More Marketing Compliance Obstacles: Do Not Call/Fax/SpamDocument Transcript
More Marketing Compliance Obstacles: Do Not Call/Fax/Spam
By Robert M. Jaworski, Esq. and Robert H. Jackson, Esq.
Your client’s business is down. Print ads don’t seem to have much impact in its markets.
Its website doesn’t get enough traffic. Direct mail is too expensive. So it decides to
pursue a telephone, fax, or e-mail campaign that goes directly into its customers’ home.
These campaigns are focused, direct, personal, and not overly expensive. Unfortunately,
they carry with them new and ever expanding compliance risks that your client will need
to consider. This article will explore these risks and how they have expanded during
I. DO NOT CALL
A. Brief History of “Do Not Call” Rules. Congress enacted the Telephone Consumer
Protection Act (“TCPA”)1 in 1991. The TCPA restricted the use of telephones to deliver
unsolicited advertisements and gave authority to the Federal Communications
Commission (“FCC”) to administer its provisions over all calls: international, interstate
and intrastate.2 Three years later, Congress passed the Telemarketing and Consumer
Fraud and Abuse Prevention Act (“Telemarketing Act”),3 giving the Federal Trade
Commission (“FTC”) similar regulatory authority over interstate calls.
Although both agencies adopted implementing regulations,4 neither initially chose
to exercise its authority to create a national “Do Not Call” (“DNC”) Registry.
Instead, each established rules, which among other things, required sellers to
maintain lists of consumers that requested not to be called by that company
(“Company DNC Lists”), and required telemarketers to honor such requests.
When these rules ultimately proved ineffective in the eyes of individuals,
consumer advocates and privacy groups, the FTC, on January 29, 2003, revised its
regulations to include provisions to establish, maintain and administer a national
DNC Registry (collectively, with the similar rules adopted by the FCC, “DNC
B. How “Do Not Call” Works6
The FTC’s DNC Rule cover any plan, program, or campaign to sell
goods or services through interstate telephone calls and include
telemarketers who solicit consumers on behalf of third-party sellers
as well as sellers that are paid to provide, offer to provide, or
arrange to provide, goods or services to consumers.7 The FCC’s
DNC Rule also covers intrastate telemarketing calls.8
The DNC registry essentially works as follows:9 (1) Consumers
may register their residential telephone numbers—including
wireless numbers10—on the DNC List at no cost for a period of five
years (renewable at five year intervals), and may remove their
number from the DNC List at any time; (2) telemarketers may not
make calls to persons on this list beginning within a “reasonable
time”—but not more than 30 days—after such request has been
made; and (3) beginning January 1, 2005, telemarketers must search
the registry at least once every 31 days to synchronize their calling
lists with an updated version of the registry and to “scrub” (i.e.,
drop) from their distribution lists any registered subscribers.11
Exempt from these DNC requirements are: (i) business-to-business calls;
(ii) calls made directly by charitable institutions and political candidates,
parties or groups; (iii) telephone requests for bona fide surveys (that are
not merely disguised attempts to sell goods or services); (iv) calls to
consumers who, after placing their telephone number on the DNC
Registry, give the seller express permission to call; (v) calls to consumers
with whom the individual telemarketer has a “personal relationship”; (vi)
calls by, or on behalf of, tax-exempt non-profit organizations; and (vii)
under certain circumstances, calls by businesses to former or potential
customers who have made inquiries about the business’s products or
services (the “established business relationship” or “EBR” exemption).12
Established Business Relationship. An EBR exists under the DNC
Rule: (1) for 3 months after a consumer makes an inquiry or
application regarding goods or services offered by a seller; or (2)
for 18 months after a consumer purchases, rents, or leases the
seller’s goods or services, or engages in a financial transaction with
the seller.13 A telemarketer may call a consumer’s phone number
(despite its inclusion on the national DNC list) so long as that
consumer has not terminated the EBR by requesting that he/she be
placed on that Company’s DNC List. (Affiliates fall within the
EBR exemption only if the consumer would reasonably expect them
to be included, given the identity of the affiliate and the goods and
services being offered.14)
“Telemarketer” is defined broadly in the DNC Rule to include any
person (including a seller seeking to induce the purchase of its own
products or services) who, in connection with a campaign to induce
the purchase of goods or services by the use of one or more
telephones and which involves more than one interstate call,
initiates or receives telephone calls to or from a customer.
