Utah Expands Reach of CAN-SPAM

ZooBuh is a Utah-based Internet access service which provides email, chat, and blogging services to approximately 35,000 customers worldwide and is one of the more recent entrants to the anti-spam litigation club.

In 2011 it filed several actions under the CAN-SPAM Act in Utah federal court against Better Broadcasting, LLC and other defendants.  [Full disclosure – I represented one of the defendants dismissed from this case]  ZooBuh sought default judgment and won.

The Utah district court made three key findings:

(1) Zoobuh and Standing

It concluded that Zoobuh’s 3-man operation was a bona fide ISP that had been adversely affected under CAN-SPAM.  The court cites ZooBuh’s efforts to

identify the source, examine the transmission information,examine and analyze the header information, take efforts to determine how and why the specificemails were able to circumvent and/or bypass preliminary filtering techniques, and to ultimately attempt to make the emails stop.

This, however, is more consistent with the operation of a plaintiff mill than that of a standard ISP.

(2) Trancos and Private Domain Registrations

It applied the California Court of Appeal’s Trancos decision to conclude that use of a privacy protect domains for sending email constitutes deceptive header information.

[W]here an email contains a generic “from” name and is sent from a privacy-protected domain name, such that the recipientcannot identify the sender from the “from” name or the publicly available WHOIS information,such is “materially misleading” and is a violation of 15 U.S.C. § 7704(a)(1)(C).

(3) Are Disclosures in Image Files Void

A determination of whether an email contains a Content Violation turns on theinterpretation of the term “clear and conspicuous.” In a commercial communication through anelectronic medium “clear and conspicuous” is defined as follows: the “disclosure must beunavoidable . . . [and] [a]ny visual message shall be of a size and shade, with a degree of contrast  to the background against which it appears, and shall appear on the screen for a duration and in alocation sufficiently noticeable for an ordinary consumer to read and comprehend it.”  F.T.C. v. Affiliate Strategies, Inc, No. 5:09-CV-04104-JAR-KGS, 2011 WL 3300097, *2 (D. Kan.Aug. 1,2011).

The question presented to the Court in this case is whether Required Content provided inthe emails through a remotely hosted image is clearly and conspicuously displayed. This Court determines that it is not.

The flaw with this conclusion is that it permits liability to rest not on the actual content of the message but on how a recipient’s anti-theft software elects to display it.

The opinion is below.