January 05, 2011
Lawyer-Spam Plaintiff Loses in the Sixth Circuit Over Allegedly Misleading DISH Network Emails -- Ferron v. Echostar
[Post by Venkat Balasubramani]
Ferron v. Echostar Satellite LLC, 09-4407 (6th Cir.; Dec. 28, 2010)
Ferron brought claims against Dish Network and its retail and marketing partners alleging that he had been deceived by the terms of email offers sent by defendants. According to defendants, Ferron's strategy was to actually sign up to receive emails which he claimed were deceptive. However, prior to receiving any emails, he allegedly called to verify the terms of Dish Network's service:
according to defendants, Ferron purposefully provided his email address to the approximately twelve satelitte dish websites from which he later received advertisements. Before he provided his email address to the websites, Ferron contacted Dish network call centers to obtain information about the terms and conditions of various Dish Network products and services. Accordingly, Ferron was aware of the terms allegedly excluded from the deceptive emails before he received them.
The trial court granted summary judgment, and the Sixth Circuit affirms in an unpublished opinion.
Ohio Consumer Protection Statute: Ferron claimed that he did not need to have been deceived personally to bring a claim under the OCSPA - it was sufficient that the emails contained objectively misleading information. The court disagrees. Citing overwhelming precedent in defendants' favor, the court concludes that a plaintiff must have been actually deceived in order to bring a claim under the OCSPA (i.e., individual plaintiffs cannot take the private attorney general route). Although Ferron argued that a ruling to this effect would foreclose legitimate claims, this argument didn't get much traction with the court:
Simply put, the only persons foreclosed by today's ruling are individuals who solicit emails from an advertiser after having researched and discovered the additional terms the advertisement allegedly excludes.
The Publisher Exception to the OCSPA: The Sixth Circuit also affirmed the trial court's ruling that one of the defendants (Hydra) who was a mere intermediary was entitled to the "publisher exception" to the OCSPA. As an initial matter, the court concludes that Hydra "was not involved in the creation of the . . . advertisements," and thus was precisely the type of entity who could take advantage of the publisher exception. Ferron argued that Hydra was not the type of publisher the legislature intended to fit within the exception, because Hydra received a referral fee each time a customer signed up (instead of a flat fee per ad, or a monthly fee). The court rejects this argument, reasoning that regardless of the fee structure, the publisher always has an interest in ensuring that customers respond to advertisements. Ferron also argued Hydra should not be entitled to take advantage of the publisher exception with respect to any ads transmitted by Hydra after the filing of the lawsuit. The court rejects this argument as well, since the mere filing of Ferron's complaint is not indicative of a violation of the statute (just that Ferron alleged that defendants violated the statute).
Request for Sanctions: Ferron requested sanctions on the basis that defendants did not maintain the ads in their native form (i.e., he could not click through and access the underlying links and graphics). The Sixth Circuit affirms the district court's rejection of Ferron's request for sanctions, noting that Ferron himself had the emails in question and should have saved them.
The court's description of the facts makes me think a section 230 defense may have been available to Hydra, not that it ended up needing it anyway.
The bigger takeaway? When it comes to spam litigation at least, courts seem more than able to ferret out what they see as unworthy claims. This is one of a long line of losses by plaintiffs who seem to have made it a part of their business to seek out and sue people to send them unsolicited email (see Gordon v Virtumundo, Mummagraphics, etc.).
A couple of days after the Sixth Circuit issued its opinion in this case, it issued its ruling in Charvat v. Echostar, a case where Ferron was counsel for the plaintiff. This case involved alleged do-not-call violations against Echostar and third parties brought by Philip Charvat, whom the court describes as not being "shy in taking on the role of private attorney general under the Telephone Consumer Protection Act" and listed him as a plaintiff in 13 TCPA lawsuits. The Sixth Circuit delves into the thorny jurisdictional issues, but ultimately ends up punting to the FCC on the interesting issue of whether Echostar could be liable for TCPA-violating calls made by third party independent contractors/affiliates. The FCC's amicus brief in this case suggests that it has an expansive (and perhaps troubling) view of such imputed liability.
Coverage of an earlier Ferron lawsuit: "Q1 2009 CAN-SPAM Quick Recaps"