Court Opinion

ID: 4697314
Source: CourtListenerOpinion
Date Created: 2021-06-21 21:02:28.182941+00
Date Added: 2024-06-11T08:05:45.329763
License: Public Domain

Filed 6/21/21
                 CERTIFIED FOR PARTIAL PUBLICATION *

       IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                          FIRST APPELLATE DISTRICT

                                  DIVISION ONE

 MARTA GREENBERG ET AL.,
           Plaintiffs and Appellants,
                                              A158854
 v.
 DIGITAL MEDIA SOLUTIONS, LLC,                (San Francisco County
                                               Super. Ct. No. CGC-18-572010)
           Defendant and Respondent.

       Plaintiffs Marta Greenberg, John Judge, Karen Mandel, Andrew
Monroe, and Katie Van Cleave (collectively, the recipients) received
unsolicited emails that advertised products sold by defendant Digital Media
Solutions, LLC (DMS), which does business as Platinum Auto Warranty. The
emails were not sent by DMS itself, but instead by third party “marketing
partners” of DMS. The recipients sued DMS under Business and Professions
Code 1 section 17529.5, which makes it unlawful to advertise in commercial
emails under specified circumstances.
       The trial court sustained DMS’s demurrer and entered a judgment
dismissing the case. We affirm in part and reverse in part. In the
unpublished portion of this opinion, we conclude that the court correctly
dismissed the recipients’ challenge to the emails’ subject lines. In the

       Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this
       *

opinion is certified for publication with the exception of part II.B.
       All subsequent statutory references are to the Business and
       1

Professions Code.
                                        1
published portion, we conclude that the court erred by dismissing the
recipients’ challenge to the emails’ domain names. In doing so, we hold that a
recipient of a commercial email advertisement sent by a third party is not
precluded as a matter of law from stating a cause of action under
section 17529.5 against the advertiser for the third party’s failure to provide
sufficient information disclosing or making traceable the third party’s own
identity. We further hold that such a cause is not precluded simply because
such an email sufficiently identifies the advertiser.
                                    I.
                          FACTUAL AND PROCEDURAL
                               BACKGROUND
      The recipients initiated this action in late 2018. Their complaint
alleged that they received at least 282 unsolicited commercial email
advertisements (spam). (See § 17529.1, subd. (o).) The spam was allegedly
from “third-party spam networks and publishers (‘[m]arketing [p]artners’),”
including defendant “Bilco Media Inc.,” which was alleged to be “an unknown
entity of unknown organization with an unknown primary place of business”;
defendant Allan Hughes; and other defendant marketing partners identified
as Does one through five. 2 The recipients alleged that DMS contracted with
these marketing partners to send email advertisements on its behalf, and
these partners sent “some, if not all,” of the 282 unsolicited emails.
      The complaint contained one cause of action under section 17529.5,
subdivision (a)(2) (subdivision (a)(2)). Specifically, the complaint alleged that
the emails the recipients received contained “materially false and deceptive

      2The only defendant that appeared below was DMS, and the liability of
the other named defendants is not at issue in this appeal.
                                        2
information” pertaining to the emails’ domain names, “From Names,” and
“Subject Lines.” 3
      As to the domain names, the complaint alleged that the 282 emails
included dozens of different ones, most of which neither identified the actual
sender on their faces nor were readily traceable. The complaint reproduced a
“representative sample” of an email received by plaintiff Greenberg, which
was purportedly sent by “Vehicle.Service.Plan@badealz.com.” The complaint
alleged that “81% [of the emails at issue] were sent from domain names,” like
badealz.com, “that were registered to [defendant Bilco Media Inc.], an entity
that does not exist, and that claims an address at a commercial mail
receiving agency without specifying the box number.”
      As to the from names, the complaint alleged that they often consisted of
the phrase “ ‘Vehicle Service Plan[,]’ which [was] generic text that
misrepresent[ed] who[m] the spam [was] really from.” Other times, the from
names consisted of the similarly generic phrase of “Vehicle Protection Info.”
According to the complaint, the emails “[did] not identify the sender in [their
bodies], so the only way a recipient could even attempt to identify the
[m]arketing [p]artner responsible for the spam [was] to click on a link
contained in the spam or search the source code of the email.”
      Finally, as to the subject lines, the complaint alleged that they
contained “falsified and/or misrepresented information.” The subject line of
the sample email to Greenberg included her email address as follows:

