In a recent decision, a federal district court in San Francisco dismissed email marketing-related California State legal claims against Sauphtware, Inc. d/b/a “Panda Mail,” finding that Panda Mail’s delivery of email on behalf of third-party advertisers did not, in and of itself, amount to advertising. The ruling would appear to absolve emailers of liability for sending commercial email messages to California State residents that are prepared by third-party advertisers and do not feature products or services of the mailer itself.

What are the takeaways for emailers?

Email Marketing Campaign and Lawsuit

In September 2016, a number of California State residents sued Panda Mail, certain of its advertising partners and other third parties in San Francisco County Superior Court (Case No. 16-554299) for alleged violations of California Business and Professions Code § 17529.5, which forbids email advertisements containing false or deceptive subject lines and header information.

The subject plaintiffs allegedly received nearly 600 unsolicited commercial email messages, including approximately 40 email marketing messages that were purportedly prepared by third-party advertisers and sent by Panda Mail.

In August 2017, five of the subject defendants removed the case to the U.S. District Court for the Northern District of California (Case No. 17-cv-4497).

Claims Against Panda Mail Dismissed

On September 22, 2017, the Court dismissed the above-referenced plaintiffs’ claims against Panda Mail. After considering the plain language and legislative history of § 17529.5, the Court found that California’s high court would interpret the statute to only cover advertisers. Because Panda Mail only sent the subject email marketing, and did not itself advertise in any of the applicable messages, the Court held that Panda Mail could not be held liable for violations of § 17529.5.

Notably, the Court has afforded the plaintiffs leave to amend their complaint to allege that Panda Mail advertised in the subject commercial email messages, in addition to sending them.

Sending Commercial Email? Protect Yourself

The above-referenced decision should be viewed as a win for emailers that deliver messages to California State residents that are prepared by and feature third-party advertisers. Nevertheless, there are clear best practices that should be implemented to minimize the risk of becoming involved in a “spam” lawsuit in the first place.

To begin with, emailers should confirm that their email marketing partners are taking proper steps to maintain compliance with § 17529.5 and the Controlling the Assault of Non-Solicited Pornography and Marketing Act (“CAN-SPAM”), among other regulations. Above all, it is critical to work with experienced email marketing counsel before the launch of any campaign in order to implement the practices and procedures necessary to prevent the sending of unlawful commercial email and to avoid being named in a “spam” lawsuit.