with just a computer, a modem and a service provider, the constitu-
ent parts of the Internet (namely the computer hardware and
software, servers, service providers and related items) are owned
and managed by private entities and persons, corporations,
educational institutions and government entities, who cooperate to
allow their constituent parts to be interconnected by a vast
network of phone lines.

11. In order for non-AOL members to send Internet e-mail
to AOL members, non-AOL members must utilize a combination of their
own hardware and software, the Internet and AOL's network.

12. To obtain its initial access to the Internet, AOL
obtained an Internet address and domain name from IANA, a clearing-
house that routinely and ministerially assigns Internet addresses
and domain names.

13. Cyber, an advertising agency incorporated in 1996,
provides advertising services for companies and individuals wishing
to advertise their products and services via e-mail.

14. Cyber sends its e-mail via the Internet to members of
AOL, members of other commercial online services and other
individuals with an Internet e-mail address.

15. AOL provides its subscribing members with one or more
e-mail addresses so that members can exchange e-mail with one
another and exchange e-mail (both sending and receiving) over the
Internet with non-AOL members.

16. AOL has attached to its Memorandum of Law in Support
of its Motion for Partial Summary Judgment on First Amendment
Issues three sets of examples of e-mail messages sent by Cyber to
AOL members. The first set (Tab 1) consists of a multi-page set of
advertisements; the second set (Tab 2) consists of an exclusive or
single-advertiser e-mail; and the third set (Tab 3) consists of a
document called by Cyber an "e-mag." Under each tab are two
examples, the first selected by AOL and the second selected by
Cyber. The Court has reviewed all of the examples and notes that
many of the ads include get-rich-quick ads, weight loss ads, health
aid promises and even phone sex services.

17. To attract membership, AOL offers a variety of
services, options, resources and support, including content-based
services, access to stock quotes, children's entertainment, news,
and the ability to send and receive Internet e-mail to and from
non-AOL members.

In addition to the parties's Stipulation of Facts, it is
necessary for resolution of the issue before us to relate some of
the factual findings about the Internet itself made earlier this
year by our court in American Civil Liberties Union v. Reno, 929
F.Supp. 824 (E.D. Pa. 1996). They are as follows:

18. "The Internet is...a unique and wholly new medium of
worldwide human communication." Id. at 844.

19. The Internet is "a giant network which interconnects
innumerable smaller groups of linked computer networks." Id. at
830. In short, it is "a global Web of linked networks and comput-
ers..." Id. at 831.

20. "The Internet is an international system." Id. It is
"a decentralized, global medium of communications -- or 'cyberspace'
--
that links people, institutions, corporations, and governments
round the world. This communications medium allows any of the
literally tens of millions of people with access to the Internet to
exchange information." Id.

21. "No single entity -- academic, corporate, governmen-
tal, or non-profit -- administers the Internet. It exists and
functions as a result of the fact that hundreds of thousands of
separate operators of computers and computer networks independently
decided to use common data transfer protocol to exchange communica-
tions and information with other computers (which in turn exchange
communications and information with still other computers)." Id. at
832.

22. Computer users have a wide variety of avenues by
which to access the Internet. Id. One such avenue is "through one
of the major national commercial 'online services' such as [AOL]...
Id. at 833. These online services offer nationwide computer
networks (so that subscribers can dial-in to a local telephone
number), and the services provide extensive and well organized
content within their own proprietary computer networks. In addition
to allowing access to the extensive content available within each
online service, the services also allow subscribers to link to the
much larger resources of the Internet." Id. (emphasis in original)
"The major commercial online services have almost twelve million
individual subscribers across the United States." Id. Approximately
six million individuals are subscribers of AOL.

23. There are a number of different ways to communicate
over the Internet. One such way "is via electronic mail, or 'e-
mail', comparable in principle to sending a first class letter. One
can address and transmit a message to one or more other people."
Id. at 834.

24."[T]he content on the Internet is as diverse as human
thought." Id. at 842.

25. "Communications over the Internet do not "invade" an
individuals's home or appear on one's computer screen unbidden.
Users seldom encounter content 'by accident.'" Id. at 844.

26. Unlike a radio or television, "the receipt of
information on the Internet requires a series of affirmative steps
more deliberate and directed than merely turning a dial." Id. at
845.

