On Monday, the California Senate Business, Professions and Economic Development (“BP&ED”) Committee held a hearing and voted on AB 2546, Assemblyman’s Chau’s wish list for plaintiff’s lawyers.
The Internet Law Center submitted its opposition to the bill and appeared at the hearing to argue against Assemblyman Chau and Dan Balsam, the bill’s principal proponent. We worked closely with the Internet Business Coalition and Jared Gordon, who is Vice Chair of the California Lawyers Association’s Internet and Privacy Subcommittee.
As outlined in the letter below, at the hearing I argued that:
- Chau and Balsam were falsely pitching the bill as minor technical amendments when in fact it was a total rewrite greatly expanding marketers’ potential liability.
- The bill was attempting to win from the legislature what they could not win in court. The bill sought to reverse court decisions, including the unanimous Supreme Court decision in Kleffman, that the changes proposed in the bill were not deceptive and therefore did not harm consumers in any way. The only ones who would benefit under the new law were the small cadre of anti-spam plaintiffs lawyers.
- That passage of this legislation will force e-commerce companies to severely curtail or abandon email solicitations altogether to avoid potential liability, resulting in a dramatic loss in sales and substantial layoffs.
I also urged a few amendments, including:
- Eliminating changes to the definition of commercial email to include “or any other solicitation” since this would include charitable and even political solicitations. Chau agreed to amend this provision.
- Remove the language extending the scope of the bill to falsity in the email body since this was a backdoor attempt to rewrite California’s false advertising law by removing both the requirements of intent and actual harm to consumers.
- Remove all language regarding circumventing email filters since a unanimous Supreme Court had found this not to be deceptive.
Balsam tried to argue that the bill was merely addressing vagueness in the current law, but I shot back that this was not true.
You are not addressing vagueness, you are trying to reverse court decisions that explicitly said what you claim is wrong – it is not deceptive. You are trying to make money where the courts said there is no harm.
Several Senators were sympathetic to these arguments and urged Chau to scale back the bill to address these concerns. The bill was passed by the Committee based on Chau’s representation to work with the Committee to amend the bill. It is expected that almost all of the new causes of action added by the bill will be removed.
The bill will be heard next week by the Senate Judiciary Committee which also has amendments to the bill. If approved by the Judiciary Committee, it would need to be approved by the Senate and then again by the Assembly by August 31st. Passage in either body is not certain.
You can view the hearing in full below (thirty minutes). In addition, the Senate BP&ED Committee analysis of the bill is found here.