e360 sues a vendor


As if suing themselves out of business by going after Comcast and Spamhaus weren’t enough, e360 is now suing Choicepoint for breach of contract and CAN SPAM violations. As usual, Mickey has all the documents (complaint and answer) up at SpamSuite.
This may actually be an interesting case. On the surface it is a contractual dispute. Choicepoint sold e360 40,000,000 data records containing contact information including email addresses, snail mail addresses and phone numbers. Some of the records were marked “I” meaning they could be used for email. Some of the records were marked “O” meaning they could not be used for email.
Despite these terms being reasonably well defined in the contract, e360 sent email to addresses in records marked “O.” Some of those addresses resulted in e360 being sued by recipients. During the course of the suit, e360 contacted Choicepoint and asked for indemnification. Choicepoint refused for a number of reasons, including the fact that Choicepoint told e360 the addresses were not for mailing. In response, e360 filed suit.
The interesting and relevant part of this case is the CAN SPAM violation that e360 alleges.

9. In her September 10, 2008, letter, Ms. Meredith Sidewater on behalf of ChoicePoint declined to indemnify e360 for the expenses and damages incurred by e360 in the three (3) disputes. See Letter attached hereto as Exhibit B. She claimed four (4) of the six (6) emails at issue in the disputes were “Optin Status of O,” which she contended means that the records were approved only for direct mail and not email.
10. If Ms. Sidewater’s assertion is true, this assertion constitutes an admission of violation of the CAN-SPAM Act of 2003, which provides that if a recipient requests not to receive commercial email, then it is unlawful for the sender to release, sell, or transfer such person’s email address to a third party. Thus, ChoicePoint admits that it breached ¶ 12(a)(ii) of the Agreement. But for this breach, e360 would not have sent any emails to the complainants and would not have been sued.

CAN SPAM does indeed state that once someone has opted out from email that the address cannot be sold, transferred, leased for any purpose. If e360 prevails in this case it will have far reaching implications for a lot of senders and data brokers. I’ll be watching this one closely.

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  • Two problems with e360’s CAN-SPAM violation argument. First, just because the status of the email addresses was that they were approved for directmail only, does not mean that those people opted-out per CAN-SPAM. It could very well be the case that the consents that those consumers provided at the point their data was collected was limited to direct mail. Hence, the “direct mail” only restriction, not necessarily an opt-out request. Second, Choicepoint was just a data vendor, not an advertiser, so there’s no requirement under CAN-SPAM that Choicepoint maintain an opt-out file. CAN-SPAM only requires that a commercial email contain a methid to opt-out of receiving future commercial emails from the “sender,” which, to anyone who’s actually read the definitions section of the Act, is the advertiser, not the list owner nor the mailer. So, only the company whose products/services/website is featured in an email needs to compile an opt-out list/file. Finally, and this isn’t a CAN-SPAM issue, but…uhh…causation, dude…

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