Interested Persons Memo: Analysis of S. 630, Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2001 or the CAN SPAM Act of 2001

Initially, we question whether government regulation of truthful unsolicited commercial electronic mail is appropriate at all. Where the communication is truthful, it is generally preferable to let the marketplace control, rather than government intervention. 

Clearly, the government may have a role in regulating such mail where it is fraudulent, but current law already provides a remedy. The Federal Trade Commission currently pursues such cases. The Securities and Exchange Commission rules prohibit certain kinds of stock promotions, and various state laws closely regulate contests and sweepstakes. Thus, fraudulent electronic mail can be attacked using current laws.

Sending spam by misappropriating another's domain name has already been successfully prosecuted. Last year, America Online used trademark and unfair competition laws to pursue a spammer who sent 73 million e-mail messages for his adult web sites using an ""aol.com"" address. The address was nonexistent. The federal magistrate found the use infringed on America Online's trademark and recommended that the spammer pay damages of more than $1.5 million.

Finally, many Internet Service Providers (ISPs) expressly prohibit their users from sending spam. For example, Earthlink's current ""Acceptable Use Policy"" prohibits subscribers from sending ""any unsolicited commercial email or unsolicited bulk email"" or using its services for activities ""that have the effect of facilitating unsolicited commercial email or unsolicited bulk email whether or not that email is commercial in nature."" Those who breach such contracts may find their service terminated. Because ISPs rely on customer service and satisfaction to keep their customers, and the performance of their servers is an integral part of that satisfaction, they are not reluctant to pursue customers who violate the contract.

Should Congress go forward with this legislation, the following problems in S. 630 must be addressed: 

1. Amend the bill to apply only to bulk unsolicited electronic mail, and specifically define ""bulk mail.""   
2. Delete the provision requiring accurate routing information. It is destructive of anonymity and punishes innocent speech.   
3. Delete the provision regarding ""identifiers."" This is a form of prior restraint and compelled speech.    
4. Delete the provision prohibiting deceptive subject headers. It is too vague, and chills speech protected under the First Amendment.

BACKGROUND

S. 630 regulates unsolicited commercial electronic mail by creating criminal penalties for sending messages containing fraudulent routing information. Civil penalties are provided for false or misleading header information, deceptive subject headings, failure to include a valid return address and failure to honor an opt-out request. The bill gives the Federal Trade Commission primary enforcement authority for the civil portion of the bill, and treats civil violations as unfair or deceptive acts or practices. 

ANALYSIS

The bill should only apply to bulk mail, which should be specifically defined. Failure to do so subjects the bill to challenge under Central Hudson Gas v. Public Service Commission and 44 Liquormart Inc. v. Rhode Island.

The Supreme Court has recognized that the First Amendment applies to the Internet. Reno v. ACLU, 521 U.S. 844, 117 S. Ct. 2329 (1997). Any restriction on speech on the Internet must therefore be scrutinized for its First Amendment implications.

S. 630 applies solely to commercial speech in the form of unsolicited commercial electronic mail. Commercial speech is protected under the First Amendment to the United States Constitution. In Bigelow v. Virginia, 421 U.S. 809 (1975), the United States Supreme Court held that ""speech is not stripped of First Amendment protection merely because it appears"" as a commercial advertisement. Id. at 818.  In 1976, the Court reaffirmed that speech that ""does no more than propose a commercial transaction"" is protected by the First Amendment. Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 762 (1976).

In order for the government to regulate commercial speech, it must have a ""substantial governmental interest."" Furthermore, the regulation must be no more extensive than necessary to achieve the government's interest. Central Hudson Gas v. Public Service Commission, 447 U.S. 557 (1980).  

The Supreme Court strengthened commercial speech protections in 44 Liquormart Inc. v. Rhode Island, 116 S. Ct. 1495 (1996). In 44 Liquormart, the Court invalidated a regulation banning the advertisement of liquor prices. Justice Stevens, writing for a plurality, noted that when scrutinizing restrictions on truthful commercial speech, ""there is far less reason to depart from the rigorous review that the First Amendment generally demands."" 116 S. Ct. at 1507. The plurality further noted that commercial speech restrictions on truthful information are only justified where there are ""no less onerous alternatives."" With these words, the plurality veered toward a strict scrutiny approach. Thus, to regulate truthful commercial speech, the government must have a substantial government interest, and the regulation must be narrowly tailored and the least onerous of the alternatives.

