|4th Circuit Rules in CAN SPAM Act
11/17. The U.S. Court of Appeals
(4thCir) issued its
pages in PDF] in Omega World Travel v. Mummagraphics, a case
involving the CAN SPAM Act. The Court of Appeals affirmed the judgment of the
District Court for the e-mail sender.
This case illustrates that while the Congress enacted the CAN-SPAM Act three
years ago, some people who use e-mail remain irate about the messages that they
receive. It also shows that amateur attempts to complain and seek redress can be
legally hazardous to the recipients. In this case, the alleged spammers sent
commercial e-mail messages to an individual with a small business who then
complained over the phone, through the mail, and in a web site. The alleged
spammers then sued the recipient on a variety of claims and won.
The District Court, and Court of Appeals, also held that the anti-spam statute
related counterclaims of the recipient all fail. First, the courts held that the federal
statute preempts the state statute. Second, the courts held that the federal cause of
action fails because the recipient only received 11 messages, the inaccuracies in these
messages were not material, and the recipient attempted to opt-out in a manner not
specified by the opt-out language of the statute.
Statute. The Congress enacted the "Controlling the Assault of
Non-Solicited Pornography and Marketing Act of 2003", or "CAN-SPAM Act", in
2003. It was
S 877 in the 108th Congress. It is now codified at
15 U.S.C. §§ 7701-7713.
One of the prohibitions of the CAN-SPAM Act, found at
15 U.S.C. § 7704(a)(1), is as follows: "It is unlawful for any person to initiate
the transmission, to a protected computer, of a commercial electronic mail message, or
a transactional or relationship message, that contains, or is accompanied by, header
information that is materially false or materially misleading."
A similar prohibition, found at subsection (a)(2), prohibits deceptive
subject headings. Notably, in both of these prohibitions, the deceptive
information must be material. Subsection (a)(1) requires that it be "materially
false or materially misleading". Subsection (a)(2) requires that it be "about a
material fact regarding the contents or subject matter of the message".
Subsection (a)(3) provides that "It is unlawful for any person to initiate
the transmission to a protected computer of a commercial electronic mail message
that does not contain a functioning return electronic mail address or other
Internet-based mechanism, clearly and conspicuously displayed" that enables the
recipient to opt out by sending a reply electronic message.
Subsection (a)(4) then provides that it is unlawful to continue to send
commercial electronic mail messages to a recipient who has utilized the opt-out
mechanism described in subsection (a)(3).
Background. A defendant below, and appellant on appeal, is Mummagraphics, Inc.,
dba Webguy Internet Solutions, an Oklahoma based business. It President, Mark Mumma, who
is another defendant, does not like to receive unsolicited commercial e-mail.
A plaintiff below, and appellee on appeal, is Cruise.com, Inc.
It sent multiple commercial e-mail messages to the Mummagraphics' e-mail
address. Mumma telephoned asking to be removed from the mailing list. He also
wrote a letter. But, he did not utilize the electronic opt-out mechanism
provided in the messages.
Mumma threatened to sue. He also published information on an
anti-spam web site alleging that the plaintiffs were "spammers".
District Court. The cruise.com plaintiffs filed a complaint in
U.S. District Court (EDVa) against
the Mumma defendants alleging defamation, copyright infringement, trademark
infringement, and unauthorized use of likeness.
The Mumma defendants' counterclaims included allegations of violation of the federal
CAN-SPAM Act, and the state of Oklahoma's anti-spam statute.
The District Court granted summary judgment to the spammers on
all claims and counterclaims, except libel, which may go to trial. It held that
the federal CAN-SPAM Act preempted the Oklahoma statute, and that the cruise.com
plaintiffs did not violate the CAN-SPAM Act because the inaccuracies in the
e-mail messages were not material, and because the cruise.com plaintiffs had not
violated the opt-out provisions of the Act.
Court of Appeals. Mummagraphics brought this appeal on the spam
statute issues only. The Court of Appeals affirmed.
