Walton v. Network Solutions

REED, J. This appeal arises out of a civil suit premised upon Section 14-3002 of the Commercial Law Article (“C.L.”) of the Maryland Code, the Maryland Commercial Electronic Mail Act (“MCEMA”) (2002), which prohibits the sending of commercial e-mails that contain unauthorized, false, or misleading information, and C.L. Section 13-301, the Maryland Consumer Protection Act (“MCPA”) (1975, 2005 Repl.Vol.), which prohibits unfair or deceptive trade practices including making “[f]alse, falsely disparaging, or misleading oral or written statement, visual description, or other representation of any kind which has the capacity, tendency, or effect of deceiving or misleading consumers[.]” C.L. § 13-301(1). Jeffrey Walton’s (“Appellant”) complaint alleged that Network Solutions (“Appellee”) violated the MCEMA because appellee sent numerous e-mails to him using “unavailable email address[es] purporting to be legitimate and reachable[,]” and because the e-mails’ subject line contained false or misleading information. Appellant also alleged that appellee violated the MCPA, because he was not removed from appellee’s e-mail distribution list, despite his numerous efforts to “unsubscribe.” Appellee moved to dismiss the action in the Circuit Court for Montgomery County. The circuit court granted the motion and dismissed appellant’s case with prejudice.

Appellant noted an appeal raising the following four questions that we rephrased for clarity: I. Did the circuit court improperly convert the motion to dismiss to a motion for summary judgment? ⁶⁵⁹ II. Did the circuit court err in granting a motion to dismiss for failure to state a claim upon which relief can be granted with respect to appellant’s MCEMA claim relating to a misrepresentation of the e-mails’ origin or transmission path?

III

Did the circuit court err in granting a motion to dismiss for failure to state a claim upon which relief can be granted with respect to appellant’s MCEMA claim relating to a misrepresentation in the e-mails’ subject line?

IV

Did the circuit court err in granting a motion to dismiss for failure to state a claim upon which relief can be granted with respect to appellant’s MCPA claim that appellee employed a misleading oral or written statement? We answer all four questions in the negative, and, therefore, affirm the judgment of the circuit court. Factual And Procedural Background On March 7, 2013, appellant filed suit against appellee in the Circuit Court for Montgomery County seeking statutory and injunctive relief. Appellant’s complaint alleged that from 2009 to 2012, appellee sent numerous e-mails to him using “unavailable e-mail address[es] purporting to be legitimate and reachable.” After appellant replied to appellee’s e-mail message, he received the following message: “The mailbox to which you attempted to send your email is not monitored.” Appellant asserted that appellee “initiated, conspired to initiate, and assisted in the transmission” of an advertisement via e-mail, and that the e-mails contained “ ‘false or misleading information about the origin or the transmission path of the commercial electronic mail’ ” and that “[tjhey contained] false information in the ‘From’ line and in the ‘Received from’ line[,]” violating the MCEMA.

(quoting C.L. § 14-3002(b)(2)(ii)). In setting forth his second MCEMA claim, appellant’s complaint asserted that appellee “initiated, conspired to initiate, and assisted in the transmission” of an advertisement via email, and that the “messages contained ‘false or misleading ⁶⁶⁰ information in the subject line that has the capacity, tendency, or effect of deceiving the recipient’ ” violating the MCEMA. (quoting C.L. § 14 — 3002(b)(2)(iii)). Next, Appellant alleged that appellee violated the MCPA, because he was not removed from appellee’s e-mail distribution list, despite his numerous efforts to “unsubscribe.” Appellant spoke to an employee of appellee’s in November 2009, and following appellant’s request to “unsubscribe,” the employee sent an e-mail on November 13, 2009, stating, “I have confirmed that your email address and phone number have been added to our Do Not Contact lists and any marketing communications will cease within the next 7-10 business days.” Despite this assurance, appellant’s exhibit reveals that he received an e-mail on December 1, 2009, and that he continued to receive e-mails from 2009 to 2011.

Subsequently, appellant spoke to another employee of appellee’s, but he continued to receive e-mails from 2011 to 2012. On June 10, 2013, appellee filed a motion to dismiss for failure to state a claim pursuant to Rule 2-322(b), and a request for a hearing. On June 28, 2013, appellant filed an Opposition to the Motion to Dismiss and a Request for Hearing. Appellee then filed a reply in support of its motion to dismiss on July 3, 2013.

