• Just the Fax: Recent TCPA Developments on Liability for Unsolicited Faxes and Fax Opt-Out Notices
  • December 10, 2014 | Authors: Keith J. Barnett; Thomas M. Byrne; Ellen M. Dunn; Juan C. Garcia; Allegra J. Lawrence-Hardy
  • Law Firms: Sutherland Asbill & Brennan LLP - Atlanta Office ; Sutherland Asbill & Brennan LLP - New York Office ; Sutherland Asbill & Brennan LLP - Houston Office ; Sutherland Asbill & Brennan LLP - Atlanta Office
  • The end of October 2014 saw two significant developments for Telephone Consumer Protection Act (TCPA) rules governing facsimile transmissions, fax opt-out notices and liability for faxes sent by third parties.

    On October 30, the Federal Communications Commission (FCC) ruled that opt-out notices, giving the recipient the right to decline receipt of further fax communications, are required on facsimile advertisements regardless of whether the recipient provided prior consent.1 The FCC’s order was in response to petitions seeking a declaratory ruling that opt-out notices are not required on fax advertisements sent with the recipient’s prior express consent. In denying the Application for Review and numerous other petitions on the same issue, the FCC confirmed its prior position that senders of any fax advertisement must include instructions that clearly and conspicuously explain to recipients how to opt out of future communications, “even if [recipients] previously agreed to receive fax ads with the recipient’s prior express consent.”

    In addition to clarifying the opt-out rules for faxes, the FCC also acted on several individual requests for waivers, granting retroactive relief to parties that were reasonably uncertain about whether the opt-out notice requirement applied to faxes sent with the recipient’s prior permission. The FCC provided a six-month window starting on October 30, 2014, for the waiver recipients to come into full compliance with the order. Lastly, the FCC noted that parties similarly situated may apply for waiver requests, which must be filed by April 30, 2015. If a waiver is not received, however, full compliance is expected, and past or future failure to comply with the order could subject entities to private litigation or enforcement sanctions, such as forfeitures and fines.

    On the same day, in Palm Beach Gold Center of Boca, Inc. v. John G. Sarris, D.D.S., P.A., 13-14013 (11th Cir. 2014), the U.S. Court of Appeals for the Eleventh Circuit issued a decision regarding the standard for liability when a fax transmission is sent on behalf of a defendant by a third-party marketer. In 2005, plaintiffs received a one-page unsolicited fax advertisement promoting the defendant’s dental practice. The fax was sent by a hired marketing manager with “free rein” to market the defendant’s practice. Plaintiffs filed suit under the TCPA. The district court granted the defendant’s motion for summary judgment on the ground that the fax was sent by a third party and not by the defendant. The district court reasoned that per the FCC’s 2012 declaratory ruling In Re Dish Network, LLC (Dish Network), direct liability exists under the TCPA only by the “person actually transmitting the fax itself.” And although vicarious liability can exist against a person who delegates to another, the district court determined that the plaintiffs had failed to plead “a theory of vicarious liability in its complaint, a heightened pleading requirement under Florida law,” such that the “claim was defective.”

    In reversing and remanding the trial court’s decision, the Eleventh Circuit set a broad standard that direct liability for an unsolicited fax can be applied to a company on whose behalf an advertisement is sent, even if the company did not send the fax itself. In so holding, the court agreed with plaintiffs’ argument that Dish Network did not apply because it did not specifically “construe the TCPA provision related to” faxes. The court also relied on an FCC letter brief, filed at the court’s request, which argued that Dish Network should not be extended to fax cases. And the court held that an advertisement sent on behalf of a company whose services are advertised in an unsolicited fax transmission can lead to direct liability of the company under the TCPA.

    The FCC’s fax order and the Eleventh Circuit’s decision in Palm Beach Gold Center highlight two of the significant TCPA issues in fax cases: required opt-out notices on faxes and the potentially broad standard for direct liability for fax transmissions sent by third parties. As TCPA litigation continues to increase, it is essential for companies transmitting fax messages to maintain a focus on TCPA compliance.


    1 See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991; Junk Fax Prevention Act of 2005; Application for Review filed by Anda, Inc.; Petitions for Declaratory Ruling, Waiver, and/or Rulemaking Regarding the Commission’s Opt-Out Requirement for Faxes Sent with the Recipient’s Prior Express Permission, CG Docket Nos. 02-278, 05-338, Order, FCC 14-164 (Oct. 30, 2014).