Topic: Junk Fax Prevention Act

Eastern District of Pennsylvania Holds That Differentiating Service Is an “Advertisement” and Defendant’s Intent in Sending Fax Is Irrelevant

The Eastern District of Pennsylvania recently reaffirmed that an objective “four corners” standard governs whether faxes are “advertisements” that must meet the TCPA’s consent requirement. Separately, any fax that compares the sender’s product or service to others could constitute an “advertisement” under the Court’s decision.

Background

In Steven A. Conner DPM, P.C. v. Fox Rehabilitation Services, P.C., 2023 WL 2226781 (E.D. Pa. Feb. 24, 2023), Plaintiff (a podiatrist) alleged that Defendant sent unsolicited faxes to his office during the onset of the COVID-19 pandemic to promote its in-home physical therapy services. Plaintiff had never had contact with or made a referral to Fox Rehab before receiving the faxes. Fox Rehab testified at trial that it had sent the faxes to Plaintiff as part of a blast campaign to inform referring healthcare providers that it was adhering to recently issued public guidelines for stemming the spread of coronavirus. Since Fox Rehab admitted to having sent the faxes, the sole issue for the Court was whether they were “unsolicited advertisements” under the TCPA.

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The Losses Mount for a Serial TCPA Plaintiff

In an ever-growing string of losses, the Seventh Circuit affirmed the Northern District of Indiana in denying class certification to serial TCPA plaintiff Gorss Motels, Inc. in Gorss Motels, Inc. v. Brigadoon Fitness, Inc., — F.4th —, 2022 WL 872639 (7th Cir. 2022).

The fact pattern in the present matter is consistent with the other cases Gorss Motels has filed, and the basic fact pattern can be found here. In the present case, Gorss Motels sued a franchisor-approved vendor, Brigadoon Fitness, Inc., for sending a fax advertisement for deals on fitness equipment. Gorss Motels was denied certification for a class of all recipients of this fax, Gorss Motels, Inc. v. Brigadoon Fitness, Inc., 331 F.R.D. 335 (N.D. Ind. 2019), which was denied again on reconsideration, Gorss Motels, Inc. v. Brigadoon Fitness, Inc., No. 1:16-CV-330-HAB, 2019 WL 5692168 (N.D. Ind. Nov. 4, 2019).

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PBM’s Policy Update Fax Not TCPA “Advertisement,” Says Eastern District of Missouri

Earlier this week, the U.S. District Court for the Eastern District of Missouri granted summary judgment for a pharmacy benefit manager (PBM) that allegedly violated the TCPA by sending unsolicited advertisements via fax to thousands of healthcare providers. The defendant was entitled to judgment as a matter of law, the court concluded, because the fax simply notified recipients of changes to insured patients’ coverage and did not promote any products or services.

The case began when a St. Louis healthcare provider (BPP) filed a complaint alleging that defendant CaremarkPCS Health, LLC, violated the TCPA when it sent an unsolicited fax to over 55,000 providers notifying them of new limits on insurance coverage for opioid prescriptions for pediatric and adolescent patients in plans sponsored by Caremark’s clients. BPP v. CaremarkPCS Health, LLC, No. 4:20-cv-126, 2021 WL 5195785, at *1 (E.D. Mo. Nov. 9, 2021). Caremark, which manages prescription drug benefits for various health insurers, asked for summary judgment on the ground that the fax was not an “advertisement” under the TCPA and that plaintiff’s claim therefore failed as a matter of law. Id.

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Sixth Circuit Rejects Strict Liability for Products Advertised via Fax, “Some Level of Knowledge” Required

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)).

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Single Fax Received by E-Mail Deemed Insufficient to Confer Article III Standing

As we have reported here and here, courts throughout the country, including most notably the Eleventh Circuit in Salcedo v. Hanna, have grappled with the question of whether a single unsolicited text message may constitute sufficient injury to satisfy the constitutional standing requirement in Article III. The Salcedo court held that one text message does not suffice.

But what about a single fax? That was the question recently presented to the Middle District of Florida in Daisy, Inc. v. Mobile Mini, Inc., No. 20-0017 (M.D. Fla. Sept. 24, 2020). The court similarly found that, at least under the relatively unique circumstances of the case, a single fax did not confer standing.

