Back to Cases Page The following is the Final Consent Order by Stipulation which was filed on 9 May in Federal District Court for the Eastern District of Pennsylvania in Philadelphia in Compuserve v. Cyber Promotions. In a separate Memorandum of Settlement (not shown here), the parties jointly request that the action be transferred to the US District Court for the Southern District of Ohio for entering this Final Consent Order by Stipulation. It is in that court where the final disposition should occur. ------------------------------------------------------------------------ IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO COMPUSERVE INCORPORATED, ) ) Plaintiff, ) ) Case No. C2-96-1070 v. ) ) Judge Graham CYBER PROMOTIONS, INC. and ) SANFORD WALLACE, ) ) Defendants. ) ) FINAL CONSENT ORDER BY STIPULATION The parties having resolved their differences by agreement, and this Court being otherwise fully advised of the premises of that agreement, IT IS HEREBY ORDERED: 1. This Court has jurisdiction over the parties, plaintiff CompuServe Incorporated ("CompuServe") and defendants Cyber Promotions, Inc. ("Cyber Promotions") and Sanford Wallace ("Wallace"). This Court has subject matter jurisdiction over the controversy pleaded. 2. For purposes of settlement, the parties have agreed as follows, and have consented that their agreements be incorporated into this Final Consent Order by Stipulation: a. The Defendants, their agents, and all other parties acting in concert with them, are permanently enjoined from directly or indirectly: (i) causing, authorizing, participating in, or assisting others in the sending of any commercial or promotional messages or solicitations ("Prohibited Messages") to a CompuServe e-mail address that have not been specifically requested by the individual associated with that e-mail address (such Prohibited Messages being referred to herein as "Unsolicited Prohibited Messages"); and (ii) causing, authorizing, participating in, or assisting others in the use of any false or misleading reference to CompuServe, a CompuServe e-mail address, or CompuServe equipment in the header of or in connection with any electronic message. For purposes of this Final Consent Order, the term "CompuServe e-mail address" includes any e-mail address that is registered with, maintained by, or maintained at or with facilities owned or operated by or on behalf of, CompuServe or any of its subsidiaries or affiliates, provided that Defendants have received written notice of the domain name or identification number of such facility from CompuServe. b. With respect to any service operated by either Defendant that enables third parties to send or receive electronic messages, the Defendant shall include in the applicable terms of service a conspicuous provision that expressly prohibit s the user of that service from using it in connection with Unsolicited Prohibited Messages sent to a CompuServe e-mail address. The Defendant shall require each and every user of such service to expressly and specifically affirm that the user will not use the service in connection with the sending of Unsolicited Prohibited Messages to any CompuServe e-mail address. Upon receipt of notice from CompuServe that a user of such a service is using it in connection with Unsolicited Prohibited Messages sent to a CompuServe e-mail address, the Defendant shall, as soon as is practicable and in no event later than two (2) business days after receiving the notice, complete the steps necessary to ensure that the user does not continue to do so, including, if necessary, permanently terminating that user's right and ability to use the Defendant's service, and Defendant shall provide CompuServe with all relevant information indentifying such user, including home and business name, address, phone, fax, and e-mail information. Defendants shall not sell or otherwise provide to any user of such a service a list or other data disclosing CompuServe e-mail addresses. c. Until such time as specified in paragraph 2(d) below, CompuServe shall permit Cyber Promotions to send to a CompuServe e-mail address, and CompuServe shall not block, messages for which Cyber Promotions has first received a verified subscription request from that e-mail address as prescribed by this paragraph 2(c). (i) To verify a subscription request from a CompuServe e-mail address, Cyber Promotions must send a responding confirmation request to the e-mail address specified in that subscription request that asks the recipient to confirm the subscription request by sending a reply e-mail message confirming the request. The subscription request will be deemed verified only if, within seven days after sending the confirmation request, Cyber Promotions receives a direct reply to the confirmation request from th e CompuServe e-mail address to which it was sent that confirms the subscription request. (ii) Every message sent to a CompuServe e-mail address by Cyber Promotions pursuant to this paragraph 2(c) shall be sent from only one of the following e-mail addresses, or such other address as the parties may agree to in writing: cyberout@cyberpromo.com cyberout@pleaseread.com cyberout@answerme.com cyberout@tosguard.com cyberout@savetrees.com (iii) Cyber Promotions shall configure the computers and software used to send any message to CompuServe e-mail addresses pursuant to this paragraph 2(d) so that the return address for the message specified in the header of the message contains t he same domain name of the e-mail address from which Cyber Promotions sends the message. Cyber Promotions shall also configure its computers and software so that each recipient is able to cancel the subscription request and remove his or her CompuServe e -mail address from Cyber Promotions' mailing list by use of the e-mail "reply" command. (iv) E-mail messages sent by Cyber Promotions to CompuServe e-mail addresses pursuant to this paragraph 2(d) shall comply with CompuServe's generally applicable Terms of Service in effect at the time the messages are sent. d. At such time, if any, that CompuServe implements a separate program for delivering commercial or promotional electronic messages to its subscribers, CompuServe shall provide Cyber Promotions with written notice, which notice shall describe the program and invite Cyber to participate in that program on terms similar to those offered by CompuServe to other similarly situated participants in the program. Receipt of the notice and the information contained in it shall not be disclosed by Cyber Promotions to any third party without prior written consent from CompuServe. Beginning the forty-sixth day after receiving the notice, Cyber Promotions shall