Be Warned of the “Professional Plaintiff”

A client recently received the ultimate “shakedown” letter—claiming violation of the California CAN-SPAM law as a result of getting eight emails, demanding $80,000 in statute-mandated damages, yet willing to settle for $2400. Unfortunately, this has become a cottage industry. The California law has a private right of action that has been taken advantage of by a few noteworthy legal vigilantes. Their actions have created a template for the “shakedown.”

[Editor’s Note: Gary Hennerberg is traveling this week, but attorney Peter Hoppenfeld has stepped in to supply this week’s blog.]

A client recently received the ultimate “shakedown” letter—claiming violation of the California CAN-SPAM law as a result of getting eight emails, demanding $80,000 in statute-mandated damages, yet willing to settle for $2400.

Unfortunately, this has become a cottage industry. The California law has a private right of action that has been taken advantage of by a few noteworthy legal vigilantes. Their actions have created a template for the “shakedown.”

To add insult to injury, the “professional” victim opted-in herself for each of the lists that she claims issued a spam email. I’m fairly sure that she probably has a cyber-ambulance chasing attorney ready to pounce on a contingency basis.

What do you do?

The American Corporate Counsel Association has issued a white paper that is very helpful. Seems like the SPAM demand toolkit left out one key defense—if your ISP has reasonable processes in place to prevent spamming, the statutory damages in California are reduced from $1000 to $100 per occurrence.

Quoting my letter:

First, it is clear that you are following a textbook (albeit outdated) approach of a “professional plaintiff” under the California anti-spam law. Attached is a copy of a White Paper prepared by the Association of Corporate Counsel that clearly rebuts each and every point that you have raised in an attempt to coerce my client to pay you monies.

We are in possession of proof that you opted into a number of email lists as proof that these emails are not unsolicited. Even if unsolicited, all of my client’s emails contain compliant opt-out links and you have not elected to take advantage of that option.

The element of the California law that you conveniently ignored is Section 17529.8 which reduces the potential statutory damages to $100 per occurrence. Please note:

” … working with reputable email service providers (ESPs), advertisers can be more confident that recipients did opt-into receive commercial email. ESPs generally maintain or can produce evidence of each opt-in, in the form of IP address from which the consumer opted-in, date/time stamp of opt-in, and other information. {NOTE: ALL IN OUR POSSESSION.}

While plaintiffs may contest the veracity of such evidence in a proceeding, once the evidence is produced, the burden to show it is inaccurate generally shifts to the plaintiff [NOTE: WE ARE UNAWARE OF ATTORNEYS WHO WILL TAKE A MATTER ON CONTINGENCY WHEN THERE ARE BURDENS OF PROOF SUCH AT THIS.}

More importantly, statutory damages under the Code of $1,000 for each spam are reduced to $100 for each spam, when there is evidence that a defendant established and implemented practices and procedures reasonably designed to effectively prevent spamming. {NOTE: SUCH PRACTICES AND PROCEDURES ARE IN PLACE.}

Accordingly, we deem your demand a “shake down” and a nuisance, and to save time and expense offer you the sum of $800 in full and final settlement of this matter. No monies will be provided to you unless you agree in writing: that no Spam violation took place; to maintain the terms of this arrangement confidential; and to agree to a penalty of $10,000 if it is determined that in the future you are engaged in any attempt to assist others to assert this type of claim against my client.

The matter settled, but the complainer remained indignant. Unbelievable.

Key takeaways:

  • Have a complete understanding of the CAN-SPAM laws.
  • Use an identifiable “from” email, a non-deceptive subject line, include a physical address, provide for an opt-out link and remove people who opt-out within 10 days.
  • Even more importantly, if affiliates are mailing for you, make sure they “scrub” their lists against your Suppression list.

Good Luck All. It’s a jungle out there.

Peter Hoppenfeld is an attorney and adviser in the representation of direct marketers, speakers, authors, information marketers, “thought leaders,” entrepreneurs and domestic and international training companies and their founders. Reach him at peterhoppenfeld.com.

Melissa Campanelli’s The View From Here: What Marketers Can Learn From Divorce Attorneys

This week, I learned an interesting statistic about social networks: Eighty-one percent of the nation’s top divorce attorneys have seen an increase in the number of cases using social networking evidence during the past five years, according to a survey published earlier this year by the American Academy of Matrimonial Lawyers. What’s more, Facebook holds the distinction of being the unrivaled leader for online divorce evidence, with 66 percent citing it as the primary source, according to the survey.

This week, I learned an interesting statistic about social networks: Eighty-one percent of the nation’s top divorce attorneys have seen an increase in the number of cases using social networking evidence during the past five years, according to a survey published earlier this year by the American Academy of Matrimonial Lawyers. What’s more, Facebook holds the distinction of being the unrivaled leader for online divorce evidence, with 66 percent citing it as the primary source, according to the survey.

The main reason divorce attorneys use social networks is to track any possible contradictions to previously made statements and promises by estranged spouses. Apparently, it’s relatively easy for lawyers to gather this information, at least according to a June 1 article on CNN.com.

“It’s becoming all but impossible to protect your information, unless you spend hours and hours figuring it out,” said Lee Rosen, a divorce attorney in North Carolina, in the CNN.com article.

To be fair, Facebook has acknowldedgd that it’s gradually relaxed privacy settings over the last year, enabling some members’ personal details to be leaked without users realizing it. And, as a result, last month it announced new tools that make it easier for users to tighten privacy settings and block outside parties from seeing personal information.

Still, lawyers are relying on the sites and other social tools for gathering evidence. According to the CNN article, for example, they’re accessing sites such as Flowtown.com, which allows them to enter a peron’s email address into the site, and the site returns various social media profiles on that person.

I thought this sounded interesting, so I investigated. It seems that Flowtown was co-founded in January 2009 by Ethan Bloch, a serial entrepreneur who founded his first business at the tender age of 13.

Flowtown, according to its website, is a “platform that businesses use to connect with their customers everywhere in the social web. Companies like Facebook, Twitter, LinkedIn and MySpace have made it standard practice, for all of us, to publicly share information about ourselves. Flowtown helps make sense of all this data and turns it into meaningful output in the form of stronger business relationships.”

I thought I’d give it a whirl. I registered on the site (it took all of 60 seconds), added a few of my personal email addresses, and bam, within seconds my Facebook, Twitter and LinkedIn profiles appeared. While it took me aback, it made me realize what a powerful tool this could be for marketers.

Imagine importing entire email lists into your system and getting access to thousands of customers’ social networking profiles. This information could be used to track which customers are key influencers talking about your brand (or your competition), as well as what your customers’ interests are.

What do you think? Have you ever used Flowtown.com? Let me know by posting a comment below.