Email Evolution Conference 2010, presentation by Kavon Adli, Esq. of The Internet Law Group

1. “Stay Compliant and Protect Your Reputation”
Evolution of U.S. email marketing law & survival tactics
Presenter: Kavon Adli, Esq.
www.TheInternetLawGroup.com
NOTE:
The information in this presentation is intended for discussion purposes only
and is not intended as legal advice.
Content may include unverified student research
Authorities and opinions are strictly fact and jurisdiction-dependent and
should not be applied to any situation or relied upon for any purpose without
independent analysis by a licensed attorney

2. CAN-SPAM Act of 2003 basics
 Email messages must not include false/misleading header info
 Commercial (i.e., non-transactional, non-relationship) email
messages must:
 be identified as an advertisement or solicitation and contain
warnings on sexually oriented materials (unless affirmative
consent has been obtained)
 include a valid physical postal address
 provide clear and conspicuous notice to recipients of their right
to opt-out of future emailings
 provide recipients with a valid return email address or other
opt-out mechanism
 not include a misleading subject heading

3. Consequences of Non-Compliance
(non-exclusive):
• Government prosecutions/fines/investigations
• Lawsuits by private parties
• IAS action including having access revoked
• Reputational harms

4. CAN-SPAM Monetary Damages
Federal – $10,000 max/unfair or deceptive act
State – Actual Loss or Statutory Damages
$250 max/violation up to $2 million*
IAS – Actual Loss or Statutory Damages
$25 max/violation of most requirements
$100 max/violation of false or misleading headers
prohibition up to $1 million
All plaintiffs – Attorney fees and costs (at court’s
discretion)

5. Civil Investigative Demands (or “CIDs”):
Investigative tools increasingly used by
the Federal Trade Commission and state
agencies to explore suspected email
marketing law violations to determine if
enforcement action is warranted.

6. Be prepared –
• Have comprehensive written
compliance policies in place.
• Enforce them consistently.

7. Marketing Relationships
and
Commercial Email Liability

8. 2 main
categories
(under
CAN-SPAM):
• “sender”
• “initiator” and
“procurer”
(sub-category
of initiator)

9. Definition of “Sender”:
The term “sender” when used with respect to a commercial electronic mail
message, means a person who initiates such a message and
whose product, service, or Internet web site is advertised
or promoted by the message. 15 USC §7702(16)(A) (emphasis added).
Definition of “Initiate”:
The term "initiate", when used with respect to a commercial email
message, means to originate or transmit such message or to
intentionally pay or provide other consideration to, or
procure the initiation or transmission of such message, but
shall not include actions that constitute routine conveyance of such
message. For purposes of this paragraph, more than one person may be
considered to have initiated a message. 15 USC §7702(9) (emphasis
added).

10. 3 main
categories
of participants
(non-legal):
• advertiser
• emailer
• intermediary
(affiliate networks
or agencies)

11. Relationships between categories
Categories of Categories
participants (bus- (under
iness/non-legal): CAN-SPAM):
- advertiser - “sender”
- emailer - “initiator” and
- intermediary “procurer”
(affiliate networks (sub-category
or agencies) of “initiator”)

12. “Initiate”: [T]o originate or transmit…
[a commercial email] message or to
intentionally pay or provide other
consideration to, or induce, another person
to initiate such a message on one’s behalf,
but shall not include actions that constitute routine
conveyance of such message. For purposes of
this paragraph, more than one person may be
considered to have initiated a message.
15 USC §7702(9) as modified by §7702(13) [def’n
of procure] shown in italics (emphasis added).

13. Initiator knowledge requirement for IAS actions:
The term “procure” when used with respect to the
initiation of a commercial electronic mail message,
means intentionally to pay or provide other
consideration to, or induce, another person to
initiate such a message on one’s behalf with
actual knowledge, or by consciously
avoiding knowing, whether such person is
engaging, or will engage, in a pattern or
practice that violates this Act.
§7702(13) (as modified by §7706(g)(2) in bold/italics).

14. To whom does the requirement to honor opt-
out requests within 10 business days apply:
1. the advertiser?
2. the email marketer?
3. both advertiser and email marketer?

15. Best-practice compliance tip:
Include an opt-out link for the third-
party email marketer in addition to the
required opt-out link for the advertiser.

16. Best-practice compliance tip:
If you provide separate opt-out links for
the third-party email marketer and
advertiser, label each opt-out link in a
manner that makes clear which is which.

17. Best-practice compliance tip:
Consider including a “Report Spam
or Abuse” telephone number on your
unsubscribe page.
(advertisers especially)

18. Best-practice compliance tip:
Process opt-outs quickly and make sure
your advertisers do as well.

19. Best-practice compliance tip:
Implement technological solutions
to CAN-SPAM compliance
where appropriate.

20. Q: Can advertiser’s requirement to
honor consumer opt-out requests
impose liability on the third-party
email marketer or list manager?

