Cyberheat, Inc., ran sexually explicit websites for consenting adults. It hired other companies, called affiliates, to drive potential subscribers to its sites. The affiliates were paid a fee for each subscriber they generated. The contract that Cyberheat signed with its affiliates explicitly prohibited them from violating the CAN-SPAM Act. It also discouraged email promotions. However, Cyberheat did not investigate its affiliates, nor did it actively monitor their compliance. Cyberheat provided affiliates with a hyperlink to use in emails that would link them directly to the sexually explicit site being advertised. The FTC alleged that ten Cyberheat affiliates violated CAN-SPAM by sending 642 unwelcome, sexually explicit spam emails for which they were paid $209,120 in commissions. In some cases, the pornographic emails had fake subject lines, when in fact the email contained pornographic images. Cyberheat received about 400 complaints, which it ignored or handled belatedly. Oftentimes the affiliate was allowed to continue for more than one year or was never terminated. The Justice Department filed suit seeking civil penalties of up to $11,000 for each violation and an injunction to prohibit further violations. Both the FTC and Cyberheat filed motions for summary judgment. You be the Judge: Did Cyberheat violate the CAN-SPAM Act? Holding: Possibly, the case must go to trial. According to the court, the CAN-SPAM Act was not enacted in a vacuum. The purpose of the Act is to protect those who do not want to view sexually explicit material. Anyone who supplies this pornographic material should be held to a high standard – they must be responsible for ensuring that it is not sent to innocent and unwilling recipients. Cyberheat could have foreseen that when it supplied pornographic materials to its affiliates, violations of the Act would result. It might not be fair to hold Cyberheat responsible for an accidental or mistaken violation, immediately attended to and corrected. But that is not what happened here – Cyberheat kept paying any number of violators. It cannot insulate itself from any liability for the actions of the affiliates on its ultimate behalf and for its financial benefit purely by putting on blinders. It has a duty that it can only delegate at its own peril. Required: a. Did Cyberheat know its affiliates were sending sexually explicit emails? b. But, Cyberheat told its affiliates specifically not to violate the Act and discouraged them from using email. How can Cyberheat, then, be responsible for its affiliates violations?
> David Kline was the station manager and sales manager for Reading Radio, Inc., a/k/a WAGO Radio. As manager, Kline was in charge of supervising the station’s sales representatives. Molly Fink and Isaac Ulrich, two of WAGO’s top sales representatives, had
> Amaani Lyle was a comedy writers’ assistant who worked on the production of the television show Friends. The show revolved around a group of young, sexually active adults, featured adult-oriented sexual humor, and typically relied on sexual language and
> Teresa Harris was a manager at Forklift Systems; Charles Hardy was its president. Hardy frequently made inappropriate sexual comments to Harris and other women at the company. For example, he said to Harris, in the presence of others, "You're a woman, wh
> Courtney Gatter was a sales representative for IKA. The company was owned by the Stiegelmann family, which included René (who worked for the company), and his son, Marcel (who did not). Gatter reported to Refika Bilgic, who was both managing director and
> A New York State task force on teacher qualifications decided that all teachers needed a basic understanding of liberal arts and sciences. National Evaluation Systems (NES), a professional test development company, was hired to develop the Liberal arts a
> Before Title VII, Duke Power hired black employees only in the labor department, where the highest pay was less than the lowest earnings in the other departments. After Title VII, the Company required all new hires for jobs in the desirable departments t
> General Motors was the debtor on two unrelated secured transactions. The first was a $300 million loan (known as the “Synthetic Lease”); the second was a $1.5 billion term loan (the “Term Loan”). JPMorgan Chase Bank was the secured party on both transact
> On December 5, Charles H. Logging (CHL) borrowed $225,000 from Citizens Bank to buy a skidder, and signed a promissory note to repay the money along with a UCC-1 listing the skidder as collateral. The bank filed the form the next day. CHL used the loan t
> Robert Roser obtained a loan from Sovereign Bank which he promptly used to buy a car. Nineteen days later, Sovereign filed a lien with the state of Colorado. The bank expected that, with a perfected interest, it would have priority over everyone else. Un
> Based on the facts in the opening scenario, Brenner filed suit against Belliard and Fell, alleging that they had violated their duty of loyalty to the company. Issue: Did Belliard and Fell violate their duty of loyalty to Pure Power? Excerpts from Judge