A hearing was held on August 7, 2013, and the circuit court entered an order granting the motion to dismiss with prejudice on the same day. The circuit court “considered all the papers that the parties ... filed ... together with the entire file[ ]” as well as “the arguments of counsel.” The court further considered allegations that appellant made in his opposition to the motion to dismiss, which appellant indicated he would potentially add to the complaint were he granted leave to amend. The circuit court dismissed the first MCE-MA claim that appellee failed to provide truthful information about the origin or transmission of the path of the e-mail messages, because appellant failed to indicate what was false about the origin or transmission of the e-mail. In addition, the circuit court found because appellant knew that these emails came from appellee and because appellee conceded to ⁶⁶¹ sending the e-mails, that appellant was not mislead about the e-mails’ origins.

The circuit court also dismissed the second MCEMA claim that appellee’s e-mails contained false or misleading information in the subject line. Similarly, the circuit court found that appellant did not indicate any false statement in the subject line of the e-mail. It explained that appellee was “making offers for things that it does,” and determined, therefore, there was no falsity. Finally, the circuit court held that appellant’s MCPA claim that appellee made misrepresentations that had the capacity to deceive appellant was barred by the statute of limitations.

The court explained that appellant received appellee’s confirmation that he was unsubscribed on November, 13, 2009, but he received another e-mail from appellee as early as December 1, 2009. The circuit court found, therefore, that appellant “should or could have been aware” that the conversation was false on December 1, 2009. For purposes of determining whether the circuit court granted a motion to dismiss or a motion for summary judgment, the circuit court’s full ruling is provided below: [I]n treating a motion for failure to state a claim the standard that applies is that we must treat as true that which is alleged and give all reasonable inferences in favor of the non-moving party, in this case the plaintiff. With that standard in mind let me address ... the counts separately.

In this case, and I have also included in that consideration not just the allegations in the complaint, but really in an abundance of caution that which plaintiff has added by way of his opposition ... he has made or added some more specifics not really a formal amendment of the complaint but he has told us essentially what he might do if he were given leave to amend. I am looking specifically at some of the email addresses we talked about in some of the other matters. It’s clear to me having looked at the standard applicable to this motion that simple bold allegations are inadequate and in this case while the plaintiff has done a good job of saying and identifying the causes of actions the ⁶⁶² statutes that he wishes to go under he really has not said either in the complaint itself or in the additional material that he provided by way of the opposition what is false about any of this information. In other words if you look at count one false misleading information about the origin or the transmission path, well in the complaint he says its false if you look at the opposition he says these are the email addresses so looking at it all together it[’]s clear to me that there is, it may be hard to read but it’s not false.

I mean these emails came from Network Solutions.... So looking [at it] altogether it does not appear to me that there is a falsity there nor has he, if you look at altogether can he allege that. With respect to count number two, I think the same problem appears in his complaint including the exhibit that is attached to it, of course we look at all that together. Even putting aside the limitations problem which I don’t think you have to reach for that argument I don’t see what exactly is false about these subject lines.

I mean Network Solutions is offering, making offers for things that it does. There’s nothing false about that and I do think that that is something that he has to allege. Finally with respect to count 3[,] I agree with counsel that it suffers from the statute of limitations problem even if you take us through the allegations that the plaintiff made which is that there was this conversation on November 13 of 2009.... [Thereafter,] [t]here was an email that was received as quickly as ... December 1st of 2009 that was received about two and a half weeks or thereafter after this conversation and so at that point December 1, 2009[,] that’s when the plaintiff should or could have been aware that that conversation if it was false was false.

Discussion I. Preliminary Matters A. Parties’ Contentions Appellant contends that the circuit court’s ruling was a grant of a motion for summary judgment, because the circuit ⁶⁶³ court considered numerous items outside the pleadings. Specifically, appellant argues that the circuit court considered appellee’s Memorandum in Support of its Motion to Dismiss, which contained content of a purported e-mail to demonstrate that the e-mails were not false. The appellant asserts that the circuit court made it clear that it relied on the parties’ oral arguments during the August 7, 2013, hearing, and all papers filed. Appellant contends that he was prejudiced because he had not been given prior notice that the hearing held on August 7, 2013, would be a hearing for summary judgment.

