September 20, 2021

Volume XI, Number 263

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September 20, 2021

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Email SPAM Plaintiffs Take One on Chin

On July 22, 2019, a California state court judge sustained defendants’ demurrer to a complaint alleging violations of the state’s spam laws.

In Greenberg, et al. v. Digital Media Solutions LLC, et al., five (5) individuals filed suit alleging that defendants and their marketing partners sent them at least 282 unsolicited commercial emails in violation of California’s Business & Professions Code Section 17529.5(a)(2). That provision makes it “unlawful for any person or entity to advertise in a commercial email advertisement either sent from California or sent to a California electronic mail address” where “[t]he e-mail advertisement contains or is accompanied by falsified, misrepresented or forged header information.” The plaintiffs sought liquidated damages of $1,000 per email, as well as  attorneys’ fees and other relief.

Plaintiffs alleged that defendant advertised automobile warranty products in multiple unsolicited commercial emails.  An exemplar was attached to the complaint.  The subject line of that exemplar listed the recipient's email address, followed by the words “please confirm your extended warranty plan.”

The “From” line of the email read, “Vehicle Service Plan,” followed by an email address (Vehicle.Service.Plan@badealz.com).

The complaint alleged that the header information is falsified or misrepresented because it did not accurately represent who sent the emails.  Specifically, the From Name was alleged to misrepresent who sent the emails because “Vehicle Service Plan” is a generic phrase and is not a real company, brand, or trademark and cannot be traced back to the true sender/owner.

The complaint further alleged that the sending domain names misrepresented who sent the emails because they did not identify an entity traceable via a publicly searchable database, and the identity of the sender was not readily identifiable from the body of the email.

Plaintiffs alleged that most of the emails were sent from domain names that were registered to Defendant Bilco Media Inc., an entity that allegedly does not exist and that claimed an address at a commercial mail receiving agency in Miami, Florida, without specifying the box number.  They alleged that Digital Media Solutions LLC dba Platinum Auto Warranty, a Delaware limited liability company with its principal place of business in Clearwater, Florida, was the true sender of the emails through its marketing partners, and that it maintained a website at www.platinumazitowarraviy.com.

The email opened with a salutation to the recipient (“martagreenberg@yahoo.com” in the exemplar), followed by the words, “please confirm your extended warranty plan.”

The-body of the email read as follows:  Your Vehicle's Warranty May Be Expiring Within 28 Days: View your warranty options below and see how you can prevent car trouble from breaking your bank.  Protect yourself from costly vehicle repairs.  Without protection, auto issues could lead to severe financial hardship.

Below a “button” reading “View Your Warranty Options Here,” which apparently contained a hyperlink to defendant's website, the body of the email closed with an unsubscribe notice and a business name and address: Transparent Auto Warranty, 7000 W. Palmetto Park Rd. Suite 210, Boca Raton, FL 33431.

At the hearing, plaintiffs asserted that Transparent Auto Warranty was an affiliated company or fictitious name utilized by Digital Media Solutions and offered to amend the complaint to allege as much.

Although the complaint as pled contained but a single cause of action, plaintiffs sought to state three different claims for violation of a single subdivision of Section 17529.5, subdivision (a)(2).

First, they alleged that the “From Name” in the emails constituted “falsified, misrepresented, or forged header information" in violation of that provision..  Second, they alleged that the emails also violated Section 17529.5(a)(2) because they were sent from sender domain names that neither identified the actual sender nor were readily traceable to the sender using a publicly available online database.  Third, they claim that the “Subject Line” in the emails contained falsified or misrepresented information, and alleged that also violated Section 17529.5(a)(2).

The court addressed each in turn.

From Names and Domain Names

The court stated that plaintiffs' claim in the complaint is brought under a single provision of this statute, Section 17529.5, subdivision (a)(2).  It opined that the definitional provisions of the legislation do not specifically define “header information,” the key term in this provision.  “However, the courts have made clear that “header information” includes the domain names from which e-mails are sent (Kleffman v. Vonage Holdings Corp. (2010) 49 Ca1.4th 334, 340) and the purported sender names and email addresses that appear in the emails’ “From” lines. (Kleffman, 49 Cal.4th at 340 n.5 [quoting the federal CAN-SPAM Act, which defines "header information" in 15 U.S.C. § 7720(8) as "the source, destination, and routing information attached to an electronic mail message, including the originating domain name and originating electronic mail address, and any other information that appears in the line identifying, or purporting to identify, a person initiating the message"].)