> The text offers a hypothetical case concerning Tele Maker, which sells 500 televisions to Retailer, keeping a security interest in the sets and proceeds. Customers sign chattel paper when they purchase on credit. The chattel paper is proceeds, so Tele Ma
> Lila Williams purchased a new Roadtrek 200 motor home from New World R.V. Inc. She paid about $14,000 down and financed $63,000, giving a security interest to New World. The RV company assigned its security interest to Conseco Finance, which perfected. T
> Patrick Kennedy was convicted of raping his eight-year-old stepdaughter L.H. A forensic expert testified that L.H.’s injuries were the most severe he has ever witnessed from a sexual assault. The jury also heard evidence that Kennedy had raped another ei
> Oak Hill Bank loaned Roger and Bonnie Johnson money to buy a mobile home, which they used for family purposes. The bank took a security interest in the vehicle. The Johnsons went bankrupt. Oak Hill had never taken steps to perfect. When the Johnsons appe
> When the debtor pledges securities as collateral for a loan, problems can easily arise concerning the quality of care the creditor provided. In Reed v. Central National Bank of Alva, the debtor borrowed money from the bank and gave convertible debenture
> Charles E. Johnson was the founder and C.E.O. of PurchasePro.com, Inc., and Geoff Layne was its marketing director. When their internet stock went public, both officers suddenly owned shares worth millions of dollars. To increase his liquidity, Johnson t
> Corona Fruits & Veggies (Corona) leased farmland to a strawberry farmer named Armando Munoz Juarez. He signed the lease “Armando Munoz.” Corona advanced him money for payroll and farm production expenses. Corona filed a financing statement, claiming a se
> Jim Henches, a licensed massage therapist, treated Benjamin Taylor after he was injured in a car accident. Henches billed Taylor for more than $7,000. Taylor’s insurance company thought the bill was too high and paid only $2,625 for 24 massages. Henches
> When John Blackwell was seriously injured, he and his wife Ki Tae Lee hired Se Ill Choi to help Lee communicate with her husband’s doctors and perform daily chores. Eventually, Choi moved into the Blackwell home and did everything for them from preparing
> Twenty-one seamen entered into a written contract with the Alaska Packer’s Association (APA) to sail from San Francisco to Pyramid Harbor, Alaska, where they would work as fisherman and sailors during the salmon-fishing season. The workers agreed to perf
> Kenny Willis and his neighbors, Rick and Joyce Taylor, were good friends. Rick helped Kenny repair his truck and Kenny cut the Taylors’s yard because they did not own a lawnmower. One day, while the Taylors were out, Kenny began to cut their grass. Joyce
> Consideration does not require counteroffers. Students may equate “bargained-for” with “haggled-over.” A simple example can demonstrate the meaning of “bargained-for” in this context: Curt offers to mow Pedro’s lawn once a week for $50 beginning May 1 an
> Stephen Son was a part owner and operator of two corporations. Because the businesses were corporations, Son was not personally liable for the debts of either one. Jinsoo Kim invested a total of about $170,000 in the companies. Eventually, both of them f
> William Story wanted his nephew to grow up healthy and prosperous. In 1869, he promised the 15-year-old boy $5,000 if the lad would refrain from drinking liquor, using tobacco, swearing and playing cards or billiards for money, until his twenty-first bir
> In 2010, Congress enacted the Patient Protection and Affordable Care Act (the Act), which aimed to increase the number of Americans covered by health insurance and decrease the cost of health care. The Act required most Americans either to maintain healt
> The Delaware Harness Racing Commission (Commission) hired Donald Harmon to be the Presiding Judge of harness racing (charged with enforcing racetrack rules). After years on the job, Harmon was arrested for improperly changing a judging sheet to favor a h
> Douglas Kent was the Consul General of the United States in Vladivostok, Russia. One evening, he drove from his office to a gym and then home. On the way home, he was involved in an accident that left Aleksandr Kashin severely injured. Kashin sued the Un
> From about 8 P.M. until 2 A.M. the next day, Evans and several coworkers scoured the children’s playground at a McDonald’s restaurant. This special cleaning prepared the restaurant for inspection as part of McDonald’s “spring blitz” competition. At McDon
> Staff Sergeant William E. Dreyer was a recruiter for the United States Marine Corps. Driving to work one morning at 6:40 AM, in a government owned car, he struck and killed 12-year-old Justin Zankel. The child’s parents sued the federal government, claim
> The orchestra in Lancaster, Pennsylvania hired musicians to play about four classical music concerts each year. These musicians could choose to play in however many concerts they wished. They then signed a Musician Agreement, which stated that they were
> Alexandre Van Damme was eager to buy a painting by the artist Gerhard Richter. Nahum Gelber was willing to sell his Richter entitled “A.B. Diffus”. Van Damme hired Christophe Van De Weghe to inspect the painting at the Toronto apartment of Gelber’s son.
