CA Court of Appeals: State Spam Statute Imposes Strict Liability and is not Preempted by CAN-SPAM
CAN-SPAM decisions over the years have been fairly unfriendly to plaintiffs, but one open question was the extent to which CAN-SPAM preempted state spam statutes. Lower courts, particularly in California, have been across the board on this. The California Court of Appeal recently issued a blockbuster of a decision in Hypertouch v. Valueclick.
The court held that CAN-SPAM does not preempt California's spam statute, even though the state's spam statute does not require plaintiffs to prove the elements of fraud. This means that plaintiffs can sue for emails that contain misleading subject lines, incorrect header information, or which are sent through domain names without the registrant's permission, all regardless of whether they can prove reliance and damages. Second, and even more important, the court held that companies whose products or services are advertised through non-compliant emails can be held liable, even if they didn't know or had no reason to know of the underlying violation - i.e., the statute imposes strict liability. This means that if a company contracts with someone else to market the company's product, even if the parties have an agreement in place that the marketing will comply with state and federal spam statutes (and even if the company spot checks the marketers work) the company can still be held liable for emails that are found to violate California's spam statute.
This is a pretty significant decision, which I'm sure will be appealed. We'll see what the State Supreme Court does with it if it decides to hear the case. I blogged in a bit more detail on the case at Professor Goldman's Technology & Marketing Law Blog (with comments from him as well): "CA Appeals Court: Claims Under State Spam Statute Not Preempted by CAN-SPAM."
Given the significance of this case, I can see companies or trade groups weighing in as amici on this case. They should certainly think about doing so.
The court held that CAN-SPAM does not preempt California's spam statute, even though the state's spam statute does not require plaintiffs to prove the elements of fraud. This means that plaintiffs can sue for emails that contain misleading subject lines, incorrect header information, or which are sent through domain names without the registrant's permission, all regardless of whether they can prove reliance and damages. Second, and even more important, the court held that companies whose products or services are advertised through non-compliant emails can be held liable, even if they didn't know or had no reason to know of the underlying violation - i.e., the statute imposes strict liability. This means that if a company contracts with someone else to market the company's product, even if the parties have an agreement in place that the marketing will comply with state and federal spam statutes (and even if the company spot checks the marketers work) the company can still be held liable for emails that are found to violate California's spam statute.
This is a pretty significant decision, which I'm sure will be appealed. We'll see what the State Supreme Court does with it if it decides to hear the case. I blogged in a bit more detail on the case at Professor Goldman's Technology & Marketing Law Blog (with comments from him as well): "CA Appeals Court: Claims Under State Spam Statute Not Preempted by CAN-SPAM."
Given the significance of this case, I can see companies or trade groups weighing in as amici on this case. They should certainly think about doing so.
You, in both this and on Professor Goldman's Technology & Marketing Law Blog ignore one provision of 17529.5(b)(1)(D)(2) which provides a reduction of damages, if the Defendant implemented practices and procedure to prevent this.
What this ruling really means that legitimate companies will investigate people who they hire. They will not hire well known spammers who are listed on ROSKO.
What seems to be ignored in Gordon and most of the other spam cases, is that the acts are for things that legitimate companies don't do: hiding their identity, or trying to trick their ways by spam filters.
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Affiliate e-mail marketing is an extremely sleazy business, and legitimate email affiliates are close to non-existent. If advertisers can get a free pass by pretending they had no idea the affiliates they hired were spamming, it would turn CAN SPAM from mostly toothless to utterly toothless.
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Goldman's blog doesn't have comments and I couldn't make your e-mail link work so I am commenting here re Facebook firings.
Colorado has a couple of applicable laws. One prohibits action for engaging or participating in politics. CRS 8-2-108. The other prohibits firings for engaging in lawful activity unrelated to work. CRS 24-34-402.5, commonly known as the “Smokers’ Rights Statute” was originally proposed by the tobacco lobby to prevent employers from firing smokers, but more broadly prohibits an employer from discharging an employee for engaging in “any lawful activity off the premises of the employer during nonworking hours . . ..” with certain limitations and exceptions. See e.g. "Colorado's Lifestyle Discrimination Statute. . .," 67 U. Colo. L. Rev. 143 (1996). Several articles on it also appear in the state's bar journal, called the Colorado Lawyer (23 Colo. L. 1089 (1994), May 2006, and December 2006). There are six annotated cases including on that held that sexual orientation was not covered (later statutory amendment of non-discrimination laws, however, did include it). The May 2006 article specifically addresses blogging related issues. The remedy for violations of the law was greatly trimmed in 2007. The statute of limitations is six months.
A true "At Will" Facebook firing may also not constitute good cause to fire someone under unemployment laws, and hence lead to unemployment benefits for the fired worker and an increase in the employer's unemployment insurance rate which is something the real employers who have been my clients have cared a great deal about.
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