Hotmail Corporation v. Van$ Money Pie, Inc.
1998 WL 388389, 1 (N.D. Cal.)

Hotmail Corporation provides a free email service.  In order to access this service, you have to become a subscriber to Hotmail which requires you to assent to the terms of a Service Agreement.  The Terms of Service contained in this Agreement specifically prohibit subscribers from using Hotmail's services to send unsolicited commercial bulk e-mail or "spam," or to send obscene or pornographic messages.  Hotmail is entitled to terminate the account of any Hotmail subscriber who violates the Terms of Service.  The Terms of Service are presented in the form of a clickwrap agreement.

The defendant in this case was a spammer who had sent spam to thousands of email addresses and had set up numerous Hotmail accounts to facilitate their operations by using them as a "drop box" (i.e. an email account to which responses to their original messages were sent, but whose contents were never opened, read or responded to).  As a result of this, Hotmail was inundated with hundreds of thousands of misdirected responses, as well as complaints from Hotmail subscribers regarding the spam.  This seriously affected Hotmail's finite computer capacity, causing significant delay and costs in terms of increased personnel necessary to deal with the complaints and problems created by the spam.  Hotmail thus sought a preliminary injunction preventing the defendant from using its email services in the future.  The District Court granted this noting that 'the evidence supports a finding that the plaintiff will likely prevail on its breach of contract claim and that there are at least serious questions going to the merits of this claim'.

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