The U.S. Court of Appeals for the Sixth Circuit recently re-affirmed its position that manufacturers of products advertised in unsolicited fax messages do not face strict liability under the TCPA’s junk-fax provision. To face liability, the manufacturers must at least be aware that fax advertisements are being sent.
In Lyngaas v. Curaden AG, a dentist sued a Swiss toothbrush manufacturer, Curaden AG, and its American subsidiary, Curaden USA, for sending unsolicited fax advertisements for their toothbrushes. 992 F.3d 412, 417 (6th Cir. Mar. 24, 2021). The district court concluded that Curaden AG could not be held liable for the faxes because Curaden USA had designed and broadcasted the faxes on its own, without parent authorization. Id. at 423. On appeal, the dentist argued that FCC regulation extended liability to any entity “whose goods or services are advertised or promoted” in a fax, regardless of knowledge. Id. at 424 (quoting 47 C.F.R. § 64.1200(f)(10)).
The Sixth Circuit rejected this interpretation, affirming that “the TCPA does not impose strict liability on a manufacturer simply because its products wind up on the face of an unsolicited fax advertisement; the manufacturer must independently fit the role of a ‘sender.’” Id. (citing Health One Med. Ctr., Eastpointe PLLC v. Mohawk, Inc., 889 F.3d 800, 802 (6th Cir. 2018)).
Furthermore, since it was undisputed that Curaden AG played no role in the facsimile broadcast and was completely unaware that Curaden USA was sending unsolicited faxes, the Swiss entity could not have “caused” the faxes to be sent. Id. (citing Health One Med. Ctr., supra). The Curaden entities’ distribution agreement did not authorize the faxes because, by that agreement, Curaden USA simply promised to “use its best endeavours to promote the sale of [Curaden] Products” throughout the U.S. Id. at 424-25. “In short,” the court explained, “some level of knowledge that an unsolicited fax has been sent is required for an entity to qualify as a sender” and face liability under the TCPA, and Curaden AG lacked such knowledge. Id. at 425 (quoting Garner Properties & Mgmt., LLC v. Marblecast of Mich., Inc., 810 Fed. App’x 454, 456 (6th Cir. 2020)).
The court also held that electronic faxes sent to a computer—as opposed to a traditional fax machine—can give rise to TCPA liability because the statute covers all facsimile machines with the “capacity . . . to transcribe text or images” from or onto paper. Id. at 426 (quoting statute) (court’s emphasis). The court relied on an FCC order stating that Congress could not have intended for the statute to cover only ink-and-paper faxes. Id. (citing In re Rules & Regs. Implementing the Tel. Consumer Prot. Act of 1991, 18 F.C.C. Rcd. 14014, 14133 ¶ 200 (2003)).
The Lyngaas decision aligns the Sixth Circuit with at least one other appellate court that considered the issue of “sender” liability for unauthorized faxes, as well as the FCC’s Consumer and Governmental Affairs Bureau. We will continue to monitor this issue as discussed by the courts and Commission.