Calls made directly by telephone common carriers, banks, airlines,
insurance companies, and credit unions are covered by the FCC’s
DNC Rule, and not by the FTC’s DNC Rule, but virtually every
other interstate call is subject to the FTC’s regulations. The DNC
Registry is funded entirely by fees paid by telemarketers each time
they purchase the national DNC list.15 Effective September 1, 2005,
the price for access to the national DNC database is $56 per fee year
for each area code after the first five, which are free; or $15,400 for
280 or more area codes.16 It is also unlawful for any person to split
the costs for access to the DNC list.
Safe Harbor. A company can avoid liability under the DNC Rule
for calls made to a number on the national DNC List only if it can
show that the calls were the result of an error and that the company,
as part of its routine business practice, (i) has written policies and
procedures to comply with the DNC Rule, (ii) trains personnel in
these procedures, (iii) monitors and enforces compliance with these
procedures, (iv) maintains its Company DNC List, (v) accesses the
national DNC Registry no more than 31 days before calling any
consumer and maintains records that document this procedure, and
(vi) purchases the relevant DNC data directly from the
administrator of the DNC Registry. Companies that can
demonstrate, by a signed written agreement, that they received prior
permission to contact the consumer, or show that they had a
personal relationship with the recipient of the call, can also escape
The FCC and the FTC, as well as the states, are authorized to
pursue enforcement actions in federal district court against violators
of the DNC Rules and pursue fines of up to $11,000 per violation.
Individuals can also sue in state court (“if otherwise permitted by
the laws or rules of court of [that] state”17) and seek injunctive
relief, and the greater of actual damages or $500 (which can be
tripled if the violation was “willful or knowing”). 18 Recently, there
has been consumer criticism of both agencies for their limited
number of prosecutions of companies accused of violating the
Preemption and Jurisdiction
The federal DNC rules preempt any less-restrictive state
DNC regulations. In addition, the FCC has indicated that
any state’s attempt to regulate interstate or international
calls more vigorously than its own rules would likely suffer
preemption.20 However, the FCC has also said that states
may adopt more restrictive intrastate regulations than its
own, essentially free from federal interference.21 Several
petitions have been filed with the FCC seeking to preempt
more stringent telemarketing provisions in states such as
Florida, Indiana, New Jersey, North Dakota, and Wisconsin
.22 The FCC has not yet decided any of these petitions as of
the date of this article, but several state attorneys general,
governors and members of Congress are pushing strongly
for the FCC to permit states to administer stricter rules even
for interstate calls, despite the confusion that such a result
could cause to interstate marketing companies.
II. DO NOT FAX
A. How “Do Not Fax” Works
In addition to regulating unsolicited telephone calls, the TCPA prohibits
any person, including a business, individual, or tax-exempt non-profit
organization, from “us[ing] telephone facsimile machines, computers, or
other devices to send an unsolicited advertisement, [also known as a ‘junk
fax’], to another fax machine.”23 An “unsolicited advertisement” is “any
material advertising the commercial availability or quality of any property,
goods, or services which is transmitted to any person without that person’s
prior express invitation or permission.”24
Defenses. The FCC’s’s original implementing Do Not Fax (“DNF”)
regulations (“DNF Rule”) established that it is a good defense to a charge
of faxing unsolicited advertisements if the fax was not for commercial
purposes, was not advertising property, goods or services, was sent to
persons with whom the sender had an EBR,25 or was sent to persons from
whom the sender had secured a “prior express invitation or permission.”26
The original rules defined an EBR as a prior or existing relationship,
which has not been previously terminated by either party, and which is
voluntarily formed on the basis of the fax recipient’s inquiry, application,
purchase, or business transaction, with regard to goods or services offered
by the sender.27
When the FCC amended its DNF Rule on July 25, 2003, it eliminated this
EBR exemption and required that consent be in the form of a written,
signed agreement granting express permission to send fax advertisements
to the consumer and listing the fax number to which advertisements may
be sent to the recipient.28 This amendment was initially scheduled to take
effect on October 1, 2003, but was postponed several times as a result of a
storm of protest from interested industries that lobbied Congress to
reinstate the FCC’s original EBR exemption.29,30,31 In the meantime,
Congress passed the Junk Fax Prevention Act (“Fax Act”), on July 9,
The New Fax Act. The Fax Act became effective immediately and
amended the TCPA by allowing companies to send commercial faxes
without prior permission so long as the sender and the recipient have an
EBR; and the recipient’s fax number was provided by the recipient or was
made publicly available, as in a directory, advertisement, or Website. One
should keep in mind that most, if not all, lists of fax numbers that are
obtained in the marketplace would not likely pass this test and are,
therefore, unlawful to use.