The Court of Appeals wrote that "The CAN-SPAM Act prohibits some
material misstatements and imposes opt-out requirements, but it does not make
every error or opt-out request into grounds for a lawsuit. The e-mails in this
case are not actionable under the Act. Nor can the messages be actionable under
Oklahoma’s statutes, because allowing a state to attach liability to bare
immaterial error in commercial e-mails would be inconsistent with the federal
Act’s preemption text and structure ..."
This case is Omega World Travel, Incorporated, et al. v. Mummugraphics,
Inc., et al., U.S. Court of Appeals for the 4th Circuit, App. Ct. No.
05-2080, an appeal from the U.S. District Court for the Eastern District of
Virginia, Alexandria Division, D.C. No. CA-05-122, Judge Leonie Brinkema
presiding. Judge Wilkinson wrote the opinion of the Court of Appeals, in which
Judges Duncan and Voorhees joined.
|SEC Releases Annual
11/15. The Securities and Exchange Commission
(SEC) released a report
[109 pages in PDF] titled "2006 Performance and Accountability Report". This
report addresses many technology related topics, including interactive data, e-proxy
rules, information technology (IT) security at the SEC, e-authentication, upgrading
equipment and software in forensics lab to improve the recovery of data store on
electronics devices, teleworking by SEC employees, and use of IT in examinations and
Interactive Data. SEC Chairman Chris Cox wrote in a cover letter to the report
that "The SEC’s Interactive Data initiative has paved the way for the imminent
conversion of our public company disclosure regime to a global system of financial
information exchange built on ``smart data´´. In 2006, we awarded three separate
contracts totaling $54 million to transform the agency's 1980s-vintage public company
disclosure system from a form-based electronic filing cabinet to a dynamic real-time
search tool with interactive capabilities."
The body of the report states that "The SEC continued to build upon a voluntary
program initiated in FY 2005 that allows registrants to use eXtensible Business Reporting
Language in their financial disclosure filings. In early 2006, an interactive data test
group was launched to explore how new Internet-based reporting technologies can improve
the financial reporting process for investors, financial intermediaries, the
SEC, and companies themselves. The pilot program enables participant companies
to determine the benefits of using interactive data and provide feedback to the
SEC, and enables investors and analysts to assess new technologies for analyzing
interactive data reports submitted to the SEC in XBRL format."
See also, the SEC's February 2005
rule changes that initiated
the SEC's XBRL Voluntary Program, and its
web page summary of the program.
E-proxy Rules. Cox wrote that "We proposed e-proxy rules, to further
advance our goal of tapping the enormous power of technology and the Internet to simplify
and improve disclosure."
See also, story
titled "SEC Proposes to Allow Internet Delivery of Proxy Materials" in
TLJ Daily E-Mail Alert No.
1,263, December 1, 2006.
Telework. The report states that the SEC has increased its telework
participation rate to 34% of SEC employees. The report adds that the SEC is one of the
few federal agencies that does not exclude certain job functions or groups of employees
The report states that "In FY 2006 the SEC purchased and deployed new technology
that allows employees to access their files via the Internet at any time or location,
thereby facilitating more telework without compromising the security of the SEC’s
information. Also, the SEC continued its pilot ``virtual workforce´´ project in the
Division of Corporation Finance, in which an initial group of 10 employees
works from home full-time."
IT Security. The report states that during the past year "the SEC
implemented a wide variety of new policies and procedures governing the assessment and
management of information security risk. These procedures include comprehensive approaches
for identifying security risk; configuring, testing, and monitoring information
systems; incident response; remedial action tracking; and many other areas. The
SEC also completed the certification and accreditation of its major systems, and
conducted awareness training for 99 percent of SEC staff. In addition, the
agency also established and tested its disaster recovery and business continuity
plans in accordance with recommendations from previous years."
The report continues that the SEC will "refine and extend the procedures and
management controls put in place during FY 2006 to reduce the residual risk. The
most important of these will be improvements in the processes for controlling
changes to the technical environment, strengthening the management of user
accounts and passwords, and measures to tighten the physical perimeter around
sensitive areas of the SEC’s premises. In addition, the agency will remediate a
number of specific technical issues in such areas as patch management, data
security, and intrusion detection systems."
