SEATTLE - A federal judge has denied the government's request for a permanent injunction that would have imposed record-keeping and affiliate-oversight requirements on Impulse Media Group despite a jury verdict declaring the adult entertainment company did not violate the CAN-SPAM Act.
The ruling, issued Thursday by Judge Robert S. Lasnik of the U.S. District Court for the Western District of Washington, essentially said the government would not be allowed to make an end run around the legal system by asking the court to impose on Impulse Media Group terms similar to those the Federal Trade Commission imposed on other adult-industry companies that settled rather than face trial for alleged CAN-SPAM violations.
At issue was the government's assertion that although the jury found no evidence that Impulse Media Group violated CAN-SPAM, the company was likely to violate the anti-spam law and should be bound by the same terms under which the companies that settled now operate. The judge found the assertion baseless and the request insupportable.
"In its post-trial filings, [the government] argues that IMG's provision of marketing materials to PureCash, one of IMG's affiliates, for use in commercial electronic mail messages justifies the entry of the proposed injunctive order," Lasnik wrote in his decision. "PureCash did not send any of the 413 messages captured [and used as evidence at trial]. Nor has plaintiff produced evidence that PureCash sent any electronic mail messages using the materials provided by IMG or that such messages, if sent, violated the CAN-SPAM Act. Instead, plaintiff attempts to link the materials IMG provided to PureCash with five violative electronic mail messages sent by Imatrix, another IMG affiliate.
"The argument seems to be that IMG knew or must have known that materials provided to PureCash would make their way to Imatrix and that IMG therefore initiated the five messages sent by Imatrix. ... [T]he jury has already concluded that IMG did not initiate these five messages. Even if the court reweighs the evidence in light of plaintiff's post-trial submissions, the link between PureCash and Imatrix is so tenuous that it does not support a finding that IMG intentionally paid or induced Imatrix to transmit the electronic mail messages at issue."
As a result, Lasnik noted, he had no choice but to deny the request for an injunction. He also seemed peeved that the government made the request.
"[The government] has failed to show that IMG violated the [CAN-SPAM] Act of 2003," he wrote. "After listening to the evidence presented at trial, the jury found that IMG had not initiated any of the 413 commercial electronic mail messages at issue in this case. Despite ample warning that defendant intended to challenge every assumption on which the government's claims were based, plaintiff failed to provide evidence from which the tech-savvy jury could conclude that IMG had procured the transmission of violative messages. The court declines to second-guess or otherwise alter the jury's findings."
According to Impulse Media Group attorney Robert Apgood, the judge and jury made good decisions in the case. The decisions, he said, may have put a halt to ill-advised prosecutions of adult content producers for the actions of their affiliates.
"This was a proper and intellectually honest decision on the part of the court, wholly supported by the facts and the decision of the jury," he said.
Impulse Media Group is the parent company of SoulCash. It was one of seven adult companies targeted by the FTC in 2005 for alleged violations of the CAN-SPAM Act.
The other six companies - BangBros.com, MD Media (parent company of PimpRoll), APC Entertainment (parent company of Adult Players Club), sister companies Pure Marketing Solutions and Internet Matrix Technology, TJ Web Productions (parent company of Adult Paymaster) and Cyberheat (parent company of TopBucks) - paid fines ranging from $50,000 to $650,000 and must submit to increased FTC scrutiny as part of their settlement agreements.
Impulse Media Group was the only company to insist on adjudication. The company was found not guilty of wrongdoing in a trial that ended March 24 after three hours of jury deliberation.
According to Apgood, the jury's verdict hinged on Impulse Media Group's lack of intent to spam. Unlike copyright law, which imposes strict vicarious (or unintentional) liability on violators, CAN-SPAM requires an element of intent before violations can be said to occur.
