Rosolowski v. Bosley Medical Group CA2/3 ( 2014 )

Filed 11/20/14 Rosolowski v. Bosley Medical Group CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
GREG ROSOLOWSKI et al., B252278
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC499040)
v.
BOSLEY MEDICAL GROUP,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County,
Elihu M. Berle, Judge. Affirmed.
Law Offices of Morse Mehrban and Morse Mehrban for Plaintiffs and Appellants.
Doll Amir & Eley, Michael M. Amir and Johari N. Townes for Defendant and
Respondent.
_________________________
Plaintiffs and appellants Greg Rosolowski et al. (collectively, Plaintiffs)1 appeal
a judgment of dismissal following an order sustaining a demurrer interposed by defendant
and respondent Bosley Medical Group, A Medical Corporation (Bosley), to Rosolowski’s
first amended complaint without leave to amend.
The essential issue presented is whether Plaintiffs stated a cause of action for
violation of Business and Professions Code section 17529.5,2 on the theory that Bosley
sent them unsolicited commercial email advertisements purporting to be from “hair loss
solution”, “hair loss solution@yahoo.com”, “hair restoration”, “RestoreYourHair” and
“restore your hair”, which are not names or registered fictitious business names of
existing entities, and are not traceable to Bosley via a WHOIS database search.3
1
In addition to Greg Rosolowski, the plaintiffs and appellants are: Mark
Rosolowski, Blanca Ayala, Victor Saucedo, Mark Bates, Jose Estrada, Jimmy Jaramillo,
Mark Lewis, Gwen Aparente, Rustom A. Aparente, Jr., Heriberto Parada, Alfredo
Garcia, Sr., Shawn Monroe, Luis Marquez, Herbert Henry, Jennifer Rodman, Miriah
Rodman, Mary Ramirez, Cindy Rodman, Francisco Duarte, Angel Estrada, Irelia
Marquez, Luis Alberto Perez, Nina Zamora, Michelle Balansag, Erlinda Salonga,
Vanessa Vasquez, Celia Ruiz, Amy Palomino, Georgia Anderson, Brian Anderson,
Shontae Dunn, Alfredo Garcia, Jr., Nadine Balansag, Jeremy Balansag, Franz Balansag,
Roxanne Balansag, Jessica Lindsay, John Lindsay, Miguel Martinez, Julie Westfall, Matt
Boyster, Michael Matienzo, Barbara Matienzo and Esperanza Matienzo.
2
Business and Professions Code section 17529.5 states in relevant part at
subdivision (a): “It is unlawful for any person or entity to advertise in a commercial e-
mail advertisement either sent from California or sent to a California electronic mail
address under any of the following circumstances: [¶] (1) . . . [¶] (2) The e-mail
advertisement contains or is accompanied by falsified, misrepresented, or forged header
information. This paragraph does not apply to truthful information used by a third party
who has been lawfully authorized by the advertiser to use that information.” (Italics
added.)
Unless otherwise specified, all further statutory references are to the Business and
Professions Code.
3
WHOIS “is a publically available online database through which users can access
information regarding domains, including the registrant’s name, address, phone number,
and e-mail address. See Definitions, Implementation, and Reporting Requirements
2
We conclude no cause of action was stated for violation of section 17529.5,
subdivision (a)(2) (misrepresented header information) and affirm the judgment of
dismissal. We hold a header line in a commercial email advertisement does not
misrepresent the identity of the sender merely because it does not identify the official
name of the entity which sent the email, or merely because it does not identify an entity
whose domain name is traceable from an online database, provided the sender’s identity
is readily ascertainable from the body of email, as was the case here.4
FACTUAL AND PROCEDURAL BACKGROUND
1. Pleadings.
The gravamen of the allegations in the operative first amended complaint is that
Bosley sent Plaintiffs unsolicited commercial email advertisements which, instead of
identifying the sender as Bosley, indicated the sender was “hair loss solution”, “hair loss
solution@yahoo.com”, “hair restoration”, “RestoreYourHair” or “restore your hair”,
which are not names or registered fictitious business names of existing entities, and are
not traceable to Bosley via a WHOIS search.
