Eastern District of Michigan Finds No Strict Liability for Faxes Sent Without Defendant’s Knowledge or Involvement

Recently, an Eastern District of Michigan court entered summary judgment in favor of a defendant upon finding that it had neither transmitted nor caused the transmission of the fax at issue. In Garner Properties & Management, LLC v. Marblecast of Michigan, Inc., the plaintiff alleged that it had received an unsolicited fax that referenced the products of two companies: Marblecast of Michigan and American Woodmark. The plaintiff sued both companies in a putative class action. American Woodmark eventually moved for summary judgment and argued that the plaintiff had failed to offer evidence from which a reasonable juror could conclude that it had “sent” the fax at issue. See 47 U.S.C. § 227(b)(1)(C) (“It shall be unlawful for any . . . to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement, unless. . . .”) (emphasis added). In opposition, the plaintiff argued that American Woodmark was strictly liable as a sender under the TCPA because the fax had referenced its products.

In granting the defendant’s summary judgment motion, the court followed the Sixth Circuit’s recent decision in Health One Medical Center v. Mohawk, Inc., which found that “an innocent party cannot be held liable under the TCPA just because its goods were advertised or promoted in an unsolicited fax advertisement.” We previously reported on the district court decision here. In light of the Sixth Circuit’s decision, the Eastern District of Michigan rejected the argument that American Woodmark was strictly liable merely because some third party had transmitted a fax that advertised its goods. Indeed, if that were the standard, businesses could be bankrupted simply because—entirely unbeknownst to them, and perhaps even with the intent to do them harm—a third party transmitted a fax that mentioned their goods or services.

The court then found that there was no genuine issue of material fact regarding whether American Woodmark had sent or caused the transmission of the fax at issue. First, while American Woodmark had entered into a distributorship agreement with Marblecast that imposed on Marblecast a duty to promote and increase sales of American Woodmark’s products, the agreement did not authorize Marblecast to promote American Woodmark’s products via fax. Second, Marblecast did not discuss a fax campaign with American Woodmark or obtain American Woodmark’s consent to the hiring of a fax broadcaster. And third, a representative for Marblecast testified that the fax at issue was sent to promote Marblecast’s business and the fax would have been sent notwithstanding the distributorship agreement with American Woodmark. In light of those facts, the court concluded that American Woodmark could not be held liable for sending the fax at issue.

This decision highlights that plaintiffs should not be able to bring a TCPA action against a business simply because that business’s goods or services happen to be advertised in an unsolicited fax. Rather, plaintiffs must allege—and eventually prove—that a party either transmitted or caused the transmission of a fax.

Michael P. Daly

About the Author: Michael P. Daly

Mike Daly has spent two decades defending, counseling and championing clients that interact with consumers. His practice focuses on defending class actions, handling critical motions and appeals, and maximizing the defensibility of marketing and enforceability of contracts. Clients large and small have trusted him to protect their businesses, budgets and brands in complex cases across the country.

John S. Yi

About the Author: John S. Yi

John Yi represents clients in civil and criminal litigations in federal court, as well as investigations and enforcement actions by the Federal Trade Commission (FTC), the U.S. Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and other federal and state regulatory bodies. For clients in health care and other sectors, he handles a full array of antitrust issues. John has helped secure merger clearances from federal regulators and defended clients’ interests in suits alleging a variety of anticompetitive conduct. He has assisted companies with internal investigations and compliance strategies. John also has experience handling all aspects of civil litigation, including discovery, settlement, dispositive motions, trial advocacy and appellate work. John also defends a number of class action cases with a wide variety of claims, including issues arising under federal and state antitrust laws, the Telephone Consumer Protection Act (TCPA) and the Fair Credit Reporting Act (FCRA).

©2024 Faegre Drinker Biddle & Reath LLP | All Rights Reserved | Attorney Advertising.
Privacy Policy