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Miami attorney adds trial lawyers group as defendant in proposed class action over ‘junk’ faxes

By Jessica M. Karmasek | Feb 9, 2015

MIAMI (Legal Newsline) - A Miami attorney suing over so-called “junk” faxes has now amended his complaint to include the American Association for Justice.

Plaintiff Timothy Blake filed his original complaint in the U.S. District Court for the Southern District of Florida in October.


Blake sued J.L. Barnes Insurance Agency Inc., doing business as JLBG Health, over a fax he received in July from the company -- an insurance brokerage and benefits management firm -- promoting its products and services.


The AAJ, formerly the Association of Trial Lawyers of America, is a member association of JLBG Health.


JLBG Health’s fax, according to Blake’s complaint, promoted the AAJ Health Care Marketplace. The website markets JLBG’s products and services to AAJ members, employees and their family members.


Blake, who is a member of the AAJ, argues that the fax failed to contain an opt-out notice, as required by the Telephone Consumer Protection Act.


The law restricts telephone solicitations, i.e. telemarketing, and the use of automated telephone equipment.


In particular, the TCPA limits the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages and fax machines. It also specifies several technical requirements for fax machines, autodialers and voice messaging systems -- principally with provisions requiring identification and contact information of the entity using the device to be contained in the message.


“A compliant opt-out notice is required to be included on all Facsimile Advertisements by the TCPA and its implementing regulations,” Blake’s original complaint stated.


In November, Blake added the AAJ -- the world’s largest trial bar -- as a named defendant in the proposed class action.


He argues that the AAJ benefits from sending the faxes, as it receives royalty payments from JLBG Health when its members purchase the company’s insurance products and/or services.


Last month, the AAJ filed a motion to dismiss Blake’s amended complaint or is asking that the action be stayed pending resolution of petitions filed by the defendants with the Federal Communications Commission.


“This case should be dismissed, without prejudice, or stayed pursuant to the primary jurisdiction doctrine, the Hobbs Act and the Court’s inherent powers, because the FCC is expected to issue an order mooting Plaintiff’s claim,” the bar association wrote.


“Prior to his alleged receipt of the single, one-page facsimile on July 10, 2014, Plaintiff had provided AAJ with his express invitation and permission to send him facsimile advertisements. Thus, the facsimile advertisement at issue is considered ‘solicited’ under the TCPA.”


As the AAJ notes in its motion, there has been great debate in recent years as to whether opt-out notices are required for solicited facsimile advertisements.


Mainly because the TCPA expressly applies only to unsolicited facsimile advertisements; the regulation promulgated by the FCC purportedly requiring opt-out notices in solicited facsimile advertisements also expressly applies only to unsolicited facsimile advertisements; and the FCC expressly stated that the opt-out notice requirement only applies to unsolicited facsimile advertisements in the order promulgating the regulation that purportedly requires opt-out notices in solicited facsimile advertisements.


“Accordingly, a number of businesses engaged in litigation involving this issue petitioned the FCC for clarification,” the AAJ wrote.


In October, the commission issued a declaratory ruling stating that opt-out notices must be included in solicited facsimile advertisements.


The FCC recognized, however, that the requirement was not previously clear and that the commission’s prior guidance caused confusion. As a result, the FCC granted the petitioners a retroactive waiver of the opt-out notice requirement for solicited facsimile advertisements and a six-month window within which to come into compliance.


The FCC then expressly invited similarly situated entities to request the same waivers.


The defendants in this case have filed petitions with the commission seeking such waivers.


The AAJ argues in its motion that if their petitions are granted -- which, they contend, is “virtually certain” -- Blake’s claims will fail as a matter of law.


“To proceed with litigation at this time would not only create the potential of inconsistent rulings in TCPA cases and risk wasting the time and resources of the Court and parties, it would also be highly prejudicial to Defendants and provide no benefit to Plaintiff,” the bar association wrote.


Shawn A. Heller and Joshua A. Glickman of the Social Justice Law Collective PL, in Washington, D.C., and Peter and Richard Bennett of Florida-based law firm Bennett & Bennett are representing Blake and the proposed class in their lawsuit.


When asked about the AAJ’s dismissal arguments -- and whether, if successful, they could hurt other plaintiffs attorneys’ ability to bring similar lawsuits -- they declined to comment.


“We have no comment beyond our court filings,” Richard Bennett wrote in an email.


In a Jan. 26 response to the motion, the plaintiffs argue that the AAJ’s mootness argument is “wholly reliant” on their “false assertion” that Blake consented to receive the fax.


They also argue that lack of consent is not an element that the plaintiffs need to prove or plead.


“In the event that Defendants receive a waiver, consent would be, at most, an affirmative defense for which the defendant bears the burden of proof, warranting discovery and litigation, not a stay,” the plaintiffs wrote.


They continued, “Defendants’ Motion further mischaracterizes both the holding and impact of the FCC’s Oct. 30, 2014, Order. Contrary to Defendants’ Position, the 2014 Junk Fax Order supports Plaintiff’s claims, and moots nothing.


“Neither party has challenged the validity of any administrative order and there are no issues currently pending before the FCC that are also before this Court.”


In a reply to the response, filed Thursday, the defendants contend the issue at hand is “much simpler” than the plaintiffs “would have the court believe.”


“Plaintiff alleges a claim based entirely on solicited facsimile, such that the FCC’s forthcoming ruling will wholly dispose of his claim. In his briefing, Plaintiff contends, on the other hand, that his claim involves both solicited and unsolicited facsimiles, such that the FCC’s forthcoming ruling will not dispose of this case, but will instead narrow the issues and provide Defendants with an unassailable affirmative defense,” the reply states.


“Whichever is correct, the FCC’s forthcoming ruling will clearly have a tremendous impact on this case. Indeed, that ruling will have the force of law and anything that occurs in the interim will either be moot, superfluous or require vigorous reexamination to ensure compliance with the FCC’s ruling. Accordingly, both the primary jurisdiction doctrine and the Hobbs Act

favor dismissal or imposition of a stay.


“Moreover, since this case is at the pleading stage and no prejudice will be suffered, a stay pursuant to the Court’s inherent powers is also favored.”

The defendants contend Blake and the other plaintiffs are asking the court to ignore the “clear impact” of the commission’s forthcoming rule and “allow this case to immediately proceed in a textbook waste of judicial and party resources.”


“Unable to articulate a basis for his request, Plaintiff tries to confuse the issues by advancing a number of fragile and baseless arguments that, when examined, reveal the true purpose of his opposition,” the defendants wrote in their reply.


Steve Augustino, a partner at Kelley Drye & Warren LLP’s Washington, D.C., office, said the case is an “interesting” one because there are two parties to the litigation. However, the case, itself, is a common one.


Augustino, who focuses his practice on telecommunications and enforcement matters, is part of a team at Kelley Drye that is tracking the number of active TCPA petitions before the FCC.


He said he was somewhat surprised that the FCC adopted the approach it did, inviting entities to apply for waivers.


“I think the FCC created more work for themselves by addressing it the way they did,” he said, adding that it seems a little “overkill” that on every single fax -- even solicited ones -- the recipient must be warned they can opt out.


From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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