On March 6, 2018 in Silverstein v. Keynetics, Inc. the United States Court of Appeals for the Ninth Circuit affirmed the dismissal of a putative class action lawsuit brought under California Business & Professions Code section 17529.5, also known as the California email law (the “Email Law”).  The crux of the case was that the plaintiff received LinkedIn messages which were falsified within the meaning of the Email Law in that the individual sender names (e.g., Liana Christian) were allegedly made up names.

Kavon Adli and Seth Wiener of The Internet Law Group (TILG) represented 418 Media, LLC and Lewis Howes, two of the four prevailing Defendants-Appellees in the action.

California Business and Professions Code section 17529.5 governs unsolicited commercial email. It provides in pertinent part that it is unlawful for a person or entity to advertise in a commercial e-mail advertisement either sent from California or sent to a California electronic mail address under any of the following circumstances:

(1) The e-mail advertisement contains or is accompanied by a third-party’s domain name without the permission of the third party.

(2) The e-mail advertisement contains or is accompanied by falsified, misrepresented, or forged header information.[1] This paragraph does not apply to truthful information used by a third party who has been lawfully authorized by the advertiser to use that information.

Cal. Bus. & Prof. Code § 17529.5(a).  The statute provides for liquidated damages of one thousand dollars ($1,000) for each unsolicited commercial e-mail advertisement transmitted in violation of section 17529.5, up to one million dollars ($1,000,000) per incident.

Plaintiff made the following allegations in the second amended complaint, all of which were assumed true for purposes of the motion to dismiss:

• Plaintiff is a member of the group “C, Linux and Networking Group” on LinkedIn, a professional networking website. Through his membership in that group, he received commercial emails that came from fictitiously named senders through the LinkedIn group email system.
• Plaintiff alleged that the text in the “from” name field in the email headers is “false and/or deceptive” in that defendants “insert[ed] a false name into the email header…” For example, the “from” names include “Liana Christian,” “Whitney Spence,” “Ariella Rosales,” and “Nona Paine,” none of which identify any real person associated with any defendant. Further, plaintiff alleges that the emails “claim to be from actual people…”
• The bodies of the emails contain links to five web pages. Plaintiff alleged that these links “go through clickbank.net,” which is owned and operated by defendant Click Sales, and that Click Sales is a wholly owned subsidiary of defendant Keynetics. He also alleged that defendant 418 Media owns one of the web pages and that defendant Lewis Howes, an individual, owns and operates 418 Media.

In this case, plaintiff alleged that the emails at issue violated section 17529.5(a)(1) because the emails were sent from the linkedin.com domain, even though LinkedIn did not authorize the use of its domain and was not the actual sender of the emails. He further alleged the emails violated section 17529.5(a)(2) because the “from” names are “false” and that Defendants “insert[ed] a false name into the email header in an attempt to trick the recipient into opening the email.”

The District Court dismissed Silverstein’s second amended complaint with prejudice on the ground that his claims under California Business & Professional Code § 17529.5 were preempted by the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, 15 U.S.C. § 7701 et seq. (CAN-SPAM Act).  The CAN-SPAM Act’s express preemption provision provides in pertinent part that it “supersedes any statute, regulation, or rule of a State or political subdivision of a State that expressly regulates the use of electronic mail to send commercial messages, except to the extent that any such statute, regulation, or rule prohibits falsity or deception in any portion of a commercial electronic mail message or information attached thereto.” 15 U.S.C. § 7707(b) (emphasis added). Congress carved out from preemption state laws that proscribe ‘falsity or deception’ in commercial e-mail communications.” Gordon v. Virtumundo, Inc., 575 F.3d 1040, 1061 (9th Cir. 2009). In Gordon, the Ninth Circuit held that the CAN-SPAM Act’s exception from preemption for laws prohibiting “falsity” and “deception” refers to “‘traditionally tortious or wrongful conduct.’” Id. at 1062 (citing Omega World Travel, Inc. v. Mummagraphics, Inc., 469 F.3d 348, 354 (4th Cir. 2006)). Thus, in order to escape preemption, “the false or deceptive information in a commercial email must be material.” Silverstein v. Keynetics, Inc., 2016 WL 3479083, at *4 (citing Gordon, 575 F.3d at 1062).

The Ninth Circuit affirmed the District Court’s dismissal, holding as follows:

The e-mails’ use of the LinkedIn.com domain name is not materially false or misleading within the meaning of the CAN-SPAM Act. See Gordon v. Virtumundo, 575 F.3d 1040, 1062–64 (9th Cir. 2009). Although LinkedIn itself did not send the e-mails, LinkedIn has an automatic e-mail feature that allows LinkedIn group members to communicate with each other. The parties do not dispute that the e-mails actually originated from the LinkedIn.com domain, and that the senders of the e-mails would have to have been members of LinkedIn to send the e-mails.

Silverstein at most has alleged that other LinkedIn users violated the terms of LinkedIn’s user agreement by using the LinkedIn domain to contact him and other group members with unauthorized spam or advertising. However, the senders’ conduct does not make use of the LinkedIn domain name materially false or misleading because the e-mails did come from a LinkedIn member. Accordingly, use of the domain does not rise to the level of “traditionally tortious or wrongful conduct,” as required to escape CAN-SPAM Act preemption. See Gordon, 575 F.3d at 1062 (quoting Omega World Travel, Inc. v. Mummagraphics, Inc., 469 F.3d 348, 354 (4th Cir. 2006)).

The “From” names were also not materially false or misleading, as Silverstein did not allege that the individuals listed in the “From” field were actually known to him and that the senders misappropriated those names. Cf., e.g., Hoang v. Reunion, No. C-08-3518 MMC, 2010 WL 1340535, at *6 (N.D. Cal. Mar. 31, 2010) (holding that a § 17529.5 claim was not barred by Gordon where “plaintiffs allege that each plaintiff received an e-mail indicating the sender was an actual person known to such recipient, when, in fact, the e-mails were sent by defendant”). Nor did Silverstein allege that the “From” names deceived him as to the nature of the e-mails. It is hard to see how they could have, given that the “From” names were adjacent to clearly commercial subject lines, such as “How a newbie banked $5K THIS WEEK . . . What Nobody Told You About.”

In short, the use of fictitious “From” names does not make an e-mail header materially false or misleading within the meaning of the CAN-SPAM Act where those names do not “spoof” the identities of individuals known to the recipient and are accompanied by accurate domain names and subject lines that make it clear the e-mail is commercial in nature. Therefore, Silverstein’s claim is preempted by the CAN-SPAM Act.

Links to the applicable Ninth Circuit and District Court opinions are:

• United States Court of Appeals for the Ninth Circuit, Case No. 17-15176 (Mar. 6, 2018)
• United States District Court, Northern District of California, Case No. 16-cv-00684-DMR (Dec. 29, 2016)

[1] The Email Law does not define the term “header information.” In Kleffman v. Vonage Holdings Corp., 49 Cal. 4th 334, 340 n.5 (2010), the California Supreme Court applied the CAN-SPAM Act’s definition of header information, which is “the source, destination, and routing information attached to an electronic mail message, including the originating domain name and originating electronic mail address, and any other information that appears in the line identifying, or purporting to identify, a person initiating the message.” (citing 15 U.S.C. § 7702(8)).