As a result, appellant asserts that he did not have an opportunity for discovery prior to the hearing. Appellee counters that the circuit court did not convert the motion to dismiss to a motion for summary judgment, but that the court was considering the additional facts only in its consideration of whether to grant appellant leave to file an amended complaint. B. Analysis As a preliminary matter, the parties disagree as to whether the circuit court’s ruling was a dismissal or a grant of summary judgment. We hold that the circuit court’s ruling was a dismissal. “[W]hen a trial judge is presented with factual allegations beyond those contained in the complaint to support or oppose a motion to dismiss and the trial judge does not exclude such matters, then the motion shall be treated as one for summary judgment.” Okwa v. Harper, 360 Md. 161, 177 , 757 A.2d 118 (2000) (emphasis added); see also Smith v. Danielczyk, 400 Md. 98, 104-05 , 928 A.2d 795 (2007) (“Although no extraneous material was attached to either the complaint or the motion to dismiss in this case, appellees made certain factual averments in the memorandum they filed in support of their motion” and “[b]ecause the court dismissed the complaint without explanation, it is not clear whether any of that material was, in fact, considered.

The record does not indicate that the extraneous documents or averments were ⁶⁶⁴ ‘excluded’ by the court, however, so we must assume that they were considered.”). In its ruling, the circuit court stated: [I]n treating a motion for failure to state a claim the standard that applies is that we must treat as true that which is alleged and give all reasonable inferences in favor of the non-moving party, in this case the plaintiff. With that standard in mind let me address ... the counts separately. In this case, and I have also included in that consideration not just the allegations in the complaint, but really in an abundance of caution that which plaintiff has added by way of his opposition ... he has made or added some more specifics not really a formal amendment of the complaint but he told us essentially what he might do if he were given leave to amend.

I am looking specifically at some of the email addresses we talked about in some of the other matters. It’s clear to me having looked at the standard applicable to this motion that simple bold allegations are inadequate and in this case while the plaintiff has done a good job of saying and identifying the causes of actions the statutes that he wishes to go under he really has not said either in the complaint itself or in the additional material that he provided by way of the opposition what is false about any of this information. It is clear from this statement that the circuit court only considered facts outside of the pleading in considering whether to grant appellant leave to amend the complaint. Because the circuit court knew the correct standard and applied it correctly to the present case, we shall treat the circuit court’s ruling as one granting a motion to dismiss.

II

Mcema Claim I — E-Mails’ Origin or Transmission Path A. Parties’ Contentions Appellant contends that his pleading met the necessary standard, and that the circuit court erred when it granted appellee’s motion to dismiss. He asserts that he did not need to prove, but only had to plead specific facts indicating that ⁶⁶⁵ appellee initiated, conspired to initiate, and assisted in the transmission of an advertisement via e-mail; that appellee failed to provide truthful information about the origin or transmission path of the e-mails; and that appellee also failed to provide a valid return e-mail address. Appellant asserts in his complaint that the origin or transmission path of the emails were false, because they “were sent using an unavailable e-mail address purporting to be legitimate and reachable” and that an e-mail was “returned to [appellant] with a note that ‘The mailbox to which you attempted to send your email is not monitored.’ ” Finally, the complaint further states that the emails “contain false information in the ‘From’ line and in the ‘Received from’ line.” Appellee contends that the circuit court correctly granted the motion to dismiss, because Appellant’s complaint was completely devoid of any description of a false or misleading statement related to the e-mails’s origin or transmission path. Appellee counters that an unmonitored mailbox does not demonstrate that the transmission path was false or misleading.

In addition, appellee asserts that MCEMA does not require that a mailbox be monitored, but only requires that there not be a false or misleading transmission path. We agree. B. Standard of Review A motion to dismiss for failure to state a claim tests the sufficiency of the pleadings. Md. Rule 2-322(b)(2).

Therefore, when reviewing the circuit court’s grant of a motion to dismiss, the reviewing court must “assume the truth of, and view in a light most favorable to the non-moving party, all well-pleaded facts and allegations contained in the complaint, as well as all inferences that may reasonably be drawn from them----” RRC Ne., LLC v. BAA Md., Inc., 413 Md. 638, 643 , 994 A.2d 430 (2010) (citing Lloyd v. Gen. Motors Corp., 397 Md. 108, 121-22 , 916 A.2d 257 (2007)). We will affirm the circuit court’s grant of a motion to dismiss “only if the allegations and permissible inferences, if true, would not afford relief to the plaintiff.” RRC Ne., 413 Md. at 643 , 994 A.2d 430 . “A reviewing court may look only to the facts and ⁶⁶⁶ allegations contained in the original complaint.” Id. (citing Converge Servs.