STANDARD OF REVIEW

Under Federal Rule of Civil Procedure 56(c), summary
judgment may be granted when, "after considering the record
evidence in the light most favorable to the non-moving party, no
genuine issue of material fact exists and the moving party is
entitled to judgment as a matter of law." Turner v. Schering-
Plough Corp., 901 F.2d 335, 340-41 (3d Cir. 1990). For a dispute
to be "genuine," the evidence must be such that a reasonable jury
could return a verdict for the non-moving party. Anderson v.
Liberty Lobby Inc., 477 U.S. 242, 248 (1986); Williams v. Borough
of Chester, 891 F.2d, 458, 460 (3d Cir. 1989). To establish a
genuine issue of material fact, the non-moving party must introduce
evidence beyond the mere pleadings to create an issue of material
fact on "an element essential to that party's case, and on which
that party will bear the burden of proof at trial." Celotex v.
Catrett, 477 U.S. 317, 322 (1986). The burden of demonstrating the
absence of genuine issues of material fact is initially on the
moving party regardless of which party would have the burden of
persuasion at trial. First Nat'l Bank of Pennsylvania v. Lincoln
Nat'l Life Ins., 824 F.2d 177, 180 (3d Cir. 1987). Following such
a showing, the non-moving party must present evidence through
affidavits or depositions and admissions on file which comprise of
a showing sufficient to establish the existence of every element
essential to that party's case. Celotex, 477 U.S. at 323. If that
evidence in, however, "'merely colorable' or is 'not significantly
probative,' summary judgment may be granted." Equimark Commercial
Finance Co. v. C.I.T. Financial Corp. 812 F.2d 141, 144 (3d Cir.
1987) (quoting, in part, Anderson, 477 U.S. at 249-50).

In view of the parties' Stipulation of Facts and the
prior factual findings of this Court in ACLU v. Reno, supra., the
Court finds there are no genuine issues of material fact as to the
First Amendment issue and that that issue is suitable for summary
disposition.

In its Motion for Partial Summary Judgment, AOL contends
that Cyber has no First Amendment right to send unsolicited e-mail
to AOL members over the Internet because AOL is not a state actor,
AOL's e-mail servers are not public fora in which Cyber has a right
to speak, Cyber's right to use AOL's, service free of charge, does
not substantially outweigh AOL's right to speak or not to speak,
and that AOL's restrictions on mass e-mail solicitations are
tailored to serve a substantial interest. Motion for Partial
Summary Judgment at 6. Because we find AOL is not a state actor and
none of its activities constitute state action, we need not
consider AOL's remaining First Amendment contentions.

The First Amendment to the United States Constitution
states that "Congress shall make no law respecting an establishment
of religion, or prohibiting the free exercise thereof; or abridging
the freedom of speech, or of the press." The United States Supreme
Court has recognized that "the constitutional guarantee of free
speech is a guarantee only against abridgement by government,
federal or state." Hudgens v.NLRB, 424 U.S. 507, 513 (1976). Only
recently, the Supreme Court has stated that "the guarantees of free
speech ... guard only against encroachment by the government and
'erec[t] no shield against merely private conduct.'" Hurley v.
Irish-American Gay Group of Boston, 115 S.Ct. 2338, 2344 (1995)
(citation omitted).

In the case sub judice, the parties have stipulated that
AOL is a private online company that is not owned in whole or part
by the government. Stipulation of Facts at p. 3. (emphasis added).
The parties have further stipulated that "AOL is not a government
entity or political subdivision." Id. at p. 5. They have also
stipulated that there has been no government involvement in AOL's
business decision to institute or reinstitute a block directed to
Internet e-mail sent by Cyber to AOL members or subscribers. Id. at
p. 9.

