The document summarizes the history and key aspects of laws and regulations related to commercial email (spam) in the United States, including: - California's initial anti-spam law in 1998 that banned unsolicited commercial email. - The CAN-SPAM Act of 2003, which established the national anti-spam law and includes requirements for identifying sponsored emails and including opt-out mechanisms but does not include volume limits or banning certain practices. - Subsequent FTC regulations related to the CAN-SPAM Act and court cases related to its preemption of state laws and liability issues.

2. In the Beginning . . .

3. There was California . . .
'We are saying that unsolicited e-mail
cannot be sent and there are no loopholes
. . . We don't 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

4. 84 Days Later
Controlling the Solicited
Pornography
Assault of And
Non- Marketing Act
Public Law
108-187

5. CAN-SPAM Act of 2003
CAN-SPAM IS . . . CAN-SPAM DOES NOT . . .
• An anti-fraud and • “Can Spam” – except for
disclosure statute wireless spam
• Applies to an email • Include a “Do Not Email
where the “primary Registry”
purpose” is commercial
advertisement or • Impose an “ADV”
promotion of a product labeling requirement
or service
• Create a general private
• No volume requirement right of action

6. CAN-SPAM Principal Requirements
From line must
identify initiator
Subject line must not be deceptive.
Adult Messages must provide notice.
UCE must be
identified
as
“advertisement”
Requires Working Opt-Out Postal Address for Advertiser
Mechanism for Advertiser

7. Topics
1. FTC Discretionary
Regs
2. CAN-SPAM
Plaintiffs
3. State Law &
Preemption
4. Advertiser Liability
5. California
Amendments

8. Regulatory Timeline
2004: FTC Final Rule on Adult Labeling
FCC CAN-SPAM Rules
2005: FTC (1) Final Rule on Primary Purpose
of Email; and (2) Proposed Discretionary Rules
2006:
2007:
2008: FTC Final Discretionary Rules

9. Discretionary Regs
Definition of Valid Physical Address
• Accurately registered P.O. Box allowed
Opt-Out Requests Conditions or Expiration
• Cannot impose any conditions on opt-out requests
– (e.g, fee or provide information)
• Abandons proposal to reduce processing time to 3 days
• Rejects call for expiration period for opt-out requests

10. Designated Sender Rule
Must Be a
• Name must be in the “From” Sender Under
Line CAN-SPAM
• Must be Responsible for Cannot designate
CAN-SPAM compliance Non-Sender
• Dropped requirement that
Designated Sender be in
control of the content or the
mailing list used

11. CAN-SPAM Plaintiffs
• FTC
• State AGs
• Internet Access Service
Provider (IASP)
– Adversely Effected by
Violation
• No Consumer Private
Right of Action

12. Is the IASP Remedy a Trojan Horse?
Hypertouch v. Kennedy-
Western University
• Small, free service can qualify.
• Concern that Hypertouch is a
professional plaintiff can only be
addressed by Congress
• Opens door to litigation by anti-
spam activists as faux-IASPs
Hypertouch and its principal have filed approx.
40 cases under CAN-SPAM and/or California law

13. Is Gordon a Proper Plaintiff?
• Gordon v. Virtumundo
– Continued to use other people's e-
mail addresses to collect spam . . .
for generating lawsuit-fueled revenue
– No harm related to
• Bandwidth
• Hardware
• Internet connectivity, network integrity
• Overhead, staffing or equipment costs

14. No!
• Not Plaintiff Congress
had in mind – must Followed in Cal
demonstrate Federal Court
substantial harm ASIS Internet
Services v. OPTIN
• Awards Defendant Global
Attorneys’ Fees – suit (N.D. Cal. 2008)
“ill-motivated,
unreasonable, and
frivolous”

15. Subliminal Message #2
Golf is
boring.
Let’s talk
about
spam.

16. 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

17. • Misrepresentation must be
material
• States cannot dictate form
of from line
– Cannot prohibit use of multiple
domains.
– Not misleading to use non-
corporate address where domain
may be checked using “Who Is”
• State regulation must be
based on traditional
notions of fraud
• First Amendment requires
that it not impinge non-
commercial email

18. 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
– Is this a backdoor to creating private
right of action under CAN-SPAM?

