• by Wendy Davis  @wendyndavis, December 4, 2009

A federal appellate court has upheld an order dismissing an Internet service provider's spam lawsuit against performance marketing company Epic Advertising.

The 9th Circuit Court of Appeals ruled on Wednesday that the Internet service provider ASIS could not proceed under the federal CAN-SPAM law because it hadn't suffered economic damages as a result of emails allegedly sent by an Epic affiliate.

"The mere cost of carrying spam emails over Plaintiff's facilities does not constitute a harm," the appeals court wrote. "While Plaintiff argues that employee time was spent on spam-related issues, Plaintiff concedes that it has no records detailing employee time."

The 9th Circuit also found that Epic, formerly known as AzoogleAds, wasn't liable under a separate California state law because it had not sent the contested emails itself.

The ruling upholds a dismissal order issued last year by U.S. Magistrate Joseph Spero in San Francisco.

ASIS had argued that Epic/AzoogleAds violated CAN-SPAM by using an affiliate that allegedly arranged for more than 10,000 email ads to be sent.

Epic raised several defenses, including that the messages at issue were sent to addresses allegedly obtained by another company, Seamless Media, which had allegedly obtained a lead from another party, which in turn had obtained the lead from a spammer. Epic had a contract with Seamless Media, but said it didn't know that Seamless allegedly indirectly obtained addresses from spammers. AzoogleAds also disputed that the vast majority of the alleged spam reached recipients.