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Tuesday, April 23, 2024

Making money out of spam: 'Excessively punitive' Calif. law allows $1K per email

Lawsuits
Spam

LOS ANGELES (Legal Newsline) – Instead of clearing out their spam folder, some email users are instead using a California law - one that a telecommunications attorney thinks is possibly unconstitutional - to file lawsuits.

For instance, Californian Andrew Laich filed a lawsuit against Dream World Partners Inc. in the U.S. District Court for the Central District of California on March 6 under claims that the Nevada-based company violated the California Restrictions on Unsolicited Commercial Email.

As stated in the complaint, Laich "received at least three hundred and twenty-three (323) spam emails advertising defendant’s websites at plaintiff’s 'California email address,'” as defined by the law.

Laich alleges he did not opt-in to receive those emails and he did not also consent to receive such communications.

"The spam emails are all unlawful due to materially false and deceptive information contained in or accompanying the e-mail headers, and/or misleading subject lines," the complaint said.

The complaint also stated that the spam emails contained "third-party domain names without each of the third-parties’ permission," which allegedly violated the legislation. In addition to the third-party domains, fake names and misleading subject lines allegedly were found on the communications.

California spam laws have drawn some controversy among legal specialists.

Attorney Sean Moynihan of Klein Moynihan Turco told Legal Newsline that the law is "is an excessively punitive, arguably unconstitutional, statute," whose "monetary penalty bears absolutely no relationship whatsoever to the alleged harm."

He also added that "some plaintiffs even go so far as to argue that there is no actual harm to them in order to prevent their cases from being transferred from California state courts, where they believe that they will be assigned sympathetic judges, to California federal courts."

The attorney stated that the law is prone to abuses.

"Moreover, the excessive penalty of $1,000 per email, combined with a 'plaintiffs only' attorney’s fee provision invites abuse by opportunistic plaintiffs. For example, plaintiffs are incentivized to solicit the very emails that they later sue for, to disable their spam filters and/or to refuse to opt out from receipt of additional emails until they have compiled dozens or even hundreds of such emails," Moynihan said.

"At that point, plaintiffs can sue for tens or hundreds of thousands of dollars, potentially based on dubious or discredited legal theories, and attempt to leverage unreasonable settlements with the threat of large attorney’s fee awards."

Moynihan said that "three dozen states have spam laws on the books," but these laws are "preempted by the federal CAN-SPAM Act of 2003."

Laich is seeking damages of more than $1,000 per message, plus attorneys' fees, costs and disgorgement of profits, as well as a jury trial.

He is represented by attorneys Joshua B. Swigart of Hyde & Swigart APC of San Diego, California; and Abbas Kazerounian of Kazerouni Law Group APC of Costa Mesa, California.

U.S. District Court for the Central District of California case number 5:19-cv-00411-CAS-SHK

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