At the Ecommerce Innovation Alliance (EIA), we have long warned that outdated laws, when weaponized by predatory litigation, pose a fundamental threat to the digital economy. Our advocacy has focused on Washington State’s Commercial Electronic Mail Act (CEMA) – a 1990s-era “anti-spam” law that has increasingly become a playground for class-action attorneys.
A recent development in the U.S. District Court for the Eastern District of Washington in the case of Shahpur v. Ulta Salon, Cosmetics & Fragrance, Inc. has brought this issue to a boiling point. In response to the class-action allegations, Ulta filed a motion to dismiss the case, arguing that the lawsuit was based on an unconstitutional application of state law.
However, by denying Ulta’s motion to dismiss, the court has signaled that the current litigation environment where brands face business-ending lawsuits over minor technicalities; is here to stay unless we see significant legislative reform.
The Ruling: Constitutional Challenges Rejected
In its effort to dismiss the lawsuit, Ulta raised several critical arguments. Specifically, Ulta argued that CEMA was:
- Preempted by the Federal CAN-SPAM Act: Arguing that federal law should override state-level “anti-spam” statutes to ensure a uniform national standard.
- A Violation of the Dormant Commerce Clause: Contending that Washington is overreaching by regulating interstate commerce (emails sent from outside the state) in a way that creates an undue burden on national businesses.
Unfortunately, the federal judge rejected these challenges. The court ruled that CEMA’s requirements regarding “deceptive” subject lines and misrepresented sender information are not preempted by federal law because they fall under an exception for “falsity or deception.” Furthermore, the court found the law did not violate the Commerce Clause, effectively giving a “green light” to plaintiffs looking to sue out-of-state brands in Washington courts.
Why This Hits Ecommerce Small Businesses Hard
While the headlines focus on a retail giant like Ulta, the secondary impact on small and medium-sized ecommerce brands is much more severe. As we have highlighted in our extensive coverage and active participation in CEMA reforms, this law is uniquely dangerous because of its statutory damages.
Under CEMA, a plaintiff can seek $500 per violating email. For a small ecommerce brand with an email list of just 1,000 Washington-based customers, a single “misleading” subject line in one promotional blast could result in a $500,000 legal liability. For an independent brand, that isn’t just a fine – it is a business-ending event.
The “deception” cited in these cases is often a matter of interpretation. Trial lawyers are targeting common marketing tactics—such as subject lines that are deemed “incomplete” because the details regarding the offer are disclosed in the body of the email instead of the subject line itself—and framing them as violations of the law.
A Pattern of Predatory Litigation
Since the Washington Supreme Court’s decision in Brown v. Old Navy in April 2025, the CEMA anti-spam statute has been grossly weaponized. A law originally to protect consumers from deceptive, anonymous spammers is now being used to punish legitimate businesses for standard marketing practices.
The EIA alongside the Washington Retail Association and coalition partners have been leading voices advocating for CEMA reform in Olympia. This latest ruling reinforces exactly why our advocacy is so critical. As we’ve noted in previous blog posts, CEMA was written in 1998 to combat the “Wild West” of early internet spam. It was never intended to be used as a “gotcha” tool against legitimate businesses that customers have actually opted-in to and requested to hear from.
When a court confirms that these outdated statutes are enforceable against businesses nationwide, it emboldens “professional plaintiffs” to scan their inboxes for any technicality that can be converted into a settlement. Because the cost of defending a class-action lawsuit is so high, many brands are forced to settle regardless of whether they actually intended to deceive anyone.
How the EIA is Fighting Back
The EIA is not backing down. Our advocacy in Olympia is currently centered on supporting critical reform measures like House Bill HB 2274, which aims to modernize CEMA and curb predatory litigation. We continue to engage directly with Washington state legislators to push for common-sense reforms to CEMA that would:
- Narrow the definition of “deception” to ensure legitimate marketing isn’t caught in the crosshairs.
- Require actual proof of harm before a plaintiff can collect statutory damages.
- Modernize the language to reflect how ecommerce and digital communication actually work in 2026.
While we have seen significant momentum—with these reforms successfully advancing through key House and Senate policy committees—the work is far from over. We are continuing to push for these amendments to be included in the final legislation this year and will advocate for further work on reforms after the legislature adjourns later this month. We remain at the table, ensuring the voice of the ecommerce community is heard as these bills move through the legislative process.
What’s Next
If you are an ecommerce business owner, now is the time to audit your email marketing practices. Ensure your “From” lines are transparent, your subject lines are clearly tied to the content of your email, and your headers are technically accurate.
More importantly, your voice is needed. The Ulta case proves that the courts may not save us from these outdated laws—only legislative change will.
Join the EIA today to help strengthen and shape policies that affect all ecommerce businesses. Together, we can continue to create the future of ecommerce. Subscribe to EIA email updates to stay informed on key developments and their impact on your business.
Ecommerce Innovation Alliance provides members with analysis of litigation and regulatory developments affecting online commerce and digital marketing. This post is for informational purposes only and does not constitute legal advice.
