Further amendment would be futile

Both Microsoft and Yahoo filed their motions to dismiss the Holomaxx first amended complaint (FAC). Each company filed the same set of documents.

  1. Motion to dismiss (Microsoft, Yahoo)
  2. A comparison of the original complaint and the first amended complaint (Microsoft redline, Yahoo Redline)
  3. A request for judicial notice of the MAAWG Abuse Desk Common Practices document.

The motions to dismiss the first amended complaint are not that different from the original motions to dismiss. This isn’t that unexpected as the first amended complaint isn’t that different from the original complaint. In fact, the comparison between complaints is intended to show how little Holomaxx changed or improved their arguments.  The request for judicial notice just asks the court to look at the MAAWG Abuse Desk Common Practices Document because Holomaxx quoted so extensively from the document.
The Yahoo lawyers don’t pull any punches in their motion and, in fact, seem to be treating this as an annoyance to be ridiculed. That’s not to say that their motion is not serious, they are very clearly defending their right to block mail and lining up all the precedents to support them. But, they don’t ignore an opportunity to deride Holomaxx and call them spammers.

This lawsuit is about Plaintiff Holomaxx Technologies’ failed attempt to exploit Yahoo!’s network, servers and users to deliver millions of Plaintiff’s for-profit email advertisements every day. Plaintiff wants a free ride on Yahoo’s systems, expecting Yahoo! to underwrite the operating costs of Plaintiff’s bulk email blasts, and Yahoo’s users to bear the convenience costs of inboxes clogged with unwanted junk mail. Plaintiff has no such right, and Yahoo! no such duty.  […] While Plaintiff has tried to add new factual allegations to evade the broad immunities provided by the CDA, and in response to the pleading deficiencies identified by this Court in its Order, those allegations are conclusory, irrelevant, and internally inconsistent. […] In an attempt to demonstrate “bad faith” and to try to plead around the CDA and this Court’s Order, Plaintiff alleges that Yahoo!’s spam filtering violated objective industry standards, and that Yahoo! targeted Plaintiff for filtering in an attempt to disadvantage Plaintiff in the marketplace and to enhance Yahoo’s own relative competitive position as an advertiser. These are the only new “facts” alleged, and Plaintiff is wrong on both counts.
The “objective industry standards” Plaintiff now advances are nothing more than a six year old pastiche of meeting notes from an industry working group that was formed to streamline the handling of abuse complaints in the abuse desk environment. These notes do not appear to be intended to apply to inbound spam (as opposed to abuse from within one’s own network), and certainly do not function as an “objective” yardstick for evaluating the alleged bad faith of ISP filtering decisions with respect to inbound spam.

They even ended their motion by reminding the court that they said that letting Holomaxx refile would be futile.

Plaintiff has now had the benefit of this Court’s analysis of the shortcomings of its original Complaint, and the opportunity to correct those deficiencies in the FAC. Yet all the fatal flaws in the original Complaint remain in the FAC. Accordingly, this case should be dismissed without further leave to amend. Plaintiff has shown that further amendment would be futile.

A hearing is scheduled in San Jose on July 15th. I’m going to try and make it down, if only so I can shake the hand of the Yahoo lawyer that has made reading their pleadings so entertaining.
Previous blog posts on the Holomaxx case:

The wonders of owning a business
Email filters

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Email and law in the news

A couple things related to the intersection of email and law happened recently.
The 6th circuit court ruled that the government must have a search warrant before accessing email. The published opinion is interesting reading, not just because of the courts ruling on the law but also because of the defendant. Berkeley Premium Nutraceuticals toyed with spamming to advertise their product as a brief search of public reporting sites shows. The extent and effort they went to in order to stay below the thresholds for losing their merchant accounts is reminiscent of the effort some mailers go through to get mail through ISP filters.
The other bit of interesting reading is the Microsoft motion to dismiss the case brought against them by Holomaxx. It is a relatively short brief (33 pages) and 3 of those pages are simply a listing of the relevant cases demonstrating ISPs are allowed to filter mail as they see fit. 2 more pages are dedicated to listing the relevant Federal and State statutes. I strongly encourage anyone considering suing any large ISP to to read this pleading. These lawyers understand email law inside and out and they are not going to mess around. They also have both statute and case law on their side. They point this out before the end of page 1:

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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.

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Goodmail shutting down

Yesterday Goodmail sent out mail to all their customers announcing they are ceasing operations and taking all their token generators offline as of 5pm pacific on February 8th.
While this is a bit of a surprise on one level, I’m not that shocked. Ken Magill mentioned in August that Goodmail was on the sales block and rumors have been circulating for weeks about significant changes coming to Goodmail.
Goodmail has struggled to find a market since they first started. At one point they were even giving services away to customers at partner ESPs. Despite the free service, people at some of those ESPs told me they were having difficulty getting customers to adopt Goodmail.
Likewise, on the ISP side, Goodmail didn’t seem to have much penetration into the market. They had AOL, Yahoo and some cable companies, but not much else. And as of early last year, Yahoo removed the Goodmail machines.
I think the real underlying problem was that most companies who are doing things well don’t need certification services. Sure, there are a couple exceptions but in general anyone who is sending good mail is getting to the inbox. Even for companies where delivery was not quite as good as they might want, the marginal improvement at those ISPs that do use Goodmail was not sufficient to justify the cost of Goodmail services.
While I have the utmost respect for the Goodmail management team I think this result was almost inevitable. I never got the impression they valued the end recipient quite as much as the ISPs do. That was just one thing that lead me to believe they just didn’t seem to understand the email ecosystem quite the way that a certification service should.
I echo Dennis’ thoughts and well wishes towards the Goodmail folks. The experiment in sender financed delivery was well worth doing and I think they did it as well as anyone could have.

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