How a Plaintiff Was Undeceived and Lost at Spam Litigation . . . What Nobody Told You About!

Back in 2003 there was a race to pass spam legislation. California was on the verge of passing legislation that marketers disdained. Thus marketers pressed for federal spam legislation which would preempt state spam legislation. The Can Spam Act of 2003 did just that... mostly.

"Mostly" is where litigation lives.

According to the Can Spam Act preemption-exception:

This chapter supersedes any statute, regulation, or rule of a State or political subdivision of a State that expressly regulates the use of electronic mail to send commercial messages, except to the extent that any such statute, regulation, or rule prohibits falsity or deception in any portion of a commercial electronic mail message or information attached thereto.

15 USC s 7707(b)(1). The preemption-exception is big because California affords a private right of action, where the Can Spam Act does not.  The Can Spam Act is enforced by state and federal authorities only.

This is where today's plaintiff, in Silverstein v. Keynetics, Inc., Dist. Court, ND California 2016, attempted to hang his coat.

According to the court, "Plaintiff is a member of the group 'C, Linux and Networking Group' on LinkedIn, a professional networking website. Through his membership in that group, he received unlawful commercial emails that came from fictitiously named senders through the LinkedIn group email system. The emails originated from the domain "linkedin.com," even though non-party LinkedIn did not authorize the use of its domain and was not the actual initiator of the emails." The emails themselves contained marketing links that led, allegedly, to defendants' businesses.

Plaintiff alleged that the names in the 'from' field of the emails were false or deceptive. According to Plaintiff, "the 'from' names include 'Liana Christian,' 'Whitney Spence,' 'Ariella Rosales,' and 'Nona Paine,' none of which identify any real person associated with any defendant.  Further, Plaintiff alleges that the emails 'claim to be from actual people' and that all of the false 'from' names deceive the emails' recipients 'into believing that personal connection could be made instead of a pitch for Defendants' products.'"

A reading of the Can Spam Act would appear to be clear.  The Can Spam Act preempts state causes of action "except to the extent that any such statute prohibits [either] falsity or deception."  If the email is either false or deceptive, it would seem, Plaintiff could proceed. In the case at hand, the information in the 'from' field would appear to be false.

The Judge in the Silverstein decision, however, hangs her hat on a previous 9th Circuit decision in Gordon v. Virtumundo, 575 F.3d 1040 (9th Cir. 2009). In Gordon, defendant sent out marketing emails from domain names that it had registered such as "CriminalJustice@vm-mail.com," "PublicSafetyDegrees@vmadmin.com," and "TradeIn@vm-mail.com."  These were in fact defendant's domain names.  While the 'from' field may not have clearly identified who defendant was, the information was not false nor was it deceptive.  Furthermore, according to the court, the WHOIS database accurately reflected to whom the domain names were registered.  Therefore, at best, the 'from' field information was incomplete, but not false or deceptive. As a result, the Can Spam Act preempted litigation under state law.

The Gordon court elaborated that it is insufficient for the information in the spam to be merely problematic.  It had to be materially problematic. The Gordon court looked at the words "false" and "deceptive," and other language of the Can Spam Act, and said, "we know those words. Those words refer to 'traditionally tortious or wrongful conduct.'"  Recognizing the Internet as a trans-border medium of communication, Congress had attempted to solve the patchwork of inconsistent state spam laws that were arising and establish a nationwide legal standard. It would be logically incongruous, the court argued, for Congress to erect a nationwide standard only to leave it vulnerable to a collage of immaterial exceptions emanating from state laws. The exceptions would undo the nationwide playing field for conducting business.  Thus, immaterial information inaccuracies that are insufficient to in fact deceive a plaintiff are therefore insufficient to sustain a preemption-exception. 

In the case at hand, although plaintiff has alleged that the names in the 'from' field were false, the court concluded that plaintiff has failed to establish that they are materially deceptive. Plaintiff did not, for example, alleged that the false names were people who were known to him and that the sender was spoofing their identities. Nor has plaintiff alleged that the false names somehow confused or deceived plaintiff about the nature of the emails. The emails themselves, including the subject line "How a newbie banked $5K THIS WEEK . . . What Nobody Told You About," made clear the marketing nature of the communication.

Plaintiff's claim, therefore, does not fit within the Can Spam Act preemption-exception.

Can Spam Act preempts state SPAM law where misrepresentation is not material

DAVISON DESIGN & DEVELOPMENT INC. v. Riley, Dist. Court, ND California 2013

ISSUE: Is state cause of action for SPAM preempted by the Can Spam Act?

RULE: State SPAM laws are preempted by Can Spam Act, except when they address fraud or misrepresentation. 

HELD:  State cause of action preempted by Can Spam Act where misrepresentation was not material.

