Reality Wins: Sixth Circuit Affirms Companies Must Send Fax to Be “Sender” under TCPA

Bradley Arant Boult Cummings LLP
Contact

Bradley Arant Boult Cummings LLP

To be liable for a junk fax Telephone Consumer Protection Act (TCPA) violation, does a company have to actually send a fax? The plain language of the TCPA says yes: “It shall be unlawful for any person… to use any telephone facsimile machine, computer, or other device to send…an unsolicited advertisement[.]” The verbs are “use” and “send,” so the plain language of the TCPA limits liability to the person or company actually sending the fax. Some courts, however, have added a gloss on the statute and expanded liability to persons who use agents to send unsolicited advertisements. The Sixth Circuit recently took up a case that would have expanded TCPA liability much further. Thankfully, the court refused to depart from the language of the TCPA by holding that a company cannot be liable for a junk fax that it neither sent nor caused to be sent.

In Health One Medical Center, Eastpointe P.L.L.C. v. Mohawk, Inc., the plaintiffs alleged that Mohawk Medical, a pharmaceutical wholesaler, sent unsolicited junk faxes advertising its prices for products manufactured by various pharmaceutical companies. After Mohawk failed to answer the complaint, the plaintiff amended to add the two pharmaceutical companies as defendants, arguing that these companies were “senders” of the junk faxes because somebody else sent a fax advertising the companies’ products. While the companies presumably could have indirectly benefitted from increased sales from the faxes, they neither asked for nor authorized the faxes. Relying on some broadly written FCC regulations, the plaintiff asked the court to deem the pharmaceutical companies the senders because their goods or services were being advertised.

The Sixth Circuit was having none of it: “[T]o send a fax in violation of [the TCPA],” it held, “one must ‘use’ a fax machine or other device to convey or dispatch an unsolicited advertisement to another fax machine.” Because the pharmaceutical companies “neither dispatched the faxes nor caused them to be sent,” they could not be liable. With satisfying punchiness, it labeled the plaintiff’s theory as “some legal alchemy” and declared the pharmaceutical companies “innocent.”

The court also signaled that it might, on different facts, be willing to roll back the FCC regulations on which the plaintiff relied: “the use of a fax machine or other device, and the sender’s own responsibility for the conveyance or dispatch… are [requirements] that the agency must enforce, not elide.” Whether other litigants will accept this invitation to attack the FCC regulations is an issue to watch.

Health One joins a line of recent cases that refuse to impose TCPA liability where the allegation is that companies ratified or benefitted from illegal calls, faxes, or texts made by an agent See, e.g., Hodgin v. UTC Fire & Security Americas Corp., 885 F.3d 243 (4th Cir. 2018); Kristensen v. Credit Payment Servs., Inc., 879 F.3d 1010 (9th Cir. 2018); Jones v. Royal Admin. Servs., Inc., 887 F.3d 443 (9th Cir. 2018). However, unlike Health One, these other three cases were decided after discovery and depended on specific facts showing the degree of control or benefit received by the putative principal. Companies would be prudent to review their marketing contracts to make sure that they are requiring TCPA compliance in their agreements (including indemnification provisions, if possible), and clearly delineating that third-party marketing companies are not acting as agents.

Notably, the Sixth Circuit opened its opinion with a telling quip: “Some questions seem to arise only in class-action lawsuits.”  The TCPA, in all of its ineffective obsolescence, is a favorite of the class-action plaintiffs’ bar, which has had success using it to certify classes of uninjured plaintiffs and reap large fee awards. TCPA class-action filings are up, but—if this author’s experience is any guide––so are spam calls and texts and faxes. The ground has shifted beneath the TCPA, which Congress passed in 1991, and  no apparent benefits outweigh its draconian punishments. Congress should fix it or replace it.

Written by:

Bradley Arant Boult Cummings LLP
Contact
more
less

Bradley Arant Boult Cummings LLP on:

Reporters on Deadline

Related Case Law

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.