More specifically, the Fax Act: (1) created an EBR exemption free from
any time limitations (although the FCC has discretion to decide whether or
not to impose such limitations); (2) required that unsolicited commercial
faxes include a clear and conspicuous “opt-out” provision on the first
page, and provide a free 24-hour means for recipients to request removal
from the distribution list; (3) mandated that fax numbers to which any
unsolicited advertising is delivered be obtained either directly from the
recipient or from a public source to which the recipient gave the number
for publication; and (4) “grandfathered” (as to the means by which such
numbers were obtained) fax numbers already in the possession of the
sender when the Fax Act was passed.
The Fax Act, however, left intact the rule that recipients may terminate an
EBR at any time merely by requesting that the sender refrain from
transmitting further faxes, that it is unlawful to send unsolicited fax
advertisements to businesses, individuals, or organizations with whom the
sender has no EBR (unless it has express permission to do so), and that all
faxes—whether solicited or unsolicited—must identify the registered
name and telephone number of the entity on whose behalf the fax is being
sent, and the date and time the fax was transmitted,.
As it does for DNC violations, the TCPA gives the FCC authority to impose fines
of up to $11,000 for each DNF violation. It also provides that an aggrieved
individual may, “if otherwise permitted,” file a complaint in state court or with
the FCC to seek an enforcement action.33 Unlike the DNC provisions, there exists
no safe harbor in the DNF Rule. Also, unlike a court action, a complainant before
the FCC need not prosecute her action: merely filing the initial complaint is
sufficient (although it is unlikely the FCC would act upon a single complaint,
unless truly grievous actions are alleged).34 Consumers who decide to sue in court
may recover the greater of $500 or their actual monetary loss for each unsolicited
fax transmission (tripled if the violation was “willful or knowing”35) and may do
so based upon receipt of even a single unsolicited fax advertisement.
Private actions—or at least threats to institute private actions (often as class
actions)—to enforce the provisions of the DNF Rule have become fairly
commonplace and seem likely to continue to proliferate.
The TCPA does not appear to preempt state laws that impose more restrictive
intrastate requirements than provided in the TCPA with respect to the sending of
unsolicited fax advertisements or which prohibit the use of fax machines to send
unsolicited fax advertisements. The TCPA does preempt more restrictive
interstate requirements.36 The Fax Act makes no change to this preemption
III. DO NOT E-MAIL: CAN-SPAM
On December 16, 2003, Congress enacted the CAN-SPAM Act of 2003 (Controlling the
Assault of Non-Solicited Pornography and Marketing Act) (“CAN-SPAM”), which
became effective on January 1, 2004.37 CAN-SPAM seeks to create a uniform, national
standard for the regulation of commercial electronic mail (“Commercial E-Mail”). It
was passed by Congress specifically to preempt a more restrictive California law that
would have required specific permission to send Commercial E-Mail to anyone or any
computer located in California.38
CAN-SPAM defines Commercial E-Mail as e-mail whose primary purpose is to advertise
or promote a commercial product or service, including content on an Internet website
operated for a commercial purpose.39 It generally seeks to limit fraudulent or abusive
activity conducted over the Internet by: (1) establishing requirements for those who send
Commercial E-Mail; (2) enumerating penalties for violators, including both spammers
and companies whose products are advertised by spammers; and (3) giving consumers
the right to request e-mailers to stop sending them spam. Specifically exempted from the
definition of Commercial E-Mail are “transaction and relationship messages,” defined as
e-mail that facilitates, completes, or confirms a transaction, or that updates a consumer
with whom the company has an existing business relationship about a warranty, product
safety information, changes in terms, features, or the customer’s status, etc.40
Per the FCC’s implementing regulations, adopted on December 16, 2004, mixed
messages that include both a commercial purpose and (i) a transactional/relationship
purpose or (ii) a purpose that is neither commercial nor transactional/relationship, will be
deemed to be Commercial E-Mail if: (i) a recipient reasonably interpreting the subject
line would likely conclude that the message advertises or promotes a product or service,
