Washington Court Expands Liability for Misleading Retail Emails

In response to a federal court’s request to answer a certified question, the Washington Supreme Court recently interpreted the state’s Commercial Electronic Mail Act to prohibit any false or misleading information in the subject line of a commercial email.

With consumer class actions spiking around the country, and with other states having similar or identical laws on the books, this could open another litigation trap for the countless businesses who rely on email to drive sales.

Court’s Decision

Washington’s statute prohibits sending commercial emails that contain “false or misleading information in the subject line.” The gist of Brown v. Old Navy, LLC, is that only the subject line matters—even if the body of the email says otherwise, has disclaimers, waivers, etc.

In the suit against Old Navy, plaintiffs challenged subject lines such as “Today Only!” and “Three Days Only!”, arguing they improperly created a false sense of urgency because the underlying promotions extended beyond those deadlines.

Old Navy argued CEMA targeted only subject lines that misled recipients about an email’s commercial nature—the substance of the email. The state Supreme Court disagreed, holding that any materially misleading subject line can violate the statute, regardless of the contents. The court based its conclusion on what it called the “plain meaning” of the statute.

The decision drew a narrow safe harbor for “puffery” but found that specific claims about timing, price, or availability are actionable. Notably, each CEMA violation comes with a $500 per email penalty—regardless of actual harm. In response to Old Navy’s point that this reading of the statute could lead to a multibillion-dollar exposure, the court retorted that such a result was “the plain consequence of a clear statute.”

After the Washington Supreme Court answered the certified question, Old Navy filed a motion to dismiss contending that the Washington Supreme Court’s interpretation of CEMA is preempted by the federal CAN-SPAM Act.

Specifically, CAN-SPAM preempts state laws that “expressly regulate the use of electronic mail to send commercial messages,” except to the extent those laws prohibit “falsity or deception.” Old Navy argues that the plaintiffs failed to plead a theory of liability based on material misstatements, hence their claim is preempted. Plaintiffs argue that CAN-SPAM’s “savings clause” covers their CEMA claims. The motion is fully briefed and awaiting the court’s decision.

Comparable Statutes

Recent filings of lawsuits based on allegedly deceptive or misleading email subject lines creates a daunting threat to retailers. Washington isn’t alone in having legislation directed at email subject lines.

Several states similarly regulate deceptive subject-line content (sometimes under their own versions of CEMA), creating the possibility for far-ranging risk. For example, Florida has a very similar statute prohibiting commercial emails containing “false or misleading information in the subject line” (the same verbiage as Washington’s CEMA) and similar $500 per email penalties plus attorney fee exposure. Florida courts have read this statute broadly.

California has a statute banning email subject lines that are “likely to mislead” recipients “about a material fact regarding the contents or subject matter of the message.” While California’s law isn’t limited to the subject line, California courts have already ruled the statute is not preempted by CAN-SPAM—and California courts generally construe consumer statutes favorably toward consumers.

The situation in Washington may not be an outlier, and prudent retailers should adjust their email marketing strategies without delay.

This includes ensuring that any sale timelines promoted in the subject line are valid and not subject to extension, and confirming that any reference prices in email subject lines were prices that were prevailing for a reasonable period of time over the past 90 days (e.g., if an email promotes 40% off, the undiscounted price must have been the actual price charged).

For national retailers, the immediate challenge is practical: ensuring email subject lines survive scrutiny under various state statutes. Some states have laws regulating commercial emails, although many of these states laws—unlike California—were found to be preempted by CAN-SPAM. Given that retail marketing is typically done on a nationwide basis, prudent retailers should ensure compliance with the more restrictive state laws.

Even if Old Navy’s preemption defense succeeds, plaintiffs’ attorneys (and possibly state attorneys general) may continue to assert claims under similar laws, potentially wreaking havoc on prevalent digital marketing practices.

Whether CAN-SPAM preempts Washington’s expansive interpretation of CEMA is uncertain, and the District Court’s opinion will probably not be the final word. But the message for retailers is clear: Subject-line truthfulness is a new compliance minefield.

With the holiday season approaching and the influx of electronic marketing messages, retailers need to be vigilant regarding the subject lines and/or contents of any email blasts to ensure they are in no way misleading or deceptive.

A single national email blast might generate substantial sales, but it might also generate massive exposure. Until there is clear legal authority blocking this type of lawsuit, subject-line creativity should yield to caution. Failure to do so may result in per se liability of $500 per email—far exceeding any benefit of the promotional email.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Ellen Robbins is partner at Akerman and focuses her practice on a wide variety of complex commercial disputes.

Scott Allbright is special counsel for Akerman and concentrates on complex issues affecting public and private companies.

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