After establishing the issues of preemption and standing, how can you sue for violations of CAN-SPAM? Is there any way for spam to be combated by an individual?  Yes, there is by suing for fraud or deception, which are not explicitly covered under the CAN-SPAM Act.  So, how do you plead fraud?  And how much do you need to plead?

How to plead fraud to avoid preemption?

In ASIS Internet v. Subscriberbase, which was heard by the Northern District of California, the court examined preemption and the question of fraud in relation to a motion to dismiss that was filed by defendants.  Plaintiff was suing under the California Business & Professional Code Section 17529.5, otherwise known as the False Advertising Law.  In its claim, plaintiff pleaded the following three factors California has in a fraud claim: (a) misrepresentation; (b) knowledge of falsity; and (c) intent to defraud.  However, plaintiff left out reliance and damage in its claims.  In general, the CAN-SPAM Act does not coincide with laws that prohibit falsity or deception, as well as, some other laws that overlap with it, but are extended to subject matter outside of email.  Here, that aspect of CAN-SPAM was specified to state that a claim containing the common law elements of fraud would not be prohibited.  Hence, the court decided that the complaint satisfied fraud allegations, pending the question of if all the factors were required to be alleged in the complaint.

How many factors must be pleaded?

In short, only what is necessary under the state law must be included in the allegations.  When the court in Subscriberbase looked at the legislation, it determined that the CAN-SPAM Act did not specify all of the factors must be plead, and from that point, state law determined it.  The court realized that due to the two factors not plead—i.e., reliance and damages—it allowed more enforcement type lawsuits, rather than waiting for the rare case where someone was fooled by a spam headline, and had suffered due to a scam.

While there remained the question as to if California’s law that allowed more individuals to sue under claims that seemed to substantially overlap with CAN-SPAM, the court determined that the states had the right.  Also, a state can enable its attorney general to instigate civil lawsuits or enable organizations to do the same and pursue damages.  The limits would then apply to those statutes that went above and beyond CAN-SPAM, such as in Gordon v. Virtumundo, where the law was not sufficiently limited to fraud and deception.

In Subscriberbase, the court does appear to open the door to those individuals wishing to sue for spam email, although, the facts on how it would be allowed remain unclear outside of the hypothetical defrauded email recipient. At our law firm, we assist clients with legal issues related to business, technology, and e-commerce transactions.  You may contact us to set up an initial consultation.