DISCUSSION:

"First, the parties dispute the scope of the exception to CAN-SPAM preemption. Plaintiffs argue that Riley must allege a claim for fraud in order to avoid preemption, while Riley argues that the "falsity or deception" language used in the statute creates a broader exception, encompassing more than just claims for fraud. As an example, Riley points to Cal. Civ. Code § 1710, which defines the tort of "deceit," and which does not require the elements of common-law fraud, including reliance. While the relevant Ninth Circuit authority on this issue (Gordon v. Virtumundo, 575 F.3d 1040 (9th Cir. 2009)) does use the word "fraud" when discussing the preemption exception, the court agrees with Riley that Gordon does not necessarily limit the exception to fraud claims. And while Gordon did not answer the question of whether a party must plead reliance and damages in order to avoid CAN-SPAM preemption, the court agrees with and adopts the reasoning set forth in two post-Gordon district court cases, both of which held that "reliance and damages need not be demonstrated to save a lawsuit from preemption." Asis Internet Services v. Member Source Media, LLC, 2010 WL 1610066, at *3 (N.D. Cal. Apr. 20, 2010); see also Asis Internet Services v. Subscriberbase Inc., 2010 WL 1267763 (N.D. Cal. Apr. 2, 2010). Riley need not establish reliance and damages in order to avoid preemption; instead, as long as she can establish that plaintiffs "were responsible for making knowing and material misrepresentations," her counter-claim "will sound in `falsity or deception' and will not be preempted by the CAN-SPAM Act." See Subscriberbase, 2010 WL 1267763 at *13. Specifically, if Riley can establish that the presence of her own name in the "from" line of the seven emails at issue was materially false or deceptive, her counter-claims will avoid preemption.

"Applying that standard, the court finds that while the use of Riley's name in the "from" line was indeed false, the fact that Riley would have immediately recognized the use of her own name puts her counter-claims in the same category as the "non-deceptive statements" that were rejected by the Gordon court. Upon receiving the emails, Riley would have instantly known that she did not send those emails to herself, and thus, the emails could not have been deceptive in any meaningful way. Thus, any falsity or deception was not sufficiently "material" to avoid preemption. The court recognizes that the factual circumstances of this case are unique, and that a misrepresentation as to the identity of the sender of emails will indeed be material in many cases. For instance, if Riley had received emails from plaintiffs with the name of one of Riley's personal contacts in the "from" line, those emails might well give rise to a non-preempted claim. However, as to the seven emails at issue, the court fails to see how Riley could have been deceived into believing that she sent herself these emails, and fails to see how any reasonable person could be deceived by an email bearing his or her own name in the "from" line. Accordingly, the court finds that Riley's counter-claims are preempted by CAN-SPAM, and hereby GRANTS summary judgment in favor of plaintiffs on the preemption issue. As discussed above, and for the reasons stated in the court's September 13, 2013 order (Dkt. 212), in which the court declined to exercise jurisdiction over claims relating to 108 of the emails, the court similarly declines to exercise declaratory judgment jurisdiction over plaintiffs' claims relating to these seven emails."

 

In Which It Is Asked, Is It Possible to be Online and Not Be “Commercial”? Aitken v. Communications Workers of America

Pop quiz: What does the word “commercial” mean on the Internet? Chose one:

[A] Whatever a judge chooses it to mean – neither more nor less.

[B] The sale of goods or services.

[C] A link to someone elses’s website, with whom you have no relationship, which happens to sell t-shirts.

[D] A protest by a Union against a corporation where the Union impersonates officers of the corporation.

According to the CAN SPAM ACT, the definition of commercial, in terms of commercial emails, is those emails “the primary purpose of which is the commercial advertisement or promotion of a commercial product or service (including content on an Internet website operated for a commercial purpose).” 15 U.S.C. § 7702(2)(A).

Before we unpack the full extent of the word “commercial,” let’s go to the way-back machine to a time when words – as Humpty Dumpty informed Alice – mean exactly and precisely what Humpty Dumpty chooses them to mean, nothing more and nothing less.

'The question is,' said Alice, 'whether you can make words mean so many different things.'

'The question is,' said Humpty Dumpty, 'which is to be master -- that's all.'

- Alice in Wonderland

We find ourselves in 1998, in a litigation known as Jews for Jesus v. Brodsky, 993 F.Supp. 282 (D.N.J.), aff'd 159 F.3d 1351 (3rd Cir. 1998). In this case, the defendant registered a website jewsforjesus.com where the defendant made arguments antithetical to the mission of the group Jews For Jesus. The question before the court was whether the defendant had infringed on plaintiff’s trademark by registering and using the domain name jewsforjesus.com. In order to find that defendant was guilty of nefarious doings, the court would have to find that defendant had used plaintiff’s trademark in commerce. The court found that requirement was satisfied by the fact that defendant Brodsky linked to a third party’s website that sold t-shirts. I believe this constitutes a “Wow! That’s so cool! Who’d a thunk that linking to someone else’s website that sells shirts magically transforms your website, where you sell nothin’ a t’all, into a commercial website.” Apparently, in the Third Circuit, the word “commercial” meant exactly and precisely nothing at all.

