There was California . . . “We are saying that unsolicited e-mail cannot be sent and there are no loopholes . . . We dont differentiate between Disney and Viagra. If you go out and rent a list of e-mail addresses, by definition you are not a legitimate business. You are the person we are trying to stop.” Former California State Senator Kevin Murray Author of SB 186
84 days later . . .President George W. Bush signing the CAN-SPAM Act (Dec. 16, 2003). Controlling the Assault of Non-Solicited Pornography And Marketing Act on-
CAN-SPAM Act of 2003CAN-SPAM IS . . . CAN-SPAM DOES NOT . . .• anti- An anti-fraud and disclosure • “Can Spam” – except for wireless spam statute • Include a “Do Not Email Registry”• Applies to an email where the “primary purpose” is commercial advertisement or promotion of a • Impose an “ADV” labeling requirement product or service • Create a general private right of action• Applicable to bulk and single emails • Generate stimulating cocktail party conversations
Regulatory Timeline2004: FTC Final Rule on Adult Labeling FCC CAN-SPAM Rules2005: FTC (1) Final Rule on Primary Purpose of Email; and (2) Proposed Discretionary Rules2006:20062007:2008: FTC Final Discretionary Rules
CAN-CAN-SPAMENCLATURE SENDER -- means a person who initiates a commercial e-mail and whose product, service, or Internet web site is advertised or promoted by the message. INITIATE -- means to originate or transmit, or procure the origination or transmission of, such an e-mail message. PROCURE -- means intentionally to pay or induce another person to initiate the message on ones behalf, while knowingly or consciously avoiding knowing the extent to which that person intends to comply with this Act.
From Line FTC: must give the recipient enough information to know who is sending the message Not deceptive to use multiple domains Kleffman v. Vonage Holding Corp. (C.D. Cal. 2007). Not misleading to use non-corporate address where domain may be checked using “Who Is” Gordon v. Virtumundo, Inc. (W.D. Wash. 2007) Fake address can get you in the dog house.
Designated Sender Rule Must Be a Sender• Name must be in the “From” Line CAN- Under CAN-SPAM• Must be Responsible for CAN-SPAM Cannot designate compliance Non- Non-Sender• Dropped requirement that Designated Sender be in control of the content or the mailing list used
Subject Lines • Senate Report – test is whether the person initiating the message knows that the subject heading would be likely to mislead a reasonable recipient about a material fact regarding the content or subject matter of the message • “New MySpace Phone” subject line misleads consumers by creating false sense of sponsorship by MySpace. – MySpace, Inc. v. The Globe.com, Inc. (C.D. Cal. Feb. 27, 2007) • “Free Gift” subject lines violate CAN-SPAM – Adteractive, (C.D. FTC v. Adteractive, Inc. (C.D. Cal. 2007)
Opt-Out Mechanism• Opt-Out Basics – May offer options, but total opt-out must be options, opt- one of them – 10 days to remove – No further use of email address after opt-out opt- – Separate Business Units: Opt- opt- Opt-out for Saab not opt-out for all of GM• Discretionary Regs – Cannot impose any conditions on opt-out opt- (e.g e.g, information) requests (e.g, fee or provide information)
CAN-SPAM Plaintiffs No Consumer Private Right of Action FTC & State AGs Internet Access Service Provider (IASP) Adversely Effected by Violation Must demonstrate substantial harm Civil Penalties $25 – $250 per email $2 million maximum Damage Adjustments Treble damages if willful Reduction if violation occurred despite commercially reasonable efforts to maintain compliance” 15
CAN-SPAMIGATORS Faux ISPs Established to Prosecute CAN-SPAM Actions Small, free service can qualify Hypertouch v. Kennedy-Western University, 2006 WL 648688 (N.D. Cal. 2006) But must demonstrate substantial harm - e.g., bandwidth, hardware, connectivity, overhead, staffing or equipment costs Asis Internet Services, v. Optin Global, Inc., 2008 WL 1902217 (N.D. Cal. March 27, 2008 )
Sender Liability FTC unsuccessful in seeking strict liability Advertiser liable if “actual knowledge, or by consciously avoiding knowing” about affiliate violations Strict anti-spam policies and policing of affiliates defeated allegation of intent. Hypertouch v. Kennedy-Western University, 2006 WL 648688 (N.D. Cal. 2006) – No duty to investigate Asis Internet Services, v. Optin Global, Inc., 2008 WL 1902217 (N.D. Cal. March 27, 2008 )
CAN-SPAM PREEMPTS ALL STATE REGULATION OF EMAIL EXCEPT STATE LAWS• Regulating falsity or deception in email• Not specific to email, including State trespass, contract, or tort law; or• Other State laws to the extent that those laws relate to acts of fraud or computer crime
Rulings On State Spam Regulation• Misrepresentation must be material Omega World Travel, Inc. v. Mummagraphics, Inc. (4th Cir. 2006).• States cannot dictate form of from line Kleffman v. Vonage Holding Corp. (C.D. Cal. 2007); Gordon v. Virtumundo, Inc.(W.D. Wash. 2007).• Courts split on whether state regulation must be based on traditional notions of fraud • Yes. ASIS Internet Service v. Optin Global, Inc. (N.D. Cal. 2008); Hypertouch v. ValueClick, (LA Super. Ct. May 4, 2009). • No. ASIS Internet Service v. Vista Print (N.D.Cal. 2009).• First Amendment requires that it not impinge non- commercial email Virginia v. Jaynes (Va. 2008).