      3 “Domain name” is statutorily defined as “any alphanumeric
designation that is registered with or assigned by any domain name registrar
as part of an electronic address on the Internet.” (§ 17529.1, subd. (e).) The
complaint defines “From Name” as the part of an email’s “From Line” that
does not include the sender’s email address. “So, for example, if an email’s
From Line says: ‘John Doe ’, the From Name is just
‘John Doe.’ ” The complaint does not define “Subject Line.”
                                       3
“[username]@yahoo.com, please confirm your extended warranty plan.”
According to the complaint, subject lines containing the recipient’s email
address and referring to an existing warranty plan “falsely reference[d] a
preexisting business relationship that does not in fact exist, for the purpose of
inducing the recipient into believing that the email [was] from an entity with
whom the recipient has done business, which [was] designed to lure the
recipient into clicking and opening the spam, and ultimately, sending money
to” DMS.
      The body of the sample email stated:

            “:: 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.”
A box below this text read, “View Your Warranty Options Here.” This box
was a hyperlink to platinumautowarranty.com, a website operated by DMS.
The body of the email closed with an unsubscribe notice and the following
business name and address: “Transparent Auto Warranty, 7000 W. Palmetto
Park Rd. Suite 210, Boca Raton, FL 33433.”
      DMS demurred to the complaint, arguing that the recipients could not
state a claim for a violation of subdivision (a)(2) in light of Rosolowski v.
Guthy-Renker (2014) 230 Cal.App.4th 1403 (Rosolowski). The trial court
largely agreed. In sustaining the demurrer, the court noted that the bodies of
the emails identified Transparent Auto Warranty, and the recipients stated
they could amend the complaint to allege that DMS is the registrant and
operator of transparentautowarranty.com. The court also observed that the
                                         4
complaint alleged a recipient could click on a hyperlink in the emails’ bodies
and be taken to platinumautowarranty.com, another website registered to
DMS. The court determined that the recipients therefore could not “plausibly
allege that [DMS] attempted to conceal its identity, as the clear purpose of its
e-mails, apparent from their face, was to drive traffic to its [Platinum Auto
Warranty] website.”
      Although the trial court ruled that the recipients could not state a
claim regarding the emails’ subject lines under subdivision (a)(2), it granted
leave to amend the complaint to allege a claim that the subject lines were
misleading under section 17529.5, subdivision (a)(3) (subdivision (a)(3)).
After the recipients declined to amend the complaint, the court dismissed it
with prejudice and entered judgment in favor of DMS.
                                       II.
                                  DISCUSSION
      A.    Legal Background and Standard of Review
      California has a long-held antipathy toward spam. In 2003, the
Legislature passed Senate Bill No. 186 (2003–2004 Reg. Sess.), sweeping
legislation that would have banned all spam sent to California residents.
Before the law went into effect, however, Congress reacted to the growing
“ ‘ “patchwork of state laws” ’ ” governing spam by enacting the CAN-SPAM
Act (15 U.S.C. § 7701 et seq.) (CAN-SPAM Act or Act). 4 (Rosolowski, supra,
230 Cal.App.4th at p. 1412.) “ ‘The Act does “not ban spam outright, but
rather provides a code of conduct to regulate commercial e-mail messaging
practices. Stated in general terms, the . . . Act prohibits such practices as
transmitting messages with ‘deceptive subject headings’ or ‘header

      4 The full name of the legislation is the Controlling the Assault of Non-
Solicited Pornography and Marketing Act of 2003.
                                        5
information that is materially false or materially misleading.’ [Citation.]
The Act also imposes requirements regarding content, format, and labeling.
For instance, unsolicited e-mail messages must include the sender’s physical
postal address, indicate they are advertisements or solicitations, and notify
recipients of their ability to decline further mailings.” ’ ” (Ibid.)
      With the passage of the Act, many state laws regulating spam,
including much of Senate Bill No. 186, were preempted. The Act includes one
exception to preemption, however: A state statute is not preempted “to the
extent that any such statute . . . prohibits falsity or deception in any portion
of a commercial [email] message or information attached thereto.” (15 U.S.C.
§ 7707(b)(1).) Section 17529.5, which was adopted in 2003 as part of Senate
Bill No. 186, falls within this exception. (Rosolowski, supra, 230 Cal.App.4th
at pp. 1412–1413.)
      In relevant part, subdivision (a) of section 17529.5 provides that “[i]t is
unlawful for any person or entity to advertise in a commercial e-mail
advertisement either sent from California or sent to a California [email]
address under any of the following circumstances:
      ...
             “(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.”
      Thus, subdivision (a)(2) makes it illegal to advertise with email that
has header information that is falsified, misrepresented, or forged, and
subdivision (a)(3) makes it illegal to advertise with email that has a subject
line that is reasonably likely to mislead a recipient about a material fact. If

