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Nov. 3 — A golf store that received an unsolicited fax advertising a dentist's services doesn't need to establish vicarious liability to recover under the Telephone Consumer Protection Act, even though a third party allegedly sent the fax on the dentist's behalf, the U.S. Court of Appeals for the Eleventh Circuit ruled Oct. 30.
An individual “whose services are advertised in an unsolicited fax transmission, and on whose behalf the fax is transmitted, may be held liable directly under the TCPA's ban on the sending of junk faxes,” said Judge Richard K. Eaton of the U.S. Court of International Trade, sitting by designation. The court reversed a lower court's ruling granting summary judgment in favor of the defendant dental practice and remanded the case.
Although there's “nothing earth-shattering or ground-breaking” about the decision, the court's discussion of the distinction between “initiate” and “send” in the ruling is unique, Marc Roth, a partner at Manatt, Phelps & Phillips LLP in New York, told Bloomberg BNA Nov. 3.
The TCPA makes it unlawful “to initiate” certain unsolicited phone calls and “to send” unsolicited faxed ads, the Eleventh Circuit explained. Based on this statutory distinction, the court said, the Federal Communications Commission requirement of vicarious liability for a seller who initiates calls through a third-party telemarketer doesn't extend to a seller who sends an unsolicited, faxed ad through a third party.
The court appeared to give “more latitude to ‘send' than ‘initiate,' ” Roth said.
The defendant, John G. Sarris D.D.S. PA, paid Business to Business Solutions to send 7,085 fax advertisements promoting its dental services, the court explained. Plaintiff Palm Beach Golf Center-Boca Inc., a golf equipment store, received one of the fax transmissions.
The plaintiff brought a class-action lawsuit against the dental practice, alleging that its actions violated the TCPA, 47 U.S.C. § 227, and gave rise to common law claims of conversion.
A federal district court granted summary judgment on both the TCPA and conversion claims in favor of the defendant. It held that the plaintiff lacked Article III standing because it failed to prove that the fax was printed or seen, and it said the plaintiff could only recover under the TCPA under a theory of vicarious liability, which wasn't plead in the complaint.
The Eleventh Circuit, however, said the plaintiff had standing. The court said it agreed with the plaintiff's argument that “the specific injury targeted by the TCPA is the sending of the fax and resulting occupation of the recipient's telephone line and fax machine, not that the fax was actually printed and read.”
The court said the plaintiff had two bases for standing, deprivation of the use of its fax machine and “because the TCPA functions as a congressionally created ‘bounty,' permitting private individuals to sue based on a statutory violation.”
The district court's reliance on a Federal Communications Commission declaratory ruling, In re DISH Network LLC, 28 FCC Rcd. 6574 (2012), for the conclusion that the plaintiff must plead vicarious liability was “misplaced,” the Eleventh Circuit said.
DISH Network didn't address the junk fax ban in the TCPA, the Eleventh Circuit said. The FCC, which provided its input at the court's request, said in a letter to the court that DISH Network only applies to telemarketing call liability and that under a 1995 order the commission attributed direct liability under the TCPA to “the entity or entities on whose behalf facsimiles are transmitted.”
The court concluded that the FCC's interpretation of who qualifies as a “sender” was permissible, finding it consistent with the intent of Congress. It also concluded that the record contained enough evidence for a jury to find that the fax in this case was sent on the defendant's behalf and that the grant of summary judgment in the defendant's favor was in error.
The court also concluded that the district court erred in granting summary judgment to the defendant on the conversion claim. Judge Robert L. Hinkle of the U.S. District Court for the Northern District of Florida, sitting by designation, dissented only from this holding. “In my view, a person does not suffer a common-law conversion when the person chooses to connect a fax machine to a network, chooses to use paper and toner to print faxes, and then receives an unsolicited fax,” Hinkle wrote.
Judge Beverly B. Martin also served on the panel.
Bock & Hatch LLC, Anderson + Wanca and Cohen Milstein Sellers & Toll PLLC represented the plaintiff. Lane, Reese, Summers & Ennis PA and SmithAmundsen LLC represented the defendant.
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Full text of the court's opinion is available at http://www.bloomberglaw.com/public/document/PALM_BEACH_GOLF_CENTERBOCA_INC_a_Florida_corporation_individually.
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