Balsam v. Trancos, Inc.
203 Cal. App. 4th 1083
| Cal. Ct. App. | 2012Background
- Balsam sued Trancos, Nelson, and others in 2008 for violations of the Anti-spam Law and the CLRA, plus declaratory relief.
- Trial court held Balsam lacked CLRA standing because he wasn’t a consumer and hadn’t suffered damages, and found Anti-spam claims premitted; declaratory relief was dismissed.
- Meridian, a Trancos division, used Hi-Speed’s list and privately registered domain names to send unsolicited e-mails.
- Nelson, Trancos CEO, testified about consent-based frameworks and private domain registrations to shield sender identity; he had limited involvement in Meridian.
- Eight e-mails to Balsam in 2007 allegedly used untraceable, privately registered domains with deceptive From lines; seven violated 17529.5(a)(2).
- Trial court awarded Balsam $1,000 per violative e-mail and fees; Nelson was not personally liable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does falsified header information violate 17529.5(a)(2)? | Header info misrepresented sender identity; domain names untraceable to sender. | Kleffman allows multiple domain names if accurate and traceable; private domains may not violate header rules. | Header falsification present where domain names were untraceable to sender. |
| Does CAN-SPAM preempt state claims without full common-law fraud elements? | Savings clause covers false/deceptive aspects without needing all elements of fraud. | CAN-SPAM preempts unless full fraud elements proven. | CAN-SPAM savings clause applies; state claims not preempted. |
| Does Balsam have CLRA standing as a consumer? | Any consumer who suffers damage may sue; text supports broad standing. | CLRA consumer requires seeking/receiving goods or services; Balsam didn’t. | Balsam lacks CLRA standing; no consumer transaction or damages shown. |
| Is Nelson personally liable for the Anti-spam Law violations? | Nelson participated/ratified Meridian’s actions and used his credit card to register domains. | Officer/board liability requires active participation or authorization; Nelson lacked knowledge. | No personal liability for Nelson; absence of active participation or authorization. |
Key Cases Cited
- Kleffman v. Vonage Holdings Corp., 49 Cal.4th 334 (Cal. 2010) (traceability standard for header information; domain names must be accurate and traceable)
- Hypertouch, Inc. v. ValueClick, Inc., 192 Cal.App.4th 805 (Cal.App. 2011) (CAN-SPAM savings clause applies to falsity/deception claims )
- Gordon v. Virtumundo, Inc., 575 F.3d 1040 (9th Cir. 2009) (preemption scope discussed for CAN-SPAM savings clause)
- Omega World Travel, Inc. v. Mummagraphics, 469 F.3d 348 (4th Cir. 2006) (falsity/deception scope in CAN-SPAM preemption)
- PMC, Inc. v. Kadisha, 78 Cal.App.4th 1368 (Cal. App. 2000) (officer/director liability and agency principles for torts)
- Schauer v. Mandarin Gems of Cal., Inc., 125 Cal.App.4th 949 (Cal. App. 2005) (CLRA standing requires the plaintiff to have acquired the goods/services)