CAN-SPAM Act of 2003 - Civil Enforcement

Civil Enforcement

In July 2005, the Federal Trade Commission lodged civil CAN-SPAM complaints against nine companies alleging that they were responsible for spam emails that had been sent by them or by their affiliates. Eight of the nine companies, Cyberheat of Tucson, Arizona, APC Entertainment, Inc., of Davie, Florida, MD Media, Inc., of Bingham Farms, Michigan, Pure Marketing Solutions, LLC, of Tampa, Florida, TJ Web Productions, LLC, of Tampa, Florida, and BangBros.com, Inc., RK Netmedia, Inc., and OX Ideas, Inc., LLC, of Miami, Florida entered into stipulated consent decrees. Impulse Media Group, Inc. of Seattle, Washington, represented by CarpeLaw PLLC, chose to defend itself against the allegations made by the FTC.

The Department of Justice asserted that the CAN-SPAM statute imposed strict-liability on producers such as Impulse Media for the actions of its non-agent, independent-contractor affiliates. However, the two courts to consider that argument rejected the DOJ's contention. In March 2008 the remaining defendant, Impulse Media Group, went to trial. At trial, it was determined that IMG's Affiliate Agreement specifically prohibited spam bulk-email and that if an affiliate violated that agreement, it would be terminated from the program. In fact, several affiliates had been terminated for that very reason. After a 2½ day trial, the jury retired to determine whether Impulse Media should be held liable for the bad acts of its affiliates. Three and one-half hours later, the jury returned with a verdict that IMG was not liable and that the emails were the fault of the affiliates. To-date, the FTC has not prevailed at trial in any of its civil CAN-SPAM claims.

In March 2006, the FTC obtained its largest settlement to date - a $900,000 consent decree against Jumpstart Technologies, LLC for numerous alleged violations of the CAN-SPAM act.