21. “If a recipient makes a request…not to receive
some or any commercial electronic mail
messages from such sender, then it is
unlawful…for any person acting on
behalf of the sender to initiate the
transmission…with actual knowledge, or
knowledge fairly implied on the basis of
objective circumstances, that such message
falls within the scope of the request.”
15 USC §7704(a)(4) (emphasis added).

22. “If a recipient opts out then it is unlawful for any person
acting on behalf of the sender, or any other
person who knows that the recipient has made
such a request, to sell, lease, exchange, or
otherwise transfer or release the electronic
mail address of the recipient (including
through any transaction or other transfer involving
mailing lists bearing the electronic mail address of
the recipient) for any purpose other than
compliance with this Act or other provision of law.”
15 USC §7704(a)(4)(A)(iv) (emphasis added).

23. “If a recipient opts out then it is unlawful for any person
acting on behalf of the sender to assist in
initiating the transmission to the
recipient, through the provision or selection
of addresses to which the message will be
sent, of a commercial email message with actual
knowledge, or knowledge fairly implied on the basis
of objective circumstances, that such message would
violate §7704(a)(4)(A)(i) or §7704(a)(4)(A)(ii).”
15 USC §7704(a)(4)(A)(iii) (emphasis added).

24. CAN-SPAM ACT PATTERN & PRACTICE REQUIREMENTS CHART
Pat & prac Pat & prac Pat & prac Requires
Participants to Which required for reqd for reqd for non- separate (or
Liability Attaches FEDERAL STATE procuremt primary)
STATUTORY VIOLATION Under the Act GOV action? GOV actn? IAS action? violation?
Warning labels on sexually oriented
emails requirement. §7704(d). Initiator (inclds sender*) NO NO NO NO
False or misleading header.
§7704(a)(1)(A - C). Initiator (inclds sender*) NO NO NO NO
Deceptive subject headings.
§7704(a)(2). Initiator (inclds sender*) NO NO YES NO
Inclusion of return email address or
opt-out mechanism. §7704(a)(3). Initiator (inclds sender*) NO YES YES NO
Failure to honor opt-out requests.
§7704(a)(4)(A)(i-iv). Sender and others NO YES YES NO
Inclusion of identifier, opt-out
notice, and physical address.
§7704(a)(5). Initiator (inclds sender*) NO YES YES NO
Email harvesting and dictionary
attacks. §7704(b)(1). Initiator or assistor NO NO NO YES
Automated creation of multiple
electronic mail accounts.
§7704(b)(2). Anyone involved NO NO NO YES
Relay or transmission through
unauthorized access. §7704(b)(3). Anyone involved NO NO NO YES
* Cannot be liable as a sender without also being an initiator

25. CAN-SPAM ACT MENTAL STATE REQUIREMENTS CHART
Participants to State of Mind Mental State $
State Damages
Which Liability Requirement
STATUTORY Attaches Under Specific to
req'd for Mental
GOV State
VIOLATION the Act Subsection injunctn? Reqd?
Email harvesting and dictionary Initiator or assistor Actual knowledge, or
attacks. §7704(b)(1). knowledge fairly implied NO NO
Deceptive subject Initiator (includes Actual knowledge, or
headings. §7704(a)(2). sender*) knowledge fairly implied NO NO
Failure to honor opt-out requests (initiator or Acting on behalf of Actual knowledge, or
list manager). §7704(a)(4)(A)(ii-iii). sender who initiates knowledge fairly implied
or selects addresses on basis of obj circs NO NO
False or misleading header (relayed through another Initiator (includes Knowingly
computer in order to disguise origin). §7704(a)(1)(C). sender*) NO NO
Relay or transmission through unauthorized Anyone involved Knowingly
access. §7704(b)(3). NO NO
Failure to honor opt-out requests (by sale, lease, Sender or any person Knowledge that the
exchange, transfer or release of address). who transfers or recipient has made
§7704(a)(4)(A)(iv). releases address such a request NO NO
False or misleading header (email, domain or IP Initiator (includes None
obtained through false pretenses, & "from" line sender*)
materially false/misleading). §7704(a)(1)(A-B). YES YES
Inclusion of return email address or opt-out Initiator (includes None
mechanism. §7704(a)(3). sender*) YES YES
Failure to honor opt-out requests. Sender None YES YES
Inclusion of identifier, opt-out notice, and Initiator (includes None
physical address. §7704(a)(5). sender*) YES YES

26. Kavon Adli
www.TheInternetLawGroup.com
Kavon@TILG.us