Grp., LLC v. Curran, 383 Md. 462, 475 , 860 A.2d 871 (2004)). The facts in the complaint “must be pleaded with sufficient specificity; bald assertions and conclusory statements by the pleader will not suffice.” RRC Ne., 413 Md. at 644 , 994 A.2d 430 (citations omitted). “Upon appellate review, the [circuit] court’s decision to grant such a motion is analyzed to determine whether the court was legally correct.” Id. (citations omitted). C. Analysis After reviewing the pleading in the light most favorable to appellant, we hold that the circuit court correctly granted the motion to dismiss, because appellant’s pleading failed to indicate the falsity of the e-mails’ origin or transmission path.

In 2003, Congress enacted legislation to control unsolicited commercial e-mails, commonly known as “UCE” or “spam.” Beyond Sys., Inc. v. Keynetics, Inc., 422 F.Supp.2d 523, 525 (D.Md.2006). Congress made certain findings relative to the problems posed by such e-mails. Id. According to § 7701(a) of the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM), some of these problems included the false and deceptive nature of the messages, that many senders “purposefully disguise the source of such mail,” and that the messages “include misleading information in the messages’ subject lines in order to induce the recipients to view the messages.” Id. at 525-26.

Congress additionally found that other senders neglect to provide an “'opt-out’ mechanism, or refuse to honor the requests of recipients not to receive electronic mail from such senders in the future, or both.” Id. Prior to the enactment of the federal legislation, many states, including Maryland, also passed legislation to address the problems with spam e-mails. In 2002, Maryland passed MCEMA, C.L. §§ 14-3001 to 14-3003, which provides for a private cause of action to seek redress for tortious injury arising from the receipt of misleading or fraudulent, unsolicit ⁶⁶⁷ ed, commercial e-mail. We have explained that the Court of Appeals recognized this statute was passed “to curb the dissemination of false or misleading information through unsolicited, commercial e-mail, as a deceptive business practice.” MaryCLE, LLC v. First Choice Internet, Inc., 166 Md.App. 481, 496 , 890 A.2d 818 (2006) (quoting Beyond Sys., Inc. v. Realtime Gaming Holding Co., LLC, 388 Md. 1, 16 , 878 A.2d 567 (2005) (Realtime Gaming)).

C.L. § 14-3002, which concerns “Prohibited conduct,” provides in pertinent part: (b) A person may not initiate the transmission, conspire with another person to initiate the transmission, or assist in the transmission of commercial electronic mail that: (1) Is from a computer in the State or is sent to an electronic mail address that the sender knows or should have known is held by a resident of the State; and [ (2) ](ii) Contains false or misleading information about the origin or the transmission path of the commercial electronic mail[.] In addition, the Act contains a presumption that the sender of spam knows the recipient is a Maryland resident “if the information is available on request from the registrant of the Internet domain name contained in the recipient’s electronic mail address.” Id. § 14-3002(c). The statutory damages allowed by the Act are the greater of $500 or actual damages to the recipient of the e-mail, and the greater of $1,000 or actual damages to an interactive computer service provider, i.e., an ISP. See id. § 14-3003(1) and (3). The Act also provides for the recovery of reasonable attorneys’ fees.

Id. § 14-3003. Appellant’s complaint stated a conclusory allegation that the e-mails “contain[ed] false and misleading information in the origin or transmission path, or in the subject, or in both locations. They contain false information in the ‘From’ line and in the ‘Received from’ line.” Appellant’s claim is based on the fact that the e-mail had an “unavailable e-mail address ⁶⁶⁸ purporting to be legitimate and reachable[,]” and that an email was “returned to [appellant] with a note that ‘The mailbox to which you attempted to send your email is not monitored.’ ” Assuming these facts are true, and looking at the pleading in the light most favorable to appellant, we cannot reach an inference that the appellee’s e-mails to appellant contained false or misleading information about its origin or transmission path. Domain names are the point of origin for e-mail messages.

See MaryCLE, LLC, 166 Md.App. at 491 n. 7, 890 A.2d 818 (“A ‘domain name’ is the ‘address of a computer network connection ... that identifies the owner of the address,’ or ISP, such as ‘verizon.net’ or ‘hotmail.com.’ ” (citations omitted)). A person violates MCEMA if the e-mail “[c]ontains false or misleading information about the