> File this case under: What parents will do for their children (whether or not they should). Wachovia Bank loaned Daniel Manley $420,000 and, in return, he gave the bank a promissory note in that amount. His father, Thomas, guaranteed payment of the note.
> Adrenetti Collins was a secretary who worked in the PGA office. During a four-month period, she forged 18 PGA checks totaling $22,699.81. To avoid detection, she intercepted two of the bank statements sent by Whitney National Bank and replaced them with
> During the time that Carol Young worked as an assistant to Brian P. Burns, her salary never exceeded $75,000 a year. But during this period, she opened several credit card accounts with Neiman Marcus on which she charged more than $1 in luxury goods. Alt
> MediaEdge wrote a check for $133,026 on its account at Wachovia, payable to CMP Media. Before CMP received the check, someone changed the name of the payee to Sunjin Choi Choi, and deposited the altered check into Choi’s account at Foster Bancshares. Fos
> John and Nancy Augustine hired Hanover Homes to build a house. They took out a construction loan from South Bend Bank. When directed by the Augustines, South Bend would issue a check payable to John, Nancy, and Hanover; John and Nancy would indorse it an
> The MacNabs purchased property from Richard Harrington’s client. The MacNabs came to the closing with an uncertified personal check drawn on their Merrill Lynch cash management account for $150,128.70. When Harrington called Merrill Lynch, an employee to
> Jeff Messing attempted to cash a check for $976 at a Bank of America branch office. The check was made out to Messing and drawn on the Bank of America. A teller asked Messing to provide identification. Messing presented his driver’s license and a major c
> In the mid-1950s, Richard Boeken began smoking Marlboro cigarettes at the age of 10. Countless advertisements, targeted at boys aged 10 to 18, convinced him and his friends that the “Marlboro man” was powerful, healthy and manly. Eventually, Richard chan
> During the Jewish holidays, Fallsview Glatt Kosher Caterers organized programs at Kutcher’s Country Club, where it provided all accommodations, food and entertainment. Fallsview sued Willie Rosenfeld, alleging that he had requested accommodations for 15
> Joseph Britt, a detective, enrolled in a Master’s Degree program at Chestnut Hill College in Pennsylvania. Chestnut Hill promised students credit for life experience. The college promised Britt important credits for his life experience if he enrolled, an
> Roger DeMasse and five others had been hourly employees-at-will at ITT Corporation for many years. ITT issued an employee handbook, which it revised four times over two decades. The first four editions of the handbook stated that within each job classifi
> Mr. W sells fireworks. Under Texas law, retailers may only sell fireworks to the public during the two weeks immediately before the Fourth of July and during two weeks immediately before New Year’s Day. And so, fireworks sellers like Mr. W tend to lease
> Mason was a surgeon/apothecary in the English town of Thetford. Davis wished to apprentice himself to Mason. The two agreed that Davis would work for Mason and learn his profession. They further agreed that if Davis left Mason’s practice, he would not se
> The Washington, D.C. police suspected Antoine Jones of being a drug dealer. Without a valid search warrant, they attached a GPS tracking device to his car. For 28 days, they used the GPS to determine his whereabouts. Based on this evidence, Jones was con
> Driving along the Nebraska State Highway just after midnight, Dennys Rodriguez briefly swerved onto the highway shoulder, which is a violation of Nebraska law. At 12:06 a.m., Officer Morgan Struble pulled Rodriguez over for erratic driving. Struble quest
> Jeffrey Skilling was president and chief operating officer of Enron Corporation, the seventh largest company in America in terms of revenue. At least, that is what everyone thought. Ten months into Skilling’s term of office, Enron filed for bankruptcy pr
> U.S. law provides that “whoever utters any obscene, indecent, or profane language by means of radio communication shall be fined or imprisoned not more than two years, or both.” The Federal Communications Commission (Commission) has been instructed by Co