(ii) in the case of a message including both commercial and transactional/relationship
content, the message’s transaction or relationship content does not appear at or near the
beginning of the message, or (iii) in the case of a message including commercial content
and content that is neither commercial nor transactional/relationship, a recipient
reasonably interpreting the body of the message would likely conclude that the primary
purpose of the message is to advertise or promote a product or service.41
B. How CAN-SPAM Works
Specifically, CAN-SPAM: (1) prohibits senders of Commercial E-Mail from providing
headers or subject lines (i.e., “From” and “To” routing information) that are materially
false or misleading42; (2) requires senders to (a) clearly and conspicuously identify
Commercial E-Mail as an advertisement or commercial solicitation, (b) include a clear
and conspicuous notice that the recipient can “opt out” of receiving further Commercial
E-Mail from the sender, and (c) provide the sender’s valid physical postal address and a
functioning return e-mail address (or another Internet-based response mechanism) that
remains operational for at least 30 days after transmission of the Commercial E-Mail; (3)
mandates senders and any person acting on the sender’s behalf to honor opt out requests
within 10 business days and prohibits them from transmitting (or assisting in the
transmission of) Commercial E-Mail to that recipient absent the recipient’s subsequent,
affirmative consent;43 and (4) prohibits senders from selling or transferring any e-mail
addresses belonging to individuals who have opted out, unless such transfer is to enable
the entity to comply with the Act.
Sellers or lessors that allow their goods and services to be promoted by a third party
through Commercial E-Mail that violates the above prohibitions are equally liable, along
with the transmitting third party, for the violation, if they (1) knew or should have known
that their products or services were being promoted in such Commercial E-Mail; (2)
received or expected to receive an economic benefit from the promotion; and (3) took no
reasonable action to prevent, or detect and report, the transmission.44
E-Mail Messages to Wireless Devices. Additionally, under the
FCC’s implementing regulations, adopted on September 16, 2004,
senders are generally prohibited from initiating or sending
Commercial E-Mail to any address associated with a subscription to
a wireless service (cell phone service or other service to personal or
mobile wireless equipment, but not laptop computers—even if they
use a wireless connection.45), unless the individual addressee has
supplied the sender with express prior authorization, either orally,
on paper, or electronically. The only exceptions are where (1) the
person is forwarding the message to its own address, (2) the person
is forwarding the message to another address without compensation,
provided it does not advertise or promote a product, service or
website of the person forwarding the message, or (3) the address to
which the message is being forwarded does not appear on a list of
wireless domain names posted by the FCC for a period of at least 30
days before the message was initiated.46
The FCC’s regulation also mandates that anyone initiating a mobile service Commercial
E-Mail must (1) cease sending further messages within ten (10) days after a subscriber
requests such action; (2) include a functioning return e-mail address or other web-based
mechanism to receive such requests, and (3) provide recipients who grant express
permission to send Commercial E-Mails with a functioning option to reject further
Unlike the DNC Rule and the DNF Rule, CAN-SPAM creates no private right of action
by individuals, and prohibits class actions. However, CAN-SPAM violations are deemed
to constitute unfair or deceptive acts or practices under the FTC Act, and are punishable
as such, by action of the FTC, or by the offending company’s principal federal regulator
(e.g., FDIC, OCC, OTS, NCUA, SEC), or, if it is an insurance company, its state
insurance regulator.47 Additionally, CAN-SPAM provides that states may enforce its
provisions by filing actions in federal court seeking injunctive relief and/or actual or
statutory damages. CAN-SPAM violators can be fined $250 per violation, up to a
maximum of $2,000,000, with the fine being tripled if the violations are “willful or
knowing” or include one or more “aggravated violations” enumerated in the Act (e.g.,
“address harvesting,” “dictionary attacks,” automated creation of multiple e-mail
accounts, and relaying or retransmitting through unauthorized access to a protected
computer or network).
