Anti-Spam Law: Sender Not Readily Traceable

Balsam v. Trancos, Inc., (First District, February 24, 2012) 203 Cal.App.4th 1083, 138 Cal.Rptr.3d 108, 12 Cal. Daily Op. Serv. 2303, 2012 Daily Journal D.A.R. 2555

A recipient of a number of unsolicited commercial e-mails filed suit against an internet advertising business, asserting violations of the Anti-spam Law (Business and Professions Code § 17529.5) which makes it unlawful to send e-mail advertisements containing falsified, misrepresented or forged header information, and provides for actual or liquidated damages of $1,000 for each unsolicited commercial e-mail. The plaintiff alleged that the defendant, which charged advertisers for sending out large numbers of promotional e-mails to recipients on various lists, utilized multiple nonsensical “fancifully named domain names” privately registered to the defendant, in order to prevent recipients from readily tracing the senders’ identity.

Following a court trial and judgment for the plaintiff, the defendant appealed, contending that the sending of commercial e-mails from multiple domain names which it owned did not violate the law, in that there was no affirmative misrepresentation or false statement of fact. The court of appeal affirmed, distinguishing the facts from Kleffman Holdings Corp. (2010) 49 Cal.4th 334, 110 Cal. Rptr. 628, and holding that header information in a commercial e-mail is unlawful when it uses a sender domain name that neither identifies the actual sender on its face nor is readily traceable to the sender using a publically available online database:

“There is good reason to treat a commercial e-mailer’s deliberate use of untraceable, privately registered domain names to conceal its identity as a falsification or misrepresentation for purposes of the statute. Judging from Trancos’s Meridian eMail business, such e-mailers send out millions of commercial e-mail offers per month. Each such e-mail sent has the potential to cause harm to the recipient, ranging from mere annoyance or offense to more tangible harms such as inducing the recipient to visit Web sites that place malware or viruses on their computer, defraud them out of money, or facilitate identify theft. Sending millions of such e-mails, as Trancos did, makes harm inevitable. If Trancos deliberately hides its identity from recipients, as it concedes it did, what means of redress does a recipient have? The recipient can send a blind e-mail message or a letter to a nonexistent company at a post office box making a complaint or attempting to opt out of future e-mails, but if Trancos (or an employee who sees the complaint) chooses not to respond or take any action, the recipient is at a dead end. . . . Using a privately registered domain name leaves it entirely up to Trancos whether it will or will not respond to or provide redress to persons (other than determined litigants like Balsam) who are harmed, annoyed, or offended by its communications. Trancos does not explain why its business is so sensitive and so different from all other businesses that it must be free to hide its identity from the millions of individuals to whom it directed its commercial solicitations.

If anything, the absence of ordinary marketplace safeguards in commercial e-mailing suggests Trancos should bear some accountability to the recipients of its e-mails.”