Stanford CIS

Company Not Liable for the Unauthorized Spam of an Independent Promoter Marketing the Company’s Products

By Stanford Center for Internet and Society on

In September 2002, the plaintiffs received unsolicited email messages advertising software products of Redmond Venture, Inc. (Redmond).  The plaintiffs brought suit against Redmond alleging violations of the Utah’s Unsolicited Commercial and Sexually Explicit Email Act (the Act) (repealed effective May 3, 2004) in the District Court of Utah.  Redmond filed a motion for summary judgment, arguing that the email messages were unauthorized and that Redmond, therefore, is not liable under the Act because it did not “cause” the email messages to be sent.  The district court granted summary judgment and denied the plaintiff’s subsequent motion for discovery under rule 56(f) of the Utah Rules of Civil Procedure.  The Court of Appeals of Utah affirmed.The plaintiffs alleged that the Act imposes liability upon Redmond for the unsolicited email messages sent on its behalf.  The Act requires that unsolicited commercial email include certain information in the subject line and body of the message.  A person “who sends or causes to be sent” a noncompliant message is subject to civil liability.  Redmond submitted an affidavit indicating that it did not directly market its products but rather entered into contracts with independent promoters.  These contracts contained an “Anti-Spam Agreement” forbidding the use of unsolicited email messages.  The court looked to the four corners of the contract to determine whether Redmond “caused” the emails to be sent.  The court found that the agreements unambiguously prohibited the promoters to send the messages.  Redmond, therefore, did not “cause” the emails to be sent and is not liable under the Act.  The court rejected plaintiffs argument that in evaluating Redmond’s motion for summary judgment, the court should infer that the Anti-Spam Agreements were a sham and that Redmond encouraged the promoters to send the illegal messages.  The court refused to make such a presumption because the plaintiffs presented no supporting evidence.

The plaintiffs also argued that the district court erred in denying their motion for discovery under rule 56(f) of the Utah Rules of Civil Procedure.  The court of appeals held that the denial was not an abuse of discretion because the plaintiffs failed to comply with the requirements of the rule.  The motion was not timely filed, and the plaintiffs failed to submit an affidavit explaining why further discovery was necessary.

Published in: Blog , Vol. 2, No. 3 , Packets