In addition, CAN-SPAM authorizes the DOJ to pursue criminal sanctions—including
imprisonment—for senders of Commercial E-Mail who conspire to or engage in certain
activities, including: (1) using another computer without authorization to send
Commercial E-Mail; (2) using a computer to relay Commercial E-Mail so as to deceive
or mislead recipients or ISPs about their true origin; (3) falsifying header information and
transmitting such e-mail, or registering for multiple e-mail accounts or domain names
using information to falsify the identity of the true registrant; and (4) falsely representing
themselves as owners of multiple ISP addresses, which are used to transmit Commercial
Finally, and perhaps most significantly, CAN-SPAM gives authority to Internet service
providers (“ISPs”) to sue violators in federal district court to enjoin further violations
and/or to recover actual or statutory damages. Statutory damages in such actions are set
at $100 per violation, for transmitting materially false or misleading header information,
and $25 per violation for any of the other violations mentioned above, up to a maximum
CAN-SPAM preempts any state or local law or regulation expressly regulating the
sending of Commercial E-Mail, except to the extent that any such state law or regulation
prohibits falsity or deception in a Commercial E-Mail or any attachment to a Commercial
E-Mail.49 To date, there has not been any significant attempt by states to “override”
CAN-SPAM with more restrictive state regulations. On the other hand, various private
entities, including Spamhaus, refuse to acknowledge the ability of persons or entities in
the U.S. to send unsolicited, bulk Commercial E-Mail on a lawful basis and also create
pressure on ISPs to block all e-mail messages sent from such persons’ or entities’ Internet
addresses. Some believe that these “self-help” remedies are more effective than CAN-
SPAM is reducing unwanted spam.
As is apparent from the above, marketing by telephone, fax and e-mail faces many new (and
some not-so-new) federal regulatory hurdles, with more likely to come. Companies looking to
increase sales of their products and services must take note of these changes and act accordingly
to ensure that they are in compliance—or suffer the (financial and reputational) consequences.
11 Pub. L. No. 102-243, 105 Stat. 2394 (1991).
22 47 U.S.C. § 227(b)(1).
33 Pub. L. No. 103-297, 108 Stat. 1545 (1994).
44 7 FCC Rcd. 8752, 47 C.F.R. § 64.1200 (Sept. 17, 1992); 60 Fed. Reg. 43842, 16 C.F.R. § 310 (Aug. 23, 1995).
5 5 68 Fed. Reg. 4580. This regulation was almost immediately struck down as unconstitutional by a
Colorado District Court. Mainstream Mktg. Services, Inc. v. FTC, 283 F. Supp. 1151 (C. Colo. 2003), rev’d 358
F.3d 1228 (10th Cir. 2004). While the case was on appeal, Congress enacted Pub. L. 108-10 (2003), the Do Not
Call Implementation Act (“Implementation Act”), and Pub. L. 108-82 (an Act to Ratify the Authority of the [FTC]
to Establish a Do Not Call Registry (“Ratification Act”). The Ratification Act ratified the FTC’s authority to adopt
its DNC Rules, and the Implementation Act directed the FCC to adopt similar rules, which it did on July 25, 2003.
68 Fed. Reg. 44144.
6 6 There existed over 64 million registered telephone numbers on the DNC list as of December 15, 2004
(Annual Report on the National DNC Registry).
77 16 C.F.R. § 310 et seq.
88 47 U.S.C. § 152.
9 9 47 C.F.R. § 64.1200 (c)(2) and (f). (Citations to the DNC Rule will be to the FCC’s rule, unless otherwise
1010 Note that the federal government does not maintain a separate national cell phone registry.
1111 16 C.F.R. § 310.4(b)(3)(iv).
12 12 2003 TCPA Order, 18 FCC Rcd. at 14034, para. 28. Congress determined that such an exemption was
necessary to allow companies to communicate by telephone with their existing customers. See H.R. Rep. No.
102-317 at 13-14.
13 13 16 C.F.R. § 310.2(n). United States of America v. Columbia House Company, U.S.D.Ct., D.N.Ill., E.D.