Forensics Lab. The report states that during FY 2006 the SEC's
Division of Enforcement
"implemented a new forensic lab equipped with state-of-the-art equipment and software.
The lab allows Enforcement to retrieve data stored on electronic devices like personal
computers, servers and laptops. Since such data is volatile, subject to damage, and
requires special processing and handling, the forensic lab has created special protocols
that are essential to the preservation and authentication of this data."
The report adds that "Enforcement has also trained a team of examiners who are
able to perform forensic-related activities such as recovering deleted data and analyzing
email and other relevant artifacts. The forensics program has fundamentally transformed
Enforcement’s ability to receive, process, and analyze electronic storage devices."
Examinations and Enforcement. The report states that the management
information systems used for examinations and enforcement programs "are
antiquated and do not provide the kind of high-quality information capture and
reporting that is required for such large programs. The SEC began a multiyear
initiative to upgrade or replace these systems in 2006 ..."
The report continues that the SEC "has historically not invested sufficiently
in its administrative systems infrastructure, which has been a contributing
factor to the internal controls issues discussed elsewhere in this report. The
agency began to address these issues in 2006 with an upgrade to the core
accounting system and other investments in procurement and budgeting systems;
over the next three years, additional upgrades are planned."
The report also states that the SEC's
Office of Information Technology
"certified and accredited eight
major applications; recertified the agency's accounting and general support
systems because of major upgrades; and completed 14 electronic authentication
risk assessments. E-authentication is a review process at the transaction level
designed to help agencies ensure that authentication processes provide the
appropriate level of assurance."
The report is vague in its description of IT programs used to facilitate enforcement
and examination. For example, it describes some of its IT projects underway simply as
"Upgrade analytical tools available to examiners" and "Redesign the
enforcement case management system to improve management of penalties and
|House Judiciary Committee Holds
Hearing on Caller ID Spoofing
11/15. The House Judiciary Committeee (HJC)
held a hearing on
HR 5304, the "Preventing Harassment through Outbound Number Enforcement
(PHONE) Act". This bill would criminalize the modification of caller ID information
with intent to mislead.
Rep. Tim Murphy (R-PA), the sponsor of
the bill, wrote in his
that "A criminal could try to obtain personal financial information from individuals
by using a bank's phone number, ... An ex-spouse could harass a former wife or husband
who has blocked calls from the ex-spouse’s phone line, ... A pedophile could stalk a
child by stealing a school phone number or the phone number of a friend of the
Phil Kiko, Chief of Staff and General Counsel of the HJC, wrote in his
testimony that caller ID spoofing "creates two categories of victims: 1) the person
who receives a telephone call identified as coming from someone other than the actual
caller; and 2) the person whose caller identification is used fraudulently to disguise
the true identity of the caller."
He continued that "I fall into the second category, because without my knowledge
or consent, my caller identification (``ID´´) was used hundreds, if not thousands, of
times to mask the true identity of a fraudulent caller. As a result, my family
and I have received up to 20 telephone calls a day from angry people who fall
into category one, who were either: returning the telephone call of the
fraudulent caller; asking me to stop calling them; or asking me to take them off
the telemarketing list."
He added that caller ID information is
"circulated to other fraudulent callers", and that "The only effective way to
end being victimized is to change one’s telephone number".
James Martin (The 60 Plus Association) wrote
prepared testimony that "have not received what you might consider an
alarming number of complaints on this issue. But it’s only a matter of time.
This is a stink that's coming and we want to be proactive."
On June 6, 2006, the House approved
the "Truth in Caller ID Act of 2006", by voice vote. The House Commerce
Committee (HCC) amended and approved the bill on May 24, 2006.
The Senate has not approved HR 5126. However, the
Senate Commerce Committee's (SCC)
stalled communications reform bill does include a section titled "Truth in
Caller ID" that is similar to HR 5126. It was offered by
Sen. Bill Nelson (D-FL) and
Sen. Olympia Snowe (R-ME).
