California Spam Law Upheld By Appeals Court

J

Joepublic

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Mar 6, 2007
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From Slashdot:
www.sorehands.com writes "In the first California appeals court ruling (pdf), in Hypertouch v. Valueclick, it is ruled that the I-CAN-SPAM Act does not preempt California Business & Professions Code Section 17529.5. California Business & Professions Code Section 17529.5 prohibits the use of falsified headers and subject lines that are likely to mislead recipients. Spammers have been claiming, and some courts have been ruling, that to survive preemption, a Plaintiff has to show all the elements of fraud (false representation, knowledge, reliance, and damage from the reliance.) The reliance and damage from the reliance is difficult as it would essentially require the recipient to buy the penis enlargement pills and show that they don't work, or to send the money to the Nigerian prince. An ISP could never show reliance and harm, as they are not the recipient and would not be responding to e-mails traversing their systems. The ruling also made it clear that the advertiser is responsible for the acts of their agents, even if their agents promise not to spam."
 


From the decision:

First, the statute permits a recipient of a deceptive commercial e-mail to bring suit regardless of whether they were actually mislead or harmed by the deceptive message. This ensures that the use of deceptive e-mail will not go unpunished merely because it failed to mislead its targets. Second, imposing strict liability on the advertisers who benefit from (and are the ultimate cause of) deceptive e-mails, forces those entities to take a more active role in supervising the complex web of affiliates who are promoting their products. (8)
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(8) The evidence in this case shows that online marketing services like ValueClick and PrimaryAds rely on thousands of affiliates and sub-affiliates to drive consumers to their promotional offers and readily admit that, under the business model they have adopted, they have no “knowledge of, or control over, the email delivery methods or header information used by [affiliates] or their sub-affiliates.”
Click to expand...
 
It seems fairly in line with other decisions regarding preemption. California has had several landmark decisions involving CAN SPAM (asis v. optin global...which was the azgoogle case). They rely on the criminal law definition of knowledge saying "when knowledge of the existence of a particular fact is an element of an offense, such knowledge is established if a person is aware of a high probability of its existence". It's a high threshold, much higher than mere tort negligence. Whats interesting is now it appears they are imposing a standard of "strict liability" on the part of advertisers and networks, which is what we're seeing the FTC doing as well.

One interesting question I have is do the ad networks and advertisers now have to carry insurance for their affiliates when they carry out a tort in the line of business? Where do you draw the line at "actual knowledge" since you've got thousands of affiliates as well as offers being brokered? It seems to be counterintuitive to the whole business model to make the ad networks police every single person that peddles their wares.
 
what ever happened to "buyer beware"... Can't consumers take responsibility for their own actions?! There have always been deceptive sales tactics, and there always will be doesn't matter where they pin the liability.

It's all bullshit!
 
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