Hypertouch, Inc. v. Valueclick, Inc.
192 Cal. App. 4th 805
| Cal. Ct. App. | 2011Background
- Hypertouch, Inc. sued ValueClick, Inc. and subsidiaries and PrimaryAds, Inc. alleging CAN-SPAM Act violations tied to California §17529.5 deceptive e-mail provisions.
- The complaint covered over 45,000 e-mails, with Hypertouch claiming deceptive header information, third-party domain names, and misleading subject lines.
- ValueClick and PrimaryAds moved for summary judgment, arguing CAN-SPAM preemption and failure to prove §17529.5 elements.
- The trial court held CAN-SPAM preempted §17529.5 and entered judgment for respondents with costs.
- On appeal, Hypertouch contends CAN-SPAM does not preempt, that triable issues exist as to §17529.5 violations, that the one-year limitations may not apply, and that costs were wrongly awarded.
- The appellate court reversed, holding CAN-SPAM does not preempt §17529.5 and remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does CAN-SPAM preempt §17529.5 claims? | Hypertouch argues §17529.5 targets deception and is not preempted by CAN-SPAM. | Respondents contend CAN-SPAM preempts state deception-related claims. | CAN-SPAM does not preempt §17529.5 claims. |
| Do Hypertouch’s §17529.5 claims raise triable issues of fact? | Hypertouch provided emails and testimony raising issues of advertising involvement by respondents. | Respondents argue content errors do not violate §17529.5 and lack of knowledge defeats liability. | Triable issues exist as to whether respondents advertised in the emails and whether subject lines/content violated §17529.5. |
| Is PrimaryAds entitled to summary adjudication for emails received before one year prior? | No; limitations analysis shows actual damages (3 years) and liquidated damages (1 year) with potential recovery; not all claims barred. | ||
| Must §17529.5 §(a)(3) require proof of deception by the defendant’s state of mind? | §17529.5 imposes strict liability for deceptive content in advertising in emails. | §17529.5 does not require scienter; it targets deceptive advertising content. | §17529.5 imposes liability without proving scienter for advertising in deceptive emails. |
Key Cases Cited
- Omega World Travel, Inc. v. Mummagraphics, 469 F.3d 348 (4th Cir. 2006) (preemption for immaterial errors; strict liability not allowed for minor inaccuracies)
- Virtumundo, Inc. v. NetZero, Inc., 575 F.3d 1040 (9th Cir. 2009) (CAN-SPAM preemption limits state claims for deception; nationwide standard)
- TJX Companies, Inc. v. Superior Court, 163 Cal.App.4th 80 (Cal. Ct. App. 2008) (penalties and discretionary/mandatory distinctions in statute of limitations)
- G.H.I.I. v. MTS, Inc., 147 Cal.App.3d 256 (Cal. Ct. App. 1983) (distinct limitations framework within statutory schemes with actual and punitive damages)
- Menefee v. Ostawari, 228 Cal.App.3d 239 (Cal. Ct. App. 1991) (separate limitations applicable to actual vs. punitive damages under statutory schemes)
- Kleffman v. Vonage Holdings Corp., 49 Cal.4th 334 (Cal. 2010) (statutory interpretation; preemption context; use of 'falsity/deception' term broader than common law fraud)