Antitrust Law Daily Wrap Up, PRIVACY—6th Cir.: Fax advertisement recipient had standing to pursue TCPA claim for fax he had never seen, (Jul 7, 2015)

By Linda O’Brien, J.D., LL.M.

A recipient of a fax advertisement, who had no personal knowledge of receiving the fax, had standing to pursue claims under the Telephone Consumer Protection Act (TCPA), since the statute did not require proof of receipt, according to the U.S. Court of Appeals in Cincinnati. Furthermore, a restaurant that hired a third party to send fax advertisements on its behalf could be primarily liable for the third party’s violations of the TCPA. Thus, a district court’s order granting summary judgment dismissing the complaint was reversed (Avio, Inc. v. Alfoccino, Inc., July 7, 2015, Stranch, J.).

The owners of the Alfoccino restaurant business hired Business-to-Business Solutions (B2B) to send facsimile advertisements to recipients in Southeast Michigan. B2B obtained a list of fax numbers from a company called InfoUSA. B2B represented that this list was composed of individuals who were willing to accept fax advertisements, but did not actually seek or obtain permission before faxing the advertisements.

Avio, Inc., a supplier of home entertainment equipment, filed a putative class action suit against Alfoccino, Inc. in January 2010, alleging that the company violated the Telephone Consumer Protection Act (TCPA) by hiring B2B to send unsolicited facsimile advertisements. Avio never produced an original fax from the restaurant, and a company representative had no memory of receiving such a fax. Rather, Avio offered an analysis of a B2B hard drive showing the number of faxes sent to support the TCPA claim. In May 2014, the district court granted the defendants’ motion to summary judgment on the grounds that Avio lacked Article III standing and Alfoccino could only be held vicariously liable for the transmitted faxes, not primarily liability, under the statute. Avio appealed.

Article III standing. The district court erred in determining that Avio lacked Article III standing to pursue its TCPA claim, the appellate court found. Though the TCPA does not expressly state who has a cause of action to sue under its provisions, the descriptions of the prohibited conduct refer to the “recipient” of the unsolicited fax. Following its decision in American Copper & Brass, Inc. v. Lake City Indus. Products, Inc., 757 F.3d 540(2014), the appellate court noted that viewing or printing a fax advertisement was not necessary to suffer a violation of the right under the TCPA to have one’s telephone and fax machine free of the transmission of unsolicited advertisements. In this case, the recipient’s injury was based on the review of B2B’s hard drive, rather than on personal knowledge of a fax, and there was sufficient evidence that Avio suffered an injury when it received the two fax transmissions from B2B.

Vicarious liability. Additionally, under Federal Communications Commission (FCC) regulations, Alfoccino may be held directly liable for the faxes sent by B2B to Avio. According to the appellate court, the FCC regulation defines “sender” with respect to the TCPA prohibition on unsolicited fax advertisements as being “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.” The plain language of the TCPA and FCC regulation definition of “sender” establish that direct liability attaches to the entity whose goods or services are advertised as opposed to the fax broadcaster. Avio has presented evidence that Alfoccino was the entity whose goods or services were advertised in the unsolicited advertisements. Therefore, Alfoccino could be directly liable to Avio as the sender of the fax.

The case is No. 14-1704.

Attorneys: Phillip A. Bock (Bock & Hatch, LLC) for Avio, Inc. John R. Prew and Jason R. Mathers (Harvey Kruse, P.C.) for Alfoccino, Inc., Taliercio Investments, Inc., and Farshid Shushtari.

Companies: Avio, Inc.; Alfoccino, Inc.; Taliercio Investments, Inc.

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