District Court (Cal.) Says State Law Anti-Spam Rule Conferred Article III Standing, Plaintiff’s Protestation to Remand Notwithstanding

In Lynch v. Aml Network, No. CV 21-3574-GW-RAOx, 2021 U.S. Dist. LEXIS 187234, at *11-14 (C.D. Cal. Sep. 27, 2021), Judge Wu kept jurisdiction over a state-law anti-spam case, disagreeing with the Plaintiff that he did not have Article III standing.

Findings (e) and (h) explicitly compare the harms caused by spam emails to injuries caused by junk faxes and spam telephone calls, which (as discussed above) the Ninth Circuit has recognized as injuries in fact sufficient to confer Article III standing. See Van Patten, 847 F.3d at 1043. As this Court recognized in a substantially similar case, “[t]he legislative findings support the conclusion that Cal. Bus. & Prof. Code § 17529.5 codifies a substantive right to be protected from spam, and that a person who is the subject of a violation of that right sustains injuries including lost productivity and resources, annoyance, consumption of valuable digital storage space and financial costs.” Durward v. One Techs. LLC, No. CV 19-6371-GW-AGRX, 2019 WL 4930229, at *8 (C.D. Cal. Oct. 3, 2019) (quoting Silverstein v. Keynetics, Inc., No. LACV1804100JAKAGRX, 2018 WL 5795776, at *9 (C.D. Cal. Nov. 5, 2018)). Plaintiffs’ argument that an economic injury needs to be alleged for Article III standing in a false advertising case is unavailing here. For one, Plaintiffs’ assertion relies on Reid v. Johnson & Johnson, 780 F.3d 952 (9th Cir. 2015), but that case addresses injury in fact under California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200-10, False Advertising Law (“FAL”),  Cal. Bus. & Prof.Code §§ 17500-09, and Consumer Legal Remedies Act (“CLRA”), Cal. Civ.Code §§ 1750-84. See Reid, 780 F.3d at 957. The statutes at issue there are consumer protection laws, which of course require that a plaintiff be a consumer and have “paid more for a product than they otherwise would have paid, or bought it when they otherwise would not have done so.” Id. at 958. The provision at issue in this case is not so limited: a purchase is not a prerequisite to suffering the harms of spam emails detailed in § 17529. In this same vein, Plaintiffs’ argument also fails because it misidentifies the injury. The substantive right § 17529.5 is protection from unwanted spam emails — not necessarily protection from financial harm. An economic injury would be sufficient to show an injury in fact, but it is not necessary.  Plaintiffs also assert that because they seek only statutory damages, not actual damages, their allegations do not sufficiently allege an injury in fact. But the Court would conclude that this, too, is based upon the flawed premise that § 17529.5 – including the provision for statutory damages of $1,000 per email — is not a substantive provision. Plaintiffs’ first claim includes allegations that Plaintiffs received “at least 1,107 spams between November 2018 and December 2020 inclusive” [*13] and that “[e]ach and every spam had materially misrepresented and/or deceptive information contained in or accompanying the headers in violation of Business & Professions Code § 17529.5(a)(2), due to the use of misrepresented From Names and/or From Email Addresses containing domain names registered so as to not be readily traceable to the sender.” Complaint ¶¶ 26, 53. And Plaintiffs’ second claim includes allegations that “Defendants advertised in unlawful spams sent to the email addresses of Plaintiffs in California” and “Plaintiffs are informed and believe and thereon allege that 121 of the spams contains or is accompanied by a third-party’s domain name without the permission of the third party in violation of Business & Professions Code § 17529.5(a)(1).” Id. ¶¶ 75, 76. The transmission and receipt of these emails — as alleged by Plaintiffs — constitutes an injury in fact sufficient confer Article III standing. See Silverstein, 2018 WL 5795776, at *9 (“Cal. Bus. & Prof. Code § 17529.5 ‘identifies a substantive right … that suffers any time’ a prohibited spam message is transmitted.” (quoting Eichenberger, 876 F.3d at 983)). Nor does the Supreme Court’s recent decision in TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), disturb this conclusion. In that case, a class of 8,185 people sued a credit reporting agency, claiming that TransUnion failed to use reasonable procedures to ensure the accuracy of the class members’ credit files. TransUnion, 141 S. Ct. at 2200. But even assuming the inaccuracies in the files, the Supreme Court nonetheless held that only the 1,853 class members whose data was transmitted to third-party businesses had Article III standing. Id. That logic would support the conclusion in this case. The reasonable-procedures claim in TransUnion alleged only a “bare procedural violation, divorced from any concrete harm[.]” Spokeo I, 136 S. Ct. at 154. Because the 6,332 class members whose data had not been transmitted to third parties could not allege a procedural violation and the requisite concrete injury, they “did not suffer a concrete harm.” TransUnion, 141 S. Ct. at 2212. In essence, the Supreme Court reaffirmed its holding in Spokeo I, more clearly delineating between purely procedural violations (even if egregious) and substantive ones. Here, § 17529.5 is a substantive provision, not a procedural one. Thus, the allegation that Defendant violated § 17529.5 by sending spam emails to Plaintiffs sufficiently establishes an injury in fact; no other allegations of harm are necessary.