The recent California appellate decision in Balsam v. Trancos, Inc. provides a caution to email marketers who use proxy services to send commercial emails on their behalf. The defendant, Trancos, is an email marketing company who sends marketing emails on behalf of its clients. As part of this service, Trancos generates the domain name used in the “from” line of the email. For the emails in question, it generated “fanciful” names for the domains used, which were legitimately registered to Trancos through a proxy server. The physical address provided in the body of the email also belonged to Trancos.
Despite these facts, the California appellate court determined that these emails violated California’s state Anti-Spam law. Similar to the federal CAN-SPAM Act, California’s Anti-Spam law prohibits commercial email which “contains or is accompanied by falsified, misrepresented, or forged header information.” Earlier precedent in California had held that a commercial emailer did not misrepresent its identity when it used multiple, randomly-named, but traceable domain names in order to avoid spam filters. The key difference in Trancos, in the court’s reasoning, was that the proxy domain names used here were not “traceable.” Any consumer who attempted a WHOIS search of the domain names in the commercial emails would not be led back to Trancos, but would instead be directed to the proxy service with whom the domain names were registered. This lack of traceability, which would potentially prevent a consumer from determining the sender’s identity or whether the sender was acting in good faith, drove the court’s ruling.
The court also ruled that on this issue, the federal CAN-SPAM Act does not preempt California’s statute. The California statute would apply to any entity that either sends commercial emails from California or to California consumers.