To ascertain how 47 U.S.C. 227(b)(1)(C), the federal law prohibiting the distribution of unsolicited advertisements via facsimile transmission was being enforced, I conducted a computer search for any state case citing the federal law. Any decision in a case brought to enforce the federal law would be expected to have cited the law under which suit was brought. I searched the data bank of state cases because the federal statute authorizes suit to be brought in the state courts and recent federal decisions have held that enforcement actions may be brought only in state court, not federal court. International Science and Technology Institute, Inc. v. Inacom Communications, Inc., 106 F.3d 1146 (4th Cir. 1997); Chair King, Inc. v. Houston Cellular Corporation, 1997 WL 768609 (5th Cir. 12/15/97); Foxhall Realty Law Offices, Inc. v. Telecommunications Premium Services, LTD, 975 F.Supp. 329 (S.D.N.Y. 1997) (attempted class action brought in federal court dismissed following International Science, supra); compare Kenro, Inc. v. Fax Daily, Inc., 962 F.Supp. 1162 (S.D. Ind. 1997) (unsolicited fax action initially brought in state court, removed to federal court, remand to state court denied because enforcement action of federal statute properly belongs in federal court).
I found four state cases citing the federal law, none of which related to unsolicited faxes; they related to other provisions of the federal statute. Two of the four cases related to the prohibition of automatic telemarketing devices. Moser v. Frohnmayer, 845 P.2d 1284 (Or. 1993); State by Humphrey v. Casino Marketing Group, 491 N.W.2d 882 (Minn. 1992). One found that a state's criminal law prohibiting the interception of cordless telephone communications was not preempted by this federal Communications Act of 1934, of which 47 U.S.C. Section 227 is a part. People v. Stevens 34 Cal.App.4th 56 (Cal. 1995). The final case dealt with live telemarketing. Scefczed v. Hillsborough Beacon 668 A.2d 1099 (N.J. 1995).
Although no published state case reflects an action to enforce the prohibition against unsolicited faxes, this latter case, Scefczed v. Hillsborough Beacon 668 A.2d 1099 (N.J. 1995), is instructive as to how actions to enforce the Telephone Consumer Protection Act proceed in state courts. In Scefczed the plaintiff, Ms. Scefczed, repeatedly received unwanted live telemarketing calls. She was particularly offended by the repeated calls because her husband was terminally ill. She repeatedly complained to the supervisor and telemarketers who repeatedly assured her that her name and number would be removed from their list. The telemarketing calls continued. She brought suit in small claims court, representing herself.
The court initially ruled that the statute, 47 U.S.C. 227, was inapplicable to facts of her case relating to live telephone solicitations. Upon motion for reconsideration, the court found under the FCC regulations enacted pursuant to the statute, 47 U.S.C. 227(c)(2), the facts of her case did state of cause of action and awarded her $1,500.00 in damages. The defendant then requested and was granted a new trial. Upon new trial, the United States government was allowed to join the lawsuit to defend the constitutionality of the federal law. The court found the law and its pertinent regulations constitutional. The court went on to hold that the defendant violated the act in failing, twice, to promptly place the plaintiff on a do-not-call list, in failing to honor her request after she had been placed upon that list, and in failing to properly train and instruct its telemarketing employees.
The court awarded plaintiff $500 for each of 4 unwanted telemarketing calls. The court refused to award treble damages, which are to be awarded when the "defendant willfully or knowingly violated the regulations." (47 U.S.C. Section 227(c)(5).) The court found that the defendant did have procedures to prevent violations of the act and that defendant had tried to prevent the unwanted call. Plaintiff contended only that the defendant's violations were knowing, not willful, violations of the law. The court opined that the term knowing "contemplates that defendant affirmatively knew at the time each telemarketing call to plaintiff was made, that such call was a knowing violation of the statute." 688 A.2d at 1111. The court volunteered that if the standard were "reckless or negligent," or "knew or should have known," instead of willful or knowing, its decision may have been different.
I also sought any federal cases enforcing the Telephone Consumer Protection Act, 47 U.S.C. Section 227. I conducted the same search in the published federal cases data bank. The search revealed a few cases dealing with actions brought to enforce the unsolicited fax law.
