Antitrust Law Daily Wrap Up, PRIVACY—OHCtApp: Opt-Out Notice Not Required Under TCPA for One-Time Facsimile Ad Sent with Permission of Recipient, (Nov 30, 2012)

By Tobias J. Gillett, J.D., LLM.

The Telephone Consumer Protection Act of 1991 (TCPA) does not sanction sending a one-time facsimile advertisement when the recipient has given permission to send the communication, even when the facsimile does not contain an opt-out notice, an Ohio Court of Appeals has ruled (Fackelman v. Micronix, November 29, 2012, Celebrezze, F.).

Ron Shalkhauser, through his company, Micronix, had called approximately a dozen local print shops in an attempt to sell a quantity of paper his son had acquired. These print shops included David Fackelman’s printing company, Swift Print. Shalkhauser testified that a Swift Print employee answered the call and offered to share Shalkhauser’s offer with Fackelman. The employee provided Shalkhauser with Swift Print’s fax number and asked Shalkhauser to send a list of available paper and pricing through that number. Shalkhauser sent the communication, which Fackelman filed with other advertisements received by fax.

Fackelman then brought suit, claiming Shalkhauser had violated the TCPA. A Small Claims Division magistrate heard the case and concluded that Shalkhauser had not breached the TCPA because his communication had not been unsolicited. A trial court adopted the magistrate’s opinion in full, overruling Fackelman’s objections.

The TCPA prohibits sending an “unsolicited advertisement” to a facsimile machine, unless statutory exceptions apply. One provision of the Federal Communication Commission regulations issued pursuant to the TCPA, former 47 C.F.R. 64.1200(a)(3)(iii), prohibits sending an “unsolicited advertisement” to a facsimile machine, unless it “contains a notice that informs the recipient of the ability and means to avoid future unsolicited advertisements.” Another one, former 47 C.F.R. 64.1200(a)(3)(iv), provides that a “facsimile advertisement that is sent to a recipient that has provided prior express invitation or permission to the sender must include an opt-out notice.”

Fackelman argued that the second provision’s lack of a qualifier meant that all advertisements sent to a facsimile machine must contain an opt-out notice, whether solicited or unsolicited. The court disagreed, finding “outcome determinative” its prior case precedent holding that “the above provisions, and the opt-out notice requirements thereunder, do not apply to fax transmissions unless they constitute unsolicited advertisements.”

The court determined that Fackelman’s interpretation would not give sufficient notice that a violation would occur, given the persistent use of the term “unsolicited” throughout the FCC regulations at issue. The court also noted that although the FCC regulation referred to prior express permission and the recipient’s ability to revoke it, the present case did not involve “ongoing transmissions that may occur in the future.” The court concluded that “[t]his is not a situation prohibited by the Act and not something that should be punished by statutory damages.”

Fackelman referred to an FCC amicus brief filed in Nack v. Walburg, E.D.Mo. No. 4:10CV00478 AGF, January 28, 2011, as supporting his interpretation of former 47 C.F.R. 64.1200(a)(3)(iv). However, the Nack court also found that the regulation did not apply because “[t]he paragraph requiring the opt-out notice, on which Plaintiff relies, is under the paragraph that prohibits the sending of an ‘unsolicited’ fax advertisement,” and noted that the FCC Rules and Regulations implementing the TCPA stated repeatedly that “its rule requiring an opt-out notice applies to all unsolicited fax advertisements.”

The court concluded that Fackelman’s “strict liability” interpretation of the regulation would “encompass situations completely outside the Act’s intended purpose,” such as a restaurant sending a customer a menu at the customer’s request.

The court therefore affirmed the trial court’s decision to adopt the magistrate’s opinion, and dismissed Fackelman’s appeal.

The case is 2012-Ohio-5513.

Joseph R. Compoli for David Fackelman. William M. Kovach for Micronix.

Cases: Privacy Advertising ConsumerProtection OhioNews