An Assembly member recently introduced AB 2546, an author-sponsored bill that would amend California’s anti-SPAM legislation (CBPC § 17529.5). The potential impact on the email marketing industry is profound.
The bill expands California’s anti-SPAM law to provide that it is not only unlawful for any person or entity to “advertise in” a commercial email, but also unlawful for a person or entity “to initiate, advertise in, or enable or assist a person or entity to initiate or advertise in,” a commercial email advertisement either sent from California or to a California email address, under certain circumstances. It expands the existing circumstances under which the anti-SPAM law is triggered and adds six new circumstances.
The bill also expands the list of individuals allowed to bring an action under the anti-SPAM law, amends the available remedies to limit the circumstances under which liquidated damages could be reduced by the court, and allows the court to issue injunctions.
Specifically, the bill:
- Expands the three existing circumstances listed under current law in which it is unlawful to send SPAM to also include circumstances where: (i) the email advertisement contains or is accompanied by a third-party’s email address without the permission of the third party, except as specified; (ii) the email advertisement contains or is accompanied by falsified, misrepresented, or forged information in the subject line or body; and (iii) the email advertisement has a subject line that is likely to mislead, and not just where it has a subject line that a person knows would be likely mislead;
- Adds new circumstances where advertising in a commercial email sent from California or to a California email is unlawful, including where: (i) the party who initiates the email uses “multiple domain names for no legitimate reason other than to bypass SPAM filters;” (ii) the body of the email or the underlying source code contains nonsensical text unrelated to the advertiser’s business that is intended to bypass SPAM filters; (iii) the “From” name of the email advertisement meets certain requirements, such as using generic text that misrepresents who the email advertisement is from or generic text that a reasonable consumer would not associate with the advertiser, or a fictitious business name that the advertiser uses exclusively or primarily as the “From” name in email advertisements; (iv) the subject line begins with “re:” or anything substantially similar, or the subject line otherwise states that the email advertisement is being sent in response to a request or previous correspondence from the recipient, when the recipient made no such request; and (v) the subject line contains the word “free” or any language substantially similar to “free” if there are conditions attached, as specified, unless the subject line clearly indicates that there are conditions attached (a mere asterisk or other symbol, referring to conditions in the body of the email, does not satisfy this requirement);
- Allows the following individuals to bring an action under California’s anti-SPAM law and allow them, if prevailing, to recover reasonable attorney’s fees and costs: (i) a district attorney or a city attorney; or (ii) a person whose name, username, email address, or domain name appear in the “From” name or sender’s email address without permission from that person or entity;
- Provides that truthful content in or accompanying an email advertisement, including, but not limited to, identifying the sender in the body of an email advertisement, shall not cure false, misrepresented, or forged information in another part of an email advertisement;
- Provides that a recipient is not required to opt-out of receiving the commercial email messages in order to bring a cause of action for a violation of the anti-spam law and that a defendant shall not assert any defense relying on the assertion that the recipient did not opt-out, subject to a specified remedy;
- Adds to the list of available remedies, authorization for courts to enter an order enjoining a violation of this law;
- Revises the circumstances under which the court must reduce liquidated damages to instead provide that the court may only do so only upon a finding that the defendant has complied with, and has satisfied the burden of proof by demonstrating specified requirements. These requirements, would include, among other things, that the defendant has established and implemented with due care practices and procedures reasonably designed to effectively prevent unsolicited commercial email advertisements;
- Codifies the intent of the legislature that the section containing the above provisions, which prohibits falsity and deceptions in commercial email messages, shall operate within the exception to federal preemption to the full extent permitted by the CAN-SPAM Act of 2003 (Title 15 United States Code Section 7707(b)) and any other provision of federal law. This bill would further include a severability clause in the section containing these provisions;
- Expands the definition of “commercial email advertisement,” as specified, for these purposes;
- Updates codified legislative findings and declarations and add that there is a need to regulate the advertisers who use SPAM because they may obtain an unfair advantage over their competitors who engage in legitimate and lawful advertising practices.
