Source: http://pacedm.com/2017/09/court-rules-anti-spam-law-imposes-liability-advertisers/
Timestamp: 2018-10-21 02:27:46
Document Index: 133270580

Matched Legal Cases: ['§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529', '§ 17529']

Court Rules Anti-SPAM Law Only Imposes Liability on Advertisers - Pesach "Pace" Lattin
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Court Rules Anti-SPAM Law Only Imposes Liability on Advertisers
Richard B. Newman 2017-09-26
1 24 4 minutes read
On September 22, 2017, the District Court for the Northern District of California granted defendant’s motion to dismiss plaintiffs’ first amended complaint filed in state court on December 20, 2016 in which they alleged that they collectively received almost 1,300 unlawful unsolicited commercial emails.
According to plaintiffs, the emails contained advertising for “products and services” of defendants Fluent, Inc., Reward Zone USA, LLC, RewardsFlow, LLC, American Prize Center, LLC, and Mohit Singla (collectively, “Fluent”). Plaintiffs alleged that “at least 75 of the spams at issue” were “sent” to plaintiffs by defendant Panda Mail and that other emails were “sent” to plaintiffs by defendants AdReaction, Anglo Iditech, FortAnalysis8, Concept Network, Diego Rufino, Priscila Arekelian, and Andres Mary.
Plaintiffs further alleged that the emails “had materially false and/or misrepresented information contained in or accompanying the email headers, contained Subject Lines that were misleading in relation to the bodies of the emails, and/or contained third parties’ domain names without permission.” Based on the above allegations, plaintiffs asserted a single cause of action, specifically, a claim under § 17529.5 of the California Business and Professions Code.
Panda Mail sought dismissal of the complaint in its entirety as alleged against Panda Mail.
Panda Mail argued that the complaint was subject to dismissal for failure to set forth facts sufficient to support a finding that Panda Mail violated § 17529.5 and for failure to plead fraud with the required particularity.
Section 17529.5(a) provides as follows:
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.
See Cal. Bus. & Prof. Code § 17529.5(a).
Plaintiffs did not allege that Panda Mail advertised in any of the challenged emails. Rather, plaintiffs alleged Panda Mail “sent” them some of the emails in which Fluent advertised.
Given the complaint’s lack of any allegation that Panda Mail “advertise[d] in” the challenged emails, see Cal. Bus. & Prof. Code § 17529.5(a), let alone facts in support thereof, Panda Mail argued that the § 17529.5 claim, as alleged against it, was subject to dismissal. In particular, Panda Mail argued, the statute only covers advertisers.
In response, plaintiffs argued § 17529.5 is properly interpreted as applicable not only to an entity that advertises but also to one that sends an email containing or accompanied by an advertisement.
The Court noted that neither party cited a case expressly addressing the issue presented.
Notwithstanding any other provision of law, a person or entity may not do any of the following:
(a) Initiate or advertise in an unsolicited commercial e-mail advertisement from California or advertise in an unsolicited commercial e-mail advertisement sent from California.
(b) Initiate or advertise in an unsolicited commercial e-mail advertisement to a California electronic mail address, or advertise in an unsolicited commercial e-mail advertisement sent to a California electronic mail address.
See Cal. Prof. & Bus. § 17529.2.
In conjunction therewith, the Legislature defined “initiate” to mean “to transmit or cause to be transmitted a commercial e-mail advertisement or assist in the transmission of a commercial e-mail advertisement by providing electronic mail addresses where the advertisement may be sent,” see Cal. Bus. & Prof. Code § 17529.1(i), thereby encompassing within the definition of “initiate” the act of sending commercial email advertisements.
The Court noted that, as the Legislature chose to prohibit the acts identified in § 17529.2, when committed either by an advertiser in or sender of a commercial email, but chose to prohibit the acts identified in § 17529.5 only when committed by the former, the “normal inference” to be drawn is that the Legislature did not intend a sender of a commercial email, unless such sender is also an advertiser, to be liable under § 17529.5.
Relying on their allegation that Panda Mail “conspired to send” Fluent advertisements to plaintiffs, plaintiffs next argued Panda Mail could be held liable under a theory of conspiracy. According the Court, even assuming a sender – under a theory of conspiracy – can ever be held liable for an advertiser’s violation of § 17529.5,4 however, plaintiffs fail to allege any facts to support their conclusory assertion that Panda Mail conspired to violate § 17529.5.
Moreover, plaintiffs’ allegation that Panda Mail was acting as Fluent’s “agent[ ]” when it sent the emails precluded Panda Mail’s liability on a conspiracy theory, as “duly acting agents and employees cannot be held liable for conspiracy with their own principals.”
Accordingly, the Court ruled that the complaint, as alleged against Panda Mail, was subject to dismissal.
Panda Mail also argued the complaint failed to state a claim for the additional reason that it did not allege fraud with “particularity.”
The Court held that the complaint did not identify the content of any of the “at least 75” emails Panda Mail is alleged to have sent, nor did it provide the date(s) on which those emails were sent, the names of the plaintiff(s) to whom they were sent, or any evidentiary facts to support a finding that any statement in any email sent by Panda Mail was untrue or misleading at the time such email was sent.
In response to the motion, plaintiffs took the position that it was not bound to plead with particularity with respect to their § 17529.5 claims.
The Court indicated that the plaintiffs here alleged that “[d]efendants,” including Panda Mail, “intended to deceive recipients of their spam messages through the use of falsified and/or misrepresented information in From Names, domain name registrations, and Subject Lines, and use of third parties’ domain names without permission,” that “[d]efendants went to great lengths to create falsified and misrepresented information contained in and accompanying the email headers in order to deceive recipients,” that “[t]he unlawful elements of these spams represent willful acts of falsity and deception,” and that plaintiffs “suffer[ed] damages by receiving the unlawful spams.”
In light of such allegations, the Court found plaintiffs’ § 17529.5 claim against Panda Mail was “grounded in fraud.”
Consequently, the Court agreed with Panda Mail.
Plaintiffs asserted that, if afforded an opportunity to do so, they could allege that Panda Mail “is advertising in the spams as well as sending them.”
The Court has afforded plaintiffs leave to amend the complaint.
The case is Mira Blanchard, et al. v. Fluent, Inc., et al.
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