In one federal case, Joseph N. Main, P.C. v. Electronic Data Systems Corp., 168 F.R.D. 573, 575 (N.D.Tex. 1996), plaintiff's attorney sought to certify a potentially enormous and unwieldy class of all persons "who are now receiving, or who are about to receive unsolicited fax advertisements in the United States who are located in metropolitan areas with populations above 150,000 on or after December 20, 1992 through date of judgement." However, the court did not reach the merits of class certification question. Instead the court refused to certify the class because the motion for class certification was not timely brought.
In the Main case, the court mentions eight other similar class actions having been brought by the same attorney, Keith Jensen, in Texas state court in Dallas. Two were removed to federal court and six remained in state court. Of the two in federal court, one was dismissed and the other settled. Of those in state court, three were dismissed for failure to state a claim ("nonsuited"), the other half remained pending in the state court at the time of the federal court's opinion (Sept. 12, 1996). A possible problem with those Texas actions were that they were far too large in scope, as the Main case was. Additional information about these cases might be obtained from plaintiff's attorney Keith Jensen, probably in Dallas, Texas.
In another federal case, Kenro, Inc. v. Fax Daily, Inc., supra, 962 F.Supp. 1162, action was brought to enforce the federal law against defendants who had transmitted by facsimile machine an unsolicited publication "Fax Daily" which contained commercial advertisements. The action was initially brought in Indiana state court. The defendants successfully moved to remove the action to federal court. The federal court ruled: 1) that contrary to other federal court opinion, the action was properly maintained in federal court (see related decision in the same case at 904 F.Supp. 912); 2) that the amount of $500 per unsolicited was not excessive and did not violate constitutional due process protections; 3) the prohibition on unsolicited faxes did not violate the first amendment protection of free speech; 4) that certification of a class of plaintiffs consisting of all persons who had received from defendants without prior permission or invitation a fax containing advertisements was refused, relying on the decision in Forman v. Data Transfer, Inc. 164 F.R.D 400 (E.D.Pa 1995); and 5) that the publication, "Fax Daily" was an advertisement within the meaning of the federal law.
The ultimate resolution of the Kenro case does not appear to be published. I suspect that after class certification was denied, the matter settled before trial. I further suspect that the amount settled for, aware of the statutory amount of $500 per unsolicited fax, was a very small fraction of the plaintiff's attorneys fees amassed in the difficult legal battles to resist removal to federal court, uphold the statute's constitutionality, to certify the class, and keep the lawsuit alive. Additional information about this case and its resolution might be had by contacting plaintiff's attorney, Irwin B. Levin, at Cohen & Malad in Indianapolis.
The other federal cases citing the federal law and relating to the unsolicited fax portion of that law held that actions to enforce the unsolicited fax law must be brought in state court, International Science and Technology Institute, Inc. v. Inacom Communications, Inc., 106 F.3d 1146; Chair King, Inc. v. Houston Cellular Corporation, 1997 WL 768609; Foxhall Realty Law Offices, Inc. v. Telecommunications Premium Services, LTD, 975 F.Supp. 329, or that the law was constitutional, contrary to plaintiff's request to have the law declared unconstitutional, Destination Ventures, LTD v. Federal Communications Commission, 844 F.Supp. 632 (Or. 1994). One federal case held that faxes seeking to hire away employees were not "unsolicited advertisements" within the meaning of the statute, Lutz Appellate Services, Inc., v. Curry, 859 F.Supp. 180 (E.D.Pa 1994).
In sum, there appears to be no published state cases relating to actions brought to enforce the federal law prohibiting sending unsolicited faxes containing advertisements, 47 U.S.C. 227(b), although there is some indication that state suits have been brought, particularly as class actions. Some of those cases were removed to federal court over the plaintiffs' objections. The weight of federal cases (with one dissenting federal district court) hold that actions to enforce the federal law should be brought in state court, not federal court. The federal cases further hold the unsolicited fax law to be constitutional, but refuse to allow class actions to be brought to remedy its violations.
The published cases indicate that anyone bringing an action under 47 U.S.C. Section 227 needs to be prepared to bear the burden of expensive legal battles including those regarding where suit can be brought, whether the law is constitutional, and whether a class action can properly brought, if the action is brought as a class action. If Ms. Scefczed's case is any example, even if the action is brought without an attorney in small claims court, one must be prepared for extensive legal battles. Without the availability of the award of plaintiffs' attorneys fees, and without class actions, these likely costly legal battles present significant barriers to the effective enforcement of the federal law.