LEGAL ISSUES

California to Jail Spammers

by Shelley M. Liberto, Esq.

Copyright © 1998 Shelley M. Liberto. All rights reserved.

A bill has been introduced in the California Assembly that carries with it civil remedies and stiff criminal penalties for unauthorized use of unsolicited commercial email, commonly referred to as "spam." The bill, AB 1629, has as its biggest supporters America On-Line and Internet service providers ("ISPs") whose servers have been vandalized by illicit spamming activities. The proposed law prescribes jail time for spammers who use fraudulent return email addresses, a tactic that has become commonplace by those who wish to avoid anti-spamming filters.

Nature of the Problem

On average, approximately 30 percent of the estimated 30,000,000 email messages transmitted each day is unsolicited commercial email. The high volume of junk email places a tremendous burden on electronic mail service providers who are required to process and store such high amounts of data. Spamming shifts advertising costs from the advertiser, whose overhead is slight, to the ISPs who bear the cost in downtime, damaged equipment, lost productivity, and lost business opportunities. At the same time, receipt of unsolicited electronic mail can be burdensome and annoying to the end-user. But when the tactics of spammers turn malicious by use of fraudulent email return addresses, the flood of return email to the unwary recipient, almost all of which is derogatory, can overload an innocent party's server and terminate its business.

In November of 1997, Juno Online Services filed suit in federal court in the Southern District of New York against five companies: Strippers, Inc., of Beverly Hills, California; IMS of Knoxville, Tennessee; Phoenix Interactive of Hermosa Beach, California; Global Information Services of Clearwater, Florida; and Scott Allen Expert Sales of Somerset, New Jersey. Juno alleged various counts of false designation of origin, fraud, and unjust enrichment as its basis for seeking $1 million in punitive damages against each of the five organizations. By way of another example, a company called PROMO.NET which provides a service known as Project Gutenberg, was recently hit with 900 return email messages on a single day on May 3, 1998, which shut down the service. Project Gutenberg provides the free public service of access to its vast database of public domain literature. The service is based in Italy, with a server in Nevada, and the cybervandal based in Montreal, Canada, rendering implementation of remedies very difficult. Project Gutenberg's horror stories can viewed online. California's anti-spamming legislation proposes to give California courts, both civil and criminal, an array of sanctions to levy against unscrupulous spammers such as these.

The AB 1629 Solution

Varying degrees of imprudent delivery of unsolicited commercial email are recognized in the proposed legislation. The bill allows an ISP to establish and publish a policy prohibiting or restricting the use of its service for the purpose of sending unsolicited commercial email. The choice to do so is purely voluntary and is not required by the proposed law. If an ISP does choose to establish such a policy, however, and the policy is violated, the ISP is entitled to bring a civil action to recover the actual monetary loss suffered by the ISP as a result of the violation of its anti-spamming policy. Alternatively, the ISP may collect $50 for each email message delivered in violation of its policy, up to a maximum of $15,000 per day. The ISP is also entitled to recover attorneys' fees if it prevails in the legal action. Acts of cybervandalism and cyberfraud, however, carry with them stiffer civil penalties, along with the potential for fines and jail time.

The criminal portion of AB 1629 addresses several classes of criminal activity including the unauthorized access and use of servers, extortion, and fraud. Included in the list of criminally sanctionable activities is the use of fraudulent domain names:

Any person who commits any of the following acts is guilty of a public offense:

On its face, therefore, AB 1629 would appear to cover all the bases of cybervandalism and cyberfraud which, to date, have been practiced with impunity by cybercriminals who have operated freely out of reach of the long arm of the law. Penalties include a fine of up to $250 per email message transmitted in violation in a manner that does not result in injury. If the victim is damaged in an amount not exceeding $5,000, the spammer can be fined up to $5,000 and sentenced to one year in county jail. For any violation that results in a victim's expenditure in an amount greater than $5,000, the spammer may be fined up to $10,000 and imprisoned in state prison for up to three years. Calculation of a victim's expenditure includes, among other things, the costs of verifying the source of the cybervandalism and the extent of both data and hardware damage. Interestingly, AB 1629 requires community colleges and state universities in California to institute policies of expulsion of students who engage in computer-related crimes. Although the proposed law would appear to be tough enough to abate current trends in cybervandalism, questions remain as to its enforcement against wrongdoers who ply their crimes far from California.

Conclusion

California's proposed legislation marks the strongest attempt by any legislative body to curb cybervandalism and cyberfraud with criminal sanctions. Persons who engage in Internet transactions targeted for California residents automatically subject themselves to the jurisdiction of California courts. Arrest and extradition of cybercriminals from distant lands, however, will probably be prohibitive except in the most extreme cases. One solution would be federal legislation that would expand the scope of jurisdiction to all 50 states. Federal laws already prohibit the use of computers to transmit unsolicited commercial faxes. It would seem that these federal laws would lend themselves to a simple amendment to expand their scope to include unsolicited commercial email.

Opponents of anti-spamming statutes such as AB 1629 claim that such laws are an unconstitutional infringement on free speech and that any government regulation of the Internet may have a dampening effect on Internet commerce. On the other hand, there is simply no constitutional right in a private contractual relationship with an ISP that would force an ISP to play host to an unsolicited commercial email enterprise against its will. If passed, AB 1629 would probably withstand constitutional scrutiny, and lend a little more order to the cacophony of unfettered speech now raging on the Web.

Disclaimer

The contents of this article are provided for general information and educational purposes, and are not provided in the course of any attorney-client relationship. Nor do they constitute legal advice. Readers are urged to contact legal counsel regarding any legal issue addressed in this article, before initiating any legal action or implementing any decision.

Shelley M. Liberto is an attorney specializing in software- and Internet-related issues. His Web page is located at http://www.libertolaw.com.