The Utah Attorney General’s office has reportedly begun picking up Unspam’s legal bills as the two fend off porn group Free Speech Coalition’s lawsuit aiming to get the state’s so-called child-protection do not e-mail registry ruled unconstitutional.
As a result, the registry is not just a financial flop, it’s now officially a fiscal drain.
Last August, Utah Attorney General Mark Shurtleff hired Brent Hatch, the attorney who had been defending Unspam, according to a report in the Salt Lake Tribune. So far, Hatch as been paid $100,000, or half his contract, according to the report.
Unspam was named along with Utah’s attorney general in the Free Speech Coalition’s lawsuit filed in November 2005 attempting to nullify the state’s child do-not-e-mail registry.
Unspam’s chief executive, Matthew Prince, reportedly told Utah officials that the resulting legal fees threatened to crush his company.
“If we shut down, that means the entire program shuts down,” Prince said, according to the Tribune. “We went to the state and said, ‘We just can’t keep doing this.’”
When Utah lawmakers passed the state’s child do-not-e-mail law, they expected it would result in between $3 million and $ 6 million in annual revenue.
As reported here last month, the state had seen a total of $37,444 in revenue from the registry in its 20-month existence as of March.
The money doesn’t come close to covering even Hatch’s fees, much less the litigation costs and other costs associated with the registry.
Utah’s child no e-mail law allows parents and guardians to register minors’ e-mail addresses and other “contact points” as off limits to anything it is illegal for children to view or buy. Organizations that want to include material off limits to minors in their commercial e-mail must scrub their lists against Utah’s registry for $5 per thousand addresses checked. Unspam takes 80% of the fee.
A similar law is in place in Michigan, which charges $7 per thousand addresses checked. Unspam gets $4 per thousand addresses there, as well.
Unspam’s Prince said he forked over $70,000 of Unspam’s money to pay Hatch before he decided he could no longer foot the bill, according to the Tribune.
Utah’s Shurtleff reportedly said he doesn’t like hiring private attorneys, but that lawmakers pressured him to hire Hatch.
Hatch reportedly gave Utah a 15% discount on his services, but still makes multiples of what state lawyers make.
Network