> “Mrs. F” was a licensed social worker in Maryland. One of her clients, “John Doe,” was convicted of child abuse and sex offenses involving his minor granddaughter. The Board of Social Work Examiners, an administrative agency, learned that Mrs. F. had lik
> See the chapter opener. Connie Daniell argued that Ford was both (1) negligent because it did not warn her that there was no opening mechanism in the trunk and (2) strictly liable for this design defect. Ford sought summary judgment. Issue: Was Ford n
> Ibrahim Boumelhem, aged four, began playing with a Bic disposable lighter that his parents had purchased. He started a fire that burned his legs and severely burned his six-month-old brother over 85 percent of his body. Ibrahim’s father sued Bic, claimin
> The Alden Leeds company packages, stores, and ships swimming pool chemicals. The firm does most of its work at its facility in Kearns, New Jersey. At any given time, about 21 different hazardous chemicals are present. The day before Easter, a fire of unk
> On a warm California day, there were about 30 personal water craft (jet skis) operating on Coyote Lake. The weather was fair and visibility good. Anthony Nguyen and Rachael Truong went for a ride on Anthony’s Polaris watercraft. Cu Van Nguyen and Chuong
> Cornell professor Joan Jacobs Brumberg attended a university fundraiser catered by Cipriani. During the event, she feasted on fancy appetizers. About 30 minutes later, she felt intense abdominal pain, which did not go away. Weeks later, her doctors remov
> Juana Curry and William Moore, customers of AvMed Insurance, took care to protect their private information. They destroyed mail that contained sensitive data and avoided uploading any such information online. Despite their care, they both became victims
> At the University of Arizona, the Epsilon Epsilon chapter of Delta Tau Delta fraternity gave a welcoming party for new members. The fraternity’s officers knew that the majority of its members were under the legal drinking age, but they permitted everyone
> Helen Palsgraf was waiting on a railroad platform. As a train began to leave the station, a man carrying a package ran to catch it. He jumped aboard but looked unsteady, so a guard on the car reached out to help him as another guard, on the platform, pus
> Biswell operated a pawn shop and had a license to sell "sporting weapons". Treasury agents demanded to inspect Biswell's locked storeroom. The officials claimed that, the Gun Control Act of 1968 gave them the right to search without a warrant. That law
> The Family Smoking Prevention and Tobacco Control Act (FSPTCA) instructed the FDA to issue regulations requiring cigarette packaging to contain graphics depicting the negative consequences of smoking. After holding hearings on its proposed regulation, th
> Christianne Carafano is a film actor under the stage name Chase Masterson. Someone posted a profile of her on the Matchmaker.com Internet dating service. This phony profile stated that Carafano was “looking for a one-night stand” and for a “hard and domi
> Duke Power used a high school completion requirement and an intelligence test in hiring and promotion. The result was that fewer minority applicants qualified for jobs at Duke Power. Griggs sued under Title VII. Issue: Does Title VII proscribe tests that
> When they applied for life insurance from Farm Bureau Life Insurance Company ("Farm Bureau") in 1999 Wyoming resident Gary Pehle and his wife Renna did not know they were infected with the Human Immunodeficiency Virus ("HIV"). Farm Bureau collected the i
> Hardingham was a recovering alcoholic. Defendant United Counseling Service (UCS) gave him a job as an emergency services counselor. Halpin, UCS's executive director, learned that Hardingham was again drinking. Halpin and other UCS employees went to Hardi
> Prosenjit Poddar killed Tatiana Tarasoff. Tatiana's parents claimed that two months earlier Poddar had confided his intention to kill Tatiana to Dr. Lawrence Moore, a psychologist employed by the University of California at Berkeley. They sued the univer
> Victor Hernandez had worked for more than 20 years as a custodian at a public power plant and had received training in health and safety rules from the Occupational Safety and Health Administration (OSHA). He took a second job as night custodian at an el
