April 08, 2009
Q1 2009 CAN-SPAM Quick Recaps
by Ethan Ackerman
While it seems most CAN-SPAM watchers (and even traditional media, apparently) await the results of key 9th Circuit and California Supreme Court cases, CAN-SPAM rulings in lower courts and in other Circuits continue to trickle in. Two of these new cases raise issues this blog has covered in the past, but they're still worth a quick note.
Ferron v. Subscriberbase Holdings, Inc
(excellent coverage, and a link to the decision, at spamnotes.com)
This case manages to come out just right in its results, even though the opinion relies rather extensively on the 4th Circuit's rather poorly-reasoned Mummagraphics precedent.
If ever there were a cut-and-dried 'actual statutory conflict' preemption case that largely didn't have to resort to parsing the CAN-SPAM Act's preemption language, it is this case. The 6th Circuit Court should have just done a straight forward preemption analysis and said: "The OH statute imposes labeling and physical address requirements in a manner inconsistent with CAN-SPAM's labeling and physical address requirements. Actual conflict preemption - the end. We need not dally in the hypothetical of whether CAN-SPAM's preemption savings clause for 'falsity or deception' applies..." While the Court came to the correct conclusions about CAN-SPAM's preemption clause not applying to this particular statute, because this statute wasn't a "falsity and deception" law, the court muddied the waters by using Mummagraphics to get there.
On the other hand, the court correctly pointed out that the general OH consumer protection act claims were not preempted, because the state act is one of general applicability and has "false or deceptive" elements, just like CAN SPAM's exception requires. [Author's comment: Wow, you'd think CAN SPAM had been specifically drafted to pointedly protect state consumer protection acts from preemption or something...]
Hypertouch v. Azoogle.com, 2009 WL 734674 (N.D.Cal.)
While this order granting motions to dismiss and granting leave to amend the complaint is a new and separate case, you could be excused in confusing it with another of federal District Judge Chesney's spam cases - the previously-blogged Hoang v. Reunion.com.
Like in Reunion.com, the opinion confuses the tort of fraud, with its special elements and pleading requirements, with the statutory provisions of the CAN-SPAM Act. To be fair, Judge Chesney does a precise and accurate job with the preemption analysis under CAN-SPAM. Everything in the opinion is an appropriate statement of the law regarding preemption, including the review of plaintiff's less-common trespass to chattels claim.
It's at the erroneous rulings over fraud pleading standards where this opinion looses its steam. As I bemoaned in a post over the same error in Reunion.com, falsity is still not the same thing as fraud, especially when Congress distinguishes between them in a statute. Unfortunately, this opinion also repeats this earlier mistake, and explicitly imposes the heightened pleading standards of FRCP Rule 9 because the pleadings "sound in fraud." It's dismaying to see this mistake again, especially after the judge even concedes that the plaintiffs in their complaint explicitly noted that they were not asserting a general claim for the tort of fraud.
Posted by Ethan Ackerman at April 8, 2009 09:38 AM | Spam
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