The Supreme Court of the United States has agreed to hear a Telephone Consumer Protection Act (TCPA) dispute concerning faxes that offer free information. The TCPA forbids the faxing of advertisements and commercial solicitations unless the sender has the recipient’s prior express written consent. In the case of Carlton & Harris Chiropractic vs. PDR Network (decided February 23, 2018), the Fourth Circuit Court of Appeals reversed a district court ruling and decided that a fax offering a free e-book constituted an advertisement and therefore violated the TCPA. The Fourth Circuit said it was constrained to accept the interpretation of the Federal Communications Commission (FCC) that even a free offer falls under the definition of an advertisement.
The defendant had argued that the offer of a free e-book could not be an unsolicited advertisement because it did not offer anything for sale. A West Virginia district court accepted that argument and dismissed the case but the case was reinstated by virtue of the Fourth Circuit’s reversal on appeal.
When the TCPA was enacted in 1991, Congress made it illegal to send “unsolicited advertisements” by fax. But in 2006, FCC went a step further, ruling that faxes offering free goods counted as advertisements for TCPA purposes. Now, the Supreme Court will to decide whether the FCC went too far in expanding the federal statute from advertisements to include free offers.
The Fourth Circuit admitted its acceptance of the FCC ruling might be “overinclusive in that (for example) it may bar an organization from faxing offers for truly free goods and services unconnected to any commercial interest.’ However, the Fourth Circuit wrote, “prophylactic rules are neither uncommon nor unlawful… such a per se rule advances the purpose of the underlying statute by protecting consumers from junk faxes, and also helps would-be-violators avoid inadvertent liability by eliminating the need for a case-by-case determination of whether a fax is indeed a free offer, or merely a pretext for something more.”
TAKEAWAY: Until the Supreme Court decides this issue, the best practice is to be sure to have the recipients’ prior express consent before sending a mass fax, even if the fax is informational in nature.
PartnerScott has focused on complex commercial litigation and arbitration involving advertising and marketing law, class action defense, administrative investigations, contractual disputes, consumer fraud, and business ...