Hitmetrix - User behavior analytics & recording

Sprint Lawsuit Is Tip of the Iceberg in Utah

Lawyers who filed a well-publicized and recently dismissed anti-spam lawsuit against Sprint in Utah have more than 500 similar cases pending in the same court.

Moreover, lawyers for many of the defendants claim the plaintiffs are simply trying to get settlement money from deep-pocketed companies rather than fight unsolicited bulk commercial e-mail.

In a letter obtained by DM News concerning one of the suits, plaintiffs' law firm Nelson, Snuffer, Dahle & Poulsen PC, Sandy, UT, offered to settle with defendant Traffix Inc. for $6,500. Hundreds of other defendants have received similar letters.

The suits come from two small law firms acting in cooperation. The second is Riddle & Associates PC, a Draper, UT, collections agency.

Utah's anti-spam law, which took effect May 6, 2002, requires senders of unsolicited commercial e-mail to include in their mailings a correct name and address, a valid return address and domain, and “ADV:” to be the leading four characters of the e-mails' subject lines. Violators are subject to penalties of $10 per e-mail, up to $25,000 per day.

The law is modeled after similar legislation in Washington, which was upheld in a recent decision against an Oregon man. Utah's law exempts e-mail from senders with whom the recipient has a pre-existing business relationship.

Defense lawyers claim Utah's anti-spam lawsuits are a classic case of unintended consequences.

“Nobody should be sending unsolicited pornography. Nobody should be sending misleading information,” said Paul Drecksel, an attorney with Parr Waddoups Brown Gee & Loveless, Salt Lake City. The firm represents about 50 companies in Utah's anti-spam lawsuits. “The downfall of this statute, and every other [anti-spam] statute in every other state, is that plaintiffs' lawyers are not interested in pursuing those cases because they know there is no money to be made. The money is in pursuing well-known, reputable companies that are trying and usually succeeding in sending e-mails only to people who have asked for them.”

Among the high-profile companies being sued in Utah under its anti-spam statute are Columbia House, eBay, FTD, Office Depot, Bell South, Princess Cruises and Publishers Clearing House.

However, Jesse Riddle, president of Riddle and Associates, denied that the lawsuits are a cynical money grab.

“I've got five kids, and I gave my oldest three a computer. Three weeks later, I go to find out who they're e-mailing, if anybody, and it's full of spam, and it's full of spam that's offensive,” Riddle said. “I've been out of town for two weeks. I have 400 spams in my traveling e-mail address. … I don't have a relationship with probably 385 of those people.”

Riddle said his firm has filed 803 lawsuits and that 550 are still active.

“My feeling was the only way to do this was to do it in a massive way where people would know that lawsuits were being filed in Utah, and that they ought to look at and comply with the statute,” he said.

So far, 50 to 60 defendants have settled, and 60 to 70 suits were dropped because the defendant presented a defensible position, Riddle said.

As for the cash-grab charge from defense lawyers, Riddle said, about 10 of those who presented defensible positions, including Symantec Corp., also offered to settle, but the plaintiffs declined and dropped the suits anyway.

“If this was a cash grab, we would have grabbed the cash,” he said.

The Sprint case was the first test of Utah's anti-spam law, and may set precedent.

According to the court's decision, neither side disputes that plaintiff Terry Gillman on May 14 opted out of online marketing firm GroupLotto's e-mail list. GroupLotto removed him, the decision said, but Gillman's e-mail address was not removed from a “queue” of e-mails advertising Sprint's Nickel Nights. As a result, on May 16, 2002, Gillman received an e-mail from GroupLotto advertising Sprint's Nickel Nights, and he subsequently sued.

Judge Denise Posse Lindberg of the Third Judicial Court in and for Salt Lake County — a court in which she is the only judge — dismissed the case under Utah's anti-spam law's prior-business-relationship exemption. Moreover, she dismissed it extremely broadly.

“Because of Gillman's pre-existing relationship with GroupLotto, the e-mail Gillman received was, by definition, not unsolicited,” she wrote.

Given that Lindberg used a pre-existing business relationship with GroupLotto to dismiss the Sprint case, the exemption can apparently be transferred to list renters.

“To be sure, this reading of the statutory language excludes from the act's protection a potentially [sizable] group of people,” Lindberg wrote. “Given the unqualified nature of the act's language, the exclusion precludes any challenges under the act that are brought by commercial e-mail recipients who have had any prior business relationship with the sender.”

Meanwhile, Steve Richter, partner at Goodman and Richter LLP, San Diego, said he is working with the Utah law's sponsor, Rep. Patrice Arent, to reword it. Richter represents 24 defendants in Utah's anti-spam suits.

“You can't show by passing this statute that there has been one less UCE [unsolicited commercial e-mail] sent into Utah, but what you can show is that there are two small law firms that have hit the mother lode,” he said. “They are demanding $6,500, of which $10 goes to their client.”

Riddle said clients get more than $10, but would not say how the money is distributed.

Arent said she agreed to rewording of the law and that the revision passed through committee, but a March deadline passed before it could be voted into law. Arent will reintroduce revisions to the law in the next legislative session, which will be either next January, when Utah's constitution requires one, or when the governor calls the next special session, which can happen any time, she said.

The revisions clarify “pre-existing relationship” and call for a “reasonable” time after someone opts out of an e-mail list before a company is considered to be violating Utah's anti-spam law, Arent said.

“We never intended to go after a situation where I purchase something from Amazon.com, and they start sending me something,” she said. “There is a relationship there.”

More revisions may be introduced depending on what happens in litigation.

“As we get opinions out of the court, there are probably some things I'll have to clarify before next year,” Arent said.

Richter said he intends to ask Lindberg to dismiss all of the anti-spam cases in her court en masse on the same grounds as the Sprint dismissal.

Riddle said that given Lindberg's decision, his firm may switch tactics. Before filing new lawsuits, he said, his firm may send potential defendants letters giving them 30 days to show they have a pre-existing business relationship.

“We're going to take a bit more of a precaution before we file a lawsuit,” Riddle said. “We want to make sure that when we file a lawsuit that the suits are meritorious.”

Related Posts