Antitrust Law Daily Wrap Up, PRIVACY—D. Md.: Limited fax broadcaster exemption from TCPA liability upheld, (Oct 18, 2013)

By Edward L. Puzzo, J.D.

FCC regulations, providing fax broadcasters with a limited exemption from Telephone Consumer Protection Act liability under certain circumstances, reasonably construed the language of the TCPA, the federal district court in Baltimore has ruled (Asher & Simons v. J2 Global Canada P.A., October 16, 2013, Bredar, J.).

Asher & Simons and others brought an action against Wellington Wreaths, J2 Global, its Canadian affiliate, and several individuals, alleging that unsolicited fax advertisements they received violated the Telephone Consumer Protection Act (TCPA). J2 acted as a “fax broadcaster” for the fax transmissions.

As one of its affirmative defenses, J2 Global Canada, citing a Federal Communications Commission (FCC) rule, pleaded that the claim was barred because it did not have a “high degree of involvement” in the sending of the fax transmissions. Plaintiffs countered that liability arose from the plain and unambiguous language of the TCPA, regardless of the FCC regulation.

To determine the relationship between the TCPA and the FCC regulations promulgated under the TCPA, the framework of the 1984 U.S. Supreme Court case of Chevron v. National Resources Defense Council, 467 U.S. 837, must be used, the court explained.

The first step in the analysis is to determine whether the intent of Congress is clear and unambiguous. At first blush, the court stated, the text of the statute appears to unambiguously prohibit any person from sending an unsolicited advertisement by fax. But where, as here, an advertiser pays a fax broadcast service to send an unsolicited advertisement over the network of a common carrier, it is not clear whom the “sender” actually is, the court continued.

Since the statutory language is open to varying constructions, the second step of Chevron is applied; that is, determining whether the interpreting agency’s construction is reasonable. The FCC’s construction in this instance, at 47 CFR Sec. 64.1200(a)(4)(vii), is that liability will be imposed only on a fax broadcaster if it demonstrated a high degree of involvement in, or actual notice of, the unlawful activity and failed to take steps to prevent the fax transmissions.

Plaintiffs argued that the FCC did not have the authority to create a limited fax broadcaster exemption from TCPA liability, but the court disagreed. The court ruled that the FCC’s interpretation of the TCPA prohibition on unsolicited advertisements, applying it to fax broadcasters only when they demonstrated a high degree of involvement or actual notice of unlawful activity and failed to take steps to prevent the fax transmissions, was a reasonable construction of the statutory language. The court therefore granted J2 Global Canada’s motion to reconsider and denied plaintiffs’ motion for partial summary judgment.

The case is Civil No. JKB-13-0981.

Attorneys: Michael Craig Worsham for Asher & Simons, P.A. Dana Whitehead McKee (Brown Goldstein and Levy LLP) for J2 Global Canada, Inc.

Companies: Asher & Simons, P.A., J2 Global Canada, Inc.

Cases: Privacy Advertising MarylandNews