Legal Alert: California’s Strict Anti-Spam Statute & Your Affiliate Marketing Campaigns

Even if your marketing department obeys California law (which is not the same as Federal CAN-SPAM law) for all commercial emails… if any of your affiliate or other partners sending offers on your behalf break the law, then you may be looking at a not-so-fun court case.

A few keys — it doesn’t matter where you are headquartered. You could be in Kalamazoo, but if you send email to people in California, then California state law applies to you. And, unlike Federal CAN-SPAM laws which have seen relatively few prosecutions, these days California district attorneys seem to be ready, willing and able to go after marketers somewhat more aggressively, in part because the DA’s office often gets to keep settlement money.

I’m NOT a lawyer. So you need to seek legal advice from your own lawyer. However, here’s what Lisa Dubrow, Esq. who is one of Subscription Site Insider’s favorite legal knowledge sources emailed us recently:”The California Court of Appeal has held that California’s anti-spam statute is not pre-empted by the federal CAN-SPAM Act. The CA law imposes strict liability for anyone who advertises in a commercial e-mail that violates the statute.

“The plaintiff in Hypertouch, Inc. v. ValueClick, Inc., apparently provided e-mail service to a relatively small number of customers through affiliates. The plaintiff’s claim is that ValueClick violated Cal. Bus. & Prof. Code § 17529.5(a) which provides in part that “It is 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:

(1) The e-mail advertisement contains or is accompanied by a third party’s domain name without the permission of the third party.

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(2) The e-mail advertisement contains or is accompanied by falsified, misrepresented, or forged header information.

(3) The e-mail 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.”

“The claim was based upon e-mails sent by ValueClick’s affiliates which contained falsified header information because the “From” or “To” fields did not accurately reflect the identity of the sender or recipient of the e-mail. However, the more compelling aspect of the decision stemmed from Hypertouch’s claim that those emails contained deceptive “Subject” lines, such as “Get a $300 Gift Card FREE,” when in fact a consumer had to pay a fee or participate in more promotions offers to get the gift card.  This copy does not reflect an unusual subject line for many offers made in email subject lines that have strings attached.”

“The court stated Section 17529.5 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.”

“The court held that Hypertouch may seek actual damages for any email it received within 3 years prior to the filing of the complaint and liquidated damages for any email received within 1 year prior to the complaint. The statute provides for liquidated damages to a maximum of $1000 for each unsolicited commercial email up to $1,000,000 per incident. “

“… obviously this case can have a huge impact on potential liability for emails sent by affiliates to CA residents and reinforces again the need to (1) review affiliate marketing agreements and procedures (2) your own marketing materials, and (3) subject lines of email marketing very carefully.”

Ditto is all I have to say to Lisa’s conclusions. And a very big ditto at that.BTW: Lisa’s also got very useful advice for laws surrounding paywalls — of which there are far more than most publishers realize. To access an on-demand training seminar she did for our members around this, go here.