California Assemblyman Introduces Oppressive Commercial Email Marketing Bill

A California Assembly member recently introduced AB 2546, a bill that seeks to amend California’s anti-spam statute.  If passed, it would effectively devastate the email marketing industry and brands that advertise via email.

In short, the bill seeks to expand Section 17529 et seq. of the California Business and Professions Code to:

• Cover those that “initiate, advertise in, or enable or assist a person or entity to initiate or advertise in,” a commercial email advertisement either sent from California or to a California email address; and
• Expand the circumstances under current law in which it is unlawful to send spam by including circumstances where: (i) the email advertisement contains or is accompanied by a third-party’s email address without the permission of the third party; (ii) the email advertisement contains or is accompanied by falsified, misrepresented, or forged information in the subject line or body; and (iii) the email advertisement has a subject line that is likely to mislead, and not just where it has a subject line that a person knows would be likely mislead.

Additionally, the bill seeks to add new circumstances where advertising in a commercial email sent from California or to a California email is unlawful, including where:

• The party who initiates the email uses “multiple domain names for no legitimate reason other than to bypass SPAM filters;”
• The body of the email or the underlying source code contains nonsensical text unrelated to the advertiser’s business that is intended to bypass SPAM filters;
• The “From” name of the email advertisement meets certain requirements, such as using generic text that misrepresents who the email advertisement is from or generic text that a reasonable consumer would not associate with the advertiser, or a fictitious business name that the advertiser uses exclusively or primarily as the “From” name in email advertisement
• The subject line begins with “re:” or anything substantially similar, or the subject line otherwise states that the email advertisement is being sent in response to a request or previous correspondence from the recipient, when the recipient made no such request; and
• the “Subject” line contains the word “free” or any language substantially similar to “free” if there are conditions attached, as specified, unless the subject line clearly indicates that there are conditions attached (a mere asterisk or other symbol, referring to conditions in the body of the email, does not satisfy this requirement).

The bill also expands the list of those that are permitted to bring an action under California’s anti-spam law, including a person who’s name or email address appears in the “From” name or sender’s email address without permission, and allow them to recover attorney’s fees and costs.

The bill provides that truthful content in or accompanying an email advertisement, including, but not limited to, identifying the sender in the body of an email advertisement, will not cure false, misrepresented, or forged information in another part of an email advertisement.

The author of the bill states that “[i]t is common for advertisers to send unsolicited commercial emails to consumers.  Often they will contract with ‘spam networks’ to distribute emails to consumers. Those ‘spam networks’ in turn contract with third-parties who actually send out those emails.  Often times, the senders will use methods designed to circumvent spam filters or mislead consumers.  Among others, these methods include: sending emails from multiple domain names, altering the “From” lines to mislead the recipient about the identity of the sender, copying headers from legitimate businesses and placing them into the email, or simply providing untruthful content to mislead a consumer.”

Proponents of the bill believe that while advertisers are strictly liable for false and deceptive spam, actual senders of the emails are not liable for sending spam.  They think that AB 2546 would strengthen California’s prohibitions on spam emails.

However, AB 2546 ignores federal law that regulates commercial email and for the most part, preempts California state legislation. It also does little more than invite excessive litigation where no damage exists.

California already possesses the nation’s toughest anti-spam law.

AB 2546 would effectively make it impossible to send legitimate commercial emails from or to California, including via the use of a d/b/a or more than one sending domain.

CAN-SPAM was enacted to avoid a chaotic patchwork of state laws that would cripple legitimate commercial email marketing business.  AB 2546 does not create new protections for consumers.  Rather, it seeks to circumvent CAN-SPAM by adding contradictory requirements and prohibitions.

Contact the author at rnewman@hinchnewman.com or (212) 756-8777 to discuss the potential implication of the bill and email marketing compliance.

Richard B. Newman is an Internet marketing compliance and regulatory defense attorney at Hinch Newman LLP focusing on advertising and digital media matters. His practice includes conducting legal compliance reviews of advertising campaigns, representing clients in investigations and enforcement actions brought by the Federal Trade Commission and state Attorneys General, commercial litigation, advising clients on promotional marketing programs, and negotiating and drafting legal agreements.

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