(FTC File No. 042 3078, Civil No. 05C4064). (Columbia House agreed in July 2005 to pay the FTC $300,000 to
settle charges that it violated the DNC Rule by placing telemarketing calls to customers whose names were on the
DNC Registry but whose purchases from Columbia House were made beyond the allowable 18-month period or
who had placed their names on its Company DNC List.)
14 In August, 2005, the FCC granted State Farm Insurance’s petition for declaratory ruling that its exclusive agents
may make telemarketing calls to consumers who have an EBR with State Farm. [GET CITE]
1515 Telemarketing Act, §§ 2, 3.
1616 16 C.F.R. § 310.8(c), amended FTC File No. P034305 (July 26, 2005).
17 At least one court has held that such state laws or state court permission need not be stated expressly but may be
implied. Schulman v. Chase Manhattan Bank, NY App. Div. 2d 03585-99, 6/12/00, reported in BNA’s BANKING
REPORT, Vol. 74, No. 26 (June 26, 2000) at p. 1169.
1818 47 U.S.C. § 227(b)(3), (c)(5) and (f).
19 Christopher Conkey, “National Do-Not-Call List Scrutinized,” Baltimore Sun, Oct. 3, 2005, available
online at http://www.baltimoresun.com/business/bal-donotcall1003,1,2846736.story?track=rss. (Despite receiving
daily complaints of 1000-to-2000 per day, the FTC has initiated only 14 telemarketing lawsuits and imposed a
mere four fines. The FCC has issued a significant number of warnings, but only two fines.)
2020 See, e.g., 68 Fed. Reg. 44155, pgh. 62.
21 21 Order, 18 FCC Rcd. at 14065, para. 85 (“Nothing that we do in this order prohibits states from enforcing
state regulations that are consistent with the TCPA and the rules established under this order in state court.”).
22 22 Public Notice, “Consumer & Governmental Affairs Bureau Seeks Comment on American Teleservices
Association, Inc. Petition for Declaratory Ruling on Preemption of New Jersey Telemarketing Rules,” CG Docket
No. 02-278, DA 04-3185 (rel. Oct. 4, 2004); Public Notice, “Consumer & Governmental Affairs Bureau Seeks
Comment on Express Consolidation, Inc. Petition for Declaratory Ruling on Preemption of Florida Telemarketing
Rules,” CG Docket No. 02-278, DA 04-3185 (rel. Oct. 4, 2004); Public Notice, “Consumer & Governmental
Affairs Bureau Seeks Comment on Advertising Petition For Declaratory Ruling on Preemption of North Dakota
Telemarketing Rules,” CG Docket No. 02-278, DA 04-3186 (rel. October 4, 2004).
2323 47 U.S.C. § 227(b)(1)(C).
2424 47 U.S.C. § 227(a)(4).
25 25 1992 TCP Order, 7 FCC Rcd. at 8779, para. 54 n.87. (in which the FCC declared it was permissible to
send unsolicited fax advertisements to a recipient with whom the sender had an EBR and that a prior business
relationship provided a business with the necessary express permission to transmit faxes to their customers). See
also Discussion at 68 Fed. Reg. 44167-44168 (concerning the FCC’s decision to eliminate the pre-existing EBR
exemption). And see Rudgayser & Gratt v. Enine, Inc., Nos. 2002-1700 KC & 2002-1740 KC
(N.Y.Sup.Ct.App.Term, April 14, 2004) (purely informational fax, which also mentions the company’s name,
constitutes unsolicited advertising, suggesting that the sender’s identity, motives, purposes, and intentions may be
relevant to whether the fax was merely “information” or “advertising”).
2626 47 C.F.R. § 64.1200(a)(3)(i).
27 27 47 C.F.R. § 64.1200(f)(3). The FCC’s June 26, 2003 order amended this provision and provided specific
time limitations to be employed in determining the existence of an EBR.
2828 47 C.F.R. § 64.1200(a)(3)(i).
2929 68 Fed. Reg. 50978 (Aug. 25, 2003).
30 30 See, e.g., HR 4600 that was approved by the House of Representatives in July, 2004; and S 2603, which
reported to the full Senate by the Senate Commerce, Science and Transportation Committee on September 28,
3131 69 Fed. Reg. 62816 (Oct. 28, 2004).