> Maria Parajon sued Diana Pereda for injuring her in a car accident. During voir dire, Parajon’s lawyer asked potential jurors: “Is there anybody sitting on this panel now that has ever been under the care of a physician for personal injuries, whether you
> Caldwell agreed with Duke/Fluor Daniel (D/FD) to install a power plant cooling system in Aiken, South Carolina. The contract stated that Caldwell would pay liquidated damages of $5,000 per day if the system was late. Marley agreed to ship to Caldwell all
> Exxon marketed gasoline to retailers in three ways. Franchisees (who owned local gas stations) were required to purchase a minimum number of gallons per month at the dealer tank wagon price (DTW) set by Exxon. Jobbers (distributors who could resell to de
> J. Sanders, Inc. had a contract with the federal government to install the heating system at a federal prison camp. The company negotiated with Superior Boiler Works to purchase three large commercial units. On March 27, Superior sent a proposal to Sande
> Ivan Tepper, the CEO of Delta Star, met with the sales manager at Michael’s, a flooring company. In a verbal agreement, he hired Michael’s to install carpet in the entryway of his office suite, and tile in his personal office and the office of Nash, his
> Sarah Jones, a high school teacher and Cincinnati Bengals cheerleader, was the subject of several posts on TheDirty.com, a gossip website run by Nik Richie. Anonymous submissions accused Jones, among other things, of being promiscuous with many football
> ProCD sold SelectPhone, a database containing information from 3,000 telephone directories. It sold the software to consumers for $150; business paid a much higher price. Every box containing the consumer version of SelectPhone was wrapped in plastic shr
> LAN Systems, Inc. (“i.LAN”), helps companies monitor their computer networks. NetScout Service Level Corp., formerly known as NextPoint Networks, Inc. (“NextPoint”), sells sophisticated software that monitors networks. In 1998, i.LAN and NextPoint signed
> Gene and Martha Jannusch owned a food concession business and believed they had agreed to sell it to Lindsey and Louann Naffziger. When the Naffzigers backed out, the Jannuschs sued. The trial court ruled that there had been no meeting of the minds, and
> Christopher Rottner’s computer began malfunctioning – its performance decreased, and the Internet speed was sluggish. Searching for a solution, he found a free trial of PC TuneUp online from AVG. AVG claimed that the software would boost Internet speed,
> Ethel Flanzraich, 78 years old, slipped and fell on property owned by Robin’s Wood and broke her left arm and left leg. Flanzraich sued, claiming Robin’s Wood employee, Anthony Monforte, had negligently painted the stairs on which she fell. Robin’s Wood
> Legends are Forever, Inc. (Legends) trademarked the slogan “Legends are Forever.” When Nike used the slogan in an ad campaign featuring basketball player Kobe Bryant, Legends sued Nike. But, during discovery, Legends repeatedly failed to comply with Nik
> Michael Brooks desperately needed financing for his company, BrooksAmerica, so he agreed to a sale-leaseback agreement with Terminal Marketing Co. Terminal would pay BrooksAmerica $250,000, and in exchange would obtain title to BrooksAmerica's computers
> MSC owned a shopping center and leased space to Tenet for use as an outpatient surgery and general medical practice. According to the lease, Tenet could assign with the consent of the lessor, and said consent would not be unreasonably withheld. MSC sold
> The California Department of Parks and Recreation (DPR) and Delaware North Companies (DNC) entered into a contract giving DNC the right to operate a concession stand at a state park in San Diego for 10 years. Four years into the contract, DNC assigned it
> Miller listed her home for sale. On August 4th, Norman made an offer, specifying that it must be accepted by 5:00 p.m. on August 5th. Miller received the offer, made several changes, signed it, and returned it to Norman. Norman did not respond. On August
> The state of Alaska entered into a contract with Corrections Corporation of America (CCA), a private company, to house Alaska’s inmates. The contract required CCA to abide by the terms of a settlement agreement between the state and its inmates known as
> Juzwiak was a tenured teacher at Hightstown High School in New Jersey. He received three emails from someone who signed himself “Josh,” with the address, “Josh Hartnett “. The teacher did not know anyone of that name. These emails said: 1. Subject line:
