Fourth Circuit Limits Scope of TCPA Fax Prohibitions and Suggests Class Actions to Enforce are Doomed

The TCPA prohibits “send[ing], to a telephone facsimile machine, an unsolicited advertisement.” 47 U.S.C. s. 227(b)(1)(c).

After receiving such an unsolicited advertisement on its fax machine from AmeriFactors Financial Group, plaintiff  Career Counseling, Inc. brought a putative class action in South Carolina. While that litigation was pending, AmeriFactors obtained a declaratory ruling from the FCC, holding that the TCPA’s prohibition only applies to advertisements sent to physical fax machines–not to advertisements that are sent to fax numbers run by online fax services.

The district court (now DC Circuit Judge Childs) denied class certification, holding that the class was not ascertainable, since there was no way of knowing which faxes sent by AmeriFactors were transmitted to actual fax machines (which are within the scope of the TCPA) and which were sent to online fax services (which, under the FCC declaratory ruling, were not).

On appeal, the Fourth Circuit affirmed, rejecting arguments that Rule 23 contains no ascertainability requirement, and that the district court was not bound to give deference to the FCC’s declaratory ruling. As to the former, the panel found it was bound by circuit precedent. As to the latter, the court did not resolve what degree of deference was owed to the FCC’s ruling, as, interpreting the statute de novo, it agreed that the TCPA’s plain language only prohibits the sending of unsolicited advertisements to “stand-alone fax machines,” not “online fax services.”  The court then agreed that the district court had not abused its discretion in holding that the plaintiff’s proposed method for identifying which fax numbers belonged to stand-alone fax machines was not so fool-proof to meet its burden as to ascertainability. Under this reasoning, it would appear difficult, if not impossible, for any TCPA class action based on unsolicited fax advertisements to meet the Fourth Circuit’s standard.

The Fourth Circuit did, though, reject AmeriFactors’ cross-appeal as to the district court’s merits decision in favor of the individual plaintiff. As to the cross-appeal, AmeriFactors had argued that it was not liable as the fax’s sender, because it was defrauded and deceived by a fax broadcaster it hired. Like the district court, the court of appeals found the record did not show any such fraud or deception.

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