E-mail Advertisement Service Provider Finds Safe Harbor Protection under Ohio’s Consumer Protection Law

Author: Yuki Ide

The Plaintiff John Ferron is an Ohio attorney. Ferron visited satellite dish websites and purposely provided his email address to those websites. Over a six-month period, he received about 45,000 unsolicited email advertisements. He sued multiple related parties who provide these unsolicited emails, alleging violations of the Ohio Consumer Sales Practices Act (CSPA) and the Electronic Mail Advertising Act (EMAA). Defendant Hydra Media Group (Hydra), provides services to connect satellite dish service retailers with companies that advertise by email. Hydra stores the advertisements created by the retailers on its database. Other companies access Hydra's database and send the advertisements to consumers by email. Hydra moved for summary judgment.

First, Hydra argued that it only disseminates information within the meaning of the CSPA, and therefore it is exempt from liability. Ferron contended that Hydra is not exempt because unlike the traditional publisher which receives a flat fee for an advertisement in its newspaper or magazine, Hydra is paid for each consumer who contacted the satellite dish service retailers as a result of the email advertisements sent by third parties. The court rejected Ferron’s claims, stating that nothing in the text of Ohio’s law suggests that the applicability of the exemption turns on how the publisher is paid. Hydra did not create or send the email advertisements, and is therefore merely a disseminator of information. Moreover, although Ferron argued that Hydra cannot satisfy the CPSA’s statutory requirement of "without knowledge," the court defined that knowledge of Ferron’s complaint does not equate to knowledge of violation of the CSPA. Therefore, the court found as a matter of law that Hydra is only a disseminator of information without knowledge of any violation of the CSPA.

Secondly, Hydra insisted that it does not satisfy Ferron’s EMAA claims because it did not transmit, or cause to be transmitted any emails to him. Ferron argued that Hydra "caused" emails to be sent to him and was therefore liable under the EMAA. Since the EMAA does not define the term "causes to be transmitted," the Court found that the EMAA’s cause requirement is subject to the same broad interpretation the Sixth Circuit has given the same phrase in the federal criminal wire fraud act. The court determined that Hydra’s involvement in the transmission of the emails Ferron received was limited based on the facts that Hydra did not create the advertisements or send the emails, and that Hydra stored advertisements on its website for use by others who would send the advertisements to consumers by email. However, the court declined Hydra’s motion for summary judgment on this count because there was an issue of fact as to whether Hydra "caused" the transmission of the email because Hydra could have reasonably foreseen the transmission.

Hydra further argued that the federal CAN-SPAM Act preempts Ferron’s EMAA claims. According to the CAN-SPAM Act’s preemption provision, it preempts state laws that regulate the use of electronic mail to send commercial messages, except to the extent that any such statute or regulation prohibits falsity or deception. The court, considering the scope of the preemption measure, agreed with Omega World Travel, Inc v. Mummagraphics and reasoned that "permitting states to enforce laws which impose liability for email advertisements which contain only inaccuracies would thwart the goal of Congress in enacting the CAN-SPAM Act". In this case, the court implied because of the fraudulent basis of the claim, that an EMAA claim needs to be plead with specificity and Ferron’s claims were insufficiently pled.

John W. Ferron v Echostar Satellite, LLC

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