United States: Pair Of California Anti-Spam Decisions Change Legal Landscape For Commercial Emailers

Court Paves Way for Wide Array Of "From" Names And Sending Domains
Last Updated: October 31 2014
Article by Ari N. Rothman and Melissa C. McLaughlin

Court Paves Way for Wide Array of "From" Names and Sending Domains

This week yielded two tremendous wins for commercial emailers. Yesterday, the California Court of Appeal ruled in a putative class action, Rosolowski et al. v. Guthy-Renker LLC, that a commercial email header does not violate California's anti-spam statute "merely because it does not identify the official name of the entity which sent the email, or merely because it does not identify an entity whose domain name is traceable via a database such as WHOIS, provided the sender's identity is readily ascertainable from the body of email."

This decision, and the unpublished People Media decision handed down on the same day, allows email marketers to use "from" names that are not official business names, and domain names that are not traceable using a WHOIS database, so long as the advertisers are identified in the emails.

Guthy-Renker also clarified that marketers may qualify statements made in email subject lines by including qualifying language in the email bodies without violating California's anti-spam statute. But, "falsified, misrepresented, or forged header information" and misleading subject lines remain unlawful. Therefore, these decisions have limits, and implementing them requires prudence and even some restraint.

California's Anti-Spam Statute

California Business & Professions Code Section 17529.5(a)(2) makes it unlawful "for any person or entity to advertise in a commercial e-mail advertisement either sent from California or sent to a California electronic mail address under any of the following circumstances: The e-mail advertisement contains or is accompanied by falsified, misrepresented, or forged header information." Similarly, Section 17529.5(a)(3) prohibits any "e-mail advertisement [that] has a subject line that a person knows would be likely to mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message."

Consumers, and email marketers and the advertisers employing them, have litigated what constitutes "falsified, misrepresented, or forged header information" and misleading subject lines under Section 17529.5 for several years now. While the court decisions resulting from prior cases yielded some guidance, they also incentivized plaintiffs to file a large number of new cases across California that caused some confusion and much debate. We discuss the two leading decisions briefly below.

Kleffman and Trancos

In 2010, the California Supreme Court held in Kleffman v. Vonage Holdings Corp. that using a domain name in a single email that "does not make clear the identity of either the sender or the merchant-advertiser on whose behalf the e-mail advertisement is sent" is not prohibited by Section 17529.5(a)(2). Kleffman determined such use does not in fact make any representation, express or implied, regarding the email's source.

The California Court of Appeal decided Balsam v. Trancos, Inc. two years later. There, none of the emails at issue identified the actual sender – Trancos – in the header of the email or the body, and none of the emails had traceable domain names. Finding that Trancos intentionally concealed its identity from email recipients, the court held "that header information in a commercial e-mail is falsified or misrepresented for purposes of section 17529.5(a)(2) when it uses a sender domain name that neither identifies the actual sender on its face, nor is readily traceable to the sender using a publicly available online database such as WHOIS."

Since Trancos, plaintiffs filed numerous lawsuits arguing that the failure to disclose the actual sender or advertiser of a commercial email in the email header is an independent violation of Section 17529.5. Likewise, plaintiffs argued that using a non-registered or privately registered domain name is in itself a violation of Section 17529.5. These plaintiffs claimed that fully disclosing the advertiser or sender in the email bodies is irrelevant, and that from names that are not literally false but that do relate to the email contents – such as "Mature Single" for a dating site – independently violate the statute. Email marketers and advertisers pushed back and continue to do so because the requirements imposed by these plaintiffs are neither grounded in legal jurisprudence nor the realities of consumer marketing, unlike the Guthy-Renker and People Media decisions. These later decisions, therefore, provide the clearest and best guidance to date for email marketers and advertisers employing commercial email as a marketing channel.

Guthy-Renker and People Media: From Names and Sending Domains under Section 17529.5(a)(2)

The plaintiffs in Guthy-Renker alleged that the emails they received contained from names that "are not names of existing companies or persons, there are no such entities or persons, and no such entities or persons are registered as fictitious business names." They also contended that the senders "were not the people or entities advertising in the emails" and that the domains were not traceable to the advertiser or the sender. Rather, the emails contained from names like "Proactiv Special Offer" or "Wen Healthy Hair." The emails clearly identified Guthy-Renker: they each provided a hyperlink to Guthy-Renker's website, and provided an unsubscribe notice as well as a physical address in Palm Desert, California.

On these facts, the California Court of Appeal held that "a header line in a commercial email advertisement does not misrepresent the identity of the sender merely because it does not identify the official name of the entity which sent the email, or merely because it does not identify an entity whose domain name is traceable from an online database, provided the sender's identity is readily ascertainable from the body of the email." The court held that "[p]laintiffs cannot plausibly allege that Guthy attempted to conceal its identi[t]y, as the clear purpose of emails was to drive traffic to Guthy's website."

The court in People Media made a similar finding. There, the plaintiffs alleged that the emails failed to identify the advertiser or sender and used untraceable domains. The emails advertised People Media's website and contained from lines such as "Mature Single" and "Mature Singles Dating" which, according to the court, were "entities which do not exist and which are not registered as fictitious names." Like Guthy-Renker, the court found that the from names and sending domains did not violate Section 17529.5(a)(2).

Guthy-Renker: Subject Lines under Section 17529.5(a)(3)

The plaintiffs also alleged in Guthy-Renker that the subject lines of the emails stated that the email recipients were entitled to a free gift, but only disclosed that that the gift was contingent upon a purchase in the bodies of the emails. Noting the appellate court's prior ruling in Hypertouch, Inc. v. Valueclick, Inc., the court held that "[t]he body of the emails made clear that free shipping or free gifts were contingent upon a purchase" and "a reasonable sender would not have reason to believe that commercial missives like these were 'likely to deceive a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message'" under Section 17529.5(a)(3). Unlike the court of appeal in Hypertouch which reviewed the email subject lines in isolation, the Guthy-Renker court followed the language in Section 17529.5(a)(3) and read the subject lines in conjunction with the email bodies to support its holding.

Practical Effect

The Guthy-Renker and People Media decisions provide email marketers and the companies that hire them greater flexibility to create from names that will increase visibility and deliverability without the threat of violating Section 17529.5. But, email marketers and advertisers should make the from names relevant to the emails themselves, and never use any false information in any part of any email header. Likewise, email marketers and advertisers should continue to do as much as they feasibly can to identify actual senders and advertisers in the from name, and use traceable mailing domains, because the plaintiff's bar surely will challenge these rulings either directly in these or other pending cases, or through the filing of other lawsuits. And, although Guthy-Renker held that the email bodies can qualify subject lines, subject lines must never be false or misleading, and the Federal Trade Commission and state attorneys general can still investigate or even sue companies for deceptive marketing. Consulting legal counsel to update current email marketing guidelines, terms and conditions, and advertiser and publisher agreements is recommended.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions