Experts to Marketers: Spam Lawsuits are Coming

NEW YORK – E-mail marketers are universally focused on answering one question these days. Emily Hackett, state policy director of the Internet Alliance, put it into words: “There’s no way the California bill is going to stand over time, the question is, what do you do in the meantime?”

Hackett spoke at the Bigfoot Interactive-sponsored “Spam Summit” in New York yesterday. Also on the panel were FTC attorney Brian Huseman; Prabhat Hajela, a science and technology fellow in Sen. Conrad Burns’ office; and the DMA’s Jerry Cerasale, SVP of government affairs.

California’s prohibitive and far-reaching law is scheduled to go into effect January 1. It goes so far as to prohibit sending ad-supported e-newsletters to California residents without recipients’ documented, explicit consent to accept messages both from the publisher and from the advertiser. This applies as well to some out-of-state Internet users who fall under the law’s jurisdiction.

“It’s my understanding that really was a mistake. I think we’ll be able to fix it in the next round,” said Hackett, “but the law will go into effect before we fix it.”

Most legitimate marketers are clinging to the hope that a federal law will pass before Congress adjourns on Nov. 21, superseding California and 35 other state anti-spam laws. The panelists agreed that whether or not this will happen is a toss-up.

Cerasale, who laid 50/50 odds on a federal law being enacted this year, said “all indications” are the president will sign any of the bills currently being considered in Congress.

Hajela said he was optimistic Congress would adjourn next week as scheduled, but was equally uncertain about the possibility of any spam law’s passage. The Burns/Wyden bill, approved last month by the Senate and endorsed yesterday by major marketing organizations (including the DMA), seems to be the federal legislation frontrunner.

Enforcement would fall to the FTC. Huseman said that from his agency’s perspective, Burns/Wyden lacks a rule that would give the FTC oversight powers, “to make the job of enforcing it as easy and efficient as possible.”

“Senator Burns believes there’s no magic bullet, but we need a law,” said Hajela, who stresses the Burns/Wyden bill was written so that certain amendments can be changed or removed entirely without nullifying the entire bill. “Senator Burns doesn’t want to stymie the e-mail business.”

Who Sues Who?

Huseman turned to Cerasale and asked if the DMA plans to sue California, should a Federal law not be forthcoming.

“We spent our war chest suing the FTC,” quipped Cerasale, referring to the DMA’s long and fruitless battle against the Do-Not-Call Registry. “The DMA won’t necessarily be the lead on that,” he stated, but said litigation was a “strong likelihood.” But, he reminded the marketers present, “a lawsuit is no preemption.”

Hackett promised that, barring federal preemption, lawsuits would be filed in California starting at 12:01 a.m. New Year’s Day. “Against you,” she told the audience of marketers. The only recourse, she said, is for marketers stop sending any e-mail at all to California. “Let’s see how they like it.”

One wry observer suggested the marketers themselves should file the first California lawsuits (the new law permits civil action) to clog to court systems and demonstrate its shortcomings.

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