The Sixth Circuit reversed a lower court’s denial of class certification and dismissal of an action following a lapsed offer for individual judgment in a decision released earlier this month. In doing so, the Sixth Circuit held that a defendant opposing class certification in a Telephone Consumer Protection Act (“TCPA”) case on the ground that issues of individualized consent predominate must do more than present “speculation and surmise to tip the decisional scales” because a “possible defense, standing alone, does not automatically defeat predominance.” The court also held that a defendant may not escape potential class-wide liability through an unaccepted offer of individual judgment.
On August 28, 2015, the Federal Communications Commission, through its Consumer & Governmental Affairs Bureau, issued three separate rulings on petitions relating to its fax rules under the Telephone Consumer Protection Act.
In a declaratory ruling, CGAB clarified that:
- faxes sent and received over telephone lines are subject to TCPA regulation even if those faxes are “converted to and delivered to a consumer as an electronic mail attachment.”
- “the consumer to whom the content of a fax or efax is directed,” and not the company hosting the fax servers that receive the faxes over a telephone line and re-send the faxes to the subscriber of the service, is the recipient of the fax under the TCPA.
- the act of sending a previously-faxed document by email is not subject to TCPA regulation.
CGAB also declined to provide “safe harbor” fax opt-out language, noting that the TCPA rules and orders already set forth the required content for opt-out notices. Finally, CGAB declined to issue a blanket rule as to whether “third parties, including fax broadcasters, who are retained to accept opt-out requests” are subject to TCPA liability, and instead noted that the question of whether a third party has sufficient involvement in the sending of faxes to create liability is an individualized inquiry.
As originally published in Law360
On Friday, July 10, 2015, the Federal Communications Commission issued its much-anticipated Declaratory Ruling and Order clarifying numerous aspects of the Telephone Consumer Protection Act. The commission had adopted the order at a particularly contentious June 18, 2015 open meeting (see earlier post), which one commissioner called “a farce” and another described as “a new low … never seen in politics or policymaking.”
In an unusual move, the commission made the order effective on its July 10 release date, rather than following publication in the Federal Register as is typical, providing companies with no opportunity to digest the order and adjust business practices accordingly.
As expected, the order largely brushes aside legitimate business concerns and a sensible approach to TCPA regulation in favor of findings that potentially increase risk for businesses in a variety of circumstances, including the possibility of increased class action litigation. In addition, beyond clarifying that carriers may offer call-blocking technologies to consumers, the order offers little to actually protect consumers from scam telemarketing schemes, including offshore “tele-spammers” that use robocalling or phone-number spoofing technologies.
The Sixth Circuit recently held that a facsimile which lacks commercial components on its face does not constitute an advertisement under the Telephone Consumer Protection Act and ruled that the possibility of remote economic benefit to a defendant is “legally irrelevant” to determining whether the fax violates the TCPA. The Sixth Circuit’s narrow rule stands out among decisions from other courts that have adopted an expansive interpretation of “advertisement” under the TCPA, and demonstrates that the scope of the TCPA is indeed subject to limitations.
In Sandusky Wellness Center, LLC v. Medco Health Solutions, Inc., the defendant, a pharmacy benefits manager, sent two unsolicited faxes to the plaintiff, a chiropractor. The faxes informed plaintiff that medications covered by defendant’s health plans could help lower costs for plaintiff’s patients, and directed plaintiff to a complete list of “plan-preferred medications” on defendant’s website. The faxes, however, did not promote defendant’s services or solicit business from plaintiff. Nor did the faxes contain pricing, ordering or sales information. Notably, defendant did not offer for sale any of the identified medicines, either in the faxes themselves or on defendant’s website.
The Sixth Circuit recently held that a facsimile which lacks commercial components on its face does not constitute an advertisement under the Telephone Consumer Protection Act and ruled that the possibility of remote economic benefit to a defendant is “legally irrelevant” to determining whether the fax violates the TCPA. The Sixth Circuit’s narrow rule stands out among decisions from other courts that have adopted an expansive interpretation of “advertisement” under the TCPA, and demonstrates that the scope of the TCPA is indeed subject to limitations. Read More
As originally published in Law360
At its June 18, 2015, open meeting, a sharply divided Federal Communications Commission made good on Chairman Tom Wheeler’s recent promise to bolster the Telephone Consumer Protection Act’s already strict rules and to bring about “one of the most significant FCC consumer protection actions since it established the Do-Not-Call Registry with the FTC in 2003.” While plaintiffs’ class action lawyers are likely to applaud the new measures, businesses are concerned that the new rules could unfairly restrict legitimate communications with customers.
