Summary Judgment Denied in Impulse Media Group Spam Case

Summary Judgment Denied in Impulse Media Group Spam Case
Steve Javors
SEATTLE — U.S. District Court Judge Robert S. Lasnik has denied a joint motion for summary judgment in the case of U.S. vs. Impulse Media Group, parent company of the SoulCash affiliate program. Impulse was charged with violating the CAN-SPAM Act and the Adult Labeling Rule.

While the U.S does not allege that Impulse itself originated or transmitted spam, it argues that the company “procured the transmission of improper emails.” Under the act, parties procure the transmission of an email message when they “intentionally pay or provide other consideration to, or induce, another person to initiate such a message on one’s behalf.”

Impulse’s culpability centers on the word “intentionally” in the definition of “procure” contained in the law. It argues that it cannot be held liable because the U.S. has not offered evidence that the company intended its affiliates to send spam, which is a violation of SoulCash’s terms of service.

The U.S. counters that Impulse Media Group is liable for injunctive relief regardless of its knowledge because Congress explicitly chose to impose such liability in the law. The court agreed with the government on this point (but still has to prove intent), saying that Impulse Media Group does not need to be aware of its affiliates’ violation of CAN-SPAM to be held liable for injunctive relief.

“However, given the inclusion and context of the word ‘intentionally’ in the act’s definition of ‘procure’ the Court cannot conclude that CAN-SPAM triggers liability without a threshold showing that the defendant intended to pay or induce another to send commercial email,” Lasnik said in the motion denying summary judgment. “While the scope of CAN-SPAM is broad, especially with regard to injunctive relief, its reach is not endless.”

The court rejected the U.S.’s effort to characterize the CAN-SPAM Act as a strict liability statute that would penalize “anyone who may have induced another party to send violative emails, regardless of whether they intended the party to send commercial emails in the first place. This interpretation of the act would render the word ‘intentionally’ in the act’s definition of ‘procure’ meaningless.”

Ultimately the court must decide on Impulse Media Group’s intent. Lasnik questioned the material facts of the company’s intent, thus rejecting the motions for summary judgment.

Impulse Media Group’s attorney Robert Apgood told XBIZ that he expects a scheduling order from the judge, which will delineate trial dates.

“The judge concluded that there wasn’t enough evidence one way or the other to determine intent,” Apgood said. “The abuse [on behalf of] affiliates does not implicate Impulse Media Group’s liability in this case. The marketing material the company provides was intended for webmasters to use, not emailers. I’m actually pleased by the order because it answered certain questions very clearly; some of the government’s arguments were untenable to begin with.”