Preemption’s Back Door?• Utah/Michigan Child Registry Laws – Makes sending prohibited email a “computer crime” – Free Speech Coalition, Inc. v. Shurtleff, Utah Federal Court refused to enjoin law finding it fell within exception for computer crime • DOJ filed brief supporting this position• New Colorado Spam Law – Makes violation of CAN-SPAM a violation of state deceptive practices and computer fraud laws – Higher Penalties – Is this a backdoor to creating private right of action under CAN-SPAM?
Selected Cases: CAN-SPAM Act CAN- Advertiser Liability ASIS Internet Services, v. Optin Global, Inc., 2008 WL Inc., 1902217 (N.D. Cal. March 27, 2008 ) Hypertouch v. Kennedy-Western University, 2006 WL Kennedy- University, 648688 (N.D. Cal. 2006) US v. Cyberheat, 2007 U.S. Dist. LEXIS 15448 (N.D. Ariz. Cyberheat, 2007) US v. Implulse Marketing, No. CV05-1285RSL (W.D. Marketing, CV05- Wash. June 8, 2007) From and Subject Lines FTC v. Adteractive, Inc., No. Case No. CV-07-5940 SI Adteractive, Inc., CV-07- (C.D. Cal. 2007) Gordon v. Virtumundo, Inc., Case No. 06-0204-JCC (W.D. Virtumundo, Inc., 06-0204- Wash. May 15, 2007) Kleffman v. Vonage Holding Corp., Case No. CV 07- Corp., 07- 2406GAFJWJX (C.D. Cal. May 23, 2007) MySpace, Inc. v. The Globe.com, Inc. No. CV 06-3391- 06-3391- RGK (JCx) (C.D. Cal. Feb. 27, 2007) (JCx)
CAN-CAN-SPAM Cases Pt 2 Preemption Asis Internet Services, v. Optin Global, Inc., 2008 WL 1902217 (N.D. Cal. March 27, 2008 ) Asis Internet Services v. VistaPrint USA, Inc., No. C 08-5261-SBA (N.D. Cal. May 5, 2009) Free Speech Coalition, Inc. v. Shurtleff, No. 2:05CV949DAK, 2007 U.S. Dist LEXIS 21556 (D. Utah Mar. 23, 2007) Gordon v. Virtumundo, Inc., Case No. 06-0204-JCC (W.D. Wash. May 15, 2007) Hypertouch, Inc. v. ValueClick, Inc., L.A. Super. Ct. No. C081000 (May 4, 2009). Kleffman v. Vonage Holding Corp., Case No. CV 07-2406GAFJWJX (C.D. Cal. May 23, 2007) Omega World Travel, Inc. v. Mummagraphics, Inc., 469 F.3d 348 (4th Cir. 2006) Virginia v. Jaynes, 666 S.E.2d 303 (Va. 2008).
Bennet Kelley Bennet Kelley founded the Internet Law Center in 2007 after a decade of activity in many of the hottest internet issues including behavioral targeting, cyber squatting, internet marketing and promotions, net neutrality, privacy, spam and spyware. Prior to launching the Internet Law Center, Bennet worked in-house with companies such as ETM Entertainment Network, SpeedyClick.com, Hi-Speed Media and ValueClick. Bennet is Co-Vice Chair of the California Bars Cyberspacebkelley@internetlawcenter.net Committee and has been a regular contributor to the Journal of Internet Law. The Internet Law Center’s is based in Santa Monica but also has a presence in Washington, D.C. and Columbia, S.C. The firm’s e- newsletter, Monday Memo, was named one of the top 100 Internet Law resources and has been nominated for the Los Angeles Press Club’s Southern California Journalism Award for best in-house or corporate publication.