An unsolicited fax comes into your business, but via your computer's network, not on an old-fashioned fax machine. Nothing prints out on paper, but someone still has to deal with the unwanted advertisement. What's been lost? Your company's time. In a recent opinion, the Sixth Circuit held just that, recognizing that unsolicited faxes impose costs in the form of wasted resources, both physical and human.
In American Copper & Brass Co, Inc. v. Lake City Industrial Products, Inc., No. 13-2605, slip op. at 2 (6th Cir. July 9, 2014), American Copper, an equipment wholesaler, received an unsolicited fax advertisement for Lake City's products. American Copper then filed a class-action lawsuit against Lake City, alleging violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227 et seq. The trial court approved of the following class definition:
All persons who were successfully sent a facsimile on February 20, 2006, February 21, 2006 or February 22, 2006 from "Lake City Industrial Products, Inc."; inquiring, "Sick and Tired of Thin, Low Quality Import Pipe Thread Sealing Tape?"; stating "End the problem now with high quality, MADE IN U.S.A. 100% virgin ptfe pipe thread sealing tapes!"; and offering "Free! Private label on every roll for first time orders.
On appeal, Lake City argued that the class definition improperly encompassed persons that may not have received, noticed, or printed the fax, or who may not have owned the machines or fax numbers. It relied on a recent Michigan district court decision that studied the legislative history of the TCPA, concluded that the statute was intended to address simply for cost of paper and ink incurred by the owner of the fax machine, and held that only the person or entity that owned the fax machine that received the unsolicited fax had standing to assert a TCPA claim.
The court of appeals rejected this reading of the TCPA. It first noted that, because the language of the statute is clear, there was no need to delve into its legislative history. The Sixth Circuit also reasoned that the district court's reading of the TCPA was "too narrow," noting that "unsolicited fax advertisements impose costs on all recipients, irrespective of ownership and the cost of paper and ink, because such advertisements waste the recipients' time and impede the free flow of commerce."
Lake City made a number of additional unsuccessful arguments on appeal, including challenging the phrase "successfully sent" in the class definition; contending that the class was not objective ascertainable; and arguing that a Michigan procedural rule that would bar TCPA class actions in Michigan state courts should apply in federal court. The broader effect of the court's ruling is to recognize that unsolicited faxes can clog network systems and drain productivity — all without costing a dime in paper and ink.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.