Now we come to this month’s exploration of the word “commercial.” But wait, before we manage to depart from 1998, we recall Senator Dan Coats who was still recovering from his sponsored legislation, the Communications Decency Act, being unanimously declared unconstitutional. Sen. Coats’ solution was to listen to the Supreme Court and come back with a new law, the Children’s Online Protection Act (COPA), which comported with the views of the Supreme Court. One of the reasons that COPA was a solution to the perceived problem was that COPA would only be aimed at “commercial” websites. This was good because now “non-profit” websites would be outside of the cross-hairs of the censors at the Department of Justice. Of course, here “non-profit” is taken to mean exactly and precisely “not commercial.” Funny thing is, the defendant in this month’s case will make exactly the same argument.

This month’s case involves a squabble between Verizon and the Communications Workers of America (CWA). Aitken v. Communications Works of America, No. 1:06cv1161 (EDVA July 12, 2007) PDF. Some members of the CWA got a cute idea – they created free Yahoo! email accounts using the names of some Verizon officers and sent out a batch of fake emails that “disparaged Verizon.” The question before the court is whether the falsified email headers constitute a violation of the relatively new CAN SPAM Act. As the CAN SPAM Act only covers commercial speech, the court must find that the emails in question were “commercial.”

First, how exactly did the members of the CWA impersonating Verizon officials “disparage” Verizon in these emails? They did this by telling the recipients of the benefits of union membership, attempting to convince these non-union members to sign up.

Now that MCI has been purchased by Verizon, the company is doing all it can to

keep you and other former MCI employees from gaining Union benefits and

wages that your co-workers at Verizon receive.

Unionized Verizon workers are members of CWA or IBEW and:

• earn a lot more money

• have a better health plan and pay less for it

• have an excellent defined benefits pension plan and 401(k) plan

• have excellent job security

. . .

It doesn’t have to be this way for former MCI employees. CWA is committed to helping former MCI employees gain the respect and dignity you deserve. When we join together, we can win.

It may sound to you like the union was engaged in a commercial solicitation, attempting to persuade individuals to pay union membership dues in exchange for union representation. But according to the CWA this is not exactly and precisely what “commercial” means. Defendant’s argue that (a) unions are non-profits and therefore do not engage in commercial activity, and (b) the emails did not attempt to solicit union membership (they just proclaimed how wonderful union membership is).

As to the first, the court clarifies that defendants have confused “commercial” and “profit.”

[W]ell-established First Amendment law makes clear that the commercial status of speech is not determined by the speaker’s profit motive. See Board of Trustees of State University of New York v. Fox, 492 U.S. 469, 482 (1989) (“[S]ome of our most valued forms of fully protected speech are uttered for a profit.”); Rubin v. Coors Brewing Co., 514 U.S. 476, 494(1995) (Stevens, J., dissenting) (“[E]conomic motivation or impact alone cannot make speech less deserving of constitutional protection, or else all authors or artists who sell their works would be correspondingly disadvantaged.”); Adventure Communications, Inc. v. Kentucky Registry of Election Finance, 191 F.3d 429, 440-442 (4th Cir. 1999) (“In and of itself, profit motive on the speaker’s part does not transform noncommerical speech into commercial speech.”) (internal citations omitted). In sum, speech is neither per se commercial merely because of the presence of a profit motive, nor per se noncommercial merely because the speaker does not intend to make a profit. . . . Instead, whether speech is commercial depends on whether it “proposes a commercial transaction” or promotes specific products or services.

The CWA proposed a commercial transaction of exchanging union representation for union dues.

The response of the CWA to this was, “did not!” To which the court responded, “did!” CWA’s argument was that these were merely preliminary emails that informed of the benefit of union membership without a primary purpose of soliciting employees to join. To this the Court rejoined,

[A] communication need not be an attempt to consummate a transaction immediately in order to be commercial in nature; advocating the benefits of the speaker’s commercial product or service in hopes of later “sealing the deal” is sufficient. See, e.g., Rushman v. City of Milwaukee, 959 F. Supp. 1040, 1043 (E.D. Wis. 1997) (“[S]tatements encouraging a future economic transaction” are commercial speech). Thus, given that CWA representation is a commercial service, defendants’ promotion of CWA representation in the emails is not excluded from the Act merely because it did not seek to enroll the email recipients immediately.

Busted.

Let’s spin the Wheel-of-Morality in order to find out the lesson to today’s post [Whirrrrrl, click, click, click]. And today’s lesson -- “Humpty Dumpty was pushed!”

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