Congress enacted the TCPA in 1991 to address what it perceived as the growing problem of unsolicited telemarketing with technologies such as fax machines, pre-recorded voice messages and automatic dialing systems. The TCPA requires anyone making a call to a wireless line using autodialer or pre-recorded voice-call technologies to obtain the “called party’s” “prior express consent,” and, following a 2012 FCC decision, “prior express written consent” for calls that introduce advertising or constitute telemarketing. Similarly, under that ruling, calls to residential lines using an artificial/pre-recorded voice that introduce advertising or constitute telemarketing require the called party’s prior express written consent. Read More
Companies that communicate by fax have until April 30, 2015 to request a retroactive waiver from a Federal Communications Commission rule requiring that opt-out notice be included on all fax ads, including those sent to consumers who have provided prior express invitation or permission.
In 2006, the FCC adopted a new rule which requires opt-out notices in facsimile advertisements sent with the recipients’ prior express permission. The FCC was then faced with an application for review of a Consumer and Governmental Affairs Bureau order and 24 petitions which collectively challenged the opt-in requirement adopted in 2006. The petitioners argued that the TCPA applies only to unsolicited advertisements and therefore could not provide a statutory basis for the rule. The petitioners also argued that the FCC provided conflicting statements with regard to the applicability of the rule to solicited facsimile advertisements.
As we previously discussed, on October 30, 2014, the FCC released an Order confirming that opt-out notices complying with rules and regulations adopted by the FCC are required on all advertisements transmitted by facsimile, including advertisements transmitted with the prior express permission of the recipient. The FCC, recognizing the uncertainty over whether the opt-out requirements applied to senders with express permission of the recipients, granted retroactive waivers to the parties that had made the requests with respect to faxes sent with consent but without opt-out notices, and allowed those parties until April 30, 2015 to come into compliance with opt-out requirements. The FCC invited “similarly situated parties” to seek waivers prior to April 30, 2015, but noted that it expected parties making similar waiver requests to “make every effort to file within six months of the release of this Order.”
At least 64 petitions for waivers have been filed, and while the FCC has invited comment on many of these petitions, it has not issued any rulings.
A new decision once again highlights the dangers that companies face if their independent contractors engage in conduct that violates the Telephone Consumer Protection Act, and highlights the need to monitor contractor compliance with the TCPA. In City Select Auto Sales, Inc. v. David/Randall Assocs., Inc., a federal court in New Jersey recently found a roofing company, David/Randall Associates, liable for $22.4 million under the TCPA for the actions of its blast fax solutions provider, Business to Business Solutions (B2B). The plaintiff had alleged that the roofer and its president were liable for the transmission of fax advertisements 44,832 times to 29,113 different fax numbers by its independent contractor, B2B, without obtaining the prior express invitation or permission of the recipients and without including an FCC-required opt-out notice.
The United States Court of Appeals for the 11th Circuit recently ruled in Palm Beach Golf Center-Boca, Inc. v. Sarris that a company that contracted with a third party advertising firm to send fax advertisements could be directly liable under the Telephone Consumer Protection Act for faxes sent by the third-party firm on the company’s behalf. In so holding, the 11th Circuit adopted a framework advanced by the Federal Communications Commission that imposes broader liability for third-party faxing than for third-party calling made on a company’s behalf. Read More
The Federal Communications Commission recently released an Order in response to multiple petitions confirming that opt-out notices are required on all advertisements transmitted by facsimile, even those sent with the prior express permission of the recipient. The FCC also granted retroactive waivers to petitioners that were reasonably uncertain, based on ambiguities in a 2006 Report and Order modifying the FCC’s junk fax rules, about whether the opt-out notice requirement applied to faxes sent at the invitation of the recipient. The FCC indicated that it would also entertain retroactive waivers requests from similarly situated parties filed prior to April 30, 2015. Read More