“In Kleffinan, our Supreme Court found that “a single email with an accurate and traceable domain name neither contains nor is accompanied by ‘misrepresented . . . header information’ within the meaning of section 17529.5,” explaining that “[a]n email with an accurate and traceable domain name makes no affirmative representation or statement of fact that is false,” the court stated.  “In Balsam, conversely, the Court of Appeal held that “header information in a commercial email 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.” (Balsam v. Trancos, Inc., 203 Cal.App.4th at 1101 (footnote omitted); cf. Kleffman, 49 Cal.4th at 340, 346-347 [domain names that “actually exist and are technically accurate, literally correct, and fully traceable to [defendant’s] marketing agents” did not constitute “misrepresented . . header information"].)

In Balsam, the court affirmed a judgment after a court trial against defendant, an Internet advertiser that had sent unsolicited commercial e-mail advertisements on behalf of eight different advertisers, where only one was a real company, and the other “senders” identified in the headers either did not exist or were otherwise misrepresented.  The court explained that unlike Kleffman, “an email with a made-up and untraceable domain name affirmatively and falsely represents the sender has no connection to Trancos.”

In this case, just as in Balsam, the court pointed out that plaintiffs allege that the senders’ domain names in defendants’ emails did not represent real companies and could not be readily traced back to defendant, the owner of the domain names and true sender of the emails.  Nothing about the generic phrase “Vehicle Service Plan” identified defendant as the sender of the emails, or referred to a real company or a product from which recipients could have identified it as the sender.  “[W]here, as in this case, the commercial e-mailer intentionally uses privately registered domain names in its headers that neither disclose the true sender's identity on their face nor permit the recipient to readily identify the sender, . . such header information is deceptive and does constitute a falsification or misrepresentation of the sender's identity.”

However, the Balsam court “express[ed] no judgment about other circumstances in which (i) header information might be falsified or misrepresented for purposes of the statute or (ii) the presence of other information identifying the sender in the body of the e-mail could affect liability under the statute.”  A later case, Rosolowski v. Guthy-Renker LLC (2014) 230 Cal.App.4th 1403, addressed the latter issue, and thereby significantly narrowed Balsam’s holding.

In Rosolowski, the Second District Court of Appeal gave Section 17529.5 a “commonsense reading,” and 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 affirmed an order sustaining a demurrer to a complaint alleging that defendant's email advertisements violated Section 17529.5(a)(2) because, although the identity of the sender could not be ascertained through the use of a publicly available database, “the body of the emails was sufficient to identify [defendant] Guthy as the sender.  The emails were advertisements for Guthy’s various consumer brands.  The emails provided a hyperlink to Guthy’s website, and provided an unsubscribe notice as well as a physical address in Palm Desert, California.  Plaintiffs cannot plausibly allege that Guthy attempted to conceal its identity, as the clear purpose of emails was to drive traffic to Guthy's website.  The complaint concedes as much, in that it alleged if a ‘recipient clicks in an email's body, a link takes him to [Guthy’s] website where he is encouraged to make a purchase.’”

The court opined, “although plaintiffs purport to allege that defendant cannot be identified as the sender of the emails from the body of the emails, their own allegations and admissions contradict that contention.  Thus, the body of the exemplar email included in the complaint lists as the apparent sender a company called “Transparent Auto Warranty” with an address in Boca Raton, Florida, which Plaintiffs have admitted is either an affiliate or fictitious name utilized by defendant.  Indeed, in their opposition brief, plaintiffs assert they could amend the complaint to state that defendant Digital Media Solutions is the registrant of the domain name transparentautowarranty.corn and operates the website with that name.  Further, plaintiffs allege that if recipients click in the body of the e-mails, a link takes them to defendant's “Platinum Auto Warranty” website where they are encouraged to make a purchase.”

The order states that “plaintiffs cannot plausibly allege that defendant attempted to conceal its identity, as the clear purpose of its emails, apparent from their face, was to drive traffic to its website.  Just as in Rosolowski, that is, “the body of the emails was sufficient to enable the recipient to identify [Defendant] as the sender.” 

