Federal court affirms $4 million judgment for faxing unsolicited ads in violation of Telephone Consumer Protection Act

Posted
by Jay Pate

The federal Telephone Consumer Protection Act (“TCPA”) prohibits any person from sending unsolicited fax advertisements. The law authorizes someone who receives an unsolicited fax ad to bring a private suit against the violator in an appropriate court of their state. Through a private suit, one can either recover the actual monetary loss that resulted from the TCPA violation or receive up to $500 in damages for each violation, whichever is greater. The court may triple the damages for each violation if it finds that the defendant willingly or knowingly committed the violation.

Believing that CPAs would find his services attractive, attorney Gregory Turza sent more than 8,000 faxes containing business advice to more than 200 CPAs. Turza’s faxes did not contain any opt-out information, so if they are properly understood as “advertising,” then they violated the TCPA.

One of the CPAs filed a class action against Turza alleging violations of the TCPA. The federal district court certified a class of all those who had received the unsolicited faxes from Turza. The court ruled that the faxes were advertisements sent in violation of the federal law and ordered Turza to pay $500 in statutory damages for each of 8,430 faxes he sent, for a total of $4,215,000.

Turza appealed to the Seventh Circuit Court of Appeals. See Ira Holtzman, C.P.A. v. Turza (7th Cir. August 26, 2013). Turza first argued that individual issues regarding each fax should have prevented the case from being heard as a class action. The court of appeals disagreed, noting “[c]lass certification is normal in litigation under [the TCPA], because the main questions, such as whether a given fax is an advertisement, are common to all recipients.”

The court rejected Turza’s argument that each recipient must prove that he printed the fax (wasting paper) or otherwise suffered monetary loss. According to the court of appeals, “even a recipient who gets the fax on a computer and deletes it without printing suffers some loss: the value of the time necessary to realize that the inbox has been cluttered by junk.” Because the statute provides for a $500 penalty, the court held, each recipient is not required to prove his or her own actual damages.

The court also rejected the argument that each recipient would need to present evidence to prove that his fax machine or computer received the fax. The record established that a company had been hired to log and maintain records of which of the fax transmissions were received and which were not. There was no evidence suggesting the records were not accurate.

Turning to the merits, the question was whether the faxes contained ads. The faxes devoted about 75% of the space to mundane business advice and the remainder to Turza’s name, address, logo, and specialties. The district court thought it impossible for any reasonable juror to doubt that the faxes were ads for the commercial availability of Turza’s services. The court of appeals agreed.

According to the TCPA, “unsolicited advertisement” means “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise.” Although Turza’s faxes did not tout the quality of his services, they did declare their “availability.”

Turza contended that the 25% of the fax alerting potential clients to the availability of his services was “merely incidental” to the 75% that delivers business advice. The Seventh Circuit essentially found Turza’s position irrelevant because “the statute does not ask whether a notice of availability is incidental to something else.” The court gave the following example: If Macy’s faxes potential customers a page from the New York Times that is devoted 75% to news about international relations and 25% to an ad for goods on sale at Macy’s, it has sent an advertisement. In other words, the fact that most of the page is not an ad does not detract from the fact that the fax contains an advertisement.

The district court’s decision on the merits was affirmed by the court of appeals, but the remedial order was vacated. Although the district judge ordered Turza to pay $4,215,000, the district court did not explain how the money would be distributed to the class. The case was remanded with instructions to enter a judgment requiring Turza to remit the money to the registry of the court or to a third-party administrator. Then, once the court knows what funds are available for distribution, the court is to reconsider how any remainder will be applied if and when the class members are paid.

Unwanted text messages and faxes: know your rights

You have the power to stop unwanted text messages or spam texts by using the Telephone Consumer Protection Act. The Telephone Consumer Protection Act includes protection from unwanted text and emails sent to cell phones. If you are getting text messages or emails sent to your phone and you have not given consent, you may be entitled to $500 or more in damages for each text message.

Each TCPA violation—each individual text message, fax, or call—can result in damages from $500 to $1,500, and there is no limit on the number of alleged violations that can be included in a lawsuit.

Text messages are banned unless (1) you previously gave consent to receive the message or (2) the message is sent for emergency purposes. This ban applies even if you have not placed your mobile phone number on the national Do-Not-Call list of numbers telemarketers must not call.

If you have received spam or unauthorized text messages, contact the lawyers at Heygood, Orr & Pearson for a free consultation by calling toll-free at 1-877-446-9001 or by filling out the brief consultation form located at the top of this page.