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Mona Seidman, d/b/a Magphone Ventures,
Plaintiff-Appellant, v. SAIC Network Solutions, Inc., Defendant-Appellee. |
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No. 96-01-CV-0151 |
Wellington, B., Presiding Judge:
This is an appeal from the order of the Addison County Circuit Court, Judge Clark H. Allstead, granting the motion for summary judgment in favor of Defendant SAIC Network Solutions, Inc.
In reviewing a grant of summary judgment, we apply the same standard as that employed by the trial court. The evidence on file must show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Marshall R. Civ. P. 56(c).
This case involves the Internet, an international network of computers and computer networks. The Defendant, SAIC Network Solutions, Inc. (NSI), administers the InterNIC registration system for Internet domain names, which identify computers connected to the Internet. The Plaintiff, Mona Seidman, registered a domain name with NSI, which later suspended the name after receiving a complaint from a third party. Plaintiff filed this action seeking reinstatement of the domain name. The parties have either stipulated to or agreed upon the underlying facts set forth in the pleadings and this opinion.
Each computer or network on the Internet, or "host," has an Internet Protocol number and one or more domain names assigned to it. Domain names are of particular importance because they are what enable Internet users to locate and communicate with other computers and networks.
Two of the most common uses of domain names are in electronic mail ("e-mail") addresses and World Wide Web citations.1 For example, in the e-mail address "president@whitehouse.gov," "president" identifies an individual and "whitehouse.gov" is the domain name representing the computer that delivers messages to that individual. In the World Wide Web citation "http://www.abanet.org," "http://" refers to the Hypertext Transfer Protocol used for accessing information on the World Wide Web, and "www.abanet.org" is the name of a computer in the "abanet.org" domain (which is registered to the American Bar Association).
Domain names have recently begun to acquire substantial economic value. Names in the ".com" domain in particular have become highly sought after, and several disputes over domain names have already reached state and federal courts.
NSI administers the domain name registration system under a contract with the National Science Foundation, an agency of the United States government.2 Plaintiff Mona Seidman is a resident of Marshall who participates in several multi-level marketing systems involving the sale of magazine subscriptions and long distance telephone service, operating under the name "Magphone Ventures."
At issue in this case is the right to a particular domain name, "magphone.com," which was originally registered to Plaintiff, but subsequently was revoked by NSI. Plaintiff seeks an order directing NSI to restore "magphone.com" to active status in its registration database.
Plaintiff contends that NSI breached its contract with Plaintiff when it revoked the domain name, and further contends that NSI's conduct denied Plaintiff her due process rights under the Fifth and Fourteenth Amendments to the U.S. Constitution.3 Plaintiff seeks declaratory and injunctive relief, claiming that NSI's conduct is causing immediate and irreparable harm to her interests, and that monetary damages are insufficient to remedy this harm.
NSI moved for summary judgment on both issues, breach of contract and denial of due process. NSI claimed that the terms of its contract with domain name owners permit NSI to revoke a domain name registration for any reason, or at least for the reason for which it revoked Plaintiff's registration. NSI claimed further that its conduct in maintaining the domain name registry does not constitute governmental action, and therefore NSI is not bound by the Constitution to respect due process rights. The circuit court determined that there was no genuine issue of material fact on either issue, and consequently granted NSI's motion for summary judgment.
The following facts, drawn from the pleadings and stipulations of the parties, are not in dispute: On December 11, 1995, Plaintiff submitted an application to NSI seeking to register "magphone.com" as a domain name for Magphone Ventures. NSI granted Plaintiff's application on December 13, 1995.
On February 16, 1996, NSI received an e-mail message from a regional Internet access provider in California, complaining that its customers were receiving a large number of unsolicited commercial e-mail messages from the "magphone.com" domain, and asking NSI to consider canceling the domain name registration.4
NSI forwarded a copy of the complaint to Plaintiff on February 19, 1996. NSI stated that it would place the "magphone.com" domain name on "hold" status if Plaintiff did not respond within 30 days.5 Plaintiff responded with a brief e-mail message to NSI on March 11, 1996, stating that she wished to continue using the "magphone.com" domain, and would supply any information NSI requested. On March 20, 1996, NSI sent Plaintiff a message stating that it was placing the domain name on "hold" status. On the same day, NSI removed "magphone.com" from its active domain registration database, which had the effect of preventing all Internet users from sending e-mail to addresses in the "magphone.com" domain or accessing information on the World Wide Web in the "magphone.com" domain.
