A Call to Arms: Marching Orders for the North Carolina Anti-spam Statute
| Publication year | 2002 |
| Citation | Vol. 4 No. 2002 |
An estimated 2.3 billion spam1 electronic messages (emails) are sent daily.2 An average Internet user is likely to receive approximately 1,500 spam e-mails by 2006.3 Spam e-mail has increased an incredible 450% in the year between summer 2001 and summer 2002.4 According to a recent European Union study, the cost to consumers and businesses of unsolicited e-mail is between eight and ten billion dollars annually, and other damages include decreased productivity, time taken to delete unwanted messages, server crashes, and the higher cost of Internet access.5 Money spent to combat spam is estimated to reach $88 million this year, a cost that is expected to double by 2006.6
As significant as these costs are, the estimated cost to the spammer is a mere .00032 cents per message,7 or $320 per million e-mails sent. Based on the numbers above, spammers pay an annual cost of approximately $270 million.8 Compared with the eight to ten billion dollars in costs for consumers and businesses,9 this cost differential amounts to a gigantic exercise in cost shifting.10 Litigation expenses, however, effectively take the free out of free ride by shifting costs back to spammers, costs that may ultimately put them out of business.11
With the costs of spam rising rapidly, North Carolinians might be heartened to know that the North Carolina General Assembly passed a fairly comprehensive anti-spam statute12 in 1999 aimed at protecting average e-mail users and Internet service providers ("ISPs") from spam. Yet, in the two and one half years since the passage of the North Carolina anti-spam statute, no cases have been fully litigated under the Act.13
This note will take an in-depth look at the North Carolina anti-spam statute, compare relevant parts of the statute with similar provisions in other state statutes, explore remedies and pitfalls brought to light by case law, and address why the North Carolina law's substantive strength does not bear on its actual use. The North Carolina anti-spam statute will likely withstand challenges under the First Amendment14 and the dormant Commerce Clause15 but will, nonetheless, remain ineffective due to the lack of state enforcement resources, a scarcity in individual lawsuits, the management decisions of ISPs, and spammers' ingenuity.
I. The North Carolina Unsolicited Electronic Bulk Commercial Mail Act
The North Carolina statute has four substantive parts, along with other sections covering standing, criminal penalties, and damages.16 A statutory violation of the Act occurs when a person sends unsolicited bulk commercial e-mail into or within the state17 that falsely identifies with an "intent to deceive or defraud the recipient" or that contains forged routing information and that violates an ISP's18 policies.19 Standing is granted to individuals20 , ISPs,21 and the state.22 Criminal penalties range from a Class 3 misdemeanor to a Class 1 felony, depending on the amount of property damage caused by the spam e-mail.23
A. Legislative Intent
The North Carolina bill was modeled after existing statutes in Washington,24 California,25 and Virginia.26 The clear intent was to facilitate quick and efficient access to the Internet for users instead of "having the system clogged with unsolicited bulk e- mail."27 The statute discourages spamming by giving ISPs, individual users, and the state standing to sue spammers and collect damages.28
B. Unsolicited Electronic Bulk Commercial Mail
The North Carolina statute only applies to e-mail that is both commercial and unsolicited. Commercial electronic mail is defined as "messages sent and received electronically consisting of commercial advertising material, the principal purpose of which is to promote the for-profit sale or lease of goods or services to the recipient."29 "Unsolicited" means e-mail sent to anyone with whom the initiator does not have an "existing business or personal relationship" and that is not sent at the "request of, or with the express consent of, the recipient."30
C. The First Amendment and the Central Hudson31 Test
Although the initial scope of the North Carolina bill covered all e-mail, the General Assembly eventually limited its scope to commercial e-mail,32 with the exception that an organization may send commercial e-mail to its members.33
Two theories best support the inclusion of the word "commercial" in the North Carolina statute. First, as a practical matter, spam is almost exclusively commercial in nature. To date, there has been little practical gain in legislating against noncommercial e-mail. For example, even though the Virginia statute does not include the word "commercial" within the definitions section of the statute,34 it has been utilized primarily in litigation against commercial e-mail.35 Second and, perhaps, more importantly, government regulation of non-commercial speech would almost certainly implicate the First Amendment.36 While the First Amendment does not protect against speech restrictions by a private party,37 its protections do circumscribe government action.38 The government, nonetheless, may restrict certain types of speech, such as commercial speech,39 subject to the test set forth in Central Hudson Gas & Electric Corporation v. Public Service Commission.40 Because the North Carolina statute regulates commercial speech,41 the Central Hudson test would apply.
