Colorado's House Judiciary Committee approved an interesting anti-spam measure yesterday. From what I can tell, the drafters intended to walk right up to the edge of what the CAN-SPAM Act permits without stepping over the line.
Colorado H.B. 08-1178 has a lot of language in it that seems to have been written in response to the Fourth Circuit's reading of the CAN-SPAM preemption provision in Omega World Travel v. Mummagraphics Inc., 469 F.3d 348 (4th Cir. 2006). The drafters seem intent on making the point that, unlike the ill-fated Oklahoma statute discussed in Mummagraphics, Colorado will treat spam as a form of fraud, requiring an intent on the part of the sender to mislead or deceive the recipient.
Colorado H.B. 08-1178 first declares that any violation of the CAN-SPAM Act is also a deceptive trade practice under Colorado law. The bill then ventures outside CAN-SPAM to prohibit, among other things, (1) failing to disclose a commercial message's point of origin and (2) falsifying transmission and routing information.
This is where the Oklahoma anti-spam statute got into trouble in Mummagraphics. The Mummagraphics court held that the CAN-SPAM Act left room for states to write their own anti-spam laws insofar as those laws prohibited falsity or deception. CAN-SPAM preempts states from punishing mere errors in e-mail message paths and routing information, the court said.
The Colorado bill seems to have been drafted with Mummagraphics in mind. Whereas the Oklahoma anti-spam law at issue in Mummagraphics made it unlawful to merely "misrepresent[ ] any information" in a message's transmission path, the Colorado proposal adds a mental state and inserts the notion of deception:
A person engages in a deceptive trade practice when, in the course of such person's business, vocation, or occupation, such person:
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(b) Knowingly fails to disclose the actual point-of-origin electronic mail address of a commercial electronic mail message in order to mislead or deceive the recipient as to the source or sender of the message;
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The bill employs similarly careful language when describing the prohibition on false routing and transmission information. Other portions of the bill contain tough talk like "All violations of the federal CAN-SPAM Act are inherently false and deceptive" and "Falsity and deception in any portion of a commercial electronic mail message or an attachment thereto harms Colorado consumers and threatens Colorado's economy."
Another noteworthy feature of the Colorado law is the extent to which it departs from CAN-SPAM in terms of the statutory damages it authorizes. In Colorado, a CAN-SPAM violation will be very expensive. The civil enforcement provisions of the bill authorize damage awards of $1,000 per unlawful message, up to $10 million against a single defendant. CAN-SPAM damages forgiving by comparison: $250 per unlawful message up to $2 million. How do lawmakers come up with these numbers? A recently introduced anti-spam measure in New Jersey (S.B. 416) would authorize civil damages between $2 and $8 per unlawful message. Almost inviting spam you might say.
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