$45M spam lawsuit against ValueClick underscores liability of advertisers

Menlo Park, Calif. - April 8, 2008 -- ValueClick, Inc. (NASDQ: VLCK) was served today with a lawsuit alleging violations of California anti-spam laws filed in California Superior Court, Los Angeles County, in Van Nuys, California. The lawsuit seeks injunctive relief and statutory damages of $45 million.

The suit alleges that the Defendants use spam email advertisements with fraudulent and misleading headers, often to randomly generated, harvested or stolen email addresses. Further, many of the emails use deceptive offers of "free" products that in reality impose costs and other obligations on the consumer, and are linked to lead generation for third party advertisers.

The international law firm of Steptoe & Johnson, LLP filed the suit on behalf of Hypertouch, Inc., a small Internet service provider (ISP) in Menlo Park, California, for flooding the ISP's customers with more than 45,000 unsolicited email advertisements. Co-defendants in the lawsuit include four of ValueClick's subsidiaries that also use spam with with fraudulent and misleading headers: E-Babylon, Inc., Hi-Speed Media, VC E-Commerce Solutions, Inc., WebClients, Inc., and along Kowabunga!, Inc. d/b/a PrimaryAds.com, for violation of California Business & Professions Code §§ 17529.5 and 17200 et seq.

Anyone who has information about the email marketing, lead generation and/or other business practices of ValueClick or its subsidiaries is invited to contact Hypertouch and its Steptoe legal team at valueclicklawsuit@hypertouch.com or via telephone at 650-328-6664.

Full details and ongoing updates are available at http://legal.hypertouch.com.

Updates will be posted below, as they occur:

• The complaint as filed California Superior Court, Los Angeles County, in Van Nuys, California, Case No. LC081000, under Judge Richard A. Adler:
  In HTML format;
  In PDF format;
  Exhibits: #1, #2, #3, #4, #5, #6, #7, #8, #9, #10, #11, #12
• Current case summary from Los Angeles Superior Court website:
• Case Updates:
  • 2011-02-10: The California Second Appellate District "On the court's own motion for rehearing is granted. A revised opinion is being filed with this order.". Appeals Case #B218603: Hypertouch v ValueClick (Microsoft Word Version)
  • 2011-01-18: The California Second Appellate District has reversed and remanded the trial court's dismissal in Hypertouch v. ValueClick, ruling no preemption of California anti-spam laws by the Federal CAN-SPAM Act, underscoring strick liability of advertisers for spam. Appeals Case #B218603: Hypertouch v ValueClick (Microsoft Word Version)
  • 2009-08-14: Steptoe & Johnson filed an appeal of the MSJ on behalf of Hypertouch. Note, while the case is under appeal it is improper to cite the MSJ ruling in California State courts.
  • 2009-06-16: Court ruled in favor of the Defendants, ruling that the CA law is preempted by the federal CAN-SPAM Act, requiring claims of "common law fraud."
  • A sample of the spam that ValueClick admitted sending is in Exhibit 2.
  To answer the obvious question: Yes, that spam admittedly sent by ValueClick really did have that hash buster text, taken from someone's blog.
  • 2008-04-30: Over 2000 new spam advertising MeziMedia's property ToseekA.com sent after February 20, 2008 have been identified. MeziMedia was acquired by ValueClick in 2007.
  • 2007-12-28: Letter sent to ValueClick by Hypertouch counsel. Never Answered
  • 2007-03-19: Complaint sent to ValueClick by Hypertouch about spam. Never Answered
• Other interesting documents, but not part of the case:
  • Other lawsuits filed against Defendants