Is Utah Taxing E-Mail?

Disclosure - this post is about a case I am handling as co-lead counsel.

My law firm filed a lawsuit on November 17, 2005 on behalf of the Free Speech Coalition (FSC) against the state of Utah to enjoin an e-mail registry statute which requires companies to pay a "per e-mail address fee" every thirty days or risk criminal charges.

We filed the lawsuit in federal district court in Salt Lake City, Utah, challenging the constitutionality and legality of that state’s “e-mail registry” law, which went into effect July 15, 2005.The complaint alleges that the Utah statute criminalizes the sending of adult oriented email advertisements (for example text that includes ads for beer and wine) to any email address that is listed in the registry for more than 30 days. It also provides criminal, administrative and civil enforcement mechanisms, and requires email marketers to “scrub” their lists against the registry for a per-scrub fee of $0.005 per e-mail address on the company's list regardless of whether a single e-mail address matches the Utah registry. Plaintiff is claiming that regardless of the "label" the Utah statute is nothing more than an expensive opt-out list and preempted by the Federal Can-Spam Act.

It is plaintiff's view that if each state were to legislate an opt-out registry and charge a fee for "scrubbing" it would lead to fifty different state registry laws and paralysis of e-commerce in the United States as a whole - major companies would fear making a single scrubbing mistake that would lead to criminal liability and smaller companies would not be able to afford to pay the de facto "e-mail tax".

Plaintiff is seeking to enjoin the Utah e-mail registry statute.