Plaintiff then filed this action for declaratory and injunctive relief, asking that her rights to the "magphone.com" domain be recognized, and that NSI be ordered to restore her registration of the "magphone.com" domain and enjoined from revoking it in the future.
Plaintiff claims first that NSI breached its contract with her when it revoked her domain name registration. The contract between the parties is set forth in the Registration Agreement which appears on the domain name application form (reproduced in Appendix A following this Opinion). It states, in relevant part:
Registering a domain name does not confer any legal rights to that name and any disputes between parties over the rights to use a particular name are to be settled between the contending parties using normal legal methods (see RFC 1591).
By applying for the domain name and through the use or continued use of the domain name, the applicant agrees to be bound by the terms of NSI's then current domain name policy (the 'Policy Statement') which is available at ftp://rs.internic.net/
policy/ internic.domain.policy. . . . The applicant acknowledges and agrees that NSI may change the terms and conditions of the Policy Statement from time to time as provided in the Policy Statement.The applicant agrees that if the use of the domain name is challenged by any third party, or if any dispute arises under this Registration Agreement, as amended, the applicant will abide by the Procedures specified in the Policy Statement.
This Registration Agreement shall be governed in all respects by and construed in accordance with the laws of the United States of America and of the State of California, without respect to its conflict of law rules. This Registration Agreement is the complete and exclusive agreement of the applicant and NSI ("parties" regarding domain names. It supersedes, and its terms govern, all prior proposals, agreements, or other communications between the parties. This Registration Agreement may only be amended as provided in the Policy Statement.
The "Policy Statement" referred to in the Agreement is NSI's Domain Name Dispute Policy Statement, revision 01 (effective Nov. 23, 1995) (reproduced in Appendix B following this Opinion); it describes NSI's procedures for resolving domain name disputes based upon trademark claims. The other document referred to in the Agreement, RFC 1591,6 describes the domain name system generally but does not contain provisions of particular relevance to this dispute.7
Plaintiff alleges that NSI's revocation of her domain name constituted a breach of the Registration Agreement. In its Answer, NSI presents two defenses. First, the Agreement itself states that "[r]egistering a domain name does not confer any legal rights to that name"; therefore, NSI urges, revocation or suspension of the name cannot violate the Agreement. Second, NSI argues in the alternative that compliance with Internet customs and standards is an implied and necessary term of the Agreement, and that Plaintiff's use of the domain name to violate Internet customs and standards justified NSI in suspending the domain name registration.
The circuit court granted NSI's motion for summary judgment based upon the language in the Agreement quoted above. Plaintiff urges this Court to find that provision unenforceable, arguing that it is unconscionable, and that it ought to be stricken because the entire Agreement is a contract of adhesion. We do not find the Agreement ambiguous with regard to the rights to a domain name. Furthermore, we do not find this provision of the Agreement at all unfair: it is clearly intended to remove NSI from disputes between parties contending for the rights to a domain name.
Even if Plaintiff did have a contractual right to the domain name, she breached an implied term of the Agreement by using the domain name to send unsolicited bulk e-mail messages in violation of Internet customs and standards, and thus NSI did not breach the Agreement by suspending or revoking the domain name.
The domain name system is one of several protocols that make communications on the Internet possible. The Domain Name Registration Agreement must be construed in that context. Several entities and organizations exercise control over various aspects of the Internet, and Internet customs and standards appear under a wide variety of labels, including Frequently Asked Questions lists (FAQs) and Requests for Comments (RFCs). The latter are approved and published by the Internet Engineering Task Force (IETF), an international organization, and appear to be the most authoritative source of Internet customs and standards.8 We conclude that these documents constitute an incorporated part of the Domain Name Registration Agreement by implication.9
RFC 1855, entitled "Netiquette Guidelines," sets forth customs of "netiquette" commonly recommended to Internet users and frequently incorporated in individual networks' acceptable use policies.10 The following statement appears within the list of guidelines for users of e-mail:
The cost of delivering an e-mail message is, on the average, paid about equally by the sender and the recipient (or their organizations). This is unlike other media such as physical mail, telephone, TV, or radio. Sending someone mail may also cost them in other specific ways like network bandwidth, disk space or CPU usage. This is a fundamental economic reason why unsolicited e-mail advertising is unwelcome (and is forbidden in many contexts).11
Plaintiff argues that advertising by e-mail is not prohibited by any law. While this may be true, the same justifications for prohibiting unsolicited facsimile transmissions apply equally to e-mail, and Plaintiff has presented no evidence to contradict NSI's claim that unsolicited e-mail is widely considered a violation of Internet customs and standards.