3232 Pub. L. 109-21 (July 9, 2005).
33 33 47 U.S.C. § 227(b)(3). See Mulhern v. MacLeod, No. SJC-0915, slip. Op. (Mass. May 20, 2004) (absence
of a Massachusetts law prohibiting consumers from suing under the TCPA was sufficient to allow a DNF lawsuit
to be heard in a Massachusetts state court).
3434 See Note 18.
35 35 See Manufacturers Auto Leasing, Inc. v. Autoflex Leasing, Inc.,No. 2-03-225-CV, slip. Op., (Texas App-
Ft. Worth, May 6, 2004) (defendant’s violation of the DNF rule held “willful and knowing” despite evidence that
defendant relied upon advice of counsel in continuing to send faxes after plaintiff told it to stop).
36 36 But see, California S.B. 833 (2005) that, if signed by Governor Schwarzenegger, would prohibit the
sending of any faxes (inter- or intrastate) to California residents or business that have not specifically given
permission to receive faxes. The bill is specifically designed to conflict with the new federal Junk Fax Law’s
reinstatement of the EBR. Governor Schwarzenegger has not signed or vetoed S.B. 833 as of the date of this
3737 Pub. L. 108-187, 117 Stat. 2699 (2003).
3838 S.B. 186 (California 2003).
3939 CAN-SPAM Act, § 3(2)(A); 15 U.S.C. § 7702(2)(A).
4040 CAN-SPAM Act, § 3(17)(A); 15 U.S.C. § 7702(17)(A).
4141 69 Fed. Reg. 50106.
42 42 See State of Washington v. Natural Instincts, No. 51204-8-1 (Wash. Ct. App., Division One, June 28,
2004) (Sender of unsolicited promotional emails -- 100,000 to 1,000,000 per week -- using subject lines: “Did I get
the right email address?” or “For your review – HANDS OFF!” fined $100,000 for violating Washington state’s
version of CAN-SPAM).
4343 CAN-SPAM Act, § 5; 15 U.S.C. § 7704.
4444 15 U.S.C. § 7705.
4545 47 C.F.R. § 64.3100.
46 46 It is important to distinguish between Commercial E-Mail sent to a wireless phone via an Internet-based
E-mail address (which is covered by CAN-SPAM) and a text message (also known as “short message service” or
“SMS”) sent to a wireless phone via a telephone number (which is not covered by CAN-SPAM, but that is
governed by the TCPA).
4747 15 U.S.C. § 7706.
48 48 15 U.S.C. § 7705(g). See Microsoft Corporation v. Khoshnood, No. CV03-4269R (VBKx), Final
Judgment (C.D.Cal. July 7, 2004) ($4 million federal court judgment obtained by Microsoft in 2004 against a
California man and his company for sending SPAM to MSN and Hot Mail customers that unlawfully attempted to
deceive customers into believing that Microsoft recommended they download the defendants’ web toolbar)
4949 15 U.S.C. § 7707.
Robert M. Jaworski is a partner in the Consumer Financial Services and the Bank Regulatory Group of Reed Smith, LLP in
Princeton, New Jersey and a former Deputy Commissioner of the New Jersey Department of Banking. He is also Co-Chair
of the RESPA and Housing Finance Subcommittee of the American Bar Association’s Consumer Financial Services
Committee; the former Editor of Pratt’s Mortgage Compliance letter, a national publication on mortgage compliance issues;
and a member of the Board of Directors of the New Jersey Bar Association’s Banking Law Section. Mr. Jaworski provides
compliance and regulatory advice to banks and other lenders, and regularly assists Reed Smith litigators in defending
lenders in individual and class actions.
Robert H. Jackson operates his own telecommunications and Internet legal practice in Washington, D.C. and is also
affiliated with Reed Smith LLP. He has been in the telecommunications industry, both as an attorney and as an executive,
since 1977. Mr. Jackson’s practice includes both regulatory advice and advocacy, as well as assistance on
This article would also not have been possible without the able assistance of Andrew V. Brisker, a law student at Cornell
University School of Law and a 2005 Summer Associate at Reed Smith, LLP in Princeton, New Jersey.