If you send advertising faxes (“faxed ads”), last week’s decision by the Federal Communications Commission (“FCC” or “Commission”) could have a major impact on you or your business. On October 30, the FCC released an Order in which it clarified that ALL faxed ads must contain the opt-out information required by the FCC’s rules. The decision rejected the arguments made by numerous petitioners claiming that only unsolicited fax advertisements should be required to include the detailed opt-out notice required by the rules.

In the Order, the FCC:

• Confirmed that “opt-out notices are required on all fax ads” and that those notices must conform to the standards adopted by the FCC in its 2006 Junk Fax Order.
• Granted retroactive relief to specific parties that made requests for waiver due to uncertainty over the issue of whether the opt-out notice requirement applied to faxes sent with the recipient’s prior permission.  These identified parties were given until April 30, 2015 (a 6-month window from October 30, 2014) to bring their practices into conformance with FCC requirements. The Commission also invited similarly situated parties to seek waivers.
• Declared that Rule 64.1200(a)(4)(iii) applies to all faxed ads, including those sent with the recipient’s prior express permission or based on a prior existing business relationship, and each opt-out notice must:
  • be clear and conspicuous;
  • state on the first page of the ad that the recipient may make a request to the sender not to send any future ads and that failure to comply, within 30 days, with such a request is unlawful; and
  • contain a domestic contact telephone number and fax number for the recipient to transmit an opt-out request.
• Stated any opt-out notice not satisfying all of these requirements is deficient.
• Refused to grant declaratory rulings that the Commission “lacked the statutory authority to require opt-out information on fax ads sent with a consumer’s prior express permission or, alternatively, that section 227(b) of the Communications Act of 1934, as amended … was not the statutory basis of that requirement.”

In 2010, Anda, Inc. (“Anda”) filed a Petition for Declaratory Ruling (“Petition”) with the FCC’s Consumer and Governmental Affairs Bureau seeking clarification that the FCC lacked the authority to adopt opt-out notice rules for faxed ads sent with the prior express invitation or permission of the recipient under the Telephone Consumer Protection Act (“TCPA”), the law under which the FCC adopted its opt-out notice rules. Anda argued that the plain language of the TCPA did not give the FCC authority to adopt the same onerous opt-out rules for solicited faxed ads as it placed on unsolicited faxed ads.

Alternatively, Anda requested that the FCC clarify that section 227(b) of the TCPA was not the basis for its rules regarding opt-out notice requirement for solicited fax advertisements. Anda sought this alternative clarification because section 227(b) provides a private right of action that allows consumers to sue the sender of an unsolicited fax advertisement that does not comply with the law’s requirements, including the FCC’s opt-out notice requirement. This private right of action has lead to a significant number of class action lawsuits with damage demands that can reach into millions, or even billions, of dollars. In filing its Petition, Anda sought to prevent these types of lawsuits from being filed against senders of solicited faxed ads.

In 2012, the Consumer and Governmental Affairs Bureau denied Anda’s Petition, and Anda filed an Application for Review (“Application”) with the Commission. In addition to the arguments Anda raised in its Petition, Anda’s Application also sought a retroactive waiver of the FCC’s opt-out rules for faxed ads it sent with prior express invitation or permission of the recipient if the Commission rejected its first two arguments.

In its Order last week, the Commission denied, in large part, Anda’s Application. It also denied 23 petitions for declaratory ruling filed by other similarly situated petitioners. However, the Commission granted a retroactive waiver of its opt-out notice rules for solicited faxed ads for Anda and the 23 other petitioners. The waiver applies only to advertising faxes sent with the prior express permission of the recipient between the adoption of the FCC’s opt-out rules in 2006 and April 30, 2015. The Commission also encouraged other similarly situated parties to request waivers of the FCC’s opt-out notice rules.

The Commission’s Order makes clear that businesses or individuals that did not fully comply with the Commission’s opt-out notice rules when sending solicited faxed ads were in violation of the rules. Therefore, parties that do not receive a waiver of the opt-out notice rules could be subject to future enforcement action by the FCC, potentially including forfeiture penalties.

This Order will likely have several impacts on TCPA litigation as well.  First, it is quite likely judges will agree that any party to litigation that was also granted a retroactive waiver is excused from liability for any solicited faxed ad sent during the waiver period.  Moreover, such parties can take the position plaintiffs cannot challenge the FCC’s waiver before the trial court because of the Hobbs Act, which limits challenges of FCC orders to the courts of appeal.

Second and conversely, a plaintiff suing a defendant that does not receive a waiver can argue the Hobbs Act prevents such a defendant from urging the trial court to excuse opt-out notice failures because the FCC granted waivers to other parties.  This is a technical argument that may or may not prevail.

Third and finally, the plaintiffs bar will likely interpret the October 30 Order as a green light to sue any sender of faxed ads not fully in compliance with the opt-out requirement unless the sender received an FCC waiver.  Accordingly, we recommend any client that sends faxed ads consider reviewing those ads, their opt-out notice and their general faxing policies with an attorney. We also recommend that any client that sends faxed ads promptly consider seeking a waiver similar to the one granted in the FCC’s October 30 Order.

If you would like more information on how this decision may impact you or your business, or if you would like assistance filing a waiver of the FCC’s opt-out rules, please contact Jane Wagner: jlw@commlawgroup.com – 703-714-1321 – Linda McReynolds: lgm@commlawgroup.com – 703-714-1318 – or Robert Jackson: rhj@commlawgroup.com – 703-714-1316.