                                         6
the representation in the header information or subject line is not material,
its regulation is preempted by the CAN-SPAM Act. (See Kleffman v. Vonage
Holdings Corp. (2010) 49 Cal.4th 334, 346 (Kleffman); Omega World Travel,
Inc. v. Mummagraphics, Inc. (4th Cir. 2006) 469 F.3d 348, 355.)
      We review de novo a claim that a demurrer was improperly sustained.
(Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 9.) In doing so, “ ‘[w]e
give the complaint a reasonable interpretation, reading it as a whole and its
parts in their context. [Citation.] Further, we treat the demurrer as
admitting all material facts properly pleaded, but do not assume the truth of
contentions, deductions[,] or conclusions of law.’ [Citation.] ‘[W]e are not
bound by the trial court’s analysis’ of questions of law and ‘independently
construe statutory law.’ ” (Id. at pp. 9–10.)
      B.    The Trial Court Properly Rejected the Recipients’ Challenge to
            the Emails’ Subject Lines.
      The trial court held that the recipients could not state a claim under
subdivision (a)(2) regarding the emails’ subject lines, because that provision
regulates headers, and the court concluded that headers do not include
subject lines. The court determined that the language and structure of
section 17529.5, as well as the Supreme Court’s analysis in Kleffman,
compelled a conclusion that claims based on an email’s subject line may be
cognizable under subdivision (a)(3), but not under subdivision (a)(2).
      At oral argument, the recipients clarified their position. In their view,
the trial court erred because challenges to emails’ subject lines may be
cognizable under both subdivision (a)(2) and subdivision (a)(3), depending on
the nature of the challenge. They accept that such a challenge is cognizable
under subdivision (a)(3) when it alleges that a subject line contains
information that “would be likely to mislead a recipient . . . about a material

                                        7
fact regarding the contents or subject matter of the [email] message.”
(§ 17529.5, subd. (a)(3), italics added.) But they argue that such a challenge
is also cognizable under subdivision (a)(2) when header information is
“falsified, misrepresented, or forged” within the meaning of that provision,
irrespective of the contents or subject matter of the email. And, according to
them, “header information” under subdivision (a)(2) includes subject lines.
      We agree with the trial court that the recipients’ challenge to the
emails’ subject lines fails under subdivision (a)(2). In arguing that “header
information” under that provision includes subject lines, the recipients cite
many cases from other jurisdictions that have stated or assumed that an
email’s subject line is part of the email’s header. 5 While we accept that in
many contexts and cases email headers are considered to include subject
lines, section 17529.5 regulates subject lines separately from headers, under
subdivision (a)(3) instead of subdivision (a)(2).
      As Kleffman observed, “California statutes do not define either the
word ‘header’ or the phrase ‘header information.’ ” (Kleffman, supra,
49 Cal.4th at p. 340, fn. 5.) Kleffman had no need to interpret the statutory
phrase either, as it was undisputed “that the domain names in question were
part of the e-mails’ ‘header information’ within the meaning of
[subdivision (a)(2)].” (Id. at p. 340.) But the Supreme Court did quote the

