Amendment is futile, part 2

When Yahoo filed for dismissal of the Holomaxx complaint, they ended the motion with “Amendment would be futile in this case.” The judge granted Yahoo’s motion but did grant Holomaxx leave to amend. Holomaxx filed an amended complaint earlier this month.
The judge referenced a couple specific deficiencies of Holomaxx’s claims in his dismissal.

Holomaxx alleges no facts in support of its conclusory claim that Yahoo!’s filtering program is faulty, nor does it identify an objective industry standard that Yahoo! fails to meet. While it suggests that Yahoo! is “using cheap and ineffective technologies to avoid the expense of appropriately tracking and eliminating only spam email,” it offers no factual support for these allegations. (Compl. ¶ 40). Nor does Holomaxx cite any legal authority for its claim that Yahoo! has a duty to discuss in detail the particular reasons for blocking Holomaxx’s communications or to provide a remedy for such blocking.

Holomaxx did their best to identify an objective standard, they really did.

9. The objective industry standard has been set forth by the Messaging Anti-Abuse Working Group (“MAAWG”), a group consisting of the largest internet service providers on the planet. YAHOO is a member of the MAAWG and has approved of the MAAWG’s industry standard for abuse desk responses but has failed to follow the MAAWG evidencing, among other things, a lack of good faith.
10. The MAAWG sets forth an objective industry standard protocol by which its members should respond to blocked senders, such as HOLOMAXX, requesting unblocking. The MAAWG protocol states that “the simplest option would be to grant unblocking when it is requested. This alleviates the necessity of judgment calls, arguments with senders or time-consuming research. The overwhelming majority of the vote was for this approach because if the sender had not fixed the issue that caused the block it would be reinstated quickly, so damage would be theoretically minimal.” In this case, YAHOO has breached this provision of the MAAWG in that, with regard to HOLOMAXX and YAHOO’s blocking of HOLOMAXX’s emails, YAHOO refuses to  unblock HOLOMAXX’s emails.

Their filing doesn’t actually reference the document in question, so I spent some time this morning looking for which document this was. It didn’t sound like anything familiar. I eventually identified the 2007 Abuse Desk Common Practices document published by the Collaboration Committee. In the 2nd paragraph it was obvious why Holomaxx didn’t include the document as an exhibit.

The intent of this document is to present options for abuse desk administrators for addressing common problems faced by abuse desks. This is not intended to represent an absolute set of best practices. It is our belief that what is “best” is frequently determined by the particular circumstances of the network/mailboxes served by the abuse desk.

So the “objective industry standard” that Holomaxx cites explicitly states this is a document that solely discusses options and how some abuse desks currently (in 2006 and 2007) handle inquiries from senders. In most cases, the abuse desk and the postmaster desk are separate, something I’m comfortable asserting about Yahoo’s setup.
In dismissing the wiretapping claim the judge cites specific problems with Holomaxx’s complaint.

Holomaxx alleges that Yahoo! “intentionally intercepted electronic communications sent by Holomaxx, in violation of 18 U.S.C. § 2510, et seq.,” (Compl. ¶ 49), and “intentionally used and disclosed the contents of such electronic communications sent by Holomaxx, while knowing 2or having reason to know that the information was obtained through the interception of those communications in violation of 18 U.S.C. § 2511.” (Id. at ¶ 50). It claims that Yahoo!intercepted e-mails to evaluate the “spam like characteristics” of the e-mails (Id. at ¶¶ 59-60). However, while the Court must “take all factual allegations in the complaint as true,” (Ashcroft v. Iqbal, 129 S.Ct.1937, 1949 (2009)), it is not required to accept a “legal conclusion couched as a factual allegation.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Here, Holomaxx’s allegations are both conclusory and devoid of factual support. Holomaxx does not explain how Yahoo! “intercepted” its communications, or how Yahoo! “used and disclosed” the contents of those communications. Additional factual detail is necessary in order to permit the Court to make a meaningful assessment of the plausibility of the allegations.

Holomaxx tried to address this deficiency.

44. Upon Information and belief, YAHOO intercepts and scans the contents of HOLOMAXX’s emails in the following manner: YAHOO uses Bayesian filtering techniques which scans the content of HOLOMAXX’s email message body and headers for words and phrases associated with alleged spam messages. YAHOO then provides the incoming and intercepted HOLOMAXX email with a score before the HOLOMAXX email reaches the YAHOO receiving server. The receiving server, armed with the score procured from the illegal interception, then decides whether or not to accept the HOLOMAXX email or reject it as spam.
45. Upon information and belief, in conjunction with the Bayesian technique, YAHOO also intercepts HOLOMAXX emails before they reach YAHOO’s servers and uses a distributed catalogue of signatures to detect spam. These signatures are generated as a result of YAHOO user submissions in the past. The HOLOMAXX emails are intercepted and the contents scanned and compared to the catalogue of past signatures. This is known as a collaborative filtration system.
46. YAHOO did not have authorization from HOLOMAXX to access the contents of HOLOMAXX’s emails in the manner alleged herein, in transit between leaving HOLOMAXX’s server and before reaching [sic] MICROSOFT’s servers.

Anyone who knows anything about email can see the flaw here. Filters don’t run on the wire. They have to go through a server somewhere, and the only way Yahoo can apply filters is to have actually received the email. Anywhere Yahoo is going to be able to filter the mail is, objectively, a server Yahoo owns or is allowed to access.  I also don’t think these three paragraphs actually explain how the mail was intercepted. It makes a lot of assertions and throws around buzzwords, but doesn’t explain how this alleged interception happened.
Holomaxx also started claiming that Yahoo sends email advertising to its users and that Y! is blocking Holomaxx to drive Holomaxx out of business and make advertisers pay higher advertising rates to Yahoo. Their proof? Screenshots of a Yahoo inbox showing banner ads on the right hand side of the screen. I think it would really help Holomaxx’s case if they could manage to not fundamentally mis-represent simple things like this. They’re ads on a webpage, they’re not sent by email.
All in all, I’m not seeing much improvement in the amended complaint. I mean, Holomaxx tried to address the deficiencies, but they really can’t support their claims. Yahoo isn’t violating the wiretapping act, they’re not violating industry standards and Holomaxx is clearly grasping at straws to try and save their company. e360 tried the same thing against Comcast and ended up bankrupting themselves. Will the same thing happen to Holomaxx?