Because the material facts are not in dispute, this issue rests solely upon contract interpretation. We find that NSI was not bound by the Agreement to maintain Plaintiff's domain name in its registration database. Even if NSI was so bound, Plaintiff had already breached an implied term of the Agreement by repeatedly sending unsolicited bulk commercial e-mail messages in violation of generally accepted Internet customs and standards. The circuit court properly granted summary judgment to NSI on the breach of contract issue.
Plaintiff's second claim is that her due process rights were violated by NSI when it revoked her domain name registration arbitrarily, without adequate notice or a proper hearing, because NSI's administration of the domain name registration system constitutes governmental action for purposes of the Fifth Amendment.
The Internet originated as a network connecting United States government agencies, government contractors, and research institutions. It was administered and supported by several U.S. government agencies, including the Department of Defense and the National Science Foundation (NSF). Domain name registration services were provided by the Defense Information Systems Agency Network Information Center until 1991, when NSF assumed responsibility for non-military registration services.
The InterNIC, or Internet Network Information Center, is a collaboration consisting of entities that perform various tasks related to support of the Internet, including domain registration services. The InterNIC was formed at NSF's request in 1992. The registration services component of the InterNIC is performed by NSI under NSF Cooperative Agreement No. NCR-9218742, which became effective on January 1, 1993, and expires on September 30, 1998.12
The Cooperative Agreement originally provided that NSF would pay NSI for administering the registration services. On September 13, 1995, the Cooperative Agreement was modified to permit NSI to collect user fees for registration services, and the payments from NSF to NSI were discontinued.13 The amended agreement authorizes NSI to impose an annual fee of $50 upon registrants for each second-level domain name, including names within the ".com" top-level domain. NSI is permitted to retain 70% of those user fees as consideration for providing registration services.
[T]he remaining 30% . . . will be used for the preservation and enhancement of the "Intellectual Infrastructure" of the Internet in general conformance with approved Program Plans. Awardee will develop and implement mechanisms to insure the involvement of the Internet communities in determining and overseeing disbursements from this account.14
Under the amended agreement, NSI must obtain the approval of NSF for any changes in the fee structure as well as for NSI's annual program plans, and must submit monthly, quarterly, and annual reports to NSF.
Several other entities also play roles in Internet governance, including the Internet Society; the Internet Engineering Task Force; the Internet Assigned Numbers Authority (IANA); and the Federal Networking Council (FNC), an interagency unit of the U.S. government. The IANA is a clearinghouse chartered jointly by the Internet Society and the FNC; it is responsible for coordinating several Internet protocol parameters, including top-level domain names.
NSF funding for the Internet backbone ended in 1995; firms such as MCI and Sprint now provide the backbone. However, NSF and other federal agencies, through the FNC, continue to provide financial support to IETF, IANA, and other organizations that perform technical and administrative functions related to the Internet. The FNC claims that it has policy control over the ".com," ".net," and ".org" top-level domains, and that NSI's role is merely to perform registrar functions for these domains.15
Plaintiff contends that NSI, though a private entity, is performing a governmental function in registering Internet domain names, and that its conduct therefore must be scrutinized under the Due Process Clause of the Fifth Amendment to the U.S. Constitution.
The Fifth Amendment provides that "[n]o person shall . . . be deprived of life, liberty, or property, without due process of law." It applies only to acts of the federal government, and offers no shield against private conduct.16 Public Utilities Commission v. Pollak, 343 U.S. 451, 461 (1952). The conduct of a private party may be deemed federal action, however, if the federal government's involvement in the conduct is substantial.
Registration of Internet domain names is not a traditional governmental function, and NSF's involvement in the process is insufficient to transform it into governmental action. The undisputed facts therefore yield but one conclusion as a matter of law: The Due Process Clause of the Fifth Amendment does not apply to NSI's performance of Internet domain registration services.17
In light of the foregoing, this Court affirms the order of the Addison County Circuit Court, Judge Clark H. Allstead, granting Defendant's motion for summary judgment.
AFFIRMED.
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Dated: June 28, 1996
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______________________________ Barry S. Wellington Presiding Judge |
CLARENDON, J., concurs.
FLETCHER, J., concurs.