Oppositions to a petition for certiorari were recently filed with the United States Supreme Court urging the Court to reject a proposed appeal filed by serial Telephone Consumer Protection Act (TCPA) plaintiffs seeking review of a March 2017 ruling by the US Court of Appeals for the DC Circuit striking down a 2006 Federal Communications Commission (FCC) rule requiring opt-out notices to appear on solicited fax advertisements. On January 16, 2018, the FCC and a group of companies, which have been sued for alleged violations of the TCPA, separately urged the Supreme Court to reject a September petition for certiorari filed by several TCPA serial class action plaintiffs (the Petitioners) seeking review of the March 2017 DC Circuit panel decision. The filings signal the next phase of protracted litigation over the 2006 FCC fax rule.
As discussed in other Eversheds Sutherland legal alerts, the TCPA, as amended by the Junk Fax Prevention Act (JFPA), generally prohibits unsolicited fax advertisements and requires opt-out notices for unsolicited faxes. The TCPA/JFPA, however, is silent about whether solicited faxes—those sent with the permission of the recipient—also require opt-out language. In 2006, the FCC issued a rule requiring that opt-out notices must be included on all faxes, even those sent with the permission of the recipient.
In 2010, Anda Pharmaceutical Inc. (Anda), the defendant in a class action alleging Anda sent solicited fax advertisements to pharmacies without the opt-out notice required under the FCC rule, petitioned the FCC for a declaratory ruling clarifying that the JFPA does not require businesses to place opt-out notices on solicited faxes. In October 2014, the FCC issued an Order affirming that the JFPA allowed the FCC to require the inclusion of the notices on all fax advertisements, regardless of whether the recipient had given permission. Anda appealed the FCC’s Order to the DC Circuit.
In a March 31, 2017 ruling, the US Court of Appeals for the DC Circuit invalidated the 2006 FCC rule. The court, in Bais Yaakov of Spring Valley et al. v. FCC, 14-1234 (D.C. Cir. Mar. 31, 2017), held that the FCC lacked the authority under the TCPA to require opt-out notices on solicited faxes because the JFPA requires only that opt-out notices be included on unsolicited faxes. The majority of the court found that allowing the FCC to promulgate a rule requiring opt-out notices on solicited faxes was beyond the scope of the authority delegated by Congress. On June 6, 2017, the DC Circuit denied the FCC’s request for an en banc rehearing of the March decision.
The Petitioners, led by Bais Yaakov of Spring Valley, filed a writ of certiorari to the Supreme Court in September 2017 seeking review of the March decision. The Petitioners argue that the D.C. Circuit’s decision conflicts with other courts on how to interpret statutory silence under the standard set by the US Supreme Court in Chevron USA Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), “effectively rewrit[ing]” the Chevron test by interpreting “statutory silence” to prohibit the FCC from enacting the rule.
In opposing the writ, the companies—which include, among others, Anda Pharmaceutical Inc., Merck & Co., Purdue and ZocDoc Inc.—argue that the DC Circuit decision is nothing more than “a straightforward statutory-interpretation decision that does not implicate any division of authority” and therefore is not worthy of the Supreme Court’s attention. Both the companies and the FCC also question the practical value of reviewing the decision in light of the FCC’s lack of opposition to the rule being vacated and the existence of retroactive liability waivers limiting the universe of businesses that the Petitioners could sue.
A decision on whether the Supreme Court will grant certiorari is expected later this year. Going forward, even though the 2006 FCC rule remains vacated, businesses and their counsel should be mindful of the core requirements of the TCPA and the JFPA. Best practices include the following:
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Unsolicited fax advertisements are generally prohibited by the TCPA, even if an opt-out notice is included on the fax.
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A fax advertisement may be sent to a party with whom the sender has an established business relationship (EBR), subject to various requirements. An opt-out notice is required if the sender is relying on the EBR.
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For a solicited fax advertisement (sent with the express permission of the recipient), an opt-out notice is no longer strictly required by the TCPA, but inclusion of an opt-out notice on all faxes is a best practice.
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An opt-out notice should contain each of the elements required by the FCC rules, which are specific on the mechanisms and disclosures that must be included.
For solicited faxes, businesses must maintain appropriate records so that they are aware of recipients who have provided express consent and those who have opted out of receiving further communications.
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