The first amended complaint was filed on behalf of lead plaintiff Greg Rosolowski
and 44 individual coplaintiffs, who collectively sought to be class representatives to
represent a larger class. Copies of five of the allegedly offending emails were attached as
Under the CAN–SPAM Act, 70 Fed.Reg. 25,426, 25,446 n.233 (proposed May 12, 2005)
(to be codified at 16 C.F.R pt. 316). WHOIS data is compiled by registrars from
information submitted by registrants.” (Gordon v. Virtumundo, Inc. (9th Cir. 2009)
575 F.3d 1040, 1064, fn. 22.)
4
“California statutes do not define either the word ‘header’ or the phrase ‘header
information.’ [However,] the federal CAN–SPAM Act, which makes it unlawful to
initiate transmission of a commercial e-mail message that contains or is accompanied by
‘header information that is materially false or materially misleading’ (15 U.S.C.
§ 7704(a)(1)), defines ‘header information’ as ‘the source, destination, and routing
information attached to an electronic mail message, including the originating domain
name and originating electronic mail address, and any other information that appears in
the line identifying, or purporting to identify, a person initiating the message’ (15 U.S.C.
§ 7702(8)).” (Kleffman v. Vonage Holdings Corp. (2010) 49 Ca1.4th 334, 340, fn. 5
(Kleffman).)
3
exhibits to the pleading. For example, Exhibit A was an email “From: Hair loss
Solution@yahoo.com (Hair loss Solution@yahoo.com).”
2. Demurrer.
Bosley demurred, contending Plaintiffs’ claims, brought pursuant to section
17529.5, should be dismissed because they were preempted by federal law, specifically,
the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003
(15 U.S.C. § 7701 et seq.) (the CAN-SPAM Act).
Bosley further argued Plaintiffs failed to allege the emails at issue actually
contained false or misleading header information; Plaintiffs merely alleged the header
information was not traceable to Bosley via a WHOIS database search. However, the
recipients of the emails at issue would have “absolutely no doubt that the emails were
sent on behalf of Bosley and that they advertise Bosley’s services. Because the recipients
of these emails would be able to readily determine that the emails advertise Bosley’s
products and services, there is nothing in the content of these emails that is misleading.”
3. Opposition to demurrer.
In opposition, Plaintiffs argued the emails violated section 17529.5, subdivision
(a)(2), in that the names appearing on the “from” lines refer to nonexistent entities and
the names could not be traced to Bosley by way of an online database such as WHOIS.
Plaintiffs further contended their claims were not preempted by the federal CAN-
SPAM Act due to material deception in the header line, which concealed the identity of
the actual sender, namely Bosley.
4. Trial court’s ruling.
On August 6, 2013, the matter came on for hearing. The trial court sustained
Bosley’s demurrer to the first amended complaint without leave to amend, stating in
pertinent part:
“Bosley . . . asserts that Plaintiffs’ claims are preempted by the Federal CAN-
SPAM Act. . . . However, where, as Plaintiffs here allege, an unsolicited commercial
email employs a materially deceptive header, it may be actionable under § 17529.5.
4
[Citation.] Accordingly, this is not an appropriate basis upon which to sustain Bosley’s
demurer.
“Under Balsam v. Trancos [(2012) 203 Cal.App.4th 1083 (Balsam)], upon which
Plaintiffs rely, header information is falsified or misrepresented for purposes of Section
17529.5(a) when it ‘uses a sender domain name that neither identifies the actual sender
on its face nor is readily traceable to the sender using a publicly available online
database.’ . . . Here, the recipient of the emails in question would not even need to use a
publicly available online database to determine who sent the emails because the name
Bosley, the entity whose products and services are being advertised, appears prominently
in the body of the emails in question. Because a recipient could determine the identity of
the sender by merely opening the email in question, there is nothing deceptive about the
header itself. Accordingly, Plaintiffs have not stated a cause of action under §17529.5.