      5 The recipients filed a request for judicial notice of 12 such cases, as
well as other examples of popular usage. The recipients also sought judicial
notice of legislative history of Senate Bill No. 186, a Federal Trade
Commission publication, and eight documents of which they sought judicial
notice below but on which the trial court did not explicitly rule. We agree
with the recipients that we may presume that the court granted judicial
notice of the eight documents it did not address. (See Aaronoff v. Martinez-
Senftner (2006) 136 Cal.App.4th 910, 918–919.) We deny the request as to
the remaining documents as unnecessary to our decision.
                                        8
CAN-SPAM Act’s definition of “header information,” which is “ ‘the source,
destination, and routing information attached to an [email] message,
including the originating domain name and originating [email] address, and
any other information that appears in the line identifying, or purporting to
identify, a person initiating the message.’ ” (Id. at p. 340, fn. 5, quoting
15 U.S.C. § 7702(8).) The Court also noted that “[a] similar definition was
proposed, but not adopted, during the legislative process that culminated in
[subdivision (a)(2)’s] enactment.” (Kleffman, at p. 340, fn. 5.) In our view,
this discussion suggests that “header information” should be interpreted in
line with the federal definition—which undisputedly does not include subject-
line information. 6
      Even if challenges to emails’ subject lines could be brought under
subdivision (a)(2), we would be hard pressed to conclude that the subject lines
alleged in this case contained information that was both material and
“falsified, misrepresented, or forged.” We again point to Kleffman, which
rejected the argument that subdivision (a)(2) prohibits information that is
merely misleading. (Kleffman, supra, 49 Cal.4th at pp. 342–343.) As the
Supreme Court explained, “ ‘when different words are used in
contemporaneously enacted, adjoining subdivisions of a statute, the inference
is compelling that a difference in meaning was intended.’ ” (Id. at p. 343.)
Thus, “the meaning of the word ‘misrepresented’ in [subdivision (a)(2)] takes

      6DMS points out that in Wagner v. Spire Vision LLC (N.D. Cal.
Feb. 27, 2015, No. C 13-04952 WHA) 2015 WL 876514, the district court held
that “header information” under subdivision (a)(2) “clearly does not include
an email’s subject line.” (Wagner, at *20; accord Holden v. Fluent, Inc. (N.D.
Cal. Nov. 20, 2020, No. 20-cv-03816-JCS) 2020 WL 6822914, at *33.) We
agree with the recipients, however, that Wagner “misread Kleffman” as
“endors[ing] the federal definition [of header information] when in fact
Kleffman merely quoted the federal definition.” (See Wagner, at *20.)
                                        9
color from the other words listed in the same provision—‘falsified’ and
‘forged’—not from the distinctly different ‘likely to mislead’ language” in
subdivision (a)(3). (Kleffman, at p. 343.) In other words, header information
is not actionable under subdivision (a)(2) if it is merely “ ‘misleading’ or ‘likely
to mislead.’ ” (Kleffman, at p. 345.)
      The subject lines at issue allegedly set forth the recipient’s email
address followed by a comma and phrases like “Confirm Your Auto Warranty
Plan Extension” or “Your Auto Warranty is Running Out!” The complaint
alleged that these subject lines violated subdivision (a)(2) because they
“falsely reference[d] a preexisting business relationship that does not in fact
exist.” While we accept that these subject lines are ambiguous and arguably
misleading by suggesting the recipient already has an auto warranty with
the sender, it is far more questionable that the statements can be considered
material and “falsified, misrepresented, or forged.”
      To begin with, subdivision (a)(2) governs header information, which
mainly concerns the source of emails. In this context, the phrase “falsified,
misrepresented, or forged” more naturally addresses the falsification of
existing electronic information rather than the assertion of a new
misrepresentation unrelated to an email’s source. (See, e.g., United States v.
Rowland (2d Cir. 2016) 826 F.3d 100, 108 [context matters in interpreting
statutory term “falsified”].) But even if the phrase addresses such assertions,
it does not easily cover the subject lines alleged here. A directive to confirm
one’s auto warranty plan or extension does not make any affirmative factual
representation whatsoever. (See Kleffman, supra, 49 Cal.4th at p. 347.) And
while a phrase like “Your Auto Warranty is Running Out!” is a factual
statement, it is either technically true or immaterial. If a recipient has an
auto warranty, the statement that the warranty is running out is technically
                                        10
true. And if a recipient does not have a warranty, the recipient is
presumably aware of that, rendering the statement immaterial in the sense
that a reasonable such recipient would not likely be influenced by it. (See
Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 332–333
[misrepresentation is material if reasonable person “ ‘ “would attach
importance to its existence or nonexistence in determining [the person’s]
choice of action in the transaction in question” ’ ”].)
      In short, the trial court properly rejected the portion of the recipients’
claim challenging subject lines under subdivision (a)(2).
      C.    The Trial Court Incorrectly Dismissed the Recipients’ Challenge to
            the Emails’ Domain Names.
      A closer question is presented by the recipients’ claim that the emails’
domain names and from names violated subdivision (a)(2). As we have said,
the recipients alleged that this header information was unlawful both
because the from names consisted of generic phrases like “Vehicle Service
Plan” or “Vehicle Protection Info” and the domain names failed to identify the
actual senders—i.e., DMS’s marketing partners—or provide enough
information to make them readily traceable using a publicly available online
database. We conclude that the recipients may proceed on the portion of the
claim involving domain names.
            1.     Applicable case law
      Several decisions bear on our analysis, starting with Kleffman. The
plaintiff in that case alleged that the defendant, through its marketing
partners, sent him unsolicited email advertisements for its broadband
telephone services using a variety of peculiar domain names, such as
superhugeterm.com; urgrtquirkz.com; and ourgossipfrom.com. (Kleffman,
supra, 49 Cal.4th at p. 338.) The plaintiff asserted that the defendant was

