143 Wash. 2d 824 | Wash. | 2001
The State of Washington filed suit against Oregon resident Jason Heckel, alleging that his transmissions of electronic mail (e-mail) to Washington residents violated Washington’s commercial electronic mail act, chapter 19.190 RCW (the Act). On cross-motions for summary judgment, the trial court dismissed the State’s suit against Heckel, concluding that the Act violated the dormant Commerce Clause of the United States Constitution. This court granted the State’s request for direct review. We hold that the Act does not unduly burden interstate commerce. We reverse the trial court’s dismissal of the State’s suit, vacate the order on attorney fees, and remand this matter for trial.
FACTS
As early as February 1996, defendant Jason Heckel, an Oregon resident doing business as Natural Instincts, began sending unsolicited commercial e-mail (UCE), or “spam,” over the Internet.
In June 1998, the Consumer Protection Division of the Washington State Attorney General’s Office received complaints from Washington recipients of Heckel’s UCE mes
On October 22, 1998, the State filed suit against Heckel, stating three causes of action. First, the State alleged that Heckel had violated RCW 19.190.020(1)(b) and, in turn, the CPA, by using false or misleading information in the subject line of his UCE messages. Heckel used one of two subject lines to introduce his solicitations: “Did I get the right e-mail address?” and “For your review—HANDS OFF!” Clerk’s Papers (CP) at 6, 92, 113. In the State’s view, the first subject line falsely suggested that an acquaintance of the recipient was trying to make contact, while the second subject line invited the misperception that the message contained classified information for the particular recipient’s review.
As its second cause of action, the State alleged that Heckel had violated RCW 19.190.020(1)(a), and thus the CPA, by misrepresenting information defining the transmission paths of his UCE messages. Heckel routed his spam through at least a dozen different domain names without receiving permission to do so from the registered owners of those names. For example, of the 20 complaints the Attorney General’s Office received concerning Heckel’s spam, 9 of the messages showed “13.com” as the initial ISP to transmit his spam. CP at 44, 113. The 13.com domain name, however, was registered as early as November 1995 to another individual, from whom Heckel had not sought or
Additionally, the State alleged that Heckel had violated the CPA by failing to provide a valid return e-mail address to which bulk-mail recipients could respond. When Heckel created his spam with the Extractor Pro software, he used at least a dozen different return e-mail addresses with the domain name “juno.com” (Heckel used the Juno accounts in part because they were free). CP at 88-89. None of the Juno e-mail accounts was readily identifiable as belonging to Heckel; the user names that he registered generally consisted of a name or a name plus a number (e.g., “marlin1374,” “cindyt5667,” “howardwesley13,” “johnjacobson 1374,” and “sjtowns”). CP at 88-89. During August and September 1998, Heckel’s Juno addresses were canceled within two days of his sending out a bulk e-mail message on the account. According to Heckel, when Juno canceled one e-mail account, he would simply open a new one and send out another bulk mailing. Because Heckel’s accounts were canceled so rapidly, recipients who attempted to reply were unsuccessful. The State thus contended that Heckel’s practice of cycling through e-mail addresses ensured that those addresses were useless to the recipients of his UCE messages.
The State sought a permanent injunction and, pursuant to RCW 19.86.140 and .080 of the CPA, requested civil penalties, as well as costs and a reasonable attorney fee. In early 2000, the parties cross-moved for summary judgment. On March 10, 2000, the trial court entered an order granting Heckel’s motion and denying the State’s cross-motion. The court found that the Act violated the Commerce Clause (U.S. Const. art. I, § 8, cl. 3) and was “unduly restrictive and burdensome.” CP at 175. The order permitted Heckel to “present a cost bill for recovery of his costs and statutory attorneys fees.” CP at 175. Heckel then moved the court for a fee award of $49,897.50. Denying Heckel’s request for fees under RCW 19.86.080 of the CPA, the court limited Heckel’s award to statutory costs under RCW 4.84.030.
Challenging the trial court’s finding that the Act violated the Commerce Clause, the State sought this court’s direct review. Heckel cross-appealed, seeking reversal of the trial court’s denial of his attorney fee request under the CPA. We granted direct review.
ISSUE
Does the Act, which prohibits misrepresentation in the subject line or transmission path of any commercial e-mail message sent to Washington residents or from a Washington computer, unconstitutionally burden interstate commerce?
ANALYSIS
Standard of Review. The State seeks review of the trial court’s decision on summary judgment that the Act violated the dormant Commerce Clause. This court reviews de novo a trial court’s grant of summary judgment and
Heckel’s Challenge under the Commerce Clause. The Commerce Clause grants Congress the “power . . . [t]o regulate commerce with foreign nations, and among the several states.” U.S. Const. art. I, § 8, cl. 3. Implicit in this affirmative grant is the negative or “dormant” Commerce Clause—the principle that the states impermissibly intrude on this federal power when they enact laws that unduly burden interstate commerce. See Franks & Son, Inc. v. State, 136 Wn.2d 737, 747, 966 P.2d 1232 (1998). Analysis of a state law under the dormant Commerce Clause generally follows a two-step process. We first determine whether the state law openly discriminates against interstate commerce in favor of intrastate economic interests. If the law is facially neutral, applying impartially to in-state and out-of-state businesses, the analysis moves to the second step, a balancing of the local benefits against the interstate burdens:
<cWhere the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course*833 depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities . . .
Id. at 754 (quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S. Ct. 844, 25 L. Ed. 2d 174 (1970)).
The Act is not facially discriminatory. The Act applies evenhandedly to in-state and out-of-state spammers: “No person” may transmit the proscribed commercial e-mail messages “from a computer located in Washington or to an electronic mail address that the sender knows, or has reason to know, is held by a Washington resident.” RCW 19.190.020(1) (emphasis added). Thus, just as the statute applied to Heckel, an Oregon resident, it is enforceable against a Washington business engaging in the same practices.
Because we conclude that the Act’s local benefits surpass any alleged burden on interstate commerce, the statute likewise survives the Pike balancing test. The Act protects the interests of three groups—ISPs (Internet Sevice Provider), actual owners of forged domain names, and e-mail users. The problems that spam causes have been discussed in prior cases and legislative hearings. A federal district court described the harms a mass e-mailer caused ISP CompuServe:
In the present case, any value CompuServe realizes from its computer equipment is wholly derived from the extent to which that equipment can serve its subscriber base. . . . [H] andling the enormous volume of mass mailings that CompuServe receives places a tremendous burden on its equipment. Defendants’ more recent practice of evading CompuServe’s filters by disguising the origin of their messages commandeers even more computer resources because CompuServe’s computers are forced to store undeliverable e-mail messages and labor in vain to return the messages to an address that does not exist. To the extent that defendants’ multitudinous electronic mailings demand the disk space and drain the processing power of plaintiff’s computer equipment, those resources are not available to serve CompuServe subscribers. Therefore, the value of that equipment to CompuServe is diminished even though it is not physically damaged by defendants’ conduct.
Along with ISPs, the owners of impermissibly used domain names and e-mail addresses suffer economic harm. For example, the registered owner of “localhost.com” alleged that his computer system was shut down for three days by 7,000 responses to a bulk-mail message in which the spammer had forged the e-mail address “nobody@localhost.com” into his spam’s header. Seidl v. Greentree Mortgage Co., 30 F. Supp. 2d 1292, 1297-98 (D. Colo. 1998); see also Spamming: The E-Mail You Want to Can: Hearing Before the Subcomm. on Telecommunications, Trade, and Consumer Protection of
Deceptive spam harms individual Internet users as well. When a spammer distorts the point of origin or transmission path of the message, e-mail recipients cannot promptly and effectively respond to the message (and thereby opt out of future mailings); their efforts to respond take time, cause frustration, and compound the problems that ISPs face in delivering and storing the bulk messages. And the use of false or misleading subject lines further hampers an individual’s ability to use computer time most efficiently. When spammers use subject lines “such as ‘Hi There!,’ ‘Information Request,’ and ‘Your Business Records,’ ” it becomes “virtually impossible” to distinguish spam from legitimate personal or business messages.
This cost-shifting—from deceptive spammers to businesses and e-mail users—has been likened to sending junk mail with postage due or making telemarketing calls to someone’s pay-per-minute cellular phone.
Under the Pike balancing test, “[i]f a legitimate local purpose is found, then the question becomes one of degree.” 397 U.S. at 142. In the present case, the trial court questioned whether the Act’s requirement of truthfulness (in the subject lines and header information) would redress the costs associated with bulk e-mailings. As legal commentators have observed, however, “the truthfulness requirements (such as the requirement not to misrepresent the message’s Internet origin) make spamming unattractive to the many fraudulent spammers, thereby reducing the volume of spam.” Jack L. Goldsmith & Alan O. Sykes, The Internet and the Dormant Commerce Clause, 110 Yale L. J. 785, 819 (2001). Calling “simply wrong” the trial court’s view “that truthful identification in the subject header would do little to relieve the annoyance of spam,” the commentators assert that “[t]his identification alone would allow many people to delete the message without opening it (which takes time) and perhaps being offended by the content.” Id. The Act’s truthfulness requirements thus appear to advance the Act’s aim of protecting ISPs and consumers from the problems associated with commercial bulk e-mail.
To be weighed against the Act’s local benefits, the only burden the Act places on spammers is the requirement of truthfulness, a requirement that does not burden commerce at all but actually “facilitates it by eliminating fraud and deception.” Id. Spammers must use an accurate, nonmisleading subject line, and they must not manipulate the transmission path to disguise the origin of their commercial messages. While spammers incur no costs in complying with the Act, they do incur costs for noncompliance, because
Drawing on two “unsettled and poorly understood” aspects of the dormant Commerce Clause analysis, Heckel contended that the Act (1) created inconsistency among the states and (2) regulated conduct occurring wholly outside of Washington.
Nor does the Act violate the extraterritoriality principle
In sum, we reject the trial court’s conclusion that the Act violates the dormant Commerce Clause. Although the trial court found particularly persuasive American Libraries Ass’n v. Pataki, 969 F. Supp. 160 (S.D.N.Y. 1997), that decision—the first to apply the dormant Commerce Clause to a state law on Internet use—is distinguishable in a key respect.
CONCLUSION
The Act limits the harm that deceptive commercial e-mail causes Washington businesses and citizens. The Act prohibits e-mail solicitors from using misleading information in the subject line or transmission path of any commercial e-mail message sent to Washington residents or from a computer located in Washington. We find that the local benefits of the Act outweigh any conceivable burdens the Act places on those sending commercial e-mail messages. Consequently, we hold that the Act does not violate the dormant Commerce Clause of the United States Constitution. We reverse the trial court and remand the matter for trial. The trial court’s order on attorney fees is vacated.
Alexander, C.J., and Smith, Johnson, Madsen, Sanders, Ireland, Bridge, and Chambers, JJ., concur.
“ ‘Commercial electronic mail message’means an electronic mail message sent for the purpose of promoting real property, goods, or services for sale or lease.” RCW 19.190.010(2). The term “spam” refers broadly to unsolicited bulk e-mail (or “ ‘junk’ e-mail”), which “can be either commercial (such as an advertisement) or
“ ‘Electronic mail address’ means a destination, commonly expressed as a string of characters, to which electronic mail may be sent or delivered.” RCW 19.190.010(3).
The subject line, similar to the “RE” line of a letter or memorandum, is generally displayed (at least in part) alongside the sender’s name in the recipient’s e-mail inbox.
Each e-mail message, which is simply a computer data file, contains so-called “header” information in the “To,” “From,” and “Received” fields. When an e-mail message is transmitted from one e-mail address to another, the message generally passes through at least four computers: from the sender’s computer, the message travels to the mail server computer of the sender’s Internet Service Provider (ISP); that computer delivers the message to the mail server computer of the recipient’s ISP, where it remains until the recipient retrieves it onto his or her own computer. Every computer on the Internet has a unique numerical address (an Internet Protocol or IP address), which is associated with a more readily recognizable domain name (such as “mysite.com”). As the e-mail message travels from sender to recipient, each computer transmitting the message attaches identifying data to the “Received” field in the header. The information serves as a kind of electronic postmark for the handling of the message. See Clerk’s Papers (CP) at 130-34. It is possible for a sender to alter (or “spoof”) the header information by misidentifying either the computer from which the message originated or other computers along the transmission path. See Kelin, supra note 1, at 445.
See RCW 19.190.010(6) (defining “Internet domain name”).
“(1) No person may initiate the transmission, conspire with another to initiate the transmission, or assist the transmission, of a commercial electronic mail message from a computer located in Washington or to an electronic mail address that the sender knows, or has reason to know, is held by a Washington resident that:
“(a) Uses a third party’s internet domain name without permission of the third party, or otherwise misrepresents or obscures any information in identifying the point of origin or the transmission path of a commercial electronic mail message; or
“(b) Contains false or misleading information in the subject line.
“(2) For purposes of this section, a person knows that the intended recipient of a commercial electronic mail message is a Washington resident if that information is available, upon request, from the registrant of the Internet domain name contained in the recipient’s electronic mail address.” RCW 19.190.020.
The experience of 1 of the 17 complainants to the Attorney General’s Office is illustrative. Nancy Smith received Heckel’s spam on September 1, 1998; the message was sent from a Juno account with the user name “apollo1113,” and the subject line read, “For your review—HANDS OFF.” CP at 140. On or about September 1, 1998, Smith sent a copy of the Natural Instincts order form with a check for $39.95 by U.S. Mail to the Salem, Oregon, address provided on the order form. Hearing nothing for some weeks, Smith sent a message by return e-mail on September 30, 1998, but within a minute she received a return e-mail from Juno stating that the attempt had failed due to termination of the account. Unable to find any information about Natural Instincts on the Internet, Smith contacted her bank and learned that the check had cleared two weeks earlier. Smith then contacted the Attorney General’s Office. CP at 140-41, 149-50.
“[W]hen Internet users attempt to reply to deceptive spam that has a fraudulent return address or domain name, one e-mail message (and the ISPt’s] related computer log entry) instantly becomes three separate e-mail messages (and additional computer log entries) because: (1) the ISP server that is the victim of the fraudulent return address or domain name sends an error message back to the Internet user and their ISP announcing that the return path was invalid, (2) a message is sent to the server administrator requesting an investigation of the return address for potential problems, and (3) a message is sent to the server log in case the ISP wishes to track down the problem later. With bulk spam, these messages snowball to clog ISP resources, and ISPs have little choice but to purchase additional equipment at a significant cost.” Br. of Amicus Washington Association of Internet Service Providers (WAISP) at 11-12.
See Br. of Amicus WAISP at 12-13; see also Spamming: The E-Mail You Want to Can: Hearing Before the Subcomm. on Telecommunications, Trade, and Consumer Protection of the Comm. on Commerce, 106th Cong. 41-42 (1999) (statement of Michael Russina, Director of Systems Operations, SBC Internet Services) (attached as App. 4, Br. of Amicus WAISP).
Testimony of Ed McNichol at Hearing on H.B. 2752 Before the Washington House Comm. on Energy and Utilities (Jan. 28, 1998) (partial transcript attached as App. 2, Br. of Amicus WAISP; audio also available at http://198.239.32.162/ramgen/199801/1998010112.ra).
See Spamming: The E-Mail You Want to Can, supra note 9, at 1 (statement of Rep. W.J. Tauzin, Chairman, Subcomm. on Telecommunications, Trade, and Consumer Protection) (attached as App. 4, Br. of Amicus WAISP).
“This generally involves paying a bulk re-mailing service to forge e-mail headers and send out the spammer’s message, or at least running additional software programs to alter the e-mail messages’ address and domain name information.” Br. of Amicus WAISP at 8.
See RCW 19.190.020(2). WAISP and the Washington Attorney General co-sponsor a registry of Washington residents who do not want to receive spam. See WAISP Registry Page, at http://registry.waisp.org (last visited May 7, 2001).
Jack L. Goldsmith & Alan O. Sykes, The Internet and the Dormant Commerce Clause, 110 Yale L.J. 785, 789 (2001).
See Goldsmith & Sykes, supra note 14, at 808 (concluding that “inconsistent-
See David E. Sorkin, Spam Laws, at http://www.spamlaws.com/state/ index.html; see also Max P. Ochoa, Legislative Note: Recent State Laws Regulating Unsolicited Electronic Mail, 16 Santa Clara Computer & High Tech. L. J. 459 (2000); Br. of Appellant at 23 and Apps. A, B. Proposed federal legislation, the Unsolicited Commercial Electronic Mail Act of 2000, H.R. 3113, 106th Cong. (2000), was passed by the House on July 18, 2000, and has been referred to the Senate Committee on Commerce, Science, and Transportation. The text of the bill may be accessed through http://thomas.loc.gov/home/c106query.html.
As the State notes, “[p]resently, mail and phone solicitors are expected to abide by different states’ telemarketing laws and other consumer protection laws. E-mail solicitors should not be excused from the burden of complying with a state’s law simply because of the ease of sending bulk e-mail solicitations in relation to other forms of commercial solicitation.” CP at 53.
See CP at 216. At least 10 other cases have distinguished American Libraries. See, e.g., Hatch v. Superior Court, 80 Cal. App. 4th 170, 94 Cal. Rptr. 2d 453 (2000); People v. Hsu, 82 Cal. App. 4th 976, 99 Cal. Rptr. 2d 184 (2000); Ford Motor Co. v. Tex. Dep’t of Transp., 106 F. Supp. 2d 905, 909 (W.D. Tex. 2000).