Rep. Murphy also testified that "I also included an amendment to prompt the FCC
to address the practice of caller ID fraud in H.R. 5672, the Fiscal Year 2007
Science, State, Justice, Commerce Appropriations Act. Still, I believe my bill,
H.R. 5304, appropriately goes further by amending criminal law to fully protect
Americans from the practice of caller ID fraud."
|More Capitol Hill News
11/14. The House Judiciary Committee's
(HJC) Subcommittee on Commercial and Administrative Law held a hearing titled
"The Administrative Law, Process and Procedure Project for the 21st
Century". Morton Rosenberg of the Library of
Congress's (LOC) Congressional Research Service (CRS) wrote in his
testimony [9 pages in PDF] that "innovations in technology and science"
appear to require a fresh look at old administrative process issues. He wrote,
for example, that "the exploding use of the Internet and other forms of
electronic communications presents extraordinary opportunities for increasing
government information available to citizens and, in turn, citizen participation
in governmental decisionmaking through e-rulemaking. A number of recent studies
has suggested that if the procedures used for e-rulemaking are not carefully
developed, the public at large could be effectively disenfranchised
rather than enhancing public participation." He also referenced "the continued
issue of avoidance by the agencies of notice and comment rulemaking by means of
``non-rule rules.´´" See also,
testimony [16 pages in PDF] of Curtis Copeland (CRS), and
testimony [10 pages in PDF] of TJ Halstead (CRS).
11/14. The Senate Judiciary Committee
(SJC) held a hearing titled "Competition in Sports Programming and Broadcasting:
Are Consumers Winning". See,
statement of Sen. Patrick Leahy (D-VT). See,
testimony of Jeffrey Pash (National Football League),
testimony of Daniel Fawcett (Directv), and
testimony of Landel Hobbs (Time Warner).
|Washington Tech Calendar
New items are highlighted in red.
|Monday, November 20
The House will next meet on Tuesday, December 5, 2006, at 10:00 AM.
See, Republican Whip Notice.
The Senate will next meet on Monday, December 4, 2006. See also,
10:00 AM. The Center for Democracy
and Technology (CDT) will hold a news conference to identify bills that threaten
the internet and civil liberties during the final days of the 109th Congress. To
participate by teleconference, call 800-377-8846. The passcode is 92713123#. For more
information, contact David McGuire at 202-637-9800x106. Location: CDT, 11th Floor,
1634 I St., NW.
5:00 PDT. Deadline to submit comments to the
Internet Corporation for
Assigned Names and Numbers (ICANN) regarding Global Name Registry Ltd.'s (GNR)
proposal for the limited release of two character names. See,
Deadline to submit initial comments to the Federal Communications
Commission (FCC) regarding Autotel's petition for preemption of the jurisdiction of the
Arizona Corporation Commission with respect to its decisions to dismiss Autotel’s
request for arbitration of an interconnection agreement with Citizens Utilities Rural
Company, Inc. and Autotel’s request for termination of the rural exemption
under section 251(f) of the Act. See, FCC
Notice [PDF] (DA 06-2083). This proceeding is WT Docket No. 06-194.
|Tuesday, November 21
12:00 NOON - 1:15 PM. The DC
Bar Association will host a seminar titled "50 Hot Technology Tips, Tricks
& Web Sites for Lawyers". The speaker will be Reid Trautz. The
price to attend ranges from $15 to $20. For more information, call 202-626-3463. See,
Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
12:15 PM. The Federal
Communications Bar Association's (FCBA) Common Carrier Committee will host a brown
bag lunch. This is a planning meeting. RSVP to Myra Creeks at Myra dot Creeks at att
dot com. Location: AT&T, 2nd floor, 1133 21st Street, NW.
EXTENDED TO DECEMBER 21.
Deadline to submit reply
comments to the Federal Communications Commission
(FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding its
media ownership rules. The FCC adopted this FNPRM on July 21, 2006, and released
[36 pages in PDF] on July 24, 2006. See also, story titled "FCC Adopts FNPRM on
Rules Regulating Ownership of Media" in TLJ Daily E-Mail Alert No. 1,397, June 22,
2006. This FNPRM is FCC 06-93 in MB Docket No. 02-277, MM Docket No. 01-235, MM Docket
No. 01-317, MM Docket No. 00-244, and MB Docket Nos. 06-121. See,
order [PDF] extending deadlines.