                                         11
liable under subdivision (a)(2) because these domain names failed to identify
the true sender and reduced the likelihood that the email would be identified
and blocked as spam. (Kleffman, at p. 338.)
      The Supreme Court rejected the plaintiff’s claim. It concluded that the
emails “neither contained nor were accompanied by ‘falsified . . . or
forged header information’ within the meaning of [subdivision (a)(2)],”
because the domain names “actually exist[ed] and [were] technically
accurate, literally correct, and fully traceable to [the defendant’s] marketing
agents.” (Kleffman, supra, 49 Cal.4th at p. 340.) The plaintiff argued that
even if the information was not falsified or forged, it was nonetheless
“misrepresented” because the domain names’ random nature created the
misleading impression that the emails were from different entities when in
fact it was all from the defendant, albeit sent through its marketing agents.
(Id. at pp. 341–342.) While the Court declined to define the full scope of the
statutory phrase “ ‘misrepresented . . . header information,’ ” it held that “a
single e-mail with an accurate and traceable domain name neither contains
nor is accompanied by ‘misrepresented . . . header information’ within the
meaning of [subdivision (a)(2)] merely because its domain name is . . .
‘random,’ ‘varied,’ ‘garbled,’ and ‘nonsensical’ when viewed in conjunction
with domain names used in other e-mails. [Fn. omitted.] An e-mail with an
accurate and traceable domain name makes no affirmative representation or
statement of fact that is false . . . [and] cannot reasonably be understood to be
an implied assertion that the source of that e-mail is different from the source
of another e-mail containing a different domain name.” (Id. at pp. 346–347 &
fn. 11.)
      Subsequently, this division considered email advertisements whose
domain names did not identify the actual sender and were not “readily

                                       12
traceable to the sender.” (Balsam v. Trancos, Inc. (2012) 203 Cal.App.4th
1083, 1101 (Balsam).) Unlike the Kleffman defendant, the main defendant in
Balsam was not the actual advertiser but instead a third-party Internet
advertising business that advertisers paid to send offers to email addresses
the third party had acquired. (Id. at pp. 1088–1089.) It was undisputed for
purposes of the appeal that the third party “intentionally used only privately
registered, meaningless domain names in order to prevent e-mail recipients
from being able to identify it as the sender, or to contact it except by sending
a blind reply e-mail to an address the [recipient] would have no way of
linking to [the third party].” (Id. at p. 1096.)
      In affirming a posttrial judgment entered against the third party,
Balsam held that “header information in a commercial e-mail is falsified or
misrepresented for purposes of [subdivision (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.” 7 (Balsam, supra, 203 Cal.App.4th at pp. 1093, 1101, italics
omitted.) We decided that there was “good reason” to conclude that “a
commercial e-mailer’s deliberate use of untraceable, privately registered
domain names to conceal its identity” violates subdivision (a)(2), given that
each of the millions of spam sent each month “has the potential to cause
harm to the recipient, ranging from mere annoyance or offense to more
tangible harms such as inducing the recipient to visit Web sites that place

      7 “WHOIS ‘is a public[l]y available online database through which
users can access information regarding domains, including the registrant’s
name, address, phone number, and e-mail address.’ ” (Rosolowski, supra,
230 Cal.App.4th at p. 1407, fn. 3.)

