Checking Your Spamming Burdens at the Dormant Commerce Clause/Jurisdiction Doors?

An update on the disjointed state of state spam law cases

By Ethan Ackerman

Despite the passage of the federal CAN-SPAM Act in 2003, state spam laws continue to be enforced by states, and it appears private litigation under them continues unabated as well. State attorneys in Virginia and Washington, Maryland law students and Microsoft are just a few examples of recent plaintiffs using state spam laws. In covering these suits, mainstream press reporting seems to, for the most part, correctly explain that state anti-spam laws aren’t entirely preempted by the federal CAN SPAM act. So with six (or in some cases, seven) years on the books and multiple court cases enforcing them, why are bloggers still asking, news outlets reporting, courts still ruling both ways on, and lawyers still not answering, the following questions: How and when do state anti-spam (and related state ‘internet protection’) laws violate the ‘Dormant’ Commerce Clause of the US Constitution, and when do state courts have jurisdiction over out of state spammers?

The Appeals March On…and off, and left, and right.

Recently, the US Supreme Court passed up its second (but certainly not last) opportunity to clarify the extent to which state laws may regulate an admittedly interstate problem – spam. State appellate courts (which generally must take appeals at the intermediate level) can’t just ‘decline certiorari,’ and so they are turning out more and more opinions on the issue. But more doesn’t look to be the same as ‘clearer.’ Maryland, for instance, has modeled its state spam laws after Washington state’s laws, and its intermediate appellate court recently released an opinion vigorously supporting the reach and constitutionality of the state’s law. This opinion, MaryCLE v First Choice Internet, stands in marked contrast to Beyond Systems v. Realtime Gaming, where Maryland’s highest court, the Court of Appeals, came to the opposite result on very similar facts six months earlier. If appeals courts in the same state aren’t going the same way, can we expect any different results nationwide?

Back in Washington state, the grandfather of dormant commerce clause cases, Washington v. Heckel, generated yet another opinion – this time by an intermediate court of appeals – further addressing the Dormant Commerce Clause and standards of proof under the Washington statute. Essentially fleshing out the conclusions the Washington state Supreme Court had earlier reached in the case, the intermediate court reaffirmed both the Dormant Commerce Clause soundness and the appropriateness of Washington court jurisdiction in the case.

These same two issues (Jurisdiction and the Dormant Commerce Clause) were the main entanglements in Maryland’s MaryCLE and Beyond Systems, and while MaryCLE found that jurisdiction was OK and the statute survived the Commerce Clause, Maryland’s highest court found it had no jurisdiction over the out-of-state defendant, and so did not even address the commerce clause issue. What make the Maryland cases significant are their different conclusions on what are very similar fact situations. In both cases, the defendant allegedly directed another company to do the actual emailing, but was sued as the person who directed or controlled the emailing. While admitting to ordering the sending of emails, and providing the lists of email addresses, the MaryCLE defendant company alleged it had no way of knowing they would go to Maryland residents. The MaryCLE court found this no barrier, and held that directing the sending of email to many commercial email addresses is itself sufficient to establish jurisdiction in Maryland, especially when the state statute imputed knowledge if state location is available from email domain registrars. Relying heavily on three similar cases (each helpfully explained on pages 20-22), the Maryland court found jurisdiction to be no problem either, even though there was a question as to whether any activity even took place in Maryland. In an effort to be comprehensive, the Court rejected four contrary (but not that different) opinions in footnote 21.

The Beyond Solutions court (Maryland’s highest) was not so quick to find a connection between the defendant and the person who sent the email because, unlike MaryCLE, the defendant argued there was none. While the emails in question allegedly linked to a website controlled by the defendant, and the URLs included an ‘affiliate ID’ that allegedly corresponded to the actual sender – who stood to receive referral fees from the defendant – the defendant alleged it was not the sender and had no control over the emails sent. This strenuous denial, and the fact that the defendant had no other connections to Maryland sufficient to establish general jurisdiction, led the Maryland Court of Appeals to dismiss the case for lack of jurisdiction. A three-person minority of that court dissented, recognizing that the sublicensing agreements and shell-companies the defendant operated under, and the affiliate programs alleged, were similar to the types of liability-hiding and obfuscating spammers often engaged in. The dissenters would have at least allowed discovery sufficient to establish whether the defendant did have a relation to, or control over, the actual sender.

What’s worth watching next?

As the cases under these laws continue to be decided, clarity will hopefully develop. Where can we look for the next step in the mix? Washington and Utah may be good starts. A Washington federal court is currently deciding one of several suits filed by Washingtonian James Gordon under that state’s spam laws, and several of his cases have survived defendants’ motions to dismiss. Federal court opinions on state spam law constitutionality are still relatively rare, and may be somewhat less biased toward their own state law, making this an important area to watch.

While not strictly a spam law, Utah’s Child Protection Registry Act creates a heavily criticized, age-restricted ‘do-not-email-list.’ Several free-speach groups have organized to challenge the law, which has also drawn amicus support from the EFF and marketing groups. This well-organized direct challenge has no esily-vilified defendant spammer and may lead to clearer standards because of this. Possibly most importantly, this case may clarify some of the strong questions over the constitutionality over ‘check-before-you-send’-style email laws.