not send any commercial messages to any CompuServe e-mail address other than through the program designated by CompuServe for such messages. e. Cyber Promotions shall be permitted to advertise on CompuServe's service subject to CompuServe's standard policies and terms and at CompuServe's standard rates. f. Cyber Promotions and Sanford Wallace shall pay CompuServe its reasonable attorneys' fees in bringing this action, in the following amount and manner: i) $10,000.00, due on or before May 2, 1997; ii) $20,000.00, due on or before August 4, 1997; iii) $20,000.00, due on or before November 3, 1997; iv) $15,000.00, due on or before February 2, 1998. Upon CompuServe's receipt of full payment of the amounts specified in items (i)-(iv) of this paragraph 2(f), the parties shall exchange mutual general releases with no admission of liability. Defendants shall be jointly and severally liable for the payment obligations specified in this paragraph 2(f). Each Defendant represents that the Defendant is financially solvent and that the Defendant will engage in no act or omission, the purpose or effect of which is to circumvent the payment obligations or any other obligation specified in this Final Consent Order or to jeopardize the Defendant's ability to satisfy those obligations in full and in a timely manner. If any of the payments specified in this paragraph 2(f) are not received by CompuServe in full by the specified due date, or if either Defendant breaches any other obligation specified in this Final Consent Order, then the balance of the payments specified in this paragraph 2(f) shall become immediately due and payable and CompuServe shall have the right to immediately terminate any or all of its obligations under paragraphs 2(c), 2(d), and 2(e). Within twelve (12) hours after receiving from CompuServe that the authorizations granted to Cyber Promotions under paragraphs 2(c) and 2(d) have been terminated, Cyber Promotions shall stop the sending of any Prohibited Messages to all CompuServe e-mail addresses. g. Upon CompuServe's receipt of each one of the four payments specified in paragraph 2(f) above, Cyber Promotions shall be permitted to place without additional charge one advertisement on CompuServe's service, pursuant to CompuServe's standard terms for a "Run of Service" advertisement guaranteed 250,000 impressions. The content of each advertisement shall be subject to reasonable prior review and approval by CompuServe. h. Each Defendant shall execute as part of this Agreement an "Affidavit of Confession of Judgment" in the forms attached hereto as attachments A and B. CompuServe shall retain the original Affidavit executed by each Defendant. If CompuServe does not receive any of the payments specified in items (i)-(iv) of paragraph 2(f) above on or before the date specified for that payment, CompuServe shall have the right to file each Affidavit with the Court and to collect the judgment confessed therein. Upon CompuServe's receipt of the final payment specified in item (iv) of paragraph 2(f) above, it shall return the original executed Affidavits to the Defendants. i. If, at any time after entry of this Final Consent Order, any e-mail message sent by either Defendant to a CompuServe e-mail address violates this Final Consent Order, CompuServe, in addition to any other relief to which it may be entitled under this Order and/or under law, shall have the right to immediately terminate any or all of its obligations under paragraphs 2(c), 2(d), and 2(e). Within twelve (12) hours after receiving from CompuServe that the authorizations granted to Cyber Promotions under paragraphs 2(c) and 2(d) have been terminated, Cyber Promotions shall stop the sending of any Prohibited Messages to all CompuServe e-mail addresses. j. If, at any time after entry of this Final Consent Order, any e-mail message sent by either Defendant to a CompuServe e-mail address violates this Order, then, in addition to any other relief to which it may be entitled under this Order and/ or under law, CompuServe shall be entitled to recover from the Defendants, as liquidated damages, an amount to be calculated as specified in this paragraph 2(j). The parties agree that the actual damages to CompuServe from such messages are not readily ascertainable without great difficulty. In any 5-day period in which a Prohibited Message is received by a CompuServe e-mail address in violation of this Order, CompuServe shall be entitled to recover from the Defendants and Defendants shall pay to CompuServe: i) $5,000, if the total number of CompuServe e-mail addresses that received messages in violation of this Order during the 5-day period is 100,000 or less; ii) $10,000, if the total number of CompuServe e-mail addresses that received messages in violation of this Order during the 5-day period is more than 100,000 but less than 200,001; iii) $20,000, if the total number of CompuServe e-mail addresses that received messages in violation of this Order during the 5-day period is more than 200,000 but less than 300,001; iv) $25,000, if the total number of CompuServe e-mail addresses that received messages in violation of this Order during the 5-day period is more than 300,000 but less than 400,001; v) $30,000, if the total number of CompuServe e-mail addresses that received messages in violation of this Order during the 5-day period is more than 400,000 but less than 500,001; and vi) $35,000, if the total number of CompuServe e-mail addresses that received messages in violation of this Order during the 5-day period is more than 500,000. k. This Final Consent Order by Stipulation shall be binding upon and inure to the benefit of the parties and their respective successors, heirs, executors, legal representatives, administrators, and assigns. If CompuServe is acquired by another entity that has a pre-existing agreement with Cyber Promotions that is inconsistent with this Order, this Order shall apply only with respect to the services and facilities that are operated by or on behalf of CompuServe after the acquisition. l. In any action to enforce the terms of this Final Consent Order by Stipulation, the prevailing party shall be entitled to recover from the other party its reasonable expenses in bringing such action, including attorneys fees, in addition to any other relief to which it is entitled under law. m. This Court retains jurisdiction to interpret and enforce this Final Consent Order by Stipulation. IT IS SO ORDERED: JAMES L. GRAHAM United States District Judge Dated: Consented to: CompuServe Incorporated Cyber Promotions, Inc. By: /Signed/ By: /Signed/ Stephen M. Heaton Sanford Wallace PRESIDENT Secretary /Signed/ Sanford Wallace Back to Cases Page