Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—N.D. Ill.: Fax advertising seminar holders may be liable for sending unsolicited advertising, (Jul 18, 2013)

By Jody Coultas, J.D.

Addison Automatics, Inc. stated Telephone Consumer Protection Act (TCPA) and Illinois Consumer Fraud and Deceptive Business Practices Act (CFA) claims against a facsimile sender, The RTC Group, Inc., and the companies that directed RTC to send the fax, the federal district court in Chicago has held (Addison Automatics, Inc. v. The RTC Group, Inc., July 16, 2013, Kendall, V.).

RTC sent a fax to Addison offering the opportunity to attend a free “technical seminar” on embedded computer technology hosted by Avnet, Inc, Intel Corporation, and Microsoft Corporation that would be held at Microsoft’s offices. Microsoft’s, Intel’s and Avnet’s logos were prominently displayed on the fax. Addison alleged that RTC and the host companies violated the TCPA and the CFA by sending the fax. The companies moved to dismiss the claim, arguing that the fax did not constitute an advertisement within the meaning of the TCPA and the claim should be dismissed as to Microsoft, Intel, and Avnet because Addison failed to adequately allege that RTC was acting as their agent.

TCPA claim. Addison stated a TCPA claim against RTC and the seminar hosts, according to the court. Faxes that are “purely informational” are not advertisements under the TCPA, but faxes promoting free seminars may be unsolicited advertisements because free seminars are often a pretext to market products or services. The court could infer from the language of the fax that the defendants intended to market their products and services at the seminar so that the attendees would purchase those products and services when they make their “next design decision.”

This plausibility was heightened by the fact that attendees would receive information and training on Microsoft and Intel products. Attendees had to visit a website offering the defendants’ products and services and describing the conference as making product launches from the defendants available to the attendees.

The court held that Addison established an agency relationship between RTC and Microsoft, Intel, and Avnet so that the companies may be held vicariously liable for the alleged TCPA violation. The sender of an unsolicited advertisement is “the 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,” according to rules promulgated by the Federal Communications Commission (FCC). Since Microsoft’s, Intel’s, and Avnet’s goods and services were advertised in the fax, they were considered “senders” under the TCPA by the FCC.

Addison also properly established an agency relationship. An agency relationship arises when a principal manifests assent to an agent that the agent shall act on the principal’s behalf and subject to the principal’s control. Addison’s allegations were sufficient to establish that Microsoft, Intel, and Avnet controlled the manner and method of work carried out by RTC, especially considering that the fax advertised that the conference would be held at Microsoft’s offices and identified the companies’ as the conference’s hosts.

CFA claim. The CFA claim was barred by the statute of limitations, according to the court. CFA claims must be filed within three years of the date the claim accrues. Here, the claim accrued on the date it received the fax.

Microsoft, Intel and Avnet were not added as parties to this litigation more than three years after the claim accrued. When a plaintiff adds new defendants as parties in an amended complaint, the amendment only relates back to the original complaint if there was an error concerning the identity of the proper party and where that party is chargeable with knowledge of the mistake. The CFA claim against Microsoft, Intel, and Avnet did not relate back to the original complaint because there was no mistake. Therefore, the claim was time barred.

The case is No. 12 C 9869.

Attorneys: Brian J Wanca (Anderson & Wanca) for Addison Automatics, Inc. Ellen M. Chapelle (Gould & Ratner LLP) for The RTC Group, Inc. Eric D. Brandfonbrener (Perkins Coie LLC) for Intel, Inc. Darrell J. Graham (Roeser Bucheit & Graham LLC) for Avnet, Inc.

Companies: The RTC Group, Inc.; Avnet, Inc.; Intel Corporation; Microsoft Corporation

Cases: ConsumerProtection StateUnfairTradePractices IllinoisNews