Who Takes The Hit? Vendor Not Liable For 'Fraudulent' Emails, Court Rules

Dismissed. That was the happy word used in a ruling last week in a case against the email vendor Sauphtware, Inc. , doing business as Panda Mail.

Responding to a motion from the company, U.S. District Judge Maxine M. Chesney ruled that an email sender like Panda Mail cannot be held liable for a allegedly fraudulent email sent by a client.

This has “significant ramifications going forward,” says Damian M. Moos, an attorney with the firm of Best Best & Krieger LLP in Irvine, CA, representing Panda Mail. “It’s potentially a game changer depending on how things shake out.”

How so? “There’s no longer a basis for direct liability against you if you linked up advertiser and mailer or simply sent an email,” Moos explains.

It remains to be seen whether this holds — vendors are under increasing pressure to conduct due diligence when taking on clients. But Chesney noted that there is no set body of law in this area.



“Neither party has cited a case that expressly addresses the issue present, nor has the Court located any such authority,” she wrote.

The case started last December when a group of plaintiffs filed suit in the Superior Court for California. It is not a class action.

The complaint alleges that Fluent Inc. and/or other entities sent 1,300 “unlawful and unsolicited” emails. It also charges that the emails misrepresent who the purported spams were from, allegedly using names such as:

  • “Gift Card Rewards”
  • “Thank You”
  • “Congratulations”
  • “Thank You Facebook Survey Rewards”
  • “Promotional Survey” 

The complaint continues that there were falsified subject lines, such as:

  • “Being Cleared: $350 Check.” (there was no such check, it says.
  • “You Win $100 From CVS Pharmacy.” 
  • “Congratulations, Here’s Your $1,000 Walmart Gift.”

Also listed as defendants in the case were several “senders” or “publishers” of email, including Panda Mail.

The plaintiffs claim that Panda Mail sent “at least 75 of the spams at issue in this action,” using a variety of domain names. They also accuse several other email “publishers” of sending such messages.

The case has bounced between state and federal courts, and is now in the U.S. District Court for the Northern District of California. 

Apparently, the court has not yet determined whether the emails are fraudulent, but it has absolved Panda Mail of wrongdoing, finding that that “the complaint fails to state a claim” against it.   

The relevant California law — California Business & Professions Code section 17529.5 — states that it is unlawful to advertise in an email if: 

  • “The email ad is accompanied by a third-party domain name without the permission of the third party 
  • “The email ad contains falsified, misrepresented, or forged header information.
  • “The ad has a subject line that the person knows would be likely to mislead a recipient.

According to the judge, the plaintiffs fail to allege that Panda Mail advertised in any of the challenged emails; thus, it has no liability. 

As for Panda Mail’s alleged spam processing, Chesney noted that the legislature chose to prohibit the acts identified in the law only when committed by an advertiser. 

The usual inference to be drawn “is that the legislature did not intend a sender of a commercial email, unless such sender is also an advertiser to be liable under spam processing,” she concluded.

That means at least one defendant is happy today. Moos does not represent the other vendors in the case, but it is likely they will file similar motions.

Of course, the plaintiffs can also come back with an amended complaint — indeed, they are being allowed to make some changes on other issues. But for now, Panda Mail has won. And lawyers around the business can chew on the decision.

There was no comment at deadline from Daniel L. Balsam, the attorney for the plaintiffs, reportedly a seasoned hand in anti-spam cases. 

2 comments about "Who Takes The Hit? Vendor Not Liable For 'Fraudulent' Emails, Court Rules".
Check to receive email when comments are posted.
  1. Chuck Lantz from, network, September 26, 2017 at 6:01 p.m.

    I guess this means I'm not guilty of any crime if I just drive the getaway car during a bank robbery?

  2. Dick Johnson from NA replied, September 30, 2017 at 4:39 a.m.

    Obviously not if you're just a taxi driver and you were not aware your passanger was about to rob a bank...

Next story loading loading..