Utah Legislators Want Marketer-Friendly Amendment to Spam Law

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Aiming to stem a flood of "unjust and abusive" anti-spam lawsuits filed by two Utah law firms, two state legislators have asked Gov. Michael O. Leavitt to include amending the state's anti-spam legislation in a list of issues to be tackled at a special session.


In Utah, special sessions are held at the governor's discretion. Sources expect the governor to call for one in June.


In a letter dated April 16, Al Mansell, the president of the Utah Senate, and Martin R. Stephens, speaker of the Utah House of Representatives, claim that "Utah's current 'Unsolicited Commercial and Sexually Explicit Email Act' has resulted in the proliferation of over 1,500 lawsuits in the last 10 months. Two Utah law firms are taking unfair advantage of our legal system."


The law firms to which the letter refers are Nelson, Snuffer, Dahle & Poulsen PC, Sandy, UT, and Riddle & Associates PC, a Draper, UT, collections agency.


"We understand that there are no other states where even 10 lawsuits have been filed under anti-spam statutes except in Utah," the letter said.


Utah's anti-spam law, which took effect May 6, 2002, requires senders of unsolicited commercial e-mail to include in their mailings a correct name and address, a valid return address and domain, and "ADV:" to be the leading four characters of the e-mails' subject lines. Violators are subject to penalties of $10 per e-mail, up to $25,000 per day.


Lawyers defending companies against the hundreds of anti-spam suits filed in Utah have characterized them as cynical attempts by the two law firms to get money out of companies that would rather settle than fight an expensive court battle. Defendants' lawyers and Mansell and Stephens cite the plaintiffs' standard four-figure settlement offers to defendants as evidence that the suits are just a cynical money grab.


"[P]laintiff attorneys are demanding $6,500 in settlement money for each lawsuit," the Utah legislators' letter to the governor said. "These lawsuits are deliberately designed to capitalize on the fact that it is more expensive to go to court than to settle."


Jesse Riddle, president of Riddle and Associates, has denied this charge.


He has said that the reason for the massive filings was to send a message to e-mail marketers that they had better comply with Utah's anti-spam law. As evidence that the suits are not simply a vehicle for short-term cash, he said that some companies who presented defensible positions, including Symantec Corp., also offered to settle, but the plaintiffs declined and dropped the suits anyway.


Among the high-profile companies being sued in Utah are Columbia House, eBay, FTD, Office Depot, Bell South, Princess Cruises and Publishers Clearing House.


In March, Judge Denise Posse Lindberg of the Third Judicial Court in and for Salt Lake County, where all of Utah's anti-spam lawsuits are filed, dismissed one against Sprint citing the state law's prior business relationship exemption.


Meanwhile, around that time a bill was introduced in Utah's 2003 legislative session to limit lawsuits against "legitimate" e-mail marketers. It passed Utah's Senate unanimously.


"The bill was reported out favorably by the House standing committee and was literally the last bill being heard when time ran out for the 2003 regular session. It was expected to pass easily in the House," the Utah legislators' letter said. "Governor, we ask for your help in stopping the continued proliferation of these unjust and abusive lawsuits against legitimate commercial marketers sending permission-based e-mails to Utah residents."


The sponsor of Utah's anti-spam law, Rep. Patrice Arent, also supports amending it.


However, any amendments would not be retroactive, said Steve Richter, partner at Goodman and Richter LLP, San Diego. Richter represents dozens of defendants in Utah's anti-spam suits.


However, he said, amending the bill in a special session called by the governor would send a message to Lindberg that may lead her to dismiss the anti-spam lawsuits pending in her court.


"We think she'll find in favor of the defendants," he said.


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