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California Court of Appeals Limits Anti-spam Law
Practical Law Legal Update 1-586-9645 (Approx. 6 pages)
California Court of Appeals Limits Anti-spam Law
by Practical Law Commercial
| Published on 04 Nov 2014 • USA (National/Federal) |
The California Court of Appeals recently released two decisions, Rosolowski v. Guthy-Renker LLC and Rosolowski v. People Media, Inc., that limit California's anti-spam legislation. The decisions allow marketers to send emails from any domain name or email address and with subject lines that are qualified in the bodies of the emails themselves.
On October 29, 2014, the California Court of Appeals issued two decisions that limit California's anti-spam law. The Court of Appeals affirmed the trial courts in both cases and allowed marketers to send advertising emails:
- From domain names and email addresses that do not identify the actual entity that sent the emails or that produces the advertised products.
- With subject lines that make claims that are qualified only in the bodies of the emails.
(Rosolowski v. Guthy-Renker LLC, No. B250951, (Cal. Ct. App. Oct. 29, 2014) (Guthy-Renker) and Rosolowski v. People Media, Inc., No. B250482, (Cal. Ct. App. Oct. 29, 2014) (People Media).)
Background and California's Anti-spam Law
California's anti-spam law prohibits marketers from sending an email to or from a California email address that:
- Contains or is accompanied by falsified, misrepresented or forged header information (Cal. Bus. & Prof. Code § 17529.5(a)(2)). Previous California appellate decisions have held that this section is violated when the sender uses a domain name or email address that:
- does not make clear the identity of either the sender or the merchant-advertiser on whose behalf the email was sent; and
- is not readily traceable to the sender using a publicly available online database, such as WHOIS (a publicly available database through which users can access information regarding domain names, including the registrant's identity and email address).
- Has a subject line the sender knows is likely to mislead the recipient (Cal. Bus. & Prof. Code § 17529.5(a)(3)). The Court of Appeals previously held that a subject line is read separately from the body of the email, when considering if it is misleading. A subject line is misleading even if it is qualified by a condition that is readily apparent from the body of the email. (Hypertouch, Inc. v. Valueclick, Inc., 192 Cal. App. 4th 805 (Cal. Ct. App. 2011).)
Under this statute, a California email address is an email address that is:
- Furnished by a service provider that sends bills for furnishing and maintaining that email address to a mailing address in California.
- Ordinarily accessed by a computer within California.
- Furnished to a California resident.
The federally enacted Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM Act) also regulates unsolicited commercial emails and preempts similar state regulation, except to the extent that a state's laws prohibit falsity or deception in any portion of a commercial email (15 U.S.C. §§ 7701-7713). For more information on the CAN-SPAM Act, see Practice Note, CAN-SPAM Act Compliance.
Emails at Issue
In both Guthy-Renker and People Media, the plaintiffs alleged that the defendants sent them unsolicited commercial email advertisements that violated Section 17529.5(a)(2). The emails purported to have been sent from domain names and email addresses that were not:
- Names or registered DBAs of existing entities.
- Traceable to the defendant by a WHOIS or similar search.
The plaintiffs in Guthy-Renker also alleged that the emails violated Section 17529.5(a)(3) because the subject lines purported to offer free gifts, without mentioning that receiving the free gift was contingent on making a purchase.
The defendants answered the complaints by asserting that:
- The plaintiffs had failed to state a cause of action under:
- Section 17529.5(a)(2) because sender's identity was easily ascertainable from the body of the email; and
- Section 17529.5(a)(3) because the sale-condition on the free gift was easily ascertainable from the body of the email.
- Claims under Section 17529.5(a)(2) and (3) were preempted by the CAN-SPAM Act.
Outcome
The Court of Appeals affirmed the trial courts' decisions and held that advertising emails do not:
- Misrepresent the sender's identity so long as the sender's identity is readily ascertainable from the body of the email.
- Mislead recipients with a subject line so long as any conditions of the claims or offers made in the subject line are readily ascertainable from the body of the email.
The Court of Appeals explicitly declined to consider whether the CAN-SPAM Act preempts Section 17529.5(a)(2) and (3).
Practical Implications
These decisions provide companies and third-party marketers with leeway, under California's anti-spam law, to send emails from domain names that have no connection to their entity's official name. Also, the Guthy-Renker decision clarifies that the body of an email can qualify offers or claims made in the subject line.
However, marketers should continue to use best practices when both choosing a domain name or email address from which to send an advertising email and when writing an email's subject line. All false and misleading advertising is subject to private action and public enforcement, by the Federal Trade Commission (FTC) or at the state level. Companies should also be aware that these rulings are likely to be challenged in the future.
For information on direct marketing, see Practice Note, Direct Marketing.
For information on FTC consumer protection enforcement, see Practice Note, FTC Consumer Protection Investigations and Enforcement.