Last week, the Ninth Circuit in True Health Chiropractic, Inc. v. McKesson Corp. (True Health II), No. 22-15710 (9th Cir. Oct. 25, 2023), affirmed the Northern District of California’s earlier ruling in True Health Chiropractic Inc. v. McKesson Corp., 13-cv-02219 (N.D. Cal. Apr. 27, 2022), which clarified the standards for certifying classes under the TCPA and determining whether a violation of the TCPA is sufficiently “willful and knowing” to warrant treble damages.
In True Health, plaintiffs received 13 faxes from defendant advertising and offering rebates for medical billing software. Plaintiffs attempted to certify a class and asked for treble damages, alleging that defendant “willfully and knowingly” violated the TCPA when it sent the faxes. In response, defendant argued that plaintiffs had consented to receiving the faxes because they filled out optional registration forms giving their contact information and had authorized the transmission of “certain computer and software usage information” by signing an end user license agreement (“EULA”). True Health, No. 22-15710 at 4. Plaintiffs had filled out both documents when purchasing other products from defendant.
The District Court found that neither the filled-out registration forms nor the signed EULAs constituted consent to receive the faxes because neither provided sufficient indication “to a reasonable consumer that . . . he or she had agreed to receive faxed advertisements.” Id. at 3. Accordingly, each of defendant’s 13 faxes was found to be a separate violation of the TCPA.
Nevertheless, plaintiffs were not allowed to proceed as a class because the Ninth Circuit affirmed the lower court’s reliance on the FCC’s ruling in In re Amerifactors Financial Group, LLC Petition for Expedited Declaratory Ruling, 34 FCC Rcd. 11950, 11950-51 (2019), which found that the TCPA does not apply to faxes received through an online faxing service. The District Court relied on Amerifactors to find that a class cannot be certified when it is impossible to distinguish which class members received faxes on a standalone fax machine and which received faxes through an online service.
Finally, the Ninth Circuit affirmed that the “willful and knowing” standard for trebling damages includes “reckless” TCPA violations where the evidence shows that “the company ran a risk of violating the law substantially greater than the risk associated with a [merely careless] reading” of the statute. True Health, No. 22-15710 at 8. The court concluded that a sender’s mere knowledge that they were sending faxes does not rise to this standard. The Ninth Circuit affirmed the lower court’s decision not to treble damages, finding that defendant had neither “knowingly violated the TCPA or ran a risk of violating the TCPA that was substantially greater than the risk associated with a ‘merely careless’ reading of the TCPA.” Id.
Andrew C. Scarafile was a contributor to this article.
