The Federal Communications Commission recently announced that all fax advertisements, including those sent with the prior express permission or invitation of the recipient, are required to contain an opt-out notice. The opt-out notice contained in fax ads must:
The FCC emphasized that the opt-out notice must precisely satisfy each of these three requirements, and that partial or substantial compliance would be deemed to be a violation of the FCC’s rules.
Congress granted the FCC authority to promulgate rules regarding fax advertisements with the passage of the Telephone Consumer Protection Act of 1991 (TCPA), amended by the Junk Fax Prevention Act of 2005. In 2006, the FCC adopted the Junk Fax Order amending the fax transmission rules, stating that a fax ad “sent to a recipient that has provided prior express invitation or permission to the sender must include an opt-out notice.” The FCC stated that unsolicited faxes and faxes sent outside of an established business relationship are unlawful. However, in a subsequent proceeding challenging the validity of these rules, the record reflected that a footnote in the Junk Fax Order caused confusion regarding the applicability of the requirement to faxes sent to recipients who provided prior express permission or invitation, and created a false sense of confidence that the opt-out notice requirement did not apply. Several petitioners sought clarification and requested retroactive waivers of the rule. The FCC’s recent decision acknowledges the inconsistency between the footnote and the rule and clearly states that the FCC’s rules require that an opt-out notice must be contained on all fax ads.
In light of the confusion, the FCC granted the petitioners retroactive waivers of the rule regarding faxes sent with the prior express permission or invitation of the recipient, but required full compliance by April 30, 2015. The FCC stated that other similarly-situated entities may request retroactive waivers from the FCC and those waiver requests must be filed by April 30, 2015, noting that all future waiver requests will be adjudicated on a case-by-case basis. These waivers do not extend to faxes sent under an established business relationship, as there was no confusion regarding the opt-out notice requirements for such faxes.
The fax transmission rules are particularly important because the TCPA affords a private right of action, in which plaintiffs can file lawsuits and seek monetary statutory damages up to $1500 for each fax. Absent a waiver, any past or future failure to fully comply with the opt-out notice requirements could subject entities to enforcement sanctions, including potential fines and forfeitures, and to private litigation. Several class action lawsuits have been filed for failure of an operator to provide an opt-out notice – even to recipients that requested the fax. For example, in the United State District Court for the Northern District of Illinois Eastern Division, Interline Brands recently entered into a class action settlement agreement to pay $40 million to a nationwide class that, over a period of four years, received unsolicited fax advertisements and advertisements that did not comply with the TCPA’s opt-out notice requirements. In the United States District Court District of Maryland, Burger King Corporation has filed a proposed settlement of $8.5 million in response to a class action lawsuit consisting of 97,000 class members who alleged they received unsolicited fax ads that failed to comply with the opt-out language requirements of the TCPA. If this settlement amount is approved, it will be the largest TCPA settlement ever in Maryland.
Finally, a recent decision in the U.S. Court of Appeals for the 11th Circuit ruled that an entity can be directly liable under the TCPA where a third party actually transmits the fax on its behalf. The appeals court reversed a lower decision granting summary judgment to the defendant, a dentist who had hired a marketing manager to promote the dental practice. The plaintiff, a golf center, received a one-page unsolicited fax from the dental practice.
If you have any questions about the facsimile advertisement requirements or how to seek a retroactive temporary waiver of the opt-out notice rules, please contact your primary attorney or S. Jenell Trigg and Deborah J. Salons in our office. Jenell can be reached at firstname.lastname@example.org or 202.416.1090 and Deborah can be reached at email@example.com or 202.416.6768.