Deadline to submit initial comments to the
Federal Communications Commission (FCC) in response
to National LambdaRail's petition for reconsideration
or clarification of the FCC's Order establishing a rural telehealth and
telemedicine pilot subsidy program. See, FCC
Notice (DA 06-2279). The FCC's order is FCC 06-144 in WC Docket No. 02-60.
|Wednesday, November 22
Deadline to submit comments to the Department of Commerce's
Bureau of Industry and Security (BIS) regarding
its annual review of the foreign policy based controls in its Export Administration
Regulations (EAR), which are implemented pursuant to section 6 of the Export
Administration Act of 1979, as expired. These rules regulate, among other things, the
export of certain encryption and software products. The BIS states that it seeks comments
on many topics, including "The likelihood that such controls will achieve the
intended foreign policy purpose, in light of other factors, including the availability
from other countries of the goods, software or technology proposed for such controls".
notice in the Federal Register, October 23, 2006, Vol. 71, No. 204, at
|Monday, November 27
9:30 - 11:30 AM. The Federal Communications
Commission's (FCC) WRC-07 Advisory Committee's Informal Working Group 4:
Broadcasting and Amateur Issues will meet. See,
[PDF]. Location: Pillsbury Winthrop Shaw Pittman, Conference Room 1G, 2300 N
10:00 AM. The Supreme Court
will hear oral argument in Bell Atlantic v. Twombly, Sup. Ct. No. 05-1126.
This case pertains to whether a complaint against a regional bell operating
company (RBOC) that alleges parallel or similar behavior, and conspiracy to
limit competition, but includes no allegations in support other than the
similar or parallel conduct, is sufficient to survive a motion to dismiss. See also,
amicus brief of the Office of the
Solicitor General and
story titled "Supreme Court Grants Cert in Bell Atlantic v. Twombly" in
TLJ Daily E-Mail
Alert No. 1,399, June 26, 2006. See also, Supreme Court
1 First St., NW.
Deadline to submit reply comments to the
Federal Communications Commission (FCC) in response to
it further notice of proposed rulemaking (FNPRM) regarding maritime Automatic
Identification Systems (AIS). The FCC adopted this item on July 20, 2006, and released
it on July 24, 2006. It is FCC 06-108 in WT Docket No. 04-344. See,
notice in the Federal Register, October 12, 2006, Vol. 71, No. 197, at
|Tuesday, November 28
10:00 AM. The Supreme Court
will hear oral argument in KSR International v. Teleflex, Sup. Ct. No.
04-1350. See also,
brief of the Office of the Solicitor General,
and story titled "Supreme Court Grants Cert in Patent Obviousness Case" in
TLJ Daily E-Mail
Alert No. 1,399, June 26, 2006. See also, Supreme Court
docket. Location: 1
First St., NW.
12:00 NOON - 1:30 PM. The
Federal Communications Bar Association's (FCBA)
Enforcement Practice Committee will host a brown bag lunch titled "Telemarketing
Enforcement -- TCPA, CAN-SPAM, Do-Not-Call, Junk Fax and More". The speakers
will be Kris Monteith (Chief of the FCC's Enforcement Bureau) and Lydia Parnes (Chief
of the FTC's Bureau of Consumer Protection). For more information, contact Christi
Shewman by November 27 at christi dot shewman at fcc dot gov. Location: Arnold &
Porter, Paul Porter Room, 10th Floor, 555 12th Street, NW.
12:00 NOON - 1:30 PM. The DC
Bar Association will host a panel discussion titled "Music Industry: Sound
Recordings and Public Performance Rights". The speakers will include Gary
Greenstein (SoundExchange), Daryl Friedman (Recording Academy), Jay Rosenthal (Recording
Artists’ Coalition), and John Simson (SoundExchange). The price to attend ranges
from $25 to $35. For more information, call 202-626-3463. See, notice. Location:
D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
12:30 - 5:00 PM. The U.S.
