Demonstrating the broad reach of U.S. anti-spam laws, a federal judge in Iowa has awarded an internet service provider (ISP) more than $1 billion in damages against three email spammers. The judgment was entered by default against these three companies because they did not contest the lawsuit. The case continues against nearly 300 other spammers who allegedly deluged the ISP's inbound mail server with up to 10 million spam emails a day. The lawsuit was filed under an Iowa anti-spam law that permits damages of $10 per spam email, and under the federal RICO statute, which permitted the damages to be tripled.
This award highlights the significant risk of liability that businesses face when they engage in e-mail marketing through companies that do not strictly comply with U.S. anti-spam laws at the state and federal levels. The billion-dollar level is a high-water mark for spam judgments; now that this threshold has been crossed, other courts may be less reluctant to apply anti-spam laws to their full punitive effect. Knowledge of these laws, and effective compliance with their provisions, has never been more important.