California’s Anti-Spam Statute

In recent years, electronic spam has become a public nuisance. In response, several states, including, but not limited to, California, have enacted statutes to prevent electronic spam. As with most legislation that deals with the constantly-changing nature of the web, these statutes struggle to define the extent of their application while staying current with trends. Therefore, courts are charged with the responsibility of interpreting the intent of these laws.

What Are The Provisions of California’s Anti-Spam Statute?

In fact, California’s Business and Professions Code section 17529.5 prohibits any person or entity from sending commercial email advertisements, or spam, in three defined circumstances. First, spam is prohibited if an email advertisement uses a third-party domain without the third-party’s permission. Second, the statute prohibits email advertisements that use misrepresented information in the header. Finally, it is unlawful to use a subject line that is reasonably likely to mislead a recipient about the content or subject of the message. This section applies if the email is sent from California or if it is sent to a California email address. Accordingly, the reach of California’s legislation into other jurisdictions is also an issue for courts to interpret. Furthermore, a party bringing suit may recover both actual damages and liquidated damages. Liquidated damages are limited to $1,000 for each unlawful email and may go up to $1,000,000.

Who May Bring Suit Under This Statute?

The anti-spam statute allows the Attorney General, electronic mail service providers, and recipients of any such unsolicited commercial emails to file a lawsuit. The issue of what constitutes a “mail service provider” has recently been the subject of litigation. Indeed, companies often have several different sectors of operation and courts are careful in characterizing a company as a mail service provider. However, this characterization is important because it establishes standing. In order to bring a lawsuit, a party must have standing–i.e., the capacity to bring suit before a court. Specifically, in the 2013 case, Beyond Systems, Inc. v. Kraft Foods, Inc., the federal district court of Maryland determined that plaintiff Beyond Systems, Inc. (“BSI”) was not a bona fide Internet Service Provider. Accordingly, the court found that BSI did not have standing to sue under section 17529.5. The court explained that both California’s anti-spam statute and Maryland Commercial Electronic Mail Act ยง 14-3001, et seq. require that a party bringing suit be a bona fide Internet Service Provider. Based on evidence from Kraft Foods, the court concluded that BSI did not meet this standard. Indeed, BSI spent most of its time in litigation with companies under anti-spam laws. It obtained three times more revenue from these cases than from actual Internet operations. In addition, BSI set up special networks to catch perpetrators violating anti-spam legislation. These were not characteristics common to service providers. The interpretation and application of the statute will largely determine how effective it will be towards preventing spam.

At the Law Offices of Salar Atrizadeh, we are knowledgeable and experienced in a wide range of areas dealing with Internet laws. To further discuss California’s Internet legislation and how it may effect you, contact us to speak with an attorney.