California 17529.5 Lawsuits:
The New 17200 Scam Suits.
By Jeffrey A. Cohen
January, 24, 2007
In 2003 certain members of the Trevor Law Group were
infamously investigated to the point of resignation under charges
by the State Bar of California for their role in what amounted
to an alleged "shake down" scam involving threatened
and actual lawsuits under the former version of California's Business
and Professions Code section 17200 for what amounted to minor code
violations. They preyed upon small businesses, many of which were
In 2007 the players and statute have changed but the game is essentially
the same. In this round, the name of the game is 17529.5 or more
specifically, California Business and Professions Code
Section 17529.5 (Restrictions on Unsolicited Commercial E-Mail
Advertisers) CA B&P Division 7, Part 3, Chapter 1, Article 1.8 effective
January 1, 2004. This statute essentially constitutes the remainder
of the California Anti-Spam efforts after they were largely annihilated
via Federal Preemption by the passing of the acronym driven Federal
Act known as the "Controlling the Assault of Non-Solicited
Pornography And Marketing Act of 2003" or CAN-SPAM ACT of
Certain individuals including some opportunist lawyers have taken
up the purported cause against SPAM as our "Heroes in Arms" under
the mantra "something must be done". However, in reality
many of these individuals are interested in nothing more than lining
their own pockets by extorting money from well intended small business
web site owners while they accomplish nothing in the war on SPAM
If you should receive a threat letter from one of these individuals
do not take it lightly. They can and will proceed to court - generally
small claims court since there are no lawyers allowed - to attempt
to secure a judgment against you. Technically, 17529.5 does allow
for such suits so prudent web site owners must know the rules of
the game in which they are ever increasingly being forced to play.
Until it was amended, B&P 17200 also permitted such suits even
without any "real injury". The amendment to 17200 by
Proposition 64 added the requirement that there be some real injury
before such suits could be maintained. Until such time as a similar
amendment is made to 17529.5 or it is found to be pre-empted by
Federal Law these opportunist lawyers and others will continue
to make these demands, file suits and even likely prevail against
those that are not prepared to defend them.
COMPLIANCE WITH 17529.5
It is often said regarding football that "the best offense
is a good defense". This applies no less to the 17529.5 game
as well. Therefore, we recommend that you start by ensuring that
you comply with the statute - yes, even if you are not in California.
Compliance with the statute is not particularly arduous and to
the extent that compliance does give all of our SPAM filters a
break it is a good thing anyway.
The basic requirements are that you make sure that your email does
not do a few things:
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.
This paragraph does not apply to truthful information used by a third party
who has been lawfully authorized by the advertiser to use that
(3) The e-mail advertisement has a subject line that a person knows would be
likely to mislead a recipient, acting reasonably under the circumstances, about
a material fact regarding the contents or subject matter of the message.
That's it. If you do that, the opportunists can still sue you under the
theory that "you can sue anyone for anything" but you will
likely win and at a minimum you or your lawyer can write a strong letter
to the initial
demand and send the opportunist packing.
WHY THEY DO IT
The remainder of the section talks about how the opportunists
get rich demanding money from you. Specifically, either
the Attorney General can come after you,
an e-Mail service provider can come after you (yes that's Web Hosting
Companies) or - and here is the rub - "a recipient of an unsolicited e-mail advertisement".
Therefore, essentially anyone that receives a SPAM message that violates 17529.5
can file a lawsuit in California in a real court with real judges and real lawyers
(and real budget problems) against anyone that "advertise[s]
in a commercial e-mail advertisement either sent from California
a California electronic
mail address (which is what exactly?)"
For their efforts, if they are successful they get either their actual
damages (the cost of hitting delete?) or, and this is the rub again,
email advertisement in addition to attorneys fees and costs - which
the opportunist lawyers will claim they are entitled to for their own
What you need to know is that as of the date of this article there
are exactly NO cases in California that deal in any significant way
with the language
of this section. The opportunists will expound on the definitions that
are most convenient to them but the reality is until the Appellate
court defines some of the elements of this statute interpretation remains
eye of the
I GOT A LETTER - WHAT NOW?
If you should find yourself on the wrong end of a vicious threat letter
and in possible violation of the above sections there are a few things
consider before you get out the checkbook.
Ask these questions as each may lead you to a defense:
If you are in small claims court make sure that you file all
of the appropriate response forms and comply with all appropriate
If the trial date
is not convenient most jurisdictions allow for a continuance
written request in writing. Most jurisdictions also provide a
line to assist
with the requirements and many forms can be found on line on
sites such as www.findlaw.com.
On the day of trial, come prepared to show how your advertisements
comply with the statute. Come with proof of your policies and
procedures to eliminate
emails. Bring witnesses that have this information if you do
not directly. Know your facts, dates, times and content of headers.
Be able to prove
that the email
was not yours if indeed that is the case.
Consider hiring a lawyer and having the matter transferred out
of small claims court into Superior court in order to allow the
use of counsel.
AFFILIATES AND INDEMNITY
Your lawyer should have included in your affiliate agreement
language that protects you against these claims and obligates
you against any such claims that you receive as the result of
your affiliates actions. Mention this at your next annual document
While not entirely clear from the statute the opportunists will
claim that you are responsible for the actions of your affiliates
there is room
statute to assert in defense that it is only the person that
sends the email that can be held responsible for any violation
statute. The language "advertises" is
vague and requires clarification however since you as the affiliate
program manager cannot control and likely had no knowledge of the
this statute by
your affiliates there is an argument that it is not intended to apply
This statute is not about sending someone an email they didn't
want. It is STRICTLY about preventing e-mail that either uses
a domain name
false, misrepresented or forged header information or contains
misleading subject information. Without one of those elements
there is no violation
of this section.
Even if you have an email that arguably contains a violation
of this statute depending upon your policies and procedures your
reduced. Speak with your lawyer as to how this may be accomplished.
Finally, as always, we recommend that you hire knowledgeable
California counsel familiar with the issues surrounding these
to review your email
campaigns and to assist you in response to any claims or demands
that should arise.
The California State Bar is likely examining these issues now
under the same light that they viewed claims under 17200. Certainly
is bad but unscrupulous
lawyers and other individuals that clog the courts with minor
concerns with relatively no public interest primarily for the
gain of the lawyers
is far more costly and of greater concern.