According to the author of the bill: “It is common for advertisers to send unsolicited commercial emails to consumers. Often they will contract with ‘spam networks’ to distribute emails to consumers. Those ‘spam networks’ in turn contract with third-parties who actually send out those emails. Often times, the senders will use methods designed to circumvent spam filters or mislead consumers. Among others, these methods include: sending emails from multiple domain names, altering the “From” lines to mislead the recipient about the identity of the sender, copying headers from legitimate businesses and placing them into the email, or simply providing untruthful content to mislead a consumer.”
“Under existing law, advertisers are strictly liable for false and deceptive spam. However, the actual senders of the emails are not liable for sending the unlawful spams. AB 2546 would strengthen California’s prohibitions on false and deceptive spam emails in a number of ways by: (i) holding spam networks and the actual senders liable for false and deceptive spamming; (ii) applying the law to falsehoods/misrepresentations in the body of emails, not just the headers; (iii) establishing that truthful content in one part of a spam email does not cure falsity in another part; (iv) prohibiting spamming from multiple domain names for the sole purpose of bypassing spam filters; (v) prohibiting “From” names that misrepresent who the spams are from; (vi) authorizing the Courts to impose injunctions to stop unlawful spamming; and (vii) allowing District Attorneys and City Attorneys to bring actions against unlawful spammers.”
In addition to expanding the list of individuals allowed to bring an action under the anti-SPAM law, the bill would expand the list of circumstances that trigger a violation of the state’s anti-SPAM law, and make clear that it is a violation not only to advertise, but to initiate or otherwise enable or assist another person to initiate or advertise commercial email advertisements in violation of California’s anti-SPAM law.
The bill also seeks to clarify what is meant by “commercial email advertisement.” Specifically, “commercial email advertisements,” would include those email messages initiated for the purpose of advertising or promoting the lease, sale, rental, gift offer, “promotion,” or other disposition of “credit, stocks, bonds, sweepstakes, insurance, employment opportunities, or any other solicitation” as well as email messages initiated for the purpose of advertising or promoting the lease, sale, rental, gift offer, or other disposition any property goods, services, or extension of credit as currently identified under existing law.
This bill does little more than ignore federal law that largely preempts it and already regulates commercial email messages. It invites excessive litigation for actions that do not result in any damages, and in a state that already has among the nation’s toughest anti-SPAM laws.
The proposed expansion of the law would make it nearly impossible to send commercial emails from or to California and would prohibit many legitimate practices, such as using the d/b/a name of a business as a “From” line, or using more than one sending domain.
Additionally, the notion that actual senders of emails that may be initiating SPAM are not liable for doing so ignores the contractual liability that senders face from marketing partners and an aggressive plaintiff’s bar that does little to distinguish between advertisers and senders. Current law already provides for enforcement by the Federal Trade Commission and state Attorneys General, including the imposition of civil penalties.
CAN-SPAM was enacted to create a single, national standard for the regulation of commercial email messages. AB 2546 purports to create new protections for consumers, but instead pushes the agenda of the plaintiffs’ bar and attempts to circumvent CAN-SPAM by adding additional state law provisions that directly contradict those of the federal anti-SPAM legislation.
AB 2546 should be of particular interest to email marketers, as well as brands that advertise via email. Contact the author at firstname.lastname@example.org or (212) 756-8777 to discuss the potential implication of the bill, email marketing compliance and/or how you can oppose AB 2546. You can also contact Sarah de Diego at email@example.com or (310) 980-8116 to discuss opposing this bill.
Richard B. Newman is an Internet marketing compliance and regulatory defense attorney at Hinch Newman LLP focusing on advertising and digital media matters. His practice includes conducting legal compliance reviews of advertising campaigns, representing clients in investigations and enforcement actions brought by the Federal Trade Commission and state Attorneys General, commercial litigation, advising clients on promotional marketing programs, and negotiating and drafting legal agreements. You can find him on Twitter at FTC Defense Lawyer.
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