Despite these stipulations, Cyber argues that AOL's
conduct has the character of state action. As a general matter,
private action can only be considered state action when "there is
a sufficiently close nexus between the State and the challenged
action of [the private entity] so that the action of the latter may
be fairly treated as that of the State itself." Blum v. Yaretsky,
457 U.S. 991, 1004 (1982). Recently, our Court of Appeals observed
that the Supreme Court appears to utilize three distinct tests in
determining whether there has been state action. Mark v. Borough of
Hatboro, 51 F.3d 1137, 1142 (3d Cir. 1995). First, we must consider
whether "'the private entity has exercised powers that are
traditionally the exclusive prerogative of the state.'" Id.
(quoting Blum v. Yaretsky, 457 U.S. at 1004-05. (emphasis in
Mark)). This test is known as the exclusive public function test.
If the private entity does not exercise such powers, we must
consider whether "'the private entity has acted with the help of or
in concert with state officials.'" Mark, 51 F.3d at 1142 (quoting
McKeesport Hospital v. Accreditation Council for Graduate Medical
Ed., 24 F.3d 519, 524 (3d Cir. 1994)). The final test 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.'"
Mark, 51 F.3d at 1142 (quoting Krynicky v. University of Pitts-
burgh, 742 F.2d 94, 98 (3d Cir. 1984)).

With regard to the first test, AOL exercises absolutely
no powers which are in any way the prerogative, let alone the
exclusive prerogative, of the State. In ACLU, supra, this Court
previously found that no single entity, including the State,
administers the Internet. ACLU, 929 F.Supp. at 832. Rather, the
Court found that the Internet is a "'global Web of linked networks
and computers" which exists and functions as the result of the
desire of hundreds of thousands of computer operators and networks
to use common data transfer data protocol to exchange communica-
tions and information. Id. In addition, "the constituent parts of
the Internet ... are owned and managed by private entities and
persons, corporations, educational institutions and government
entities, who cooperate to allow their constituent parts to be
interconnected by a vast network of phone lines." Stipulation of
Facts at p. 10. As a result, tens of millions of people with access
to the Internet can exchange information. AOL is merely one of many
private online companies which allow its members access to the
Internet through its e-mail system where they can exchange
information with the general public. The State has absolutely no
interest in, and does not regulate, this exchange of information
between people, institutions, corporations and governments around
the world.

Cyber argues, however, that "'by providing Internet e-mail
and acting as the sole conduit to its members' Internet e-mail
boxes, AOL has opened up that part of its network and as such, has
sufficiently devoted this domain for public use. This dedication of
AOL's Internet e-mail accessway performs a public function in that
it is open to the public, free of charge to any user, where public
discourse, conversations and commercial transactions can and do
take place." Cyber's Memorandum in Support of its First Amendment
Right to Send Internet E-Mail to Defendant's Members at 13. Cyber
therefore contends that AOL's Internet e-mail accessway is similar
to the company town in Marsh v. Alabama, 326 U.S. 501 (1946), which
the Supreme Court found performed a public function and therefore
was a state actor.

In Marsh, a Jehovah's Witness was convicted of criminal
trespass for distributing literature without a license on a
sidewalk in a town owned by a private company. The Supreme Court
found that since the private company owned the streets, sidewalks,
and business block, paid the sheriff, privately owned and managed
the sewage system, and owned the building where the United States
post office was located, the company, in effect, operated as the
municipal government of the town. Marsh, 326 U.S. at 502-03. "[T]he
owner of the company town was performing the full spectrum of
municipal powers and stood in the shoes of the State." Lloyd Corp.
V. Tanner, 407 U.S. 551, 569 (1972). The Court observed that "[t]he
more an owner, for his advantage, opens up his property for use by
the public in general, the more do his rights become circumscribed
by the statutory and constitutional rights of those who use it."
Marsh, 326 U.S. at 506. As a result, the Court found state action
in "the State['s] ... attempt[] to impose criminal punishment on
appellant for undertaking to distribute religious literature in a
company town..." Marsh, 326 U.S. at 509. Our Court of Appeals has
noted that "Marsh has been construed narrowly." Cable Investments.
Inc. v. Woolley, 867 F.2d 151, 162 (3d Cir. 1989).<2>

By providing its members with access to the Internet
through its e-mail system so that its members can exchange
information with those members of the public who are also connected
to the Internet, AOL is not exercising any of the municipal powers
or public services traditionally exercised by the State as did the
private company in Marsh. Although AOL has technically opened its
e-mail system to the public by connecting with the Internet, AOL

