August 20, 2005
2004 Case on Advertiser Liability for Spam
Fenn v. Redmond Venture, Inc., 2004 UT App 355 (Utah Ct. App. Oct. 15, 2004).
I was digging through my stack and stumbled across this case from last year. It seems apropos to a running theme on this blog about advertiser liability for adware, so I thought it was worth blogging about even at this late date.
Plaintiff sued for violating Utah's anti-spam law, which applies to a person who "sends or causes to be sent" a spam. Sec. 13-26-103. Given the statute's wording, the state (as it has the right to do) has made it clear that advertisers could be liable for spam sent by others.
However, the defendants win summary judgment. Why? The court points to the advertiser's "Anti-Spam Agreement," which clearly prohibits the marketer from sending spam. Because of the restrictions in the Anti-Spam Agreement, the court accepts the defendant's argument that this agreement means that the advertiser did not "cause" the marketer to spam. In other words, by prohibiting spam in the advertising contract, the advertiser gets let off the hook under the anti-spam statute.
Can this result be correct? The court notes that the plaintiffs did not introduce any evidence that the defendants "encouraged or required" its marketer to send spam or that the anti-spam agreement was otherwise a "sham." So perhaps the plaintiffs could have avoided summary judgment if they could have adduced evicence of some willful blindness.
Otherwise, this case--if followed by other courts--seems to suggest that anti-spam/anti-adware advocates who want to hold advertisers liable for the spam/adware face an uphill battle. Even if a statute expressly creates advertiser liability, a simple (and perhaps rarely-enforced) restriction in the contract would cut off liability for the downstream activity.
Frankly, this seems like an all-too-simple way for advertisers to avoid liability and defeat the statutory intent, so I'm skeptical that every court will reach the same result. But I'm not aware of any contrary case law, so for now this is the leading precedent on the topic.
Finally, it should go without saying that, if I were advising advertisers, I would strongly recommend that they include non-negotiable anti-spam and anti-illegal-adware provisions in their advertising contracts.