Federal Trade Commission v. Cyberspace.com LLC

We must decide whether a mail solicitation for internet service is deceptive as a matter of law within the meaning of the Federal Trade Commission Act.

I

In the late nineties, Ian Eisenberg and Chris Hebard formed Electronic Publishing Ventures, LLC (“EPV”) and its four subsidiaries: Cyberspace.com, LLC, Essex Enterprises, LLC, Surfnet Services, LLC, and Splashnet.net, LLC. Two offshore entities, French Dreams Investments, N.V. (owned by Eisenberg) and Coto Settlement (controlled by Hebard) owned EPV in equal parts.

Between January 1999 and mid-2000, EPV’s four subsidiaries mailed approximately 4.4 million solicitations offering internet access to individuals and small businesses. The solicitations included a check, usually for $3.50, attached to a form resembling an invoice designed to be detached from the check by tearing at the perforated line. The check was addressed to the recipient and the recipient’s phone number appeared on the “re” line. The attached invoice-type form included columns labeled “invoice number,” “account number,” and “discount taken.” The back of the check and invoice contained small-print disclosures revealing that cashing or depositing the check would…