> After his wife left him, Anthony Elonis changed his Facebook name to “Tone Dougie” and began posting self-styled rap lyrics containing violent language and imagery about his friends and family. Elonis always posted disclaimers stating that the lyrics wer
> Donna and Alan Smith wanted to raise emus, which are flightless Australian birds that look like ostriches. The creatures reproduce rapidly in almost any terrain and are sold for their meat, which is high in protein and low in fat, and for their oil, leat
> For years, Hai Yun, a Chinese instrument manufacturer, made high-quality drums for Armadillo, which was a major distributor of musical instruments in the United States. Armadillo put great time and effort into developing a new line of drum kits called “D
> Byblos sold off price designer clothing manufactured by an Italian parent company. Morris & Sons was a Chicago retailer that had been selling men’s and women’s clothing for 40 years. Aaron Krichevsky, the president of Morris, contacted Patricia Saracini,
> Edward and Kelly Kiesel bought a trailer from James Lile, the owner of Lile’s Trailer Sales. That same day, the Kiesels used the trailer. The next morning, after an all-night rain, the Kiesels noticed water inside the trailer, near the door. The next tim
> Zion Temple First Pentecostal Church ordered new choir robes from Brighter Day Bookstore, a retailer that sold robes manufactured by Murphy Cap & Gown. When Brighter Day delivered the robes to the Zion Temple, the church members found many faults. They
> Burton is a Vermont-based designer, manufacturer, and seller of snowboards. ViQuest is a manufacturer of injection-molded products based in Shanghai, China. Burton and ViQuest contracted for ViQuest to manufacture Burton’s snowboard bindings. The agreem
> In setting rules for Internet infrastructure, the FCC ruled that broadband ISPs are not common carriers and, therefore, not subject to rules that require equal treatment for all their customers. However, the Commission later became concerned that ISPs mi
> Machado Ford published the following newspaper ad: “Buy a New Ford and Get $3,000 Minimum Trade-In Allowance.” Izadi attempted to purchase a new Ford Ranger valued at $6,595 for $3,595 in cash plus his trade=in (assuming the minimum trade=in allowance).
> James Huff was the chairman of the Kenton County Airport Board, which manages the Cincinnati/Northern Kentucky International Airport (CVG). While at a conference in Italy with his wife Bertha and a colleague named Larry Savage, Huff used his iPhone to ca
> Deborah Ehling, a registered nurse and paramedic who worked at the Monmouth-Ocean Hospital Service Corporation (MONOC) reacted on her Facebook page to a shooting. Her Facebook privacy settings limited access to just “friends.” Management members were not
> Chelsea Chaney was a seventeen-year-old high school student in Fayette County, Georgia. At a county-wide Internet safety seminar, Curtis Cearley, the District’s technology director, presented a PowerPoint slideshow to illustrate the permanent and often-e
> While attempting to pass several cars on a two-lane road, Campbell drove into oncoming traffic. An innocent driver swerved to avoid Campbell and died in a collision with a third driver. The family of the deceased driver and the surviving third driver bot
> Late one night, an anti-abortion protestor named Robert Thomas climbed into a dumpster located behind the Women's Advisory Center, an abortion clinic. He found documents indicating that the plaintiffs were soon to have abortions at the clinic. Thomas gav
> Organon fired John Soldau, then sent him a letter offering to pay him double the normal severance pay, provided Soldau would sign a full release for any claims he might have against the company. Soldau signed the release and deposited it in the nearest p
> The plaintiffs sued Netscape, claiming that its SmartDownload software illegally captured private information about files they downloaded from the Internet. Plaintiffs downloaded the SmartDownload software from a page on Netscape’s web that promoted the
> Bayway Refining and Oxygenated Marketing and Trading A.G. (OMT) were both in the business of buying and selling petroleum products. Bayway agreed to sell OMT 60,000 barrels of gasoline, and OMT faxed a confirmation letter stating that it represented the
