[co- author: Grace Rosales]
A traditional fax machine is more and more giving way to email “desktop faxing” or efaxing. We know the TCPA covers the former, but does it also cover the latter? Understanding the subtle distinctions to this question and its answer can mean the difference between multimillion dollar liability or no liability.
In the Westfax Decision,[1] the FCC clarified that faxes transmitted by conventional fax machines and converted into email for recipients (efaxes) are subject to the TCPA. The FCC noted that “Efaxes, just like paper faxes, can increase labor costs for businesses, whose employees must monitor the faxes to separate unwanted from desired faxes.” The FCC reasoned that efaxes “[a]re sent over telephone lines, which satisfies the statutory requirement that the communication be a fax on the originating end.” The FCC’s analysis turned on whether the text or images (or both) were transmitted over a telephone line.
Notably, however, the FCC made a critical distinction that fax messages transmitted over the internet are not subject to the TCPA. The FCC specifically stated that “a fax sent as an email over the Internet — e.g., a fax attached to an email message or a fax whose content has been pasted into an email message — is not subject to the TCPA.” So what about a fax that is not an email, but nevertheless originates digitally and is received by the intended recipient via email?
In November 2015, the FCC received a petition asking the Commission “to declare that alleged ‘faxes’ that initiate in digital form and are received in digital form do not fall within the TCPA.” The petitioner, Joseph T. Ryerson & Son (“Ryerson”), is a distributor and processor of metals, involved in pending TCPA class action litigation for delivering an Internet fax through a third-party Web portal, which was then received by the intended recipient via email.
The Ryerson petition argues Internet faxes that are both sent and received digitally are more closely analogous to an email than a traditional fax and, therefore, should not be governed by the TCPA. The petition contends that Congress’s reasons for enacting the TCPA’s fax restrictions (costs associated with the use of fax machines and paper; the time in which fax machines are unable to process actual business communications; and other “interference, interruptions and expense”) are less compelling when applied to messages transmitted and received in digital form because “no paper, ink, or toner was used in the alleged transmission, and [the recipient’s] phone line was not tied up for incoming business calls or faxes.”
The petition also contends that applying the TCPA to digital fax transmissions would violate the First Amendment and would be void for vagueness under the First and Fifth Amendments. The petition argues that nothing in the express language of the TCPA or its legislative history suggests that the statute would or should apply to messages both initiated and received digitally, and thus such application would render the statute unconstitutionally vague.
Thirteen companies and individuals filed comments to the Ryerson petition. Comments opposing the petition suggest that even traditional emails are subject to the TCPA as long as they are sent with a system “capable of” sending an advertisement to a fax number. The Ryerson petition remains pending.
Businesses whose marketing or business practices involve delivering advertisements to consumers do well to consider not using conventional fax machines. Instead, companies might explore the various desktop faxing or efax options available as a way to potentially minimize the specter of a fax blast class action. For businesses already facing a class action, they do well to immediately consider whether the fax(es) at issue in the lawsuit were sent utilizing desktop faxing. If so, defendants have two additional strategies at their disposal: (1) filing a motion to dismiss on the grounds that the plaintiff does not have standing under the TCPA because the fax(es) at issue were digitally transmitted and received; (2) file a motion to stay pending the FCC’s decision in Ryerson.
Endnote
[1] https://apps.fcc.gov/edocs_public/attachmatch/DA-15-977A1.pdf
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