Central Hudson arose from a challenge to a New York regulation banning a utility company from promotional advertising.42 The Supreme Court, in reversing the New York Court of Appeals' validation of the regulation on the ground that the governmental interest involved outweighed the speech's limited value,43 formulated a four-prong test44 that analyzes restrictions on commercial speech.45 The first prong of the Central Hudson test holds that unlawful or misleading speech is not protected speech.46 Second, the test requires a determination of whether the governmental interest in regulating the commercial speech is substantial.47 Finally, if the speech at issue is lawful, and the government interest is substantial, then the statute must directly advance the governmental interest being asserted and do so in a manner that is limited to that which is necessary to assert that interest.48 The last two prongs may be condensed such that there is a reasonable "'fit between the legislature's ends and the means chosen to accomplish those ends.'"49 The Central Hudson test applies to both state and federal government actors regulating commercial speech. Thus, it applies in evaluating the constitutionality of the North Carolina anti-spam statute for purposes of the First Amendment because the North Carolina statute limits commercial speech by granting standing to the state attorney general.50 The North Carolina statute also grants standing to individuals and ISPs, but this requires a different First Amendment analysis, which will be discussed in greater detail below.
The first question under the Central Hudson test is whether the speech is unlawful or misleading. If the speech is found to be unlawful or misleading, it will not be afforded constitutional protection.51 Most spam is misleading, either because the message itself misrepresents what is being sold or because false routing information52 has been provided.53 In effect, falsified routing information may be considered misleading because it prevents the recipient from determining who actually sent the e-mail. Thus, a court might either treat spam as unprotected speech under the first prong of the test or rule that commercial speech itself is not unlawful, even when the vehicle by which it arrives, the message's path of identity, is unlawful.
The North Carolina statute specifically prohibits sending email that "falsely identifies with the intent to deceive or defraud the recipient" or that forges routing information.54 This would appear to satisfy the first prong of the Central Hudson test, which allows state regulation of commercial speech that is unlawful or misleading. Under this view, no further analysis under Central Hudson would be required because the North Carolina statute would satisfy the First Amendment.
Nonetheless, courts might not find spam unlawful or misleading under the first prong of the Central Hudson test for two reasons. First, as mentioned above, the North Carolina statute requires that the e-mail be false or misleading.55 There are two parts of a spam e-mail that may be misleading, the routing information and the actual message itself. These two parts require separate inquiries and present different outcomes. Arguably, the message itself is the actual speech, while routing information, although possibly false, is not speech but, rather, a technical requirement of sending an e-mail that does not depend on truth of origin for it to be sent. Thus, a truthful message sent with false routing information would still need to be analyzed under the Central Hudson test because the message itself is not false or misleading.
On the other hand, an e-mail's delivery mechanism might bear the same speech characteristics as the e-mail message itself. Consider one's own experience. Upon opening one's inbox, a person might erase messages with an unrecognized name or e-mail return address. Speech is that which transports ideas. False routing information represents an idea, the idea that this e-mail is spam. Under this rationale, routing information is speech, and its truth or falsity would bear on whether or not a court advances past the first prong of the Central Hudson test. If a court treats both the message and the routing information as speech, then both would need to be unlawful or misleading to fail the first prong of the test.
Courts may be reluctant to find spam unlawful or misleading under the first prong of Central Hudson for another reason. The North Carolina statute requires that a false or misleading e-mail also violate an ISP's...
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