While S. 630 declares a substantial government interest, it fails to narrowly tailor the regulation to achieve that asserted interest.[i] 

Section 2, subsections 4 and 5, focus on the shifting of costs from the sender to the recipient or the ISP. This appears to be the primary governmental interest articulated. Internet Service Providers testifying on similar bills, have argued that the rationale for regulation of UCE was not the isolated unsolicited commercial electronic message, but the sheer volume of bulk commercial electronic mail. On the Internet, it often costs virtually the same to send one message or one thousand messages. The testimony suggested that flooding the Internet with bulk unsolicited electronic mail caused servers to crash, and costs to mount for the Internet service providers. Recipients were inundated with messages on how to ""get rich quick."" Thus, the harms discussed in the testimony were directly related to bulk unsolicited commercial electronic mail, rather than unsolicited electronic mail in general. 

S. 630 does not discuss bulk electronic mail. It prohibits any unsolicited commercial electronic mail failing to meet the bill's requirements. For example, suppose you met someone on an airplane who you thought might be a good business prospect. You exchanged business cards, and she had her e-mail address on the card. When you get back to your office, you send her an e-mail proposing a business transaction. According to S. 630, you have now sent an unsolicited commercial electronic mail message. 

The net cast by S. 630 is therefore far too broad and is likely to run afoul of Central Hudson and 44 Liquormart. The bill should define bulk mail and apply the regulations to those who send such mail. Bulk mailers are often far more likely to have the resources to comply with these rules. The average small business-person sending out a couple of e-mails here and there to drum up business is unlikely to have the same resources. 

The bill prohibits constitutionally protected anonymous speech by redefining it as ""fraud."" 

 ""Fraud"" is normally defined as ""a false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury."" Black's Law Dictionary, Sixth Edition. S. 630 expands the definition of fraud to include anonymous unsolicited e-mails, regardless of the intent to induce action to the detriment of the recipient.[ii] Mere concealment of one's identity becomes the crime. Fraud is thus transformed in this context from a specific intent crime to one of general intent; the government need no longer prove any intent to defraud the recipient, only the act of concealing one's identity. 

Anonymous speech is protected under the First Amendment. Talley v. California, 362 U.S. 60 (1960); McIntyre v. Ohio Elections Commission, 115 S.Ct. 1511 (1995).  This right of anonymity has also been applied to speech over the Internet, American Civil Liberties Union v. Miller, 977 F.Supp. 1228 (N.D. Ga. 1997) and American Civil Liberties Union v. Johnson, 4 F.Supp.2d 1029 (D.N.M. 1998), and even to commercial speech. NLRB v. Midland Daily News, 151 F.3d 472 (6^th Cir. 1998).[iii]  By requiring accurate header information, the bill in one fell swoop destroys anonymous commercial communication on the Internet. 

A similar provision[iv] was challenged in American Civil Liberties Union v. Miller, supra., and a preliminary injunction was granted.

[B]ecause ""the identity of the speaker is no different from other components of [a] document's contents that the author is free to include or exclude,"" McIntyre v. Ohio Elections Comm'n, 514 U.S. 334, 340-42, 115 S.Ct. 1511, 1516, 131 L.Ed.2d 426 (1995), the statute's prohibition of internet transmissions which ""falsely identify"" the sender constitutes a presumptively invalid content-based restriction. See R.A.V. v. St. Paul, 505 U.S. 377, 382, 112 S.Ct. 2538, 2542-43, 120 L.Ed.2d 305 (1992). The state may impose content-based restrictions only to promote a ""compelling state interest"" and only through use of ""the least restrictive means to further the articulated interest."" Sable Communications of California, Inc. v. FCC, 492 U.S. 115, 126, 109 S.Ct. 2829, 2836, 106 L.Ed.2d 93 (1989).

The court noted that fraud prevention was the asserted state interest, but the statute was not narrowly drawn to achieve that end. 

[B]y its plain language the criminal prohibition applies regardless of whether a speaker has any intent to deceive or whether deception actually occurs. Therefore, it could apply to a wide range of transmissions which ""falsely identify"" the sender, but are not ""fraudulent"" within the specific meaning of the criminal code. [Emphasis added.]

The court found that the ACLU was likely to prevail upon its claim of overbreadth, because the statute swept protected activity within its proscription. Specifically, the act prohibited ""such protected speech as the use of false identification to avoid social ostracism, to prevent discrimination and harassment, and to protect privacy. . .""[v]

S. 630 suffers from the same infirmities. With no compelling justification, it prohibits anonymous speech, and punishes anonymous speech even where there is no intent to deceive regarding the offer or information transmitted.  

The provision requiring ""identifiers"" should be deleted. It is a form of prior restraint and compelled speech. 

S. 630 additionally requires a clear and conspicuous identifier be placed on unsolicited commercial electronic mail. The ACLU opposes this provision because it is a form of prior restraint and ""compelled speech."" 