19. Lessons from the Beehive State
Registry Income/Expense ($000)
$100
Liability $150 $133
Liabilities Exceed
Income 2-1
Income $187
$0 $50 $100 $150 $200 $250 $300 $350 $400 $450
Registry Fees Unspam Fees Law Enforcement Litigation Defense

20. “Sender” Liability
• FTC unsuccessful in
seeking strict liability
• Advertiser liable if
“actual knowledge, or by
consciously avoiding
knowing” about affiliate
violations
– Hypertouch v. Kennedy-
Western University
Strict anti-spam policies
and policing of affiliates
defeated allegation of
intent.
– ASIS Internet Services v.
Opt-In Global, Inc.
No duty to investigate

21. AB 2950
• Pushed by anti-spam activists who
have filed over 100 suits
• Wish list
– Advertiser liability
– Prohibiting use of multiple domains
– Tactics to evade email filters
– Expand Plaintiffs to include District &
City Attorneys
– Venue
– Restore Statute of Limitations to 3 Years

22. AB 2950
• Pushed by anti-spam activists who
have filed over 100 suits
• Wish list
– Expand Plaintiffs to include District &
City Attorneys
– Venue
– Restore Statute of Limitations to 3 Years

23. AB 2950
• Pushed by anti-spam activists who
have filed over 100 suits
• Wish list
–
– Expand Plaintiffs to include District &
City Attorneys
– Venue
– Restore Statute of Limitations to 3 Years

24. Cases
Preemption IASP Standing
• Omega World Travel, Inc. v. • ASIS Internet Services, v. Optin
Mummagraphics, Inc., 469 F.3d 348 Global, Inc., 2008 WL 1902217 (N.D.
(4th Cir. 2006) Cal. March 27, 2008 )
• Free Speech Coalition, Inc. v. • Gordon v. Virtumundo, Inc., supra.
Shurtleff, No. 2:05CV949DAK, 2007
U.S. Dist LEXIS 21556 (D. Utah Mar. • Hypertouch v. Kennedy-Western
23, 2007) University, 2006 WL 648688 (N.D. Cal.
2006)
• Kleffman v. Vonage Holding Corp.,
Case No. CV 07-2406GAFJWJX (C.D. No Strict Liability
Cal. May 23, 2007)
• ASIS Internet Services, v. Optin
Global, Inc., supra.
• Gordon v. Virtumundo, Inc., Case No.
06-0204-JCC (W.D. Wash. May 15,
2007) • US v. Implulse Marketing, No. CV05-
1285RSL (W.D. Wash. June 8, 2007)
• Virginia v. Jaynes, No. 062388 (Va.
September 12, 2008) • US v. Cyberheat, 2007 U.S. Dist.
LEXIS 15448 (N.D. Ariz. 2007)

25. Bennet Kelley
Bennet Kelley is founder of the Internet Law Center in Santa
Monica where he helps clients navigate the challenges of the digital
economy. He has been active in many of the hottest Internet issues
over the past decade including cyber squatting, internet marketing
and promotions, online gambling, net neutrality, privacy and spam.
Bennet will be Vice-Chair of the California State Bar's Cyberspace
Committee and is a regular contributor to the Journal of Internet
Law. Bennet worked in-house with companies such as ETM
Entertainment Network, SpeedyClick.com and ValueClick prior to
launching the Internet Law Center.
www.InternetLawCenter.net The Internet Law Center’s newsletter, Monday Memo, recently was
named one of the top 100 Internet Law resources.
.
Contact: Internet Law Center
100 Wilshire Blvd, Suite 950
Santa Monica, CA 90401
310-452-0401
bkelley@internetlawcenter.net

26. Future Presentations
October 14
• Online Advertising’s Year of Living
Dangerously, California State Bar
Cyberspace Committee (webinar)
November 3
• Email Compliance: Foundation of
Reputation & Deliverability, Direct
Marketing Association (New York)
November 21
• Affiliate & Direct Marketing, PMA
Promotion Marketing Law Conference
(Chicago)