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A former employee floods his employer’s servers with e-mail criticizing the company and urging some 35,000 employees to quit. The company alleges significant interference with productivity causing economic damages. May the company recover in tort against the former employee for losses caused by the flood of e-mail? According to the recent California Supreme Court decision of Intel v. Hamidi, 1 Cal. Rptr. 3d 32, 39 (Cal. 2003), the answer is no — at least not based on the ancient trespass to chattels doctrine where there is no showing of actual damage to servers or other computers. The court’s carefully worded opinion, however, does not preclude claims against Internet interlopers who overload and damage a computer system. The court discussed a variety of cases that previously found that cyberspace incursions could constitute “trespass to chattels,” a legal doctrine developed in the days of “replevin for a cow.” The tort of trespass to chattels is the intentional interference with the possession of personal property that has proximately caused injury, the court wrote in Intel. The Restatement of Torts has emphasized that some actual injury to personal property must have occurred in order for a trespass to chattels to be actionable. While many courts have accepted the application of trespass to chattels to unauthorized activity on someone else’s computers, the California court was not persuaded to do so in this case pregnant with First Amendment implications. THE ‘INTEL’ OPINION Hamidi was a former Intel engineer fired by the company in 1996, who subsequently sent a series of six e-mail messages to 35,000 Intel employees over a 21 month period. The messages criticized the company’s labor practices, asked employees to join an anti-Intel group and urged employees to leave the company. Intel sought a court order to stop the e-mail campaign, arguing that Hamidi’s dissemination of unauthorized (by Intel) messages on its network constituted a trespass to chattels. The trial court agreed with Intel and an appeals court upheld the lower court’s ruling. (See Intel Corporation v. Hamidi, 114 Cal. Rptr. 2d 244 (3rd Dist. Cal. 2002)). The California Supreme Court reversed the ruling of the appellate court in a lengthy opinion including two strong dissents. The majority concluded that under California law, trespass to chattels is not committed by an electronic communication that neither damages the recipient computer system nor impairs its functioning. The Court held that the tort of trespass to chattels “may not, in California, be proved without evidence of injury to the plaintiff’s personal property or legal interest therein.” Intel’s consequential economic damage — loss of productivity caused by employees reading and reacting to Hamidi’s messages and company efforts to block the messages — was not considered an injury to the company’s interest in its computers. The court recognized that messages transmitted through the Internet are not exempt from the ordinary rules of tort liability and that e-mail may, in some circumstances, be actionable under various common law or statutory theories. In reaching its conclusion, the court distinguished this case from those where courts have ruled that spammers were liable for trespass to chattels as those cases generally involved some actual or threatened interference with the computers’ functioning — a key fact missing from the Intel case according to the Supreme Court. OTHER CASES FINDING LIABILITY In Thrifty-Tel, Inc. v. Bezenek, 54 Cal. Rptr. 2d 468 (4th Dist. Cal. 1996), parents were held liable to a long-distance telephone company for trespass to personal property where their son hacked into the company’s computer system to gain confidential access codes and make free long-distance calls. The defendant’s automated dialing program “overburdened the system, denying some subscribers access to phone lines,” the court ruled. Following Thrifty-Tel, numerous federal courts held that sending unsolicited commercial bulk e-mail (UCE) through an Internet service provider’s system may constitute trespass to chattel. The lead case, CompuServe, Inc. v. Cyber Promotions, Inc., 962 F. Supp. 1015, 1016-1017 (S.D. Ohio 1997), involved the defendant’s sending UCE advertisements to Internet users, many of whom were CompuServe subscribers. While CompuServe was not physically damaged by the defendant’s conduct, the value of CompuServe’s business was found diminished because the capacity of its computer equipment and disk space was drained by the mass mailings. The court issued a preliminary injunction, holding that the defendant’s intentional use of CompuServe’s proprietary computer equipment was an actionable trespass to chattels for which the First Amendment provided no defense. The First Amendment was also raised in Intel by an amicus brief filed on Hamidi’s behalf, however, the court did not conclude the First Amendment required Intel to permit Hamidi’s e-mails to reach its employees. The Intel court also reviewed other “spam” cases following CompuServe, including Hotmail Corp. v Van$ Money Pie, Inc., 1998 Wl 388389 (N.D. Cal. 1998), and a series of America Online cases decided in federal court in Virginia. In Hotmail, the court issued a preliminary injunction after defendants sent “spam” messages advertising pornography and “get rich quick” schemes to thousands of e-mail users. The messages contained falsified Hotmail return addresses and misdirected responses to the spam were filling up Hotmail’s storage space and threatening its ability to serve legitimate customers. As such, the court found that Hotmail had presented sufficient evidence that the defendant had intentionally trespassed on its property. The America Online cases also involved unsolicited bulk e-mail. In America Online v. IMS, 24 F. Supp. 2d 548 (E.D. Va. 1998), the court granted summary judgment based on a trespass to chattels claim, where IMS sent 60 million unauthorized e-mail advertisements to AOL subscribers, forcing AOL to spend technical resources and staff time to defend its computer system and membership against the spam. One month later, the same court again ruled in favor of AOL in American Online, Inc. v. LCGM, 46 F. Supp. 2d 444 (E.D. Va. 1998), relying upon the CompuServe and the AOL/IMS opinions. EBAY AND ITS PROGENY The Intel Court also distinguished the line of district court cases addressing whether “unauthorized robotic data collection from a company’s publicly accessible Web site is a trespass on the company’s computer system.” In eBay v. Bidders Edge, 100 F. Supp. 2d 1058 (N.D. Cal. 2000), the court granted eBay’s application for preliminary injunction based on its trespass to chattel claim. The eBay court found that Bidder’s Edge’s automated and repeated access of eBay’s servers, 100,000 times per day using software robots called “spiders,” was unauthorized and outside the scope of use permitted by eBay. While eBay could not demonstrate substantial interference with its servers, the court found that Bidder’s Edge was still intermeddling with eBay’s personal property — namely its bandwidth and server capacity, the value of which was diminished by Bidder’s Edge’s activities. The court was also persuaded by eBay’s argument that if an injunction was not issued, other auction aggregators would be encouraged to crawl the eBay site resulting in reduced system performance, system unavailability or data losses. The U.S. District Court for the Southern District of New York followed suit six months later in Register.com, Inc. v. Verio, Inc., 126 F. Supp. 2d 238 (S.D.N.Y. 2000). Verio was using software robots to acquire information from Register’s “WHOIS” database of Internet name registrants. The court found this constituted a trespass to chattels under New York law, particularly since Register.com did not consent to the use of Verio’s search robot. Like eBay, the district court found the possibility that Verio’s activities would be copied by others and further diminish Register’s computer system and servers warranted injunctive relief. In a third decision involving robotic data collection, Ticketmaster v. Tickets.com, 2000 WL 1887522, the court found insufficient evidence of harm to constitute trespass to chattel. The district court found that Ticket.com’s “spiders,” which collected event information from Ticketmaster for Ticket.com’s own Web site, did not harm plaintiff’s computers nor interfere with its business. The basic elements of trespass to chattels, physical harm and some obstruction of the chattel’s function, were not sufficiently demonstrated by plaintiff. Intel urged the court to rely on eBay, arguing that the unauthorized use of another’s chattel is actionable even without any showing of injury. However, the court did not read eBay to dispense with an actual injury element and even criticized a recent California federal magistrate judge decision for reaching an incorrect legal conclusion under the auspices of eBay. The Intel court noted that the defendant’s conduct in eBay, if replicated, would likely impair the functioning of plaintiff’s system, a threat which had not been shown to exist in connection with Hamidi’s conduct. Therefore, while the court recognized that there is no right temporarily to use another’s personal property, the use is actionable as trespass only if it has proximately caused an injury. DISSENTING OPINIONS Two justices issued lengthy dissenting opinions to the Intel majority. Associate Justice Janice Rogers Brown contended that Intel should be able to maintain the integrity of its proprietary computer system, which it spent millions of dollars developing in order to increase employee productivity. The time required to review and divert 200,000 of Hamidi’s messages diverted employees from productive tasks and undermined the utility of the computer system which, she argued, resulted in tangible economic loss and impairment of the chattel’s value. Justice Brown principally relied upon Thrifty-Tel and eBay, arguing the same analysis should be applied to Intel. Associate Justice Stanley Mosk posited that the Court of Appeals ruling should have been upheld because Hamidi was intruding upon Intel’s proprietary network, equivalent to commandeering a mail cart and dropping off unwanted broadsides on 30,000 desks. He believed the circumstances warranted applying the trespass to chattels doctrine, since Intel’s proprietary computer system was being misappropriated contrary to its intended use. Justice Mosk also contended that previous judicial opinions had applied the tort of trespass to chattels to deliberate intermeddling with proprietary computer systems, primarily citing eBay and Thrift-Tel. CONCLUSION While the California Supreme Court rejected Intel’s claim, it did not reject the notion that the common-law tort of trespass to chattels can be applied to cyberspace. Future plaintiffs seeking to prevail on a theory of trespass to their cyber-chattels should focus on demonstrating concrete harm from the unwanted electronic activity as best they can. From the survey of cases discussed and analyzed in Intel, it is clear that the quantity of electronic activity, whether in the form of spam or “spiders,” must be substantial; and the communications must result in or threaten some diminution in the plaintiff’s use of its computer servers or storage systems. Adam I. Cohen is a partner in the litigation department of Weil, Gotshal & Manges (www.weil.com) in New York. Gina Dombosch is a litigation associate in the firm’s Miami office. If you are interested in submitting an article to law.com, please click here for our submission guidelines.

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