Company Owner Not Liable for Violations of Iowa Anti-Spam Law

This posting was written by Thomas A. Long, Editor of CCH Privacy Law in Marketing.

An individual who co-owned and operated a corporation that sent a large number of unsolicited commercial e-mails in an effort to generate leads for a mortgage broker could not be held jointly and severally liable to an Internet service provider for $236 million in statutory damages under Iowa's anti-spam statute, the U.S. Court of Appeals in St. Louis has decided.

A ruling of the federal district court in Davenport, Iowa (CCH Privacy Law in Marketing ¶60,257) was reversed and remanded.

The individual could not be held directly liable for her conduct because she did not use an interactive computer service to “initiate” the sending of spam, the court said.
She was not the person who hit the “send” button transmitting the spam. The “spamming operation” was conducted by another owner-operator of the company. The individual's acting as a liaison between her corporation and mortgage-lead purchasers was not sufficient for liability.

The statute required not only that she initiated the sending of spam, but that she did so via an interactive computer service. There was no evidence that the individual ever used an interactive computer service.

The statute did not create liability for conspiracy or aiding and abetting. The individual could not be held liable under common-law theories of conspiracy and aiding and abetting because the ISP did not establish that it had sustained the requisite actual damages, according to the court.

The decision is Kramer v. Perez, CCH Privacy Law in Marketing ¶60,440.