Legal Newsline

Thursday, October 17, 2019

D.C. Circuit to decide fate of rule governing fax ads

By Joe Dyton | Oct 24, 2016

WASHINGTON (Legal Newsline) - A decade-old Federal Communications Commission (FCC) rule and a 2014 change to that rule will be revisited to determine exactly which type of advertising faxes require an opt-out message under the Telephone Consumer Protection Act.

In May 2006, the FCC promulgated new rules in regards to fax advertisements. The FCC ruled any fax advertisement must include an opt-out notice, whether the recipient had already given permission to get the ad or not. However, a footnote deemed confusing said that the opt-out notice requirement only was applicable to unsolicited advertisements. 

To clear up the confusion, the FCC issued another order in October 2014 that acknowledged the confusion caused by the 2006 rule change. The FCC issued retroactive waivers of compliance with the opt-out requirement when the sender had expressed prior permission to send a fax advertisement. Anyone who failed to comply with the requirements up to six months before Oct. 30, 2014 was provided with a waiver. Applications for waivers were taken until April 2015. 

“In order to determine what a fax ad must include under the Telephone Consumer Protection Act, one must first determine whether the fax ad is considered ‘unsolicited’ or ‘permissive,’” BakerHostetler law firm partner Casie Collignon told Legal Newsline. 

Conversely, where a sender receives prior express invitation or permission, a fax is considered to be permissive.”

Although the confusion may have been erased, petitions ensued. The U.S. Court of Appeals for the District of Columbia has recently combined 13 separate petitions challenging the 2014 FCC order into a solitary action. 

The Yaakov v. Federal Communications Commission case raised two primary challenges to the FCC order. One, the petitioners say the TCPA unambiguously prohibits the FCC from requiring advertisers to include an opt-out notice on fax advertisements that were sent with prior invitation or permission as a way to prevent future unsolicited faxes.

The second reason for the challenge is to argue against the FCC’s authority to retroactively waive violations of the opt-out notice requirements.

“Where senders have obtained voluntary consent to send such advertisements by express invitation or permission, revoking consent would not be impractical for recipients because they have communicated directly with the send and are, thus, aware of the identity and contact information, which is not necessarily the case with unsolicited fax ads,” Collignon said. 

“Further, the express terms of the TCPA address only unsolicited ads. For these reasons, I think it would serve the purpose of the TCPA if the D.C. Circuit were to invalidate the 2014 FCC order.”

When oral arguments begin Nov. 8, it won’t just be the FCC and the 13 petitioners who are watching the case with interest. There are putative class action cases across the country that have sought stays based on how this case turns out. 

For example, the St. Louis Heart Center Inc. v. Athena Health, Inc. case has been stayed because the plaintiff’s putative class had solicited and unsolicited ads, the defendant had provided sufficient evidence to prove the faxes could have been sent with prior permission and the Yaakov v. FCC case out come could impact any class certification decision because it was specifically relevant to the determination of commonality.

“In addition to the 13 separate petitions that were consolidated in the Yaakov v. FCC case itself, BakerHostetler was able to identify at least two other cases that have been stayed pending the outcome of the Yaakov decision,” Collignon said. 

“However, it’s very difficult to estimate how many other cases are actually waiting on this decision nationwide because most of the cases are pending in district courts.”



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