---------footnotes-----------

2 Indeed, our Court of Appeals has observed that the exclusive
public function test itself "rarely could be satisfied." Mark, 51
F.3d at 1142. "Thus, in Jackson v. Metropolitan Edison Co., 419
U.S. 345 (1974), the Court held that a private utility company,
extensively regulated by the state, and apparently holding at least
a partial monopoly in its territory, did not act under color of
state law, in part because the state where the utility was engaged
in business had 'rejected the contention that the furnishing of
utility services is either a state function or a municipal duty.'
(citation omitted). Similarly, in Rendell-Baker v. Kohn, 457 U.S.
830 (1982), the Court held that a private entity engaged in the
education of maladjusted high school students did not perform an
exclusively public function because '[the state's] legislative
policy choice [to fund the public school] in no way makes these
services the exclusive province of the State.' (citation omitted);
see also Black v. Indiana Area Sch. Dist., 985 F.2d 707, 710-11 (3d
Cir. 1993) (private contractor providing state school bus program
at state expense not performing exclusive state function)." Mark,
id.

---------end footnoes-----------

has not opened its property to the public by performing any
municipal power or essential public service and, therefore, does
not stand in the shoes of the State. Marsh is simply inapposite to
the facts of the case sub judice.

Cyber also argues that AOL's Internet e-mail connection
constitutes an exclusive public function because there are no
alternative avenues of communication for Cyber to send its e-mail
to AOL members. As support for this proposition, Cyber directs our
attention to the decisions of the Supreme Court in United States
Postal Service v. Greenburgh Civic Assn's, 453 U.S. 114 (1981);
Lloyd Corp v. Tanner, 407 U.S. 551 (1972) and Amalqamated Food
Employees Union v. Logan Valley Plaza, 391 U.S. 308 (1968). Of
these decisions, only the Lloyd decision is helpful to Cyber.

In Greenburgh, a civic association challenged a federal
statue which prohibited the deposit of unstamped "mailable matter"
in a letterbox approved by the United States Postal Service. The
civic association contended that the First Amendment guaranteed
them the right to deposit, without postage, their notices,
circulars, flyers in such letterboxes. The Supreme Court upheld the
constitutionality of the statute, finding that neither the
enactment nor the enforcement of the statute was geared in any way
to the content of the message sought to be placed in the letterbox.
The Court also noted that the statute did not prevent individuals
from going door-to-door to distribute their message or restrict the
civic organization's right to use the mails. Greenburgh, however,
did not involve the issue of whether there was state action. It
therefore is inapplicable to the issue of whether AOL's conduct
constitutes state action.

In Logan Valley, a case involving peaceful picketing
directed solely at one establishment within a shopping center, the
Court reviewed the Marsh decision in detail, emphasized the
similarities between a shopping center and a company town and
concluded that a shopping center is the "functional equivalent" of
the business district in Marsh. As a result, the Court held that
the picketers had a First Amendment right to picket within a
shopping center. Logan Valley, however, was subsequently overruled
by Lloyd,supra. Hudgens v. National Labor Relations Board, 424 U.S.
507 (1976). ("[W]e make clear now, if it was not clear before, that
the rationale of Logan Valley did not survive the Court's decision
in the Lloyd case.")

In Lloyd, a group of individuals sought to distribute
handbills in the interior of a privately owned shopping center. The
content of the handbills was not directed at any one establishment
in the shopping center but instead was directed at the Vietnam War.
The Court noted that, unlike the situation in Logan Valley where
the protestors had no other alternative to convey their message at
the single establishment in the shopping center, the protesters in
Lloyd could distribute their message about the Vietnam war on any
public street, sidewalk or park outside the mall. The Court
therefore found that "[i]t would be an unwarranted infringement of
property rights to require [the protesters] to yield to the
exercise of First Amendment under circumstances where adequate
alternative avenues of communication exist." Lloyd, 407 U.S. at
567. The Lloyd Court went on to reject the individuals' functional
equivalency argument, finding that the private shopping center
neither assumed the full spectrum of municipal powers nor stood in
the shoes of the state, as did the private company in Marsh. The
Court held that, "[t]he First and Fourteenth Amendments safeguard
the rights of free speech and assembly by limitations on state
action, not on action by the owner of private property used
nondiscriminatorily for private purposes only." Lloyd, 407 U.S. at
567 (emphasis in original).