Further, the from names in the email headers that Plaintiffs allege are unlawful (‘hair loss
solution@yahoo.com’, ‘hair restoration’, ‘RestoreYourHair’, and ‘restore your hair’)
accurately describe the services offered [for] sale in the email advertisements by
[Bosley]. Because the headers accurately reflect the content of the emails, the headers
are not actionable under § 17529.5. . . . ”
“Plaintiffs’ counsel acknowledged at the hearing on this matter that if given an
opportunity to amend the First Amended Complaint, he could not state additional facts
that would avoid the impact of this ruling. Accordingly, Bosley’s demurrer is [sustained
without leave to amend].”
This timely appeal followed.
CONTENTIONS
Plaintiffs contend the operative first amended complaint stated facts sufficient to
state causes of action against Bosley for violation of section 17529.5, subdivision (a)(2)
(misrepresented header information), and their claims are not preempted by federal law.
5
DISCUSSION
1. Standard of appellate review.
In determining whether a plaintiff has properly stated a claim for relief, “our
standard of review is clear: ‘ “We treat the demurrer as admitting all material facts
properly pleaded, but not contentions, deductions or conclusions of fact or law.
[Citation.] We also consider matters which may be judicially noticed.” [Citation.]
Further, we give the complaint a reasonable interpretation, reading it as a whole and its
parts in their context. [Citation.] When a demurrer is sustained, we determine whether
the complaint states facts sufficient to constitute a cause of action. [Citation.] And when
it is sustained without leave to amend, we decide whether there is a reasonable possibility
that the defect can be cured by amendment: if it can be, the trial court has abused its
discretion and we reverse; if not, there has been no abuse of discretion and we affirm.
[Citations.] The burden of proving such reasonable possibility is squarely on the
plaintiff.’ [Citations.]” (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126,
italics added.) Our review is de novo. (Ibid.)
2. Overview of section 17529.5 and the CAN–SPAM Act.
a. Section 17529.5.
In 2003, “the California Legislature passed Senate Bill 186, which imposed broad
restrictions on advertising in unsolicited commercial e-mail advertisements sent from or
to a computer within California. [Citation.] According to the Legislature’s ‘findings and
declarations,’ the bill was adopted to address the ‘skyrocket[ing]’ costs and
‘annoyance[s]’ associated with ‘spam,’ which the statute defines as ‘unsolicited
commercial e-mail advertisements.’ [Citations.] The Legislature concluded that, to
effectively regulate the abuses associated with spam, it was necessary to target not only
the entities that send unsolicited commercial e-mail advertisements, but also the
advertisers whose products and services are promoted in those e-mails.” (Hypertouch,
Inc. v. Valueclick, Inc. (2011) 192 Cal.App.4th 805, 818.)
Section 17529.5 prohibits certain deceptive practices in commercial email and
states in pertinent part:
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“(a) It is unlawful for any person or entity to advertise in a commercial e-mail
advertisement either sent from California or sent to a California electronic mail address
under any of the following circumstances: [¶] (1) The e-mail advertisement contains or
is accompanied by a third-party’s domain name without the permission of the third party.
[¶] (2) The e-mail advertisement contains or is accompanied by falsified, misrepresented,
or forged header information.” (Italics added.)
Section 17529.5, subdivision (b), in turn, contains an enforcement provision that
permits the “Attorney General,” “an electronic mail service provider” or “a recipient of
an unsolicited commercial e-mail advertisement” to “bring an action against a person or
entity that violates any provision of this section.” (§ 17529.5, subds. (b)(1)(A)(i)-(iii).)
Section 17529.5, subdivision (b) also lists the remedies available under the statute,
which include “either or both of the following: [¶] (i.) Actual damages. [¶]
(ii.) Liquidated damages of one thousand dollars ($1,000) for each unsolicited
commercial e-mail advertisement transmitted in violation of this section, up to one
million dollars ($1,000,000) per incident.” (§ 17529.5, subd. (b)(1)(B).) The statute
further provides, however, that if the court finds the “defendant established and
implemented, with due care, practices and procedures reasonably designed to effectively
prevent unsolicited commercial e-mail advertisements that are in violation of this section,
the court shall reduce the liquidated damages . . . to a maximum of one hundred dollars
($100) for each unsolicited commercial e-mail advertisement, or a maximum of one
hundred thousand dollars ($100,000) per incident.” (§ 17529.5, subd. (b)(2).)
b. The CAN–SPAM Act.
