State Supreme Court Won’t Hear Challenge to Anti-Spam Law

Thursday, April 11, 2002

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State Supreme Court Won’t Hear Challenge to Anti-Spam Law

By KENNETH OFGANG, Staff Writer/Appellate Courts

The California Supreme Court won’t hear a challenge by two Palo Alto companies to a state law banning businesses from sending unsolicited commercial e-mail to recipients who don’t want it.

The court voted 5-1 at yesterday’s conference not to review the First District Court of Appeal, Div. Two ruling in Ferguson v. Friendfinders, Inc., 94 Cal.App.4th 1255. Justice Joyce L. Kennard voted to hear the case, while Chief Justice Ronald M. George was absent from the conference.

The lower panel reinstated Mark Ferguson’s suit against Friendfinders, Inc. and Conru Interactive, overruling San Francisco Superior Court Judge David Garcia. The trial jurist said the statute contravenes the “dormant” Commerce Clause by subjecting Internet users to inconsistent burdens as they do business in different states and countries.

Statute Amended

The statute, which was originally enacted as a ban on “junk faxing,” was amended in 1998 to address unsolicited commercial e-mail, commonly referred to as “spam.” It applies to businesses that send e-mail to recipients with whom the sender has no prior personal or professional relationship and who have not requested information from the sender.

The law requires such businesses to establish a toll-free number or return e-mail address—which must appear before any other text—that recipients may use to notify the sender not to send any more spam; prohibits the sending of spam to anyone who has told the sender to stop; and requires the sender to begin the subject line of each e-mail with “ADV:” or “ADV:ADLT” if the advertisement pertains to adult material.

For the law to apply, the sender must do business in California, California-located equipment must be used to transmit the message, and the recipient must be a California resident. Violation of the law may be classified as an unfair business practice or unfair advertising practice, subjecting the sender to damages, penalties, and/or injunctive relief.

California is one of about 18 states to enact such laws.

Violation Alleged

Ferguson alleged that the defendants violated the “ADV:” provision and provided no return address or other information on how to stop the spamming.

In concluding that the trial judge was wrong in dismissing, Justice Paul Haerle reasoned that the statute “does not regulate the Internet or Internet use per se.”

The justice distinguished a recent ruling by a federal judge in New York, striking down that state’s ban on using a computer to disseminate obscene materials to a minor. That law, Haerle explained, broadly applied to all Internet activity and did not limit its scope to New York-based recipients or require that equipment located in New York be used to transmit the proscribed material.

California’s law, Haerle said, does not conflict with other state statutes. While there may be minor differences from one state to another—Pennsylvania, for example, requires that the subject line of a solicitation for sexually explicit material begin “ADV-ADULT” rather than “ADV:ADLT”—the geographic limitation on the law’s scope means that no sender will face conflicting requirements from state to state, the justice wrote.

Because the state law does not discriminate against or directly regulate or control interstate commerce, Haerle explained, it does not violate the dormant Commerce Clause unless its burdens on commerce outweigh its beneficial effects.

The law is beneficial, he said, because it protects potential recipients from annoyance and waste of time, spares internet service providers from undue expense, and protects innocent third parties from having responses to commercial e-mail misdirected to them as a result of bulk e-mailers’ misuse of phony domain names.

As for the burdens imposed on interstate commerce by the law, Haerle agreed with the attorney general—who filed an amicus brief in support of the plaintiff—that the cost of compliance is “appreciably zero in term of time and expense.”

In other actions taken at the conference, the justices:

•Declined to review a ruling of this district’s Court of Appeal, Div. Three, compelling reinstatement of Hector Gutierrez, a Los Angeles County sheriff’s deputy who was fired for not telling superiors of a jail escape plan. The plan was actually a ruse designed by department officials who thought Gutierrez had knowledge of an earlier escape.

The Court of Appeal, in an unpublished opinion, said the penalty was excessive in light of the lack of harm to the public and Gutierrez’s good record with the department. Only Justice Marvin Baxter voted to grant review.

•Declined to review a Fourth District Court of Appeal, Div. One ruling that a public employee named as defendant in a job-related lawsuit is not entitled to hire separate and independent counsel at public expense, even if the attorney hired by the employer faces a conflict between employer and employee interests.

Only Kennard voted to hear the appeal brought by four Huntington Beach officers who want the city to pay the Petersen Law Firm for services it performed in defense of a pair of civil rights suits. The case is City of Huntington Beach v. Petersen Law Firm, 5 Cal.App.4th 562.

•Declined to review a Fourth District Court of Appeal, Div. One ruling which held that the California Constitution’s guarantee of free public schooling doesn’t entitle a student to play interscholastic sports. The panel held last December in Ryan v. California Interscholastic Federation-San Diego Section, 94 Cal.App.4th 1048, that the CIF was entitled to enforce rules restricting the ability of foreign transfer students to compete.

No justice voted for review of that ruling, or of a companion decision that an award of interim relief to the plaintiff did not confer a sufficient benefit on the public to support an award of attorney fees under the private-attorney-general statute.