                                        13
malware or viruses on their computer, defraud them out of money, or
facilitate identi[t]y theft.” (Balsam, at pp. 1098–1099.)
      Two years after Balsam, the Second District Court of Appeal decided
Rosolowski. In that case, the sender of the emails at issue was the actual
advertiser. (Rosolowski, supra, 230 Cal.App.4th at p. 1416.) The plaintiffs
sued on the basis that “instead of identifying the sender as [the defendant],
[the emails] indicated the sender was ‘Proactiv Special Offer,’ ‘Wen Hair
Care,’ ‘Proactiv Special Bonus Deal,’ ‘Wen Healthy Hair,’ ‘Wen by Chaz
Dean,’ ‘Proactiv Bonus Deal,’ ‘Proactiv Bonus Gift,’ and ‘Proactiv: Special
Offer,’ which are not names or registered fictitious business names of existing
entities, and are not traceable to [the defendant] via a WHOIS search.” (Id.
at pp. 1407–1408.)
      The Second District concluded that the plaintiffs failed to state a cause
of action under subdivision (a)(2), however, because “the body of the e-mails
was sufficient to enable the recipient to identify . . . the sender.” (Rosolowski,
supra, 230 Cal.App.4th at p. 1416.) As the court explained, “The e-mails
were advertisements for [the defendant’s] various consumer brands. The e-
mails provided a hyperlink to [the defendant’s] website, and provided an
unsubscribe notice as well as a physical address.” (Ibid.) Thus, the plaintiffs
could not “plausibly allege that [the defendant] attempted to conceal its
identity, as the clear purpose of e-mails was to drive traffic to [the
defendant’s] Web site.” (Ibid.) The court held that “a header line in a
commercial e-mail advertisement does not misrepresent the identity of the
sender merely because it does not identify the official name of the entity
which sent the e-mail, 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 e-mail.” (Id. at p. 1407.)

                                        14
            2.    Analysis
      With these cases in mind, we consider the recipients’ allegations here.
We begin by agreeing with DMS that the recipients cannot state a cause of
action under subdivision (a)(2) based on the allegations that the emails’ from
names consisted of generic phrases like “Vehicle Service Plan” or “Vehicle
Protection Info.” The recipients contend that these generic phrases
“misrepresent who[m] the spams are from.” But similar to the domain names
in Kleffman, which also failed to “make clear the identity of either the sender
or the merchant-advertiser on whose behalf the e-mail advertisement is
sent,” such phrases “do[] not make any ‘representation’ regarding the e-mail’s
source, either express or implied, within the common understanding of that
term, so [they] cannot be said to constitute ‘misrepresented’ information
within the meaning of [subdivision (a)(2)].” (Kleffman, supra, 49 Cal.4th at
pp. 345–346.) Moreover, as in Kleffman, “a contrary conclusion would raise
significant preemption problems,” given federal authority holding that the
CAN-SPAM Act preempts “a state law requiring an e-mail’s ‘from’ field to
include the name of the person or entity who actually sent the e-mail or who
hired the sender.” (Kleffman, at p. 346, citing Gordon v. Virtumundo, Inc.
(9th Cir. 2009) 575 F.3d 1040, 1064.)
      We come to a different conclusion, however, as to the allegations
regarding the domain names. Similar to the facts established in Balsam, the
recipients’ allegations here are that the domain names neither disclosed the
senders’ identities nor provided sufficient information to trace those
identities. The circumstances in Rosolowski were different because the
sender there was also the actual advertiser, and its identity was disclosed in
the body of the email. In contrast, nothing here made the “sender’s identity
. . . readily ascertainable from the body of the e-mail[s].” (Rosolowski, supra,

                                        15
230 Cal.App.4th at p. 1407.) Thus, even assuming, without deciding, that
Rosolowski correctly held that information in the body of an email may “cure”
header information that would otherwise violate subdivision (a)(2), we
conclude that principle does not apply here because nothing in the body of the
emails made the identities of DMS’s marketing partners readily
ascertainable.
      We recognize that, as we stated above, a domain name is not required
to explicitly state the name of the sender, and any state law so requiring
would likely be preempted. (Kleffman, supra, 49 Cal.4th at pp. 345–346.)
But while “an e-mail with an accurate and traceable domain name makes no
affirmative representation or statement of fact that is false, an e-mail with a
made-up and untraceable domain name affirmatively and falsely represents
the sender has no connection to [the actual sender].” (Balsam, supra,
203 Cal.App.4th at p. 1098.) The complaint here alleges that the domain
names were essentially made-up and untraceable, and the materiality of such
representations is not appropriate to resolve on demurrer. (See Kwikset
Corp. v. Superior Court, supra, 51 Cal.4th at pp. 332–333.) Particularly
given Balsam’s discussion of the issue (see Balsam, at pp. 1098–1099), we
cannot conclude as a matter of law that reasonable spam recipients would
attach no importance to knowing or being able to trace the identity of the
senders.
      The main difference between Balsam and this case is the nature of the
defendants. As we have said, in Balsam the defendant was not the advertiser
but a third party that sent email on the advertiser’s behalf, and it was sued
for failing to identify itself sufficiently. Here, in contrast, DMS is the
advertiser, and it is being sued for third-party senders’ failure to identify
themselves sufficiently. But as DMS acknowledges, “[s]ection 17529.5 is

