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Lawsuit from Weenie Land Revived

1/25/11

By Ken Magill

A California court of appeals last week overturned a judgment ValueClick won against serial anti-spam litigant Joe Wagner and his firm Hypertouch in 2009.

As a result, this nuisance lawsuit will continue to tie up a California court while doing nothing more in the fight against spam than making Wagner feel good about himself.

And much of this whole idiotic episode hinges on promotional use of the word “free.” Unbelievable.

First, some background:

Internet service provider Hypertouch—and the term “Internet service provider” is used loosely here—sued ValueClick, its subsidiaries and co-defendant PrimaryAds in 2008, alleging they sent Hypertouch’s customers 45,000 e-mails containing false claims.

It is unclear how much, if any, of those messages were unsolicited. Wagner admitted in court he fed dummy addresses to promotional Web sites to test them.

According to court papers, 43,600 of the allegedly deceptive e-mails were sent to “dummy,” or “test” accounts not used by Hypertouch customers.

ValueClick's lawyers argued that Hypertouch's California-state-law claims were preempted by the federal Can-Spam Act because Hypertouch had not demonstrated fraud or deception. Superior Court judge Richard Adler agreed.

The Can Spam Act supersedes state email laws except in cases of fraud and deception.

“Because plaintiffs cannot establish any of the traditional fraud elements for even a single asserted email, Can-Spam's preemption clause mandates dismissal of [the] claims," Adler wrote in his opinion. “Plaintiff has neither adduced evidence nor even attempted to show that any elements of fraud exist in this case.”

But Justice Laurie Zelon, writing for the Court of Appeals last week, said the falsity-or-deception exemption in Can Spam is broader than Adler ruled.

The Can-Spam Act’s language, Zelon wrote, doesn’t indicate that Congress intended to limit the exemption to common-law fraud, but rather that it intended to allow states to regulate deceptive practices as the Federal Trade Commission does.

Okay, so it all comes down to alleged deceptive practices. So let’s take a look at the allegations, shall we?

“Hypertouch identified numerous emails that contain subject lines purportedly offering the recipient free products or merchandise,” wrote Judge Zelon. “Representative subject lines include: ‘Get a FREE Golf Retreat to 1 of 10 destinations;’ ‘Let us know your opinion and win a free gift card’; ‘Do you think Hillary will win? Participate now for a Visa gift card;’ ‘which would you choose? win a free gift card for letting us know.’ Hypertouch contends that, in fact, in order to procure such items the recipient was required to spend money or sign up for another offer of products or services promoted on Respondents’ Web sites.

“In support of these allegations, Hypertouch’s President provided deposition testimony that, after receiving some of these emails, he clicked on a link that took him to a promotion page demonstrating that ‘in order to receive [the advertised free item] you have to … purchase from one these offers … I do not recall ever seeing an offer for an incentive award … that did not require a purchase or other obligation.’ In addition, an employee of a ValueClick subsidiary stated that, in order to obtain the advertised ‘gifts,’ the recipient of the email was typically required to participate in additional offers.”

Got that?

Wagner went … to … friggin’ … court over some email promotions using the word “free” that apparently had some strings attached.

Duh, gee George, you mean you couldn’t just click on an email and get a free vacation?

Under Wagner’s—and now Judge Zelon’s—tortured logic, so-called free-shipping promotions should be actionable. And no I’m not being absurd. There is no such thing as free shipping. Delivery costs are simply worked into the margins.

Moreover, an email subject line isn’t long enough to spell out the conditions of a “free” offer. So Wagner’s implied standard is impossible to meet.

In Wired magazine in 2005, Wagner and his firm were admiringly referred to as “The Anti-Spam Litigation Shop.”

Folks, there’s nothing to admire in the actions of Joe Wagner and Hypertouch. His efforts waste thousands of labor hours and accomplish little more than giving him an unearned sense of self satisfaction.

As I write this, the first five messages in my spam folder are “Someone has sent you a dating site membership” from “Best New Adults Only Dat,” , “Hi hi my friend best discount” from “PharmacyUsa Viagra” , “INVESTMENT” from”Sadid ‘Abid Halabi” , “You Have Qualified to get a website” from “Sarah Hunter,” and “Impotence pills such as Viagra, Buy Cialis Online” from “Porsha Verda.”

It’s a safe bet that we’ll never hear about Wagner suing the senders of the above messages. Why? Because he can’t find them. Serial anti-spam litigants target the companies they target because they can locate them.

And if you can find them and serve them with court papers, they’re not the problem.

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