According to the court, plaintiffs’ challenges to the From Names and domain names fail under RosolowskiSee also Wagner v. Spire Vision LLC (N.D. Cal. Feb. 27, 2015) 2015 WL 876514, at *4 [granting defendant's motion for summary judgment where emails provided a hyperlink to the advertiser's website, an unsubscribe link, and a mailing address for the sender; “[t]he sender's identity could thus be readily ascertained from the bodies of the emails,” and the emails “were not materially falsified, misrepresented, or forged and met the criteria that the Rosolowski standard requires”].)

Plaintiffs attempted to distinguish Rosolowski on the ground that its holding was limited to the situation where the identity of the “sender,” as opposed to the “advertiser,” is ascertainable from the body of the email.

However, according to the court, because Guthy-Reriker, the advertiser, was the only named defendant in Rosolowki, there would have been no reason in that case for the court to draw that distinction.  Nor would such a distinction find any support in the Legislature's findings and overall objectives in enacting the legislation.  To the contrary, the express findings quoted above make clear that “the Legislature did not intend the statute to apply solely to those entities that actually send or initiate a deceptive e-mail.”  Rather, both the text and legislative history of S.B. 186 make clear that section 17529.5 was intended to apply to entities that advertise in deceptive commercial emails, not only the spammers who send them.”

The court did not believe that plaintiffs offered a plausible explanation for why one category of defendant should be treated differently, nor why an email from the body of which a recipient can identify the ultimate advertiser should be treated as “falsified” or “misrepresented” but one from which the advertiser’s marketing partner can be identified should not.

In.short, the court held that “because the recipients of the emails of which plaintiffs complain could readily identify defendant, the advertiser and ultimate “sender,” from the body of those emails, Rosolowki is controlling. 

While plaintiffs attacked Rosolowski as “illogical” and “wrong,” it was considered controlling and binding authority. 

Subject Lines

Plaintiffs’ third claim - that the Subject Line of the emails constitutes falsified or misrepresented header information in violation of Section 17529.5(a)(2) – was also rejected.  That is because “the Subject Line of an email does not constitute part of the e-mail’s “header information” within the meaning of the statute.

“Email subject lines are covered by a different paragraph of Section 17529.5(a).  Subdivision (a)(3) provides it is unlawful for any person or entity to advertise in a commercial email advertisement either sent from California or sent to a California electronic mail address if the email advertisement 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.  Thus, the statute expressly distinguishes between an email’s “header information, which is governed by subdivision (a)(2), and its subject line, which is governed by subdivision (a)(3).”

According to the decision, “plaintiffs’ assertion that the Subject Line is part of email headers  conflicts with the plain language and structure of the statutory scheme.  Indeed, the Supreme Court recognized in Kleffman that the language in section 17529.5; subdivision (a)(3), fully articulates] the standard applicable to e-mail subject lines." (Id. at 343; see also Hypertouch, Inc., 192 Cal.App.4th at 836-840 [addressing under subdivision (a)(3) claim that subject lines were likely to mislead].)  Thus, plaintiffs may only make claims regarding the emails’ subject lines under Section 17529.5.5(a)(3).”

Ultimately, the court ruled that the complaint failed to state a viable cause of action for a violation of Section 17529.5(a)(2).  It also ruled that “it is possible that the portion of the complaint that seeks to challenge the Subject Lines may be amended to state a cause of action for a violation of Section 17529.5(a)(3), should plaintiffs elect to pursue such a claim.”

Accordingly, the demurrer was sustained with leave to amend.

A win for email marketers!

© 2021 Hinch Newman LLPNational Law Review, Volume IX, Number 240
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About this Author

Richard Newman, FTC Defense Lawyer, Internet Marketing, Hinch Newman Law Firm

Richard B. Newman is a nationally recognized FTC defense lawyer and advertising compliance attorney.  He regularly provides advertising counsel and represents clients in high-profile investigations (CIDs) and enforcement proceedings initiated by the Federal Trade Commission, state attorneys general, departments of consumer affairs, and other federal and state agencies with jurisdiction over advertising and marketing practices.  Richard’s practice also concentrates upon transactional matters relating to the dissemination of national advertising campaigns, including the...

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