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.
Examples of non-Internet avenues include the United States mail,
telemarketing, television, cable, newspapers, magazines and even
passing out leaflets. Of course, AOL's decision to block Cyber's e-
mail from reaching AOL's members 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.

Having found that AOL is not a state actor under the
exclusive public function test, we evaluate whether AOL is a state
actor under the remaining two tests, i.e. whether AOL is acting
with the help of or in concert with state officials and whether the
State has put itself in a position of interdependence with AOL such
that it must be considered a participant in AOL's conduct. These
tests actually overlap one another.

In its Memorandum, Cyber does not specifically argue that
AOL is acting in concert with state officials. Indeed, the two
major cases from the Supreme Court which have found state action
under this test are clearly distinguishable from the case sub
judice. See, Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970)
(finding a conspiracy between a private actor and a state official
to engage in unlawful discrimination constituted action under color
of law for purposes of 42 U.S.C. Sec. 1983); Lugar v. Edmondson Oil
Co., 457 U.S. 922 (1982) (finding private creditor's pre-judgment
attachment petition upon which clerk of state court issued a writ
of attachment and sheriff executed the writ on property of private
debtor was state action under Sec. 1983).

Rather, Cyber relies on the "joint participation"
doctrine and contends that "AOL's use of the Court to obtain
injunctive relief and/or damages [which it seeks in its prayer for
relief in its counterclaim] and its assertions of federal and state
statutory law, which if applicable to Cyber's activities, would
violate Cyber's First Amendment rights." Cyber's Memorandum at 15.

In Edmonson v. Leesville Concrete Co., 500 U.S. 614
(1991) the Supreme Court refined the joint participation test by
announcing that courts must ask "first whether the claimed
constitutional deprivation resulted from the exercise of a right or
privilege having its source in state authority; and second, whether
the private party charged with the deprivation could be described
in all fairness as a state actor." Edmonson, 500 U.S. at 620. Under
the first prong, the inquiry is "under what authority did the
private person engage in the allegedly unlawful acts." Mark, 51
F.3d at 1144.

In the case sub judice, the parties have stipulated that
"[t]here has been no government involvement in AOL's business
decisions with respect to e-mail sent by Cyber nor in any AOL
decision to institute or reinstitute a block directed to Internet
e-mail sent by Cyber to AOL members or subscribers." Stipulation of
Facts at p. 9. As a result, Cyber is unable to satisfy even the
first prong of the joint participation test.

In addition, our Court of Appeals has stated that
"[m]erely instituting a routine civil suit does not transform a
litigant's actions into those taken under color of state law."
Tunstall v. Office of Judicial Support, 820 F.2d 631, 634 (3d Cir.
1987). The Tunstall Court concluded that the filing of a quiet
title action in state court by a purchaser of land to complete the
seizure of plaintiff's property did not involve state action since
the suit "did not attempt any seizure of property with the
cooperation of state officials as in the Lugar line of cases." Id.
In addition, the United States Court of Appeals for the Eleventh
Circuit has found that a regulated utility did not act under color
of state law when it obtained a temporary restraining order from a
state court. Cobb v. Georgia Power Co., 757 F.2d 1248 (llth Cir.
1985). The United States Court of Appeals for the Second Circuit
has held that the mere filing of a state law contempt proceeding
does not constitute joint participation so as to satisfy the color
of state law requirement under 42 U.S.C. sec. 1983. Dahlberg v.
Becker,
748 F.2d 85 (2d Cir. 1984).

Perhaps recognizing the futility of its argument, Cyber
contends in its Reply Memorandum that "[i]t is not Cyber's position
that the mere filing of an action provides a party with the
requisite state action to assert a First Amendment violation.
Rather it is the Court's participation with the litigant in issuing
or enforcing an order which impinges on another's First Amendment
rights. Grandbouche v. Clancey, 825 F.2d 1463, 1466 (10th Cir.
1987)." Reply Memorandum at 7. In Grandbouche, the United States
Court of Appeals for the Tenth Circuit stated that the first
Amendment "may be applicable in the context of discovery orders,
even if all of the litigants are private entities." The Court found
government action present as a result of a magistrate's order
compelling discovery and the trial court's enforcement of that
order.