Chamber of Commerce will host an event titled "Next Steps for the American
Trade Agenda". The speakers will include
Susan Schwab (U.S. Trade Representative), former Rep. Cal Dooley
(D-CA), and former USTR Clayton Yeutter. The U.S. Chamber
states that the topics covered will include "What are the prospects for
extension of Trade Promotion Authority and completion of additional free-trade
agreements in the 110th Congress? What is the future of the multilateral
trading system, the Doha Development Agenda, and the WTO's dispute settlement
system? How can U.S. international economic policy confront the emerging challenge
posed to international business by divergent views of antitrust and intellectual
property law?" The price to attend ranges from $50 to $70. For more information,
contact Maria Medrano at mmedrano at uschamber dot com or 202-463-5384. See,
registration page. Location: U.S. Chamber 1615 H St., NW.
2:00 - 4:00 PM. The Federal Communications
Commission's (FCC) WRC-07 Advisory Committee's Informal Working Group 3: IMT-2000
and 2.5 GHz Sharing Issues will meet. See,
notice [PDF]. Location: FCC, 4th Floor South Conference Room (4-B516), 445
12th Street, SW.
Deadline to submit reply comments to the
Federal Communications Commission
(FCC) in response to National LambdaRail's petition
for reconsideration or clarification of the FCC's Order establishing a rural
telehealth and telemedicine pilot subsidy program. See, FCC
Notice (DA 06-2279). The FCC's order is FCC 06-144 in WC Docket No. 02-60.
|People and Appointments
11/16. The Defense Information Systems Agency's
(DISA) Performance Review Board published a
notice in the Federal Register announcing that
Marilyn Quagliotti, Diann McCoy, John Garing, and John
Penkoske have been appointed members of the Board for one year terms. See,
Federal Register, November 16, 2006, Vol. 71, No. 221, at Page 66757.
11/20. The Business Software Alliance (BSA) gave its
annual Cyber Champion Awards to Sen. Gordon Smith
(R-OR) and Rep. Adam Schiff (D-CA). The BSA
cited Sen. Smith long time support for free trade, and Rep. Schiff for his anti-piracy
11/17. The Federal Communications Commission (FCC) published a
notice in the Federal Register that announces, describes, and sets the
effective date (December 18, 2006) for the Report and Order (R&O) portion of its
R&O and Further Notice of Proposed Rulemaking (FNPRM) regarding the use of TV
white space by unlicensed devices. See, Federal Register, November 17, 2006,
Vol. 71, No. 222, at Pages 66876-66878. This proceeding is titled
"Unlicensed Operation in the TV Broadcast Bands". The R&O and FNPRM is FCC 06-156 in ET Docket
Nos. 04-186 and 02-380. The FCC adopted this item at an October 12, 2006, meeting, and
released it on October 18, 2006. See also, story titled "FCC Adopts Order and FNPRM
Regarding TV White Space" in TLJ Daily E-Mail Alert No. 1,467, October 12, 2006. The
deadline to submit initial comments to the FCC in response to the FNRPM portion of this
item is January 31, 2007. The deadline to submit reply comments is March 2, 2007. See,
notice in the Federal Register, November 17, 2006, Vol. 71, No. 222, at
11/13. The Electronic Privacy Information Center
(EPIC) released a short item
that is critical of Robert Cresanti, Chief Privacy Officer of the
Department of Commerce (DOC), and the DOC
generally. One issue of concern to the EPIC is the export of communications
surveillance equipment to the People's Republic of China. The EPIC wrote that
Cresanti "had more than 25 meetings with business lobbyists across the country
during a two-month period in 2006 even though he was unable to attend 1
pre-scheduled meeting with privacy advocates in Washington, DC." The EPIC stated
in a separate release that it is concerned about the DOC's failure to restrict
the export to PR China of "high-tech equipment that is used for communications
surveillance and censorship". The Export Administration Act (EAA), as expired,
and the implementing regulations, authorize the DOC's
Bureau of Industry and Security (BIS) to
regulate exports to protect US national security.
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