MAPC Lawyers Publish “State law allowing for suits against deceptive e-mail advertising found by California Court of Appeal to not be preempted by federal anti-spam law.”

by Joshua R. Dale 

The Second District Court of Appeal (Los Angeles) allowed a lawsuit by an e-mail provider against internet e-mail advertisers to resume.  The lawsuit was originally dismissed by the trial court as being preempted by the federal CAN-SPAM act, but the Court of Appeal found that a state law claim for deceptive advertising practices in e-mail could be the proper basis for a lawsuit and was not preempted by federal law.

The appellate court found that Business & Professions Code section 17529, et seq., which allows a private cause of action for deceptive or fraudulent statements in e-mails, was not preempted by CAN-SPAM because Congress created an exception to CAN-SPAM for state laws that sought to prevent deceptive advertising in e-mails.  The appellate court further found that for a state law to avoid preemption under CAN-SPAM, that law did not need to incorporate every element of common law fraud; the trial court had found Section 17529 to be preempted because its elements did not contain all the elements of common law fraud, such as, e.g., the advertiser’s knowledge of the falsity of the statement.

Expect to see a rise in state actions against online advertisers until this decision is further appealed.

Hypertouch, Inc. v. Valueclick, Inc. (2d Dist., Jan. 18, 2011) Case No. B218603