The Virtumundo case, decided last year in the Western District of Washington, and widely heralded as a case which would stem the flow of flimsy consumer CAN-SPAM lawsuits, is currently on appeal in the 9^th Circuit.  The appeal docket shows what a trainwreck the litigation has become – Gordon, the plaintiff in the case below, is proceeding pro se, and is trying to make arguments in the 9^th Circuit alleging misconduct by his lawyer.  While Gordon’s own brief does not provide much food for thought as far as the merits of the case, the Washington AG weighed in with an amicus brief which argues that the lower court didn’t exactly get the preemption issue right.  (Access a copy of the AG’s brief here [pdf], and Virtumundo’s brief here [pdf].)

CAN-SPAM Preemption Approaches

Courts have taken different approaches to CAN-SPAM preemption.  On the one hand, some courts have held that given Congressional purpose to stop spam, which would mean that it would not intend to disrupt complementary state enforcement procedures, only state enforcement procedures which would cause a defendant to have inconsistent obligations would be preempted under CAN-SPAM.  One example of this approach is Beyond Sys. v. Keynetics, Inc., 422 F. Supp. 2d 523, 528 (D. Md. 2006) [pdf]

But it is readily apparent that MCEMA – which prohibits use of a third party’s Internet domain name or electronic mail address without the permission of the third party, or which contains false or misleading information about the origin or the transmission path of the commercial electronic mail, or which contains false or misleading information in the subject line that has the capacity, tendency or effect to deceive the recipient –– is in no way inconsistent with CAN-SPAM. At most it supplements the federal law. It does not frustrate the goals of the federal legislation; in fact it furthers them. Given that sort of compatibility between state and federal law, the preemption doctrine simply does not apply. Similarly, providing a civil remedy to the individual recipient of unwanted commercial electronic mail or to a third party without whose permission its Internet domain name or electronic mail address was used, or to an ISP provider is fully in harmony with CAN-SPAM’s enforcement mechanisms.

On the other hand, cases such as Mummagraphics have taken the approach that in enacting CAN-SPAM Congress intended to create a “national standard” which emailers would have to comply with.  Any local variation would be inconsistent with this approach.  CAN-SPAM only reaches “material” misstatements, therefore, any state laws imposing a lesser standard are preempted. 

The AG’s Amicus Brief

It’s interesting to note initially that the AG takes pains to not take a position on the merits of Gordon’s state law claims.  This is awkward, but likely influenced by the fact that Gordon is not a particularly sympathetic plaintiff with sympathetic facts.  Still, as the agency that is charged with enforcing Washington’s email statute, it’s interesting to see the AG come out and make this statement.

The AG’s argument (which is not a bad one) is that Washington statute is not a strict liability statute.  It cites a prevailing consumer protection act case (Washington) for the proposition that only subject lines which have the capacity to deceive a substantial portion of the public will be considered deceptive under the email statute.  Similarly, based on general legal principles (the standard for deception) in Washington, the AG argues that the Washington statute will not cover “irrelevant” errors.  Ultimately, the AG’s brief concludes that the district court could have actually applied the appropriate standard under CEMA and found no substantive violation.  (Rather than making a preemption finding based on the claims made by the plaintiff, who was arguably trying to stretch the statutes.)  (NB:  here's a link [pdf] to an article titled The Future of Spam Litigation After Omega World Travel v. Mummagraphics, Katherine Wong, Harvard Journal of Law and Technology (Spring 2007) (agreeing with the AG's position and disagreeing with Mummagraphics).)

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Ultimately, the issue will turn on federal preemption law.  My instinct is that the AG is correct.  CAN-SPAM does not reflect any Congressional intent to “occupy the field,” and displace state enforcement mechanisms.  In fact, CAN-SPAM contains an express savings clause which saves state statutes which cover falsity or deception.  As the AG’s brief notes, many federal statutes set a baseline for conduct but leave states to set more stringent standards (e.g., employment law).  The district court's judgment will likely be affirmed, but it's possible the appeals court takes pains to state that Washington's email statute is alive and well notwithstanding the enactment of CAN-SPAM.  

In the process of weighing in, the AG offers its perspective on the contours of Washington’s spam statute.  There was very little case law interpreting this statute, particularly following the passage of CAN-SPAM. Getting the AG's take on the statute is in itself a good thing.  I would have been curious to see some enforcement statistics around Washington's email statute.  I think this would have bolstered the AG's argument.