CAN-SPAM Act of 2003: Preemption

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Section 8(b) of the CAN-SPAM Act of 2003 expressly preempts certain state anti-spam laws. See 15 U.S.C. § 7707(b). The Act preempts any state laws that explicitly govern the use of commercial email, but it carves out an exception from preemption for state laws that govern the use of commercial email by prohibiting fraud or deception in messages or attachments. 15 U.S.C. § 7707(b)(1). Moreover, state laws that are not specific to commercial email, but would apply to commercial email (together with other types of communication or activity), are not preempted; neither are state laws that address computer fraud or crime more generally. 15 U.S.C. § 7707(b)(2). Policies and procedures used by "internet access service" providers to block spam are also protected from preemption. 15 U.S.C. § 7707(c).

Questions as to which state anti-spam laws are preempted, and to what extent such laws are preempted, will ultimately be answered through the legal interpretation of courts. So far, the issue of CAN-SPAM Act preemption has been addressed by three Federal Circuit Courts of Appeals: the Fourth Circuit, the Fifth Circuit, and the Ninth Circuit.

Preemption in the Fourth Circuit: Omega World Travel v. Mummagraphics, 469 F.3d 348 (4th Cir. 2006)

In this case, the plaintiff Mummagraphics, Inc. was seeking a damage award against defendants affiliated with Omega World Travel, Inc. for spam emails allegedly sent by the defendants. The plaintiff brought his claims under the CAN-SPAM Act, and under several Oklahoma statutes.

The Oklahoma statute at issue on appeal provided as follows: "It shall be unlawful for a person to initiate an electronic mail message that the sender knows, or has reason to know:

1. Misrepresents any information in identifying the point of origin or the transmission path of the electronic mail message;

2. Does not contain information identifying the point of origin or the transmission path of the electronic mail message; or

3. Contains false, malicious, or misleading information which purposely or negligently injures a person."

Omega World Travel, 469 F.3d at 353 (citing 15 Okl. Stat. § 776.1A).

The question for the courts to decide was whether this statute fit within the CAN-SPAM Act's exception for state laws that govern commercial email, but only do so to prevent fraud or deception in email messages or attachments. The U.S. Court of Appeals for the Fourth Circuit upheld the lower court's ruling that, to the extent that the Oklahoma statute penalized non-material errors, it did not fit within the exception, and was therefore preempted. Omega World Travel, 469 F.3d at 352-57.

The lesson from this case is that state statutes may not survive CAN-SPAM Act preemption analysis if they can be interpreted as going beyond the prohibition of material falsity or deception in commercial email message or attachment content.

Preemption in the Fifth Circuit: White Buffalo Ventures v. University of Texas at Austin, 420 F.3d 366 (5th Cir. 2005)

In this case, the plaintiff White Buffalo Ventures, LLC (which offered online dating services targeted at University of Texas students) was seeking an injunction to stop the University of Texas at Austin from blocking White Buffalo's emails as spam pursuant to UT's IT policy. The district court had denied the request for an injunction, so White Buffalo was appealing on the argument that the CAN-SPAM Act preempted the University's anti-spam policy.

Following general Supremacy Clause principles, the U.S. Court of Appeals for the Fifth Circuit upheld the district court's decision that the University of Texas anti-spam policy was not preempted. While the court accepted White Buffalo's argument that University of Texas was a state actor, it nevertheless also considered the University from the perspective of an "internet access service" provider. In this latter capacity, the University was the beneficiary of a preemption exception evidently drafted to enable ISPs to block spam. See 15 U.S.C. § 7707(c). Because the court could not find clear evidence that Congress had contemplated preemption under such circumstances, and because "the tie goes to the state" under the Supremacy Clause, the Fifth Circuit held the policy was not preempted. See id. at 370.

One lesson from this case is that courts sensitive to issues of federalism will hesitate to conclude that the CAN-SPAM Act preempts state provisions that seem to go beyond what Congress contemplated preempting when it passed the CAN-SPAM Act. Additional lessons may be gleaned from the court's analysis of First Amendment protections for commercial speech. See White Buffalo Ventures, 420 F.3d at 374-78.

Preemption in the Ninth Circuit: Gordon v. Virtumundo, 575 F.3d 1040 (9th Cir. 2009)

In this case the plaintiff Gordon and his company were seeking a damage award against defendant commercial email companies (Virtumundo, Inc. and Adknowledge, Inc.), along with an individual owner of those companies. Gordon brought his claims under the CAN-SPAM Act and under Washington State's commercial email statutes. The question was whether, and to what extent, Gordon's claims based on the Washington state statutes were preempted by the CAN-SPAM Act.

The U.S. Court of Appeals for the Ninth Circuit held that Gordon's claims based on the Washington statutes were preempted by the CAN-SPAM Act. Drawing on the Fourth Circuit's analysis in Omega World Travel, the Ninth Circuit interpreted the Washington statutes as going beyond the CAN-SPAM Act's prohibitions on falsity and deception, and as being to that extent preempted. The Ninth Circuit hinted strongly that the Washington State Legislature and courts should craft the statutes and their interpretation in a manner that would avoid future preemption challenges. See Gordon v. Virtumundo, 575 F. 3d at 1057-66.