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Advertised Businesses Not Liable for Unauthorized Fax Advertisements, FCC Declares

On September 21, the FCC’s Consumer and Governmental Affairs Bureau issued a declaratory ruling clarifying that businesses advertised via fax should not face “sender liability” for unsolicited faxes sent without prior authorization.  See Declaratory Ruling at ¶¶ 9, 17, In the Matter of Akin Gump, CG Docket No. 02-278 (Sept. 21, 2020).  This ruling provides some much-needed guidance on the scope of sender liability under the Junk Fax Prevention Act, an issue which has divided the courts.

In 2005, the Junk Fax Prevention Act amended the TCPA to prohibit the sending of unsolicited advertisements via facsimile, absent some excepted relationship between sender and recipient.  See Pub. L. No. 109-21, 119 Stat. 359 (2005).  The FCC has defined the “sender” of a fax for liability purposes as any “person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement.”  47 C.F.R. § 64.1200(f)(10) (2019).[1]  The Commission also has observed that the “sender” of a fax is usually, but not always, the business advertised in the fax.  See “2006 Junk Fax Order,” FCC Rcd. 3787, 3808, ¶ 39 (2006).

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Serial TCPA Plaintiff Suffers Another Defeat

The United States District Court for the District of Connecticut recently dealt another blow to serial TCPA plaintiff, Gorss Motels, Inc., granting summary judgment to the defendant in Gorss Motels, Inc. v. Lands’ End, Inc., No. 17-cv-00010, 2020 WL 264784 (D. Conn. Jan. 16, 2020). This is the latest in a series of adverse decisions—including from a Court of Appeal—suffered by Gorss Motels.

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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. Continue reading “Eastern District of Michigan Finds No Strict Liability for Faxes Sent Without Defendant’s Knowledge or Involvement”

Testimonial Evidence Sufficient to Defeat Class Certification: Court Denies Class Cert on Basis of Defendant’s Testimony Regarding Its Compliant Practices

The Southern District of Ohio recently denied class certification because the defendant’s unrebutted testimony—which established that its procedures ensured that faxes were only sent to those who had given their prior express permission—created individualized issues that predominated over any common ones. See Sawyer v. KRS Biotechnology, 2018 U.S. Dist. LEXIS 8595 (S.D. Oh. May 30, 2018).        Continue reading “Testimonial Evidence Sufficient to Defeat Class Certification: Court Denies Class Cert on Basis of Defendant’s Testimony Regarding Its Compliant Practices”

Supreme Court Denies Petition Seeking Review of D.C. Circuit Fax Decision Holding that FCC Exceeded Its Authority

The Supreme Court today denied the petition for certiorari filed by the class action plaintiffs in Bais Yaakov of Spring Valley v. FCC, thus leaving in place the D.C. Circuit’s ruling that “although the [Telephone Consumer Protection Act] requires an opt-out notice on unsolicited fax advertisements, the Act does not require a similar opt-out notice on solicited fax advertisements . . . . [nor does it] grant the FCC authority to require opt-out notices on solicited fax advertisements.”  852 F.3d 1078, 1082 (D.C. Cir. 2017).  Our summary of the briefing on the petition is available here.

As we’ve discussed previously, the D.C. Circuit’s ruling (binding nationwide pursuant to the Hobbs Act) makes it much tougher for plaintiffs in TCPA fax suits to certify a class.  The plaintiffs’ bar has typically sought to certify classes based on violations of the opt-out notice requirement for solicited faxes, because a class defined in such a way side-stepped the inherently individualized issue of whether the fax was solicited or not. With the opt-out notice requirement for solicited faxes eliminated, plaintiffs’ attorneys have a much tougher challenge.  Indeed, in Alpha Tech Pet, Inc. v. Lagasse, LLC, No. 16 C 513, 2017 U.S. Dist. LEXIS 182499 (N.D. Ill. Nov. 3, 2017), a district court relying on the D.C. Circuit’s decision found that individualized issues of consent precluded certification of a class of fax recipients where certification could not be premised on whether the faxes included an opt-out notice.  The plaintiff in Alpha Tech has appealed that decision, arguing (among other things) that the D.C. Circuit’s decision is not binding in the Seventh Circuit.  Given the significance of this issue for the plaintiff’s bar, we can expect to continue to see collateral challenges like this to the repeal of the FCC’s solicited fax rule notwithstanding that the D.C. Circuit’s decision in Bais Yaakov is now final.