People Ex Rel. Brown v. iMERGENT, Inc.

Defendants, iMergent, Inc., and its subsidiary, StoresOnline, Inc., are self-described providers of “eCommerce” technology, training, and other Web-based programs that purport to help start, operate, and maintain home-based businesses. Recognizing the danger that such products and services present to unsophisticated purchasers, California enacted the Seller Assisted Marketing Plan (SAMP) Act (Civ. Code, § 1812.200 et seq.). Among other things, this legislation imposes a duty on the seller of SAMP’s to make certain disclosures to the Attorney General and the prospective purchasers (§§ 1812.203, 1812.205, 1812.206, 1812.207), and provides a procedure for the purchaser to cancel any contract for the sale of a SAMP (§ 1812.209). The law applies to all sellers who represent that the purchaser “will earn, is likely to earn, or can earn an amount in excess of the initial payment paid by the purchaser for participation in the seller assisted marketing plan.” (§ 1812.201, subd. (a)(1).) Defendants contend that this phrase is unconstitutionally vague. As we shall explain, the words to which defendants object cannot, in any rational way, be construed as failing to provide adequate…