California Court Issues First Anti-Spam Judgment

On October 24, 2003, the Superior Court of California for the County of Santa Clara issued a final judgment and injunction in the civil case of People v. Willis, ordering defendants to jointly and severally pay a $2 million fine for violating California's anti-spam, consumer protection, and unfair business practice laws and enjoining them from sending unsolicited commercial e-mail messages and other practices that would violate the law. The judgment -- entered by default because defendants failed to appear in court or defend themselves in a timely way -- marks the end of California's first ever anti-spam lawsuit.The lawsuit, initially filed in September 2002, alleged that Paul Willis, Claudia Griffin, PW Marketing LLC, and one hundred "John Doe" defendants had violated numerous provisions of the California Business & Professions Code in their commercial e-mail advertisements. In its final order, the court dismissed the "John Doe" defendants without prejudice.

The court's final judgment finds that Willis, et al., violated four sections of the California Business & Professions Code: Sec. 17538.45 (barring the sending of commercial e-mail messages that violate an Internet service provider's terms of service), Sec. 17538.5 (requiring merchants to disclose their legal name and address in all advertisements), Sec. 17538 (requiring merchants to supply ordered products, or an appropriate refund, to customers in a timely fashion), Sec. 17500 (dealing with false advertising), and Sec. 17200 (dealing with unfair business practices).

Besides assessing $2 million in fines, the court enjoined defendants from nine specific business practices. Several of the injunction's provisions require defendants to comply with existing law. However, the injunction also bars defendants from a) sending unsolicited commercial e-mail; b) sending any e-mail for which the sender appears to be something other than the actual sender, or for which replies could not be received by the sender, or which includes misleading information about the country/mail server sending the message; c) using false or misleading information to register an Internet domain name; or d) selling or otherwise distributing lists of e-mail addresses for use in sending unsolicited commercial e-mail. The injunction also prevents either Willis or Griffin from owning or operating any business (other than a publicly-traded business) that advertises over the Internet for ten years.

While the judgment marks the end of California's first-ever anti-spam lawsuit, more such actions are expected, particularly in the wake of California's recently-enacted anti-spam law, S.B. 186 (available at http://info.sen.ca.gov/pub/bill/sen/sb_0151-0200/sb_186_bill_20030924_ch...). The new law bars the sending of commercial e-mail to any California resident unless the resident either has a prior business relationship with the sender, or has previously consented to receive such messages. The law will take effect in California on January 1, 2004.

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