Guest Post– by Rachel Corcoran
The new year started with a roar for Internet vigilantes when the California Court of Appeal for the Second Appellate District issued its ruling in Hypertouch, Inc. v. ValueClick, Inc., et al. (B218603, Cal. Ct. App., January 18, 2011). In a stunning decision, the Court of Appeal overturned a lower court’s award of summary judgment to defendants ValueClick and Primary Ads, Inc. holding that the CAN-SPAM Act did not preempt Hypertouch’s claims under the California anti-spam law (California Business and Professions Code section 17529, et seq.).
Just when it looked like ValueClick had a victory under its belt against Hypertouch’s allegations of spam under California law (as the result of the trial court’s finding that Hypertouch failed to show ValueClick had any knowledge or control over the alleged spam activity of affiliates and that the federal exemption for state spam statutes prohibiting “falsity or deception” in emails was only intended to permit state law claims based on all the elements of common law fraud – and nothing less) the Court of Appeal upset the machinery of email marketing by holding that the CAN-SPAM Act does not preempt state spam law claims provided plaintiff simply shows that the entity advertised in a commercial email ultimately sent an email which contained falsified or misrepresented header information or a subject line that a person knows would be likely to mislead a recipient about a material fact concerning the contents or subject matter of the message. (Cal. Bus. & Prof. Code § 17529.5(a).)
We can expect to see more spam lawsuits in the future brought by these self-proclaimed spam watchdogs intent on saving the world from unsolicited commercial email now that the foundation has been laid for emails that were not even intentionally or knowingly misleading.
Vigilantes only need to show that an advertiser was the party ultimately responsible for sending an email that contained either a falsified or misrepresented header (e.g., a “From” name that the sender can’t prove has any relevance to anyone in particular) or potentially deceptive subject line, such as the “free” stuff that was promised to recipients in the ValueClick case but was not, in fact, free.
Undoubtedly, the world would be a better place if everyone played by the rules and sent emails that did not contain any deceptive content. Reputable networks go to great lengths to make sure that their affiliates follow these rules and only use pre-approved, non-deceptive subject lines and “From” names in emails.
So, you may be asking yourself why you should care about the ValueClick ruling since these folks only pursue advertisers with deep pockets, right? While most of these professional spam litigants will seek maximum damages against advertisers, your commissions may be negatively impacted if the advertiser or network decides to invoke its indemnification or set-off provision under the terms of your publisher agreement. You could find them stealing your profits right out from under you!
Rachel Corcoran is an attorney with internet advertising experience.
Last 5 posts by Naeem Kayani
- Email Authentication 101: What Do You Need To Know? - April 29th, 2011
- A New Year’s Resolution: Monitor Your “From Name” (From Address) Reputation - January 11th, 2011
- How to Improve Your Email Reputation Score - October 22nd, 2010
- Is Double Opt-in Overrated? - September 27th, 2010
