TUCSON, Ariz. - In a statement released to AVN Online on Thursday, Cyberheat made its first public comments on its recent case with the Department of Justice.
Last week, Cyberheat settled a lawsuit the Department of Justice filed against the company in 2005 on behalf of the Federal Trade Commission, pursuant to the CAN-SPAM Act. The settlement was approved by the U.S. District Court for the District of Arizona.
Cyberheat's outside counsel, Pete Wellborn and Bates Butler, said the settlement was an "outright victory for Cyberheat, especially since it was obtained without the enormous expense of money and time that a trial would have necessitated."
The case gave rise to one of the most important CAN-SPAM-related judicial opinions to date, with the court rejecting the Department of Justice's argument that affiliate-program operators should be liable for the acts of their sales-related independent contractors.
"The entire industry owes Cyberheat a vote of thanks for battling the government on this vitally important issue," Wellborn said.
Throughout the lawsuit, Cyberheat maintained that it had neither sent nor authorized the sending of unsolicited commercial email. Cyberheat presented evidence that the emails in question were sent by either an unrelated third-party seeking to cause trouble for Cyberheat and its affiliates or by a "rogue affiliate" acting without Cyberheat's knowledge or authorization and in direct violation of the affiliate's agreement with Cyberheat.
The settlement agreement does not constitute any admission of liability or culpability, Wellborn said.
"This aspect of the settlement agreement is one of many which distinguishes the Cyberheat resolution from the outcomes of similar cases brought by the DOJ and FTC," he said.
Under the settlement, Cyberheat will pay $413,000.
The settlement also yielded a narrow definition of "procure" that clears an affiliate-program operator of liability in instances in which an affiliate sends email that violates a "no commercial email" clause in the contract between the operator and affiliate.
The settlement also excluded a provision under which each Cyberheat affiliate and sub-affiliate would have been required to provide a copy of his or her driver's license.
"Because Cyberheat was already in compliance with CAN-SPAM and the related federal rules and regulations, the requirements of the settlement are a virtual non-issue to Cyberheat," Wellborn said. "The salient requirements of the final version of the settlement represent little more than prudent email-related procedures and policies that every company would do well to follow."
