E-Commerce Law Week, Issue 434

Librarian Encourages Talking -- on Cell Phones

Most of us are accustomed to librarians saying "SHHHHH!"  But the Librarian of Congress has actually taken a step to encourage more talking, and on cell phones no less.  That at least is one upshot of a recent rule promulgated by the Librarian under the Digital Millennium Copyright Act (DMCA), which exempts persons who bypass wireless carriers' software locks for the purpose of switching networks from the DMCA's prohibition on the "circumvention" of "technological measures" designed to protect copyrighted works.  The Librarian's rule, based on a rulemaking conducted by the Register of Copyrights, is intended to ensure that the statute does not "adversely affect[]" individuals' "ability to make noninfringing uses ... of a particular class of copyrighted works."  In this, the third such rulemaking, the Librarian rejected one existing exemption, upheld three others, and carved out three new exemptions.  The cell phone rule should make it easier for consumers to use their existing phones when they switch carriers and could reduce some of the disincentives to switching carriers.  It could also reduce the demand for new cell phones in the short term.  Over the long-term, it may just mean that cell phone manufacturers will compete more on the basis of quality and innovation and less on their ability to strike deals with carriers.

Court Rules That GLBA Does Not Bar Disclosures in Response to Civil Subpoena

Under the Gramm-Leach-Bliley Act, financial institutions are prohibited from "disclos[ing] to a nonaffiliated third party any nonpublic personal information" received from a consumer, unless that consumer is notified and given the opportunity to opt out.  But the GLBA provides several exceptions to this rule, including disclosures for the purpose of complying with "judicial process" and responding to government regulators.  Less clear, however, has been whether that exception extends to disclosures in response to a civil subpoena.  According to the highest courts in West Virginia and Alabama, and federal district courts in Texas and West Virginia, it does.  And, in last month's decision in Capital One Services Inc. v. Page, the Supreme Court of Mississippi agreed, finding that "the GLBA [did] not prohibit the strictly limited disclosure of the names and addresses of other Mississippians" ordered by a lower court.  Although Capital One had argued against this result, the court's decision is not necessarily bad for financial institutions, since it eliminates what otherwise would have been a recurring conflict between the nondisclosure requirements of the GLBA and the production requirements of civil subpoenas.

Fourth Circuit Finds that CAN-SPAM Preempts State Law Barring "Immaterial Errors" in Commercial Emails

The Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act of 2003 establishes substantive and procedural requirements for companies that send out commercial emails, outlawing false or misleading "from" lines and deceptive "subject" lines and requiring methods for recipients to "opt out" of future emails.  CAN-SPAM preempts state laws regulating commercial emails "except to the extent [such laws] prohibit[] falsity or deception in any portion of a commercial electronic mail message."  This carve out for state laws has occasionally proven a burden to companies that send bulk emails, as they need to determine what different state laws apply to email solicitations.  But a recent decision of the Fourth Circuit gives companies a little more running room.  In Omega World Travel, Incorporated, v. Mummagraphics, Incorporated, the court held that to the extent a state law creates liability for "immaterial errors" in commercial emails, that law is preempted.  Interestingly, the court noted that if such state laws were not preempted, they might run afoul of the "dormant Commerce Clause" of the U.S. Constitution because of the burdens they would impose on interstate commerce.

Questions and comments about E-Commerce Law Week are always welcome.  Please send your feedback to Sally Albertazzie.