FTC v. Cyberspace.com

Citation: Federal Trade Comm’n v. Cyberspace.com, No. C00-1806L, 2002 U.S. Dist. LEXIS 25565 (W.D. Wash. July 10, 2002), aff’d, 453 F.3d 1196 (9th Cir. 2006).

Trial Court Decision
The federal district court for the Western District of Washington granted summary judgment in favor of the FTC, finding, among other things, that the defendants had violated the Section 5 of the FTC Act by mailing false or misleading purported rebate or refund checks to millions of consumers and businesses without disclosing, clearly and conspicuously, that cashing the checks would prompt monthly charges for Internet access services on the consumers’ and businesses’ telephone bills. Following a trial on the issue of consumer injury, the court ordered the defendants to pay more than $17 million to remedy the injury caused by their fraudulent conduct.

Appellate Court Decision
The Court of Appeals for the Ninth Circuit affirmed the trial court’s liability finding.