Shortly after California adopted S.B. 186, Congress enacted the CAN–SPAM Act,
which, like S.B. 186, was passed “ ‘in response to mounting concerns associated with the
rapid growth of spam e-mails.’ [Citation.] The Act does ‘not ban spam outright, but
rather provides a code of conduct to regulate commercial e-mail messaging practices.
Stated in general terms, the CAN–SPAM Act prohibits such practices as transmitting
messages with “deceptive subject headings” or “header information that is materially
false or materially misleading.” [Citation.] The Act also imposes requirements regarding
7
content, format, and labeling. For instance, unsolicited e-mail messages must include the
sender’s physical postal address, indicate they are advertisements or solicitations, and
notify recipients of their ability to decline further mailings. [Citation].’ [Citation.]”
(Hypertouch, supra, 192 Cal.App.4th at p. 823.)
The CAN–SPAM Act “includes a provision that expressly preempts state statutes
that regulate the use of commercial e-mail ‘except to the extent that any such
statute . . . prohibits falsity or deception in any portion of a commercial [e-mail].’
(15 U.S.C. § 7707(b)(1).) The preemption clause reflects one of the primary goals of the
CAN–SPAM Act: to regulate commercial electronic mail ‘on a nationwide basis.’
(15 U.S.C. § 7701(b)(1).) As stated in the congressional findings accompanying the Act,
the federal statute was intended . . . ‘to implement “one national standard” [citation]’
regarding the content of commercial e-mail because ‘the patchwork of state laws had
proven ineffective.’ [Citation.]” (Hypertouch, supra, 192 Cal.App.4th at p. 824.)
3. The Kleffman decision.
In Kleffman, the California Supreme Court addressed “the scope of section
17529.5(a)(2), which makes it ‘unlawful . . . to advertise in a commercial e-mail
advertisement’ that ‘contains or is accompanied by falsified, misrepresented, or forged
header information.’ ” (Kleffman, supra, 49 Cal.4th at pp. 339-340, italics added.)
In Kleffman, as in the instant case, the plaintiff sued under section 17529.5(a)(2),
alleging Vonage, by and through its marketing agents, sent him 11 unsolicited email
advertisements for its broadband telephone services using “11 different domain names:
superhugeterm.com; formycompanysite.com; ursunrchcntr.com; urgrtquirkz.com;
countryfolkgospel.com; lowdirectsme.com; yearnfrmore.com; openwrldkidz.com;
ourgossipfrom.com; specialdlvrguide.com; and struggletailssite.com.’ These ‘11
different domain names [could] [all] be traced to a single physical address’ in Nevada
where Vonage’s marketing agent ‘is located.’ ‘None of these domain names provides
any indication to the recipient (or its spam filter) that the advertisement is from Vonage.’
Vonage’s ‘use of these multiple domain names . . . reduces the likelihood that an internet
service provider [ISP] will identify these . . . advertisements as spam and block them
8
before they reach the email inboxes of [plaintiff] and class members.’ ” (Kleffman,
supra, 49 Cal.4th at p. 338.)
The discrete issue addressed by the Supreme Court in Kleffman was whether
sending unsolicited commercial email advertisements from multiple domain names for
the purpose of bypassing spam filters constitute falsified, misrepresented, or forged
header information within the meaning of section 17529.5, subdivision (a)(2). (Kleffman,
supra, 49 Cal.4th at pp. 337, 339.) Kleffman concluded the use of multiple domain
names for the purposes of bypassing spam filters does not violate the statute.
At the outset of its analysis, Kleffman noted there was no dispute the domain
names used in the challenged emails “actually exist and are technically accurate, literally
correct, and fully traceable to Vonage’s marketing agents,”5 and the emails therefore
“neither contained nor were accompanied by ‘falsified . . . or forged header information’
within the meaning of section 17529.5(a)(2).” (Kleffman, supra, 49 Cal.4th at p. 340,
italics added.) The parties agreed the issue was whether the emails contained or were
accompanied by “ ‘misrepresented . . . header information’ ” within the meaning of that
subdivision. (Kleffman, supra, at p. 340, italics added.) The plaintiff argued the domain
names, while not actually false, were “misrepresented” because their random, garbled,
and nonsensical nature created a misleading or deceptive impression the emails were all
from different entities when in fact they were all from Vonage via a single marketing
agent. (Id. at pp. 341-342.)
