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The media is full of information and news about how Americans hate receiving "spam" and legislative efforts to limit or eliminate it. States throughout the Union and the federal
government are grappling with how to balance the constitutional rights afforded commercial speech with the ever-growing problem of receiving unwanted commercial or even sexually explicit
emails. The Utah Legislature recently tried its hand at passing a law aimed at curbing spam within the state. Utah plaintiffs have wasted no time in bringing suit under the new
legislation, seeking to recover damages, costs and attorneys' fees from alleged violators.
I. The Unsolicited Email Act
Last year, the Utah Legislature passed the Unsolicited Commercial and Sexually Explicit Email Act.1 The Act requires senders of unsolicited emails to jump through a number of hoops aimed at protecting recipients from the inconvenience and hassle of so-called "spam." For example, senders of unsolicited emails are required to include "ADV" in the subject line of their emails, apparently allowing recipients seeking to avoid receipt of such emails to program their email software to reject all emails containing "ADV" in the subject line. Other requirements include providing an easy way for recipients to be removed from the senders' email distribution lists.
An unsolicited email is one sent without the "recipient's express permission," except that the Act includes an exception where the sender has a "preexisting business or
personal relationship" with the recipient. The Act only applies to emails sent "through the intermediary of an email service provider located in the state or to an email address
held by a resident of the state."
No one can accuse the Legislature of leaving the Act without sufficient teeth to encourage compliance. A person who receives an offending email can recover either actual damages, or the
lesser of $10 per email or $25,000 per day. Costs and reasonable attorneys' fees are available to successful plaintiffs. Senders of unsolicited sexually explicit emails can also be
subject to criminal penalties.
Other states have passed similar anti-spam legislation. Besides Utah, various versions of anti-spam legislation are on the books in California, Colorado, Idaho, Illinois, Iowa, Kansas,
Maryland, Minnesota, Ohio, Oklahoma, South Dakota, Tennessee, Virginia, Washington, and West Virginia. The United States Congress is also considering federal anti-spam legislation.
II. Anti-Spam Litigation
Since the Act became effective in May of 2002, Utah plaintiffs lawyers have filed hundreds of class action suits in Third District Court against both
local and national defendants based on supposedly unsolicited emails. Whether such suits are properly within the reach of the Act, and whether the Act, as applied, is constitutional is
currently before the Third District Court. Some of these suits test the breadth of the Act's application and seek damages from well-known national defendants who consider themselves to be
responsible email marketers.
It is common to employ email distribution companies to handle email marketing. Such companies offer "opt-in" bulk email distribution services where emails are sent to recipients
who have requested to receive certain categories of information, offers and advertisements. Many of these distribution services have "anti-spam" policies that prevent email
distribution to recipients who have not opted to receive them. Companies who employ these opt-in services intend to avoid spamming and prefer that their offers and advertisements end up
in the in-boxes of those most interested in them.
At least one of the anti-spam suits now pending in Utah is against a national telecommunications company who has sent email offers through such an email distribution company. The plaintiff
in that case allegedly signed up with the distribution company to receive relevant emails but subsequently cancelled his subscription. Less than two days later, the plaintiff received an
email from the defendant company which was already posted to the outgoing queue (a sort of "out box") prior to the cancellation. Plaintiff subsequently brought a class action
suit under the Act. At least one other suit is based on an email that was received by the plaintiff while the plaintiff was still subscribed to the opt-in service. Whether such emails
were "unsolicited' and whether a "preexisting business or personal relationship" existed between the parties within the meaning of the Act are the subjects of dispute.
Most recently, a national defendant was sued under the Act because of a pop-up window on its own web page. Apparently, plaintiffs have alleged that the pop-up window was an unsolicited
email under the Act. It seems clear, however, that the Act does not have application to such a pop-up window because it was solicited within the meaning of the Act (the recipient
intentionally accessed the defendant's webpage) and because a pop-up window (unlike an e-mail) is not sent through an email service provider located in the state or to an email address
held by a resident of the state, but rather is just another webpage.
Serious questions also exist surrounding the constitutionality of the Act. Although commercial speech is not entitled to the full protection of the First Amendment, the Supreme Court
continues to recognize that the free flow of commercial information is indispensable to our society.2 For a regulation of protected commercial speech to be constitutionally permissible, the speech in question must concern lawful activity and not be misleading, the asserted governmental interest to be served by the regulation must be substantial, and the regulation must directly advance the governmental interest and not be more extensive than is necessary to serve that interest.3 Whether the Act can satisfy this standard is presently before the judiciary.
Other constitutional issues that may be called into question under the Act include possible violations of the Fourteenth Amendment, i.e., whether the Act is unconstitutionally vague
and fundamentally unfair. Furthermore, the Act may require review under the Dormant Commerce Clause, assessing the burden placed on out-of-state business. These and other questions of
constitutionality must be decided by the courts in order to clarify the legitimacy of the Act.
III. Proposed Amendments to the Act
Proposed amendments to the Act are currently under consideration. One proposed amendment would define "preexisting business
relationship" to include where the recipient has indicated a willingness to receive the emails or requested information, goods or services from the sender. At least one proposal
seeks to make it easier for plaintiffs to certify class actions by shifting the burden of proof to the defendants as to the existence of preexisting relationships. It would also increase
the amount of statutory damages. Another proposed change would allow a reasonable period of time for senders to recognize a recipient's request to no longer receive emails. A formal bill
has not yet surfaced.
The Legislature should take a close look at how the Act is being used by local plaintiffs and its effect on national and even international email marketing. Utah should recognize the
anti-spam efforts of companies that are good citizens in our virtual community. The Legislature should consider rewarding companies for using legitimate opt-in services and create an
exception for them. Until an effective, constitutional and fair legislative solution is found, anti-spam litigation in Utah will continue to grow while in-boxes continue to fill with
spam.
Footnotes
1. Utah Code Ann. ¤¤ 13-36-101, et seq.
2. Thompson v. Western States Medical Center, 535 U.S. 357 (2002).
3. Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y., 447 U.S. 557, 566 (1980).
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