On September 23, 2003, the governor of California signed California Bill ALS 487, enacting what is now the toughest anti-spam legislation in the United States. The new law, to be codified as Section 17529 of the Business and Professions Code, contains provisions that are much more restrictive than California's current law or any other law currently in force in other states. The law takes effect January 1, 2004.
By way of background, the current anti-spam legislation in California prohibits a person or entity from e-mailing unsolicited advertising material (generally defined as advertising material for the disposition of any realty, goods, services, or extension of credit) that are addressed to a recipient with whom the initiator does not have an existing business or personal relationship or that are not sent with the consent of the recipient, unless that person or entity establishes a toll-free telephone number or valid return e-mail address that a recipient may contact to notify the sender not to e-mail any further unsolicited advertisements. The current law requires that notification of the toll-free number and valid address be included in all unsolicited e-mailed advertising. Further, the current law prohibits the e-mailing of unsolicited advertising to a person who has requested not to receive such advertising and requires certain unsolicited e-mail advertisements to contain a heading of "ADV:" or "ADV:ADLT," as applicable. A violation of the foregoing provisions is a misdemeanor.
The new law contains a general prohibition on the sending of all "unsolicited commercial e-mail advertisements" to California e-mail addresses. There are a few, limited exceptions to this general prohibition. "Unsolicited commercial e-mail advertisement" does not include e-mails sent to a person who has provided "direct consent" to receive advertisements from the advertiser and e-mails sent to a person with whom the sender has a preexisting or current business relationship where the advertiser is promoting the sale or lease of property, goods, services or extension of credit.
Under the new law, sending of "commercial e-mail advertisements" (i.e., those that are not "unsolicited") is permitted, but restricted. A commercial e-mail advertisement means any electronic mail message initiated for the purpose of advertising the lease or sale of property, goods, services, or extension of credit. A commercial e-mail advertisement is one where the sender either has consent from the recipient or a pre-existing or current business relationship with the recipient, thus taking it out of the definition of unsolicited commercial e-mail advertisement. Commercial e-mail advertisements sent to persons with whom the sender has a preexisting or current business relationship must contain an opt-out notice. Further, the new law makes it unlawful to send a commercial e-mail advertisement where it contains (i) a third party's domain name without that party's permission, or (ii) falsified, misrepresented, obscured, or misleading information, or (iii) a subject line that a person knows would be likely to mislead the recipient about a material fact regarding the contents of the message.
In addition to the above, the law prohibits a person or entity from collecting e-mail addresses posted on the Internet or registering multiple e-mail addresses for the purpose of sending an unsolicited commercial e-mail advertisement.
The new law provides for substantial damages in private actions. A recipient of an unsolicited commercial e-mail advertisement, an electronic mail service provider, or the Attorney General may bring an action against an entity that violates the law and recover either or both of the following: actual damages and/or liquidated damages of $1,000 per e-mail or $1,000,000 per incident. ("Incident" means a single transmission or delivery to a single recipient or to multiple recipients of unsolicited commercial e-mail advertisements containing substantially similar content.) The statute also allows for the recovery of attorney's fees and costs. Damages will be reduced to $100 per e-mail or up to a maximum of $100,000 per incident if the court finds that the defendant implemented practices to prevent the sending of unsolicited commercial e-mail advertisements in violation of the statutory restrictions. The law exempts from liability an electronic mail service provider that is only involved in the "routine transmission" of the unsolicited commercial e-mail advertisement over its network.
While the new law repeals and replaces California's existing spam law, other sections of the Business and Professions Code that address the sending of unsolicited advertising material via e-mail remain in effect. Section 17538.45, in particular, prohibits the sending of unsolicited electronic mail advertisements in violation of an electronic mail service provider's policy prohibiting or restricting the use of its service for the initiation of unsolicited electronic mail advertisements. This section allows an electronic mail service provider to recover if its policy on unsolicited electronic mail advertisements is violated. Pursuant to the new law and a revision to Section 17538.45, an electronic mail service provider may not institute an action under both sections. Thus, an electronic mail service provider that brings an action against a party under the new law cannot bring an action against that party under Section 17538.45. Similarly, an electronic mail service provider who brings an action against a party for a violation of Section 17538.45 cannot bring an action against that party under the new law.
The passing of this statute leaves open the issue of whether other states will begin to consider similar legislation as an effective means of potentially stopping what many consumers consider to be an extreme annoyance. Regardless, given that it is virtually impossible to determine whether an e-mail address is a California e-mail address, and the new law's restrictions on speech, the new statute will likely be subject to challenge on various grounds, including that it places an undue burden on interstate commerce and that it violates the First Amendment.