Based on a close reading of the text and legislative history of the statutory
language in issue, the Supreme Court rejected the plaintiff’s argument the word
“misrepresented” in section 17529.5, subdivision (a)(2) means “ ‘misleading’ ” or
“ ‘likely to mislead.’ ” (Kleffman, supra, 49 Cal.4th at pp. 342-345.) The court found the
Legislature did not intend subdivision (a)(2) “generally to prohibit the use of multiple
5
We make the observation that a typical recipient of email would not attempt to
search the WHOIS database for the sender’s identity before deciding whether to open an
email. Be that as it may, this court is not writing on a clean slate in this area.
9
domain names.” (Kleffman, supra, at p. 345.) Thus, as the plaintiff in Kleffman
conceded, the mere use of multiple domain names did not “ ‘in and of itself’ ” violate
subdivision (a)(2). (Kleffman, supra, at p. 345.)
Kleffman further found the use of a domain name in a single email that
“does not make clear the identity of either the sender or the merchant-advertiser on
whose behalf the e-mail advertisement is sent” is not prohibited by section 17529.5,
subdivision (a)(2). (Kleffman, supra, 49 Cal.4th at p. 345.) Kleffman determined such
use does not in fact make any representation, express or implied, regarding the email’s
source. (Id. at pp. 345-346.) Kleffman also concluded that construing the statute
otherwise would raise a substantial question with regard to federal preemption.
(Kleffman, supra, at p. 346.)
While expressly declining to define the full scope of the statutory phrase
“ ‘misrepresented . . . header information,’ ” Kleffman concluded: “[A] single e-mail
with an accurate and traceable domain name neither contains nor is accompanied by
‘misrepresented . . . header information’ within the meaning of section 17529.5(a)(2)
merely because its domain name is . . . ‘random,’ ‘varied,’ ‘garbled,’ and ‘nonsensical’
when viewed in conjunction with domain names used in other e-mails. An e-mail with an
accurate and traceable domain name makes no affirmative representation or statement of
fact that is false . . . [and] . . . cannot reasonably be understood to be an implied assertion
that the source of that e-mail is different from the source of another e-mail containing a
different domain name.” (Kleffman, supra, 49 Cal.4th at pp. 346-347 & fn. 11.)
10
4. Irrespective of the allegedly untraceable domain names herein, the identity of
the sender was readily ascertainable from the body of the emails; therefore, Plaintiffs
failed to state a cause of action against Bosley for misrepresented header information
under section 17529.5, subdivision (a)(2).
The instant case presents a different factual scenario from the one addressed by the
Supreme Court in Kleffman in a critical respect. In Kleffman, it was undisputed “the
domain names used to send Vonage’s e-mail advertisements, and reflected in the header
information of these e-mail advertisements, actually exist and are technically accurate,
literally correct, and fully traceable to Vonage’s marketing agents.” (Kleffman, supra,
49 Cal.4th at p. 340.)
Here, in contrast, Bosley used domain names (“hair loss solution”, “hair loss
solution@yahoo.com”, “hair restoration”, “RestoreYourHair” and “restore your hair”)
which were not traceable to Bosley. On demurrer, accepting these properly pleaded facts
as true (Czajkowski v. Haskell & White, LLP (2012) 208 Cal.App.4th 166, 173), Plaintiffs
alleged said names “are not names of existing companies or persons, there are no such
entities or persons, and no such entities or persons are registered as fictitious business
names.” Further, the purported senders “were not the people or entities advertising in the
emails. The domains from which these emails originated were not traceable to [Bosley].
A WHOIS search would not identify [Bosley] as the registrant of the domains from
which the emails originated.”
The Kleffman court did not specify what is meant by a traceable domain name.
