Federal Judge Cans Spam Suit Against Epic Advertising
- by Wendy Davis @wendyndavis, May 21, 2008
A federal district court in San Francisco found that Epic was not responsible for the alleged spam because it neither "procured" the e-mails or knew that its affiliate would hire another company that spammed people. U.S. Magistrate Joseph Spero issued a sealed order dismissing the case in late April. A redacted version of the ruling was made public earlier this month.
The case arose from a dispute between Internet service provider ASIS and the former AzoogleAds. ASIS sued AzoogleAds for violating federal and state anti-spam laws, alleging that AzoogleAds was responsible for sending unsolicited e-mail ads with misleading headers.
AzoogleAds raised several defenses, including that ASIS had not proved that AzoogleAds procured the e-mails in question. The specific messages that were the subject of the lawsuit were sent to addresses allegedly obtained by Seamless Media, which had allegedly obtained a lead from another party, which in turn had obtained the lead from a spammer. AzoogleAds' contract was with Seamless Media, but the company didn't know that Seamless allegedly indirectly obtained addresses from spammers. AzoogleAds also disputed that the vast majority of the alleged spam reached recipients.
Spero found that AzoogleAds was not responsible for the e-mail ads, holding that the company had not consciously avoided knowledge that would have alerted it to Seamless Media's alleged business practices. "Although ASIS has pointed to significant evidence that Azoogle, during the relevant time period, did little to investigate the third party vendors it engaged, there is no evidence in the record from which a jury could conclude that Azoogle, in contracting with Seamless Media, made a deliberate choice not to know that Seamless Media would engage third parties to send out spam on Azoogle's behalf," Spero wrote.
Spero also found that ASIS did not have standing to sue AzoogleAds because ASIS had not been harmed by the alleged spam.
ASIS plans to appeal.
Don Mathis, president of Epic/AzoogleAds, said the decision shows that companies that use affiliates can protect themselves from lawsuits without resorting to extraordinary measures. "The message here is, as a network, you need to put commercially reasonable steps in place to police your network," he said. Epic currently spends about 4% to 5% of revenue on enforcement measures aimed at affiliates.
Last year, in a separate case, AzoogleAds agreed to pay $1 million to settle an investigation by the Florida Attorney General into whether ads offering "free" ringtones tricked people into signing up for paid ringtone subscriptions.