                                        16
specifically aimed at advertisers so that advertisers can be held liable for
abuses perpetrated by their marketing agents.” (See Hypertouch, Inc. v.
ValueClick, Inc. (2011) 192 Cal.App.4th 805, 820 [“by its plain terms, the
statute is not limited to entities that actually send or initiate a deceptive
commercial e-mail, but applies more broadly to any entity that advertises in
those e-mails”]; see also Rosolowski, supra, 230 Cal.App.4th at p. 1411.) We
have already rejected DMS’s claim that it is immune from liability based on
the emails’ domain names so long as it is identified in the body of an email,
and we perceive no other reason it should not be responsible for its marketing
partners’ misrepresentation of their own identities. We observe that
section 17500—a provision of the Unfair Competition Law that is similar to
subdivision (a)(2)—“ ‘incorporates the concept of principal-agent liability,’ ”
meaning that “persons can be found liable for misleading advertising and
unfair business practices under normal agency theory.” (People v. JTH Tax,
Inc. (2013) 212 Cal.App.4th 1219, 1242.) “The existence of an agency
relationship is usually a question of fact” (Violette v. Shoup (1993)
16 Cal.App.4th 611, 619), and here, the recipients have alleged that DMS had
a contractual relationship with at least some of the marketing partners who
sent the emails. 8 Given these circumstances, we conclude that the recipients

      8 The complaint alleged that the marketing partners—which have
never appeared in this action—are independently liable under
subdivision (a)(2) “on the basis of civil conspiracy.” In contrast, DMS
suggests that only an advertiser, but not “a third-party marketing agent,” can
be liable under subdivision (a)(2). We need not and do not resolve the issue
here, but we note that there is conflicting authority on whether spam
recipients can state a claim under subdivision (a)(2) against entities that
send spam but are not the actual advertisers. California appellate cases have
held or assumed they can. (E.g., Balsam, supra, 203 Cal.App.4th at p. 1101;
Hypertouch, Inc. v. ValueClick, Inc., supra, 192 Cal.App.4th at p. 820.) At
least one federal district court has held they cannot. (Blanchard v. Fluent,
                                       17
are not precluded as a matter of law from stating a cause of action against
DMS under subdivision (a)(2) based on the domain-name allegations.
Accordingly, the trial court incorrectly sustained the demurrer as to these
allegations.
                                     III.
                                 DISPOSITION
      The trial court’s demurrer rulings are reversed in part and affirmed in
part. We reverse the ruling that the recipients did not state a claim under
section 17529.5, subdivision (a)(2), based on the domain-name allegations,
but we affirm the balance of the order sustaining the demurrer. The
judgment of dismissal is reversed, and the matter is remanded for further
proceedings consistent with this opinion.

Inc. (N.D. Cal. Sept. 22, 2017, No. 17-cv-04497-MMC) 2017 WL 4224768, at
*2–3; see Bank v. Hydra Group LLC (E.D.N.Y. Mar. 31, 2019, No. 10 Civ.
1770 (VMS)) 2019 WL 1434081, at *10 [addressing liability under
subdivision (a)(3)].)
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                                         _________________________
                                         Humes, P.J.

WE CONCUR:

_________________________
Margulies, J.

_________________________
Sanchez, J.

Greenberg et al. v. Digital Media Solutions, LLC A158854

                                    19
Trial Court:

      Superior Court of the City and County of San Francisco

Trial Judge:

      Hon. Ethan P. Schulman

Counsel for Plaintiffs and Appellants:

      Daniel Balsam, The Law Offices of Daniel Balsam; Jacob Harker, Law
Offices of Jacob Harker; Douglas A. Applegate, Pacific Legal Group, PC

Counsel for Defendants and Respondents:

      Jay Ramsey, Sheppard, Mullin, Richter & Hampton LLP; Neil Asnen,
Klein Moynihan Turco LLP

Greenberg et al. v. Digital Media Solutions, LLC A158854

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