A prior restraint consists of a government regulation that restricts or interferes with speech prior to its utterance. The Supreme Court has said that ""[a]ny system of prior restraints of expression comes to this Court bearing a heavy presumption against its constitutional validity."" Bantam Books v. Sullivan, 372 U.S. 58, 70 (1963). 

Fundamental to the issue of labels or identifiers is that the First Amendment's protections include ""both the right to speak freely and the right to refrain from speaking at all."" Wooley v. Maynard, 430 U.S. 705, 714 (1977). It is a ""fundamental principle that the coerced publication of particular views, as much as their suppression, violates the freedom of speech."" Herbert v. Lando, 441 U.S. 153, 178 n.1 (1979)(Powell, J., concurring).  The protections of the First Amendment encompass ""the decision of both what to say and what not to say."" Riley v. National Federation of the Blind, 487 U.S. 781, 797 (1988).  ""The First Amendment mandates that we presume that speakers, not the government, know best both what they want to say and how to say it."" Id. at 790-791. By requiring an identifier on certain electronic mail, this bill forces senders to say something they may not wish to say, which is constitutionally suspect.

As noted above, a regulation of commercial speech must be narrowly tailored to achieve the asserted substantial government interest. Where the harm comes from the sheer volume, and inability to opt-out from receiving any further messages, this provision is not narrowly tailored to achieve the asserted substantial interest. 

The provision prohibiting deceptive subject headings is too vague, and will chill speech protected under the First Amendment.

Section 5(a)(2) of S. 630 prohibits deceptive subject headings that the sender ""knows is likely to mislead the recipient about a material fact regarding the contents or subject matter of the message."" This places the government in the position of having to ""grade"" subject headings. Suppose, for example, a message comes with the subject line: ""This could make you a millionaire!"" The body of the message touts the latest Amway or other multi-level marketing scheme. Is this subject line misleading? For the vast majority of people who do not invest the time and energy into the program, their answer may be ""yes."" But for those few who may actually become millionaires, the answer is ""no."" 

Marketing is all about getting a potential consumer's attention. In the real world (as opposed to cyberspace), marketers often disguise the nature of the message. ""Urgent"" may be placed on the outside of the envelope, although the urgency is one of the marketer's creation. While this is currently permissible in the real world, the bill seems to assume a different rule is necessary for cyberspace. The end result is that marketers may be unable to discern what might be likely to mislead the recipient, and steer far wider than necessary to avoid violating the law. 

It is a general principle of law that ""laws [must] give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly."" Grayned v. City of Rockford, 408 U.S. 104, 108 1972). If a law is too vague to give this ""reasonable opportunity,"" it is deemed void for vagueness. When a law interferes with the right of free speech, the courts apply a more stringent variation of the vagueness test. Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 499 (1982). The Supreme Court has recognized that First Amendment ""freedoms are delicate and vulnerable, as well as supremely precious in our society. The threat of sanctions may deter their exercise almost as potently as the actual application of sanctions. Because First Amendment freedoms need breathing space to survive, government may regulate in the area only with narrow specificity."" NAACP v. Button, 371 U.S. 415, 433 (1963).

In order to avoid the vice of vagueness, the law or regulation ""must provide explicit standards for those who apply them. A vague law impermissibly delegates basic policy matters to policemen, judges, and juries for resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory application."" Grayned, 408 U.S. at 108-109. Therefore, the law must provide an ""ascertainable standard for inclusion and exclusion."" Smith v. Grayned, 415 U.S. 566, 578 (1974). When that standard is missing, the law unconstitutionally produces a chilling effect on speech, inducing speakers to ""steer far wider of the unlawful zone"" than if the boundaries were clearly marked. Id. It forces people to conform their speech to ""that which is unquestionably safe."" Baggett v. Bullitt, 377 U.S. 360, 372 (1964).

By forcing marketers to guess whether the government will consider a subject line ""likely to mislead,"" they will err on the side of ""that which is unquestionably safe,"" foregoing speech that is protected under the First Amendment.

CONCLUSION

While unsolicited commercial electronic mail, like paper junk mail, may be unwanted and annoying, the ""short, though regular, journey from mail box to trash can. . . .is an acceptable burden, at least so far as the Constitution is concerned."" Bolger v. Young's Drug Products Corp., 463 U.S. 60 (1983).

There is a considerable question of whether regulation of truthful unsolicited commercial electronic mail should be the subject of legislation, and whether new laws are needed to deal with such mail at all. S. 630 assumes the answer is in the affirmative, and attempts to regulate unsolicited commercial electronic mail. As the bill notes in its findings, ""In legislating against certain abuses on the Internet, Congress should be very careful to avoid infringing in any way upon constitutionally protected rights, including the rights of assembly, free speech, and privacy."" [Emphasis added.] There are significant constitutional concerns in this bill that need to be addressed before that goal may be achieved.