Email marketers understandably may have assumed that the enactment of the federal CAN-SPAM Act preempted state laws restricting email marketing. However, a recent U.S. District Court decision in Utah casts significant doubt on the scope of that preemption, potentially opening the door for states to re-enter the anti-spam field.

The Utah Statute

The Utah case, Free Speech Coalition, Inc. v. Shurtleff (Case No. 2:05CV94DAK, C.D. Utah, March 23, 2007), concerned the Utah Child Protection Registry Act. The Utah law, which took effect on May 1, 2006, allows parents of a minor child in Utah to register electronic "contact points" —including email addresses, Instant Messaging addresses, and cell phone numbers—with the Utah state government. A person may not send, or cause to be sent, a communication to a "contact point" on the Utah registry if the communication "has the primary purpose of advertising or promoting a product or service that a minor is prohibited from purchasing; or (b) contains or has the primary purposes of advertising or promoting material that is harmful to minors." Marketers are required to purge their target lists to remove "contact points," using the Registry's "scrubbing" service. One of the defendants in the action is a private corporation that has contracted with the Utah government to "scrub" the email lists at a cost of 0.5 cents per name.

In effect, the Utah law requires marketers of certain products to purge their lists against a state-specific registry in addition to the established Do-Not-Call and/or email "opt-out" lists. A similar law in Michigan has a like effect.

Preliminary Injunction Denied

In Free Speech Coalition, the plaintiff, a trade association representing 2,000 members involved in "sexually explicit non-obscene expression," sought a preliminary injunction against enforcement of the Utah Registry on several grounds. First, the association argued that the CAN-SPAM Act expressly preempts state laws that regulate electronic mail. In the CAN-SPAM Act, Congress preempted any state law "that expressly regulates the use of electronic mail to send commercial messages, except to the extent that any such statute, regulation, or rule prohibits falsity or deception in any portion of a commercial electronic mail message or information attached thereto." However, Congress expressly did not preempt state laws "not specific" to electronic mail (such as trespass, contract, or tort law) or laws relating to "fraud or computer crime." Plaintiff contended that the Utah Registry does not fit into any of the listed exceptions.

To obtain a preliminary injunction, the plaintiff must demonstrate a "likelihood of success on the merits." U.S. District Judge Dale A. Kimball ruled that the association had not done so. First, the court held that whether the CAN-SPAM Act's preemption of state laws "specific to email" applied to the Utah Registry could not be determined conclusively and that the language "could be interpreted to support either side." Therefore, he held that plaintiff had not demonstrated a likelihood of success on that score.

Second, Judge Kimball ruled that the Utah Registry's applicability to pornographic messages brought it within the scope of the "computer crimes" exception to the CAN-SPAM Act. The court noted that the U.S. Department of Justice had filed a statement of interest in support of the Utah law, arguing that in the absence of a definition of "computer crime" in the CAN-SPAM Act, the term should include crimes (involving computers) that traditionally have been the subject of state police-power regulations. Accordingly, the court held that the Utah Registry fits within the state computer crime exception to the CAN-SPAM Act's general preemption of state spam laws.

The court also considered, but rejected, a contention that the Utah law violates the dormant Commerce Clause of the Constitution. Plaintiff had contended that the law impermissibly burdens interstate commerce by requiring all senders, whether located in Utah or interstate, to purge their lists before sending commercial messages to contact points on the Registry. Rejecting that contention, the court held that Congress, in the CAN-SPAM Act, had expressly allowed states to regulate commercial email in certain ways pursuant to their inherent police power.

Finally, the court considered, but rejected, claims that the Utah Registry violates the First Amendment. Judge Kimball found that the Registry is a permissible regulation of commercial speech, relying on Mainstream Marketing Services, Inc. v. FTC, 358 F.3d 1228 (10th Cir. 2004), which upheld the national Do-Not-Call Registry against a First Amendment challenge.

Future Implications

This decision addressed only whether a preliminary injunction would issue. The case will now proceed toward trial. In the meantime, however, Utah is free to enforce its Registry with criminal, civil, and/or administrative sanctions. More broadly, the decision may open the door for states to enact anti-spam laws that, in addition, prohibit other activities under their traditional police power. The result may be to weaken the preemptive effect of the federal anti-spam law.