Legalese Column: The CAN-SPAM Cookbook

This article originally ran in the April 2014 issue of AVN magazine. There hasn’t been much chatter about commercial emails of late, hopefully because readers of this column are behaving themselves. It has been a long time since this column has discussed the topic, perhaps because it has been a long time since the Federal Trade Commission has clobbered anyone for breaking email regulations. This is the agency that enforces the federal commercial email rules. Just to get your attention, consider that if you send a commercial email that doesn’t conform to federal law, it can cost you $11,000 per email. The FTC hit a whole bunch of folks in this industry with hundreds of thousands of dollars in civil penalties about a decade ago before that message got out. If you know about the federal spam rules—meaning that you have an attorney who knows about them—you can stop reading. Otherwise, it would behoove you to continue. In the late 1990s and the early 2000s, when email was migrating from a novelty for computer nerds to an integral part of commerce, states started wrestling with the problem of unwanted commercial emails. The history of this could generate a treatise by itself; suffice it to say that Congress for years wrestled with how to handle spam. Shortly after California enacted a law almost entirely prohibiting commercial email—raising some interesting First Amendment issues—Congress finally got it together, enacting the CAN-SPAM Act (which actually is one of its two official titles, the other being the “Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003”), globally regulating commercial email and preempting almost all state email regulations. (Parenthetically, federal preemption means that the federal law nullifies any state law on the same subject.) California’s law never saw the light of day. One important component of CAN-SPAM was that it did not create a private remedy. Before CAN-SPAM, a cottage industry evolved of people who made a living suing companies that sent them spam, on a variety of tenuous theories. Presumably, Congress was not keen to clog up the courts with what had been demonstrated to be professional spam plaintiffs. However, that didn’t mean violators were off the hook. Rather, CAN-SPAM put enforcement in the hands of the Federal Trade Commission. And the FTC enforced CAN-SPAM with a vengeance. The FTC has come to the forefront of late because of its actions against dating sites. If you were at either of the legal panels at the most recent Internext—this author being a panelist on one of them and in the audience during the other—you heard him relate what he has said to clients who have had the misfortune to receive an enforcement letter from the FTC: “Your life as you know it is over” (shamelessly stolen from the movie The Firm). The CAN-SPAM Act authorizes the FTC to bring a civil action against violators seeking civil penalties of $11,000 for each email that fails to comply with the act. Having defended a handful of such actions, this columnist can tell you that the FTC is relentless. Its initial demand typically is 100 percent of the revenue generated from the illegal emails—revenue, mind you, not profit. Never mind that you paid out 50 percent of the revenue to affiliates. Oh, by the way, it is the position of the FTC that affiliate programs are fully responsible for illegal spam sent out by their affiliates, irrespective of any anti-illegal-spam measures taken by the affiliate program, simply because the spam advertises the affiliate program’s site. There are cases to the contrary, but do you really want to spend the money to litigate the issue? There is a cookbook for compliance with the CAN-SPAM Act. If you are going to promote anything via email, you need to know that cookbook. It has precision requirements—for example, a sexually oriented spam must include “SEXUALLY-EXPLICIT:[space]” as the first 19 characters of the subject line. There is more—much more. Spam is not the issue it was ten years ago. Spam filters are better, and spam is no longer a high-end method of soliciting business. So, the FTC doesn’t get so many complaints. (They have a complaint email address to which illegal spam can be forwarded.) But if you want to solicit business with emails, get your attorney’s sign-off. And if you tell the attorney that you need to discuss compliance with the CAN-SPAM Act and the attorney can’t quickly give you an outline of it, get another attorney. Clyde DeWitt is a Las Vegas and Los Angeles attorney, whose practice has been focused on adult entertainment since 1980. He can be reached at ClydeDeWitt@earthlink.net. More information can be found at ClydeDeWitt.com. This column is not a substitute for personal legal advice. Rather, it is to alert readers to legal issues warranting advice from your personal attorney.