Skip to content

Using Email Marketing: The Latest Legal Development

Answered by: 

Question: 
There has been some discussion on BankersOnline.com about doing email marketing and what kind of legal restrictions there might be. Can you comment on this?
Answer: 

When sending commercial email messages, you must take into consideration the possible effect/application of anti-spam legislation. The latest development in the anti-spam battle involves a new California appellate court decision upholding the constitutionality of a California anti-spam statute. The statute affects anyone who may be sending unsolicited commercial email messages to individuals residing in California. The case is Ferguson v. Friendfinders, Inc..

Section 17538.4 of the Business and Professions Code in California requires that a "person or entity conducting business in this state" who causes an unsolicited e-mail document to be sent

  1. establish a toll-free telephone number or valid sender operated return e-mail address that recipients may use to notify the sender not to e-mail further unsolicited documents;
  2. include as the first text in the e-mailed document a statement informing the recipient of the toll-free number or return address that may be used to notify the sender not to e-mail any further unsolicited material;
  3. not send any further unsolicited advertising material to anyone who has requested that such material not be sent; and
  4. include in the subject line of each e-mail message "ADV:" as the first four characters or "ADV:ADLT" if the advertisement pertains to adult material. (Section 17538.4, subd. (a)-(g).)


Section 17538.4 applies to unsolicited e-mailed documents that are "delivered to a California resident via an electronic mail service provider's service or equipment located in this state." "Electronic mail service provider" is defined as "any business or organization qualified to do business in this state that provides individuals, corporations, or other entities the ability to send or receive electronic mail through equipment located in this state and that is an intermediary in sending or receiving electronic mail (e-mail)." (Section 17538.4, subd. (d).)

The defendant argued that this statute violated the dormant Commerce Clause of the United States Constitution. The California court disagreed.

I found the following portion of the Court's decision particularly interesting:

Respondents argue that, even if e-mail recipients do have geographic residences, it is simply not possible for senders of UCE to determine the residency of any particular e-mail recipient. Thus, respondents argue that the only way to avoid violating section 17538.4 is to comply with it in every instance. This argument has two fatal flaws. First, respondents ignore the second geographic limitation imposed by section 17538.4: it applies only when equipment located in the State is used. By limiting the scope of section 17538.4 to UCEs that are transmitted via equipment located in the State, our Legislature ensured that the statute would not reach conduct occurring "wholly" outside the State.

Two points to consider before you embark on further email marketing:

  • This statute affects you only if the commercial email you are transmitting is unsolicited and is going to reach some California recipients. If the recipients have knowingly opted-in to receiving your emails, the message is not unsolicited and will not be subject to the four requirements of the statute. And if the recipients are residents of another state that doesn't have a similar law, you will not have to deal with this restriction.

  • If you intend to send commercial emails that truly are unsolicited, you must either find a way to pin down the geographic location of the recipients and send only compliant emails to the California crowd, or, if you can't make the differentiation on the basis of recipient location, comply with the California requirements for email sent to all recipients.



On a related note: The Federal Trade Commission has announced a major initiative to target deceptive senders of unsolicited commercial email (UCE).

"What we are in the process of doing for the first time is to launch a systematic attack on fraudulent and deceptive Spam. We are also working on (Spam) cases that involve claims that you can opt out, whenin fact what clicking on the link to unsubscribe will do is simply verify that you have a valid email address, so that you can then get lots of Spaminstead of a little," Howard Beales, chairman of the FTC'sBureau of Consumer Protection, said.

Every day irate consumers pass on about 10,000 individual pieces of spam to the FTC. Join the crowd! If you receive a deceptive mailing, you can send it along to uce@ftc.gov

First published on BankersOnline.com 2/11/02

First published on 02/11/2002

Filed under: 
Filed under technology as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics