Proxy Domain Registration May Violate the CAN-SPAM Act

Print Friendly, PDF & Email

1369223_35747408A recent ruling by the United States District Court for the District of Utah points towards a nationwide shift in the interpretation of the Controlling the Assault of Non-Solicited Pornography and Marketing Act (“CAN-SPAM Act”).  The Court ruled that where an unsolicited marketing email message contains a generic proxy registration name (where the registrant’s true identifying information is “cloaked”), such email violates the CAN-SPAM Act and subjects the sender to statutory penalties.  In fact, the Court determined that proxy registrations may violate two provisions of the CAN-SPAM Act.  The Court relied on a California State court ruling concerning a substantially similar set of facts as persuasive authority in reaching its decision.

The Court’s Reasoning

The Court first concluded that “where an email contains a generic ‘from’ name and is sent from a privacy-protected domain name, such that the recipient cannot identify the sender from the ‘from’ name or the publicly available WHOIS information, such is ‘materially misleading’ and is a violation of 15 U.S.C. § 7704(a)(1)(C).”  The Court reasoned that the sending of email via a proxy registered domain name prevents the recipient from determining who sent the email in question, thus frustrating Congress’ intent in passing the CAN-SPAM Act.

Additionally, the Court found that unsolicited email messages sent employing cloaked uniform resource locator (“URL”) registrations violate Section 7704(a)(1)(A) of the CAN-SPAM Act.  Specifically, the Court found that “[u]nder 15 U.S.C. § 7704(a)(1)(A), even header information that is technically accurate violates the CAN-SPAM Act when the email ‘includes an originating electronic mail address, domain name, or Internet Protocol address the access to which for purposes of initiating the message was obtained by means of false or fraudulent pretenses or representations.”  The Court noted that, when a party registers a domain with an ICANN-compliant registrar, the domain registration agreement itself prohibits the use of the registered domain to send unsolicited commercial email.  Therefore, if a marketer intends to use the domain for “prohibited purposes”, the marketer will have obtained the URL under false pretenses and any email that is eventually sent through the use of such URL will be in violation of the CAN-SPAM Act.

Consequences of CAN-SPAM Violation

Under the CAN-SPAM Act, a successful plaintiff may recover monetary damages equal to the actual losses suffered or statutory damages of $100 per header violation, whichever is greater.  In addition, a court may award triple damages where a marketer uses an automated process to create proxy registered email addresses.  In the Utah action, the Court awarded $1,608,360.00 in damages for the sending of 13,453 email messages.  Although this “anti-cloaking” decision has been reached in only two jurisdictions, it indicates a growing trend that marketers should be aware of and use as guidance in deciding whether or not to use proxy registration in connection with sending commercial email messages.

If you are interested in learning more about this topic or if you have been served with legal process relating to the CAN-SPAM Act or any state deceptive marketing statute, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
Attorney Advertising

David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

Schedule a Call
In The Know

Trending Topics

Creating a Viral and Legally Compliant "Pin to Win" Contest- Klein Moynihan Turco

Creating a Viral (And Legally Compliant) “Pin to Win” Contest

Print Friendly, PDF & Email

We have frequently written about the marketing benefits associated with the use of promotional contests and sweepstakes.  Promotional contests and sweepstakes often appear on social media platforms, which provide companies with a free and effective means to increase the number of consumers participating in their respective contests. While companies must

Facebook Decision defines a TCPA Autodialer- Klein Moynihan Turco LLP

Facebook Aftermath: Courts Clarify Definition of TCPA Autodialer

Print Friendly, PDF & Email

On April 1st, the U.S. Supreme Court released its opinion in Facebook, Inc. v. Duguid, marking a newly clarified definition of “autodialer” within the meaning of the Telephone Consumer Protection Act (“TCPA”). In the two weeks that followed, two federal courts have directly addressed the definition of TCPA autodialer as

Critical Role that TCPA Plays in Outbound Telemarketing- KMT

The Critical Role that the TCPA Plays in Outbound Telemarketing

Print Friendly, PDF & Email

If you’re running any sort of outbound telemarketing campaign – phone calls, voicemail drops, or text messaging – you need to understand the Telephone Consumer Protection Act (TCPA) and its enabling regulations. Call center operators are not the only businesses that employ outbound telemarketing to reach out to consumers. Using

How to Use Promotional Marketing the Legal Way: Klein Moynihan Turco LLP

How To Use Promotional Marketing The Legal Way

Print Friendly, PDF & Email

The use of promotional contests, games and sweepstakes marketing can be a dynamic and cost-effective way to increase sales, build a database of interested consumers and otherwise increase brand awareness and buzz. Consumers are more easily attracted to your marketing message by the opportunity to win prizes than with more

Share on facebook
Share on google
Share on twitter
Share on linkedin