We are troubled by the Grandbouche decision because it
has the effect of creating government action every time a magis-
trate simply signs, and a trial judge enforces, a discovery order.
Therefore, even if this Court had enforced a discovery order (which
we have not), we would not follow the Grandbouche decision.

In sum, we find that since AOL is not a state actor and
there has been no state action by AOL's activities under any of the
three tests for state action enunciated by our Court of Appeals in
Mark, 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.

Cyber also contends that its practice of sending e-mail
advertisements to AOL's servers is also protected "under state
constitutional law, which in many instances, affords even broader
protection than federal First Amendment guarantees which this Court
can enforce." Cyber's Memorandum at 17. Specifically, Cyber refers
to the state constitutions of Pennsylvania and Virginia. 3 Although
this argument is beyond the scope of the issue the Court directed
the parties to brief, we will nevertheless consider it at this
time.

The theory that a state constitution's free speech
provisions may afford broader rights than similar provisions of the
United States Constitution was first recognized by the Supreme
Court in PruneYard Shopping Center v. Robins, 447 U.S. 74 (1980).
The PruneYard Court held that, while the First Amendment did not
grant the defendants the right to solicit in a privately owned
shopping center, state (California) law might grant that right. The
Supreme Court of Pennsylvania has itself recognized that "Pennsyl-
vania may afford greater protection to individual rights under its
Constitution" than the Constitution of the United States. Western

-------footnotes------

3 Cyber contends it is entitled to the protection of the
Pennsylvania Constitution because Cyber's e-mail originates from
Pennsylvania and that it is entitled to the protection of the
Virginia Constitution because AOL's blocking actions occur in
Virginia.

--------end footnotes------

Pennsylvania Socialist Workers 1982 Campaign v. Conn.Gen.Life
Ins.Co., 515 A.2d 1331, 1333-34 (1986) (plurality opinion);
Commonwealth v. Tate, 432 A.2d 1382 (1981).

Article 1, Section 7 of the Pennsylvania Constitution
provides:

The free communication of thoughts and opin-
ions is one of the invaluable rights of man,
and every citizen may freely speak, write and
print on any subject...

In Tate, the only case on which Cyber relies, the Supreme Court of
Pennsylvania overturned convictions for defiant trespass stemming
from a group of protester's refusal to desist from distributing
politically oriented materials in a peaceful manner on the campus
of a privately owned college. The court found 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. Because the
college had become a public forum and because the defiant trespass
statute had provided a defense to a charge of defiant trespass in
those circumstances <4>, the Tate Court held that the protesters had
a right to speak freely without fear of criminal conviction under
Article I, Section 7 of the Pennsylvania Constitution.

Tate was subsequently clarified by the Supreme Court of
Pennsylvania in Western Pennsylvania Socialist Workers. supra. In
that case, a political committee, its chairman, a gubernatorial

-------footnotes------

4 Pa.Cons.Stat.Ann. tit. 18 sec.3503(c)(2) provides:
It is a defense to prosecution under this section that:
the premises were at the time open to members
of the public and the actor complied with all
lawful conditions imposed on access to or
remaining on the premises.

------end footnotes-------

candidate and a campaign worker claimed they had the right under,
inter alia, Article 1, Section 7 of the Pennsylvania Constitution
to collect signatures for the gubernatorial candidate~s campaign at
privately owned shopping malls, including one owned by Connecticut
General Life Insurance Co. Connecticut General had a policy which
uniformly prohibited all political activities including solicita-
tion at its mall. The Court distinguished Tate, by observing that
"[B]y adhering to a strict no political solicitation policy,
[Connecticut General] has uniformly and generally prevented the
mall from becoming a public forum." Western Pennsylvania, 515 A.2d
at 1337. Rather, the Court noted that Connecticut General had only
invited the public into the mall for commercial purposes. Since
Connecticut General had not invited the public into the mall for
political purposes, the Court held that Article 1, Section 7, was
inapplicable.

The Western Pennsylvania Court also rejected attempts to
analogize the mall to the company town in Marsh v. Alabama. supra
by stating:

A shopping mall is not equivalent to a town.
Though it duplicates the commercial function
traditionally associated with a town's busi-
ness district or marketplace, the similarity
ends there. People do not live in shopping
malls. Malls do not provide essential public
services such as water, sewers roads, sanita-
tion or vital records, nor are they responsi-
ble for education, recreation or transporta-
tion. Thus, the Marsh analysis is not applica-
ble to the instant case.