It simply stated all 11 emails at issue could be “traced” to a single physical address in
Nevada where Vonage’s marketing agent was located. (Kleffman, supra, 49 Cal.4th at
p. 338.) There, it was undisputed “the domain names used to send Vonage’s e-mail
advertisements, and reflected in the header information of these e-mail advertisements,
actually exist[ed] and [were] technically accurate, literally correct, and fully traceable to
Vonage’s marketing agents.” (Id. at p. 340.)
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a. The Balsam decision.
Unlike Kleffman, where all of the domain names were accurate and traceable to
the sender, in Balsam, supra, 203 Cal.App.4th 1083, “the domain names were not
traceable to the actual sender. The header information [was] ‘falsified’ or
‘misrepresented’ because Trancos deliberately created it to prevent the recipient from
identifying who actually sent the message. Thus, the nonsensical domain name
‘misstepoutcome.com’ neither disclose[d] Trancos’s name nor [could] it be linked to
Trancos using any public database. While, as Kleffman states, an e-mail with an accurate
and traceable domain name makes no affirmative representation or statement of fact that
is false, an e-mail with a made-up and untraceable domain name affirmatively and
falsely represents the sender has no connection to Trancos.” (Balsam, supra,
203 Cal.App.4th at p. 1098, certain italics added.)
Balsam concluded Kleffman should be “read . . . commonsensically . . . to mean
that a domain name is ‘traceable’ to the sender if the recipient of an e-mail could
ascertain the sender’s identity and physical address through the use of a publicly
available database such as WHOIS.” (Balsam, supra, 203 Cal.App.4th at p. 1098.)
Balsam “express[ed] no judgment about other circumstances in which (1) header
information might be falsified or misrepresented for purposes of the statute, or (2) the
presence of other information identifying the sender in the body of the e-mail could affect
liability under the statute.” (Balsam, supra, 203 Cal.App.4th at p. 1101, fn. 17, italics
added; accord Asis Internet Services v. Subscriberbase Inc., No. 09-3503 SC, 2010 WL
1267763 (N.D.Cal. April 1, 2010) at p. 5 [“A finder of fact may therefore reasonably
consider the body of an email or a hyperlinked page in determining whether
misrepresentations in the subject lines were actually material”].)
b. Body of the emails was sufficient to enable recipient to identify
Bosley as the sender.
Guided by the above, we turn to the facts of the instant case. Although the identity
of the sender of the subject emails in the “from” line could not be ascertained through the
use of a publicly available database such as WHOIS, the body of the emails was
12
sufficient to enable the recipient to identify Bosley as the sender. The emails on their
face were advertisements for Bosley’s hair restoration services. The emails provided a
hyperlink to Bosley’s website, and provided an unsubscribe notice as well as a physical
address in Beverly Hills, California. Plaintiffs cannot plausibly allege that Bosley
attempted to conceal its identity, as the clear purpose of the emails was to drive traffic to
Bosley’s website. The complaint concedes as much, in that it alleged if a “recipient
clicks in an email’s body, a link takes him to [Bosley’s] website where he is encouraged
to get hair transplants from [Bosley].”
Giving section 17529.5, subdivision (a)(2) a commonsense reading, as did the
Balsam court, we conclude a header line does not misrepresent the identity of the sender
merely because it does not identify the official name of the entity which sent the email, or
merely because it does not identify an entity whose domain name is traceable via a
database such as WHOIS, provided the sender’s identity is readily ascertainable from the
body of the email, as was the case here.
5. Issue of federal preemption not reached.
Because we conclude Plaintiffs failed to state sufficient facts to allege violation of
section 17529.5, subdivision (a)(2) (misrepresented header information), it is unnecessary
to address Bosley’s argument the CAN-SPAM Act preempts Plaintiffs’ claims. (See
Martin v. PacificCare of California (2011) 198 Cal.App.4th 1390, 1409 [“Because we
conclude [Health & Safety Code] section 1371.25 bars the Martins’ claims, we do not
reach the question whether the Medicare Act preempts the Martins’ claims”].)
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DISPOSITION
The judgment of dismissal is affirmed. Bosley shall recover its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
KLEIN, P. J.
We concur:
KITCHING, J.
ALDRICH, J.
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