Western Pennsylvania, 515 A.2d at 1338.

The case sub judice is more similar to Western Pennsylva-
nia than it is to Tate. AOL's e-mail servers are certainly not a
traditional public forum such as a street, park or even the college
in Tate. Instead, AOL's e-mail servers are privately owned and are
only available to the subscribers of AOL who pay a fee for their
usage. Moreover, unlike Tate, AOL has not presented its e-mail
servers to the public at large for disseminating political messages
at a certain event. Indeed, AOL has never presented its e-mail
servers to the public at large for dissemination of messages in
general as AOL's servers have a finite capacity. Stipulation of
Facts at p. 7. As noted above, AOL's e-mail system simply provides
a means for its members to communicate with those members of the
public who are connected with the Internet.
Cyber also does not have the right under the Constitution
of Virginia to send unsolicited e-mail over the Internet to AOL
members. Article I, Section 12 of the Virginia Constitution
provides:

That the freedoms of speech and of the press
are among the great bulwarks of liberty, and
can never be restrained except by despotic
governments; that any citizen may freely
speak, write, and publish his sentiments on
all subjects, being responsible for the abuse
of that right; that the General Assembly shall
not pass any law abridging the freedom of
speech or of the press, nor the right of the
people peaceably to assemble, and to petition
the government for the redress of grievances.

There are no decisions which interpret this provision in a manner
which would be helpful to Cyber. The decisions Cyber cites,
National Capital Naturists. Inc. v. Board of Supervisors, 878 F.2d
128, 133 (4th Cir. 1989); Leachman v. Rector & Visitors of the
Univ. of Virginia, 691 F.Supp. 961, 964 n.5 (W.D.Va. 1988), aff'd,
915 F.2d 1564 (4th Cir. 1990); Robert v. Norfolk, 188 Va. 413, 49
S.E.2d 697, 700 (1948) all merely recognize the principle enunciat-
ed by the Supreme Court in PruneYard that states have the "sover-
eign right" to give their constitutions an expansive interpreta-
tion.

Although we have found 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, we will not, at this time, enter judgment
on Count V of Cyber's First Amended Complaint for declaratory
relief. This is because Cyber contends in its Reply brief that
"many more issues ... have to be addressed since there are numerous
reasons beyond the First Amendment which will permit Cyber to send
e-mail to AOL members." Cyber's Reply-Memorandum at 1. Therefore,
we will simply declare that Cyber has no right under the First
Amendment to the United States Constitution or under the Constitu-
tions of Pennsylvania or Virginia to send unsolicited e-mail over
the Internet to members of AOL. We will allow Cyber ten days from
the date of this Memorandum Opinion and Order to submit a list of
the theories other than the First Amendment it believes entitles it
to send unsolicited e-mail to members of AOL.

An Order to that effect follows.

_______________________________________________________________

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

CYBER PROMOTIONS, INC.
VS.
AMERICA ONLINE. INC.

C.A. NO. 96-2486

_______________________________________________________________

AMERICA ONLINE, INC.
VS.
CYBER PROMOTIONS, INC.

C.A. NO. 96-5213

_______________________________________________________________

ORDER

The motion of America Online, Inc. for partial summary
judgment on First Amendment issues is GRANTED in part and DENIED in
part.

The Court declares that Cyber Promotions, Inc. does not
have a right under the First Amendment to the United States
Constitution or under the Constitutions of Pennsylvania and
Virginia to send unsolicited e-mail advertisements over the
Internet to members of America Online, Inc. and, as a result,
America Online, Inc. may block any attempts by Cyber Promotions,
Inc. to do so.

Cyber Promotions, Inc. shall, within ten days of the date
of this Order, submit to the Court a list of the theories other
than the First Amendment which it believes entitles it to send
unsolicited e-mail to members of America Online, Inc.

Either party may request that we issue an Order certify-
ing our decision for an immediate interlocutory appeal to the
United States Court of Appeals for the Third Circuit.

IT IS SO ORDERED.

CHARLES R. WEINER

------------------------------

Date: Thu, 21 Mar 1996 22:51:01 CST
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