On Friday, in a split decision, the United States Court of Appeals for the District of Columbia Circuit entered its long-awaited ruling in Yaakov v. Federal Communications Commission, holding that "the FCC's 2006 Solicited Fax Rule is [] unlawful to the extent that it requires opt-out notices on solicited faxes." Order, Yaakov v. Federal Communications Commission, No. 14-1234, at 4 (D.C. Cir. Mar. 31, 2017) [hereinafter Yaakov Opinion].
The court's decision, if not appealed, will finally resolve the confusion and controversy surrounding an FCC order issued in 2006 (2006 FCC Order) announcing that the Telephone Consumer Protection Act (TCPA) requires opt-out notifications in fax advertisements sent with prior express invitation or permission ("solicited fax advertisements"), notwithstanding the fact that, by its express terms, the TCPA applies only to unsolicited faxes. 47 U.S.C. § 227(b)(1)(C) & (a)(5); In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991 Junk Fax Prevention Act of 2005, 21 F.C.C. Rcd. 3787, 3820–21 (2006).
In the wake of the 2006 FCC Order, and an October 2014 FCC order confirming the 2006 Solicited Fax Rule, several businesses were faced with class-action litigation seeking substantial claims for statutory damages. See Yaakov Opinion at 6-7 ("Petitioner Anda is a company that sells generic drugs ... Anda faxes advertisements to small pharmacies [that] have given permission to Anda for Anda to send those faxes"; nevertheless, Anda faced a class action suit wherein plaintiffs "sought over $150 million in damages ... Let that soak in for a minute: Anda was potentially on the hook for $150 million for failing to include opt-out notices on faxes that the recipients had given Anda permission to send").
In late 2014, several businesses filed petitions challenging the FCC's authority to impose the 2006 Solicited Fax Rule. Thirteen of these petitions were consolidated into Yaakov. In its strongly worded majority opinion, the Yaakov court examined the plain terms of the TCPA, concluding that "[a]lthough the [TCPA] requires an opt-out notice on unsolicited fax advertisements, the [TCPA] does not require a similar opt-out notice on solicited fax advertisements ... Nor does the [TCPA] grant the FCC authority to require opt-out notices on solicited fax advertisements." Yaakov Opinion at 8. Notably, the court rejected the FCC's argument that it was justified in promulgating the rule because Congress had not expressly prohibited such action, stating "[t]hat theory has it backwards as a matter of basic separation of powers and administrative law ... Congress has not authorized the FCC to require opt-out notices on solicited fax advertisements ... that is all we need to know to resolve this case." Id. at 9.
Given the decision that the 2006 Solicited Fax Rule was unlawful, the court did not reach the second issue before it – the challenges to the FCC's decision to waive application of the 2006 Solicited Fax Rule to fax advertisements sent before April 30, 2015. The petitions challenging the FCC's waiver were dismissed as moot.
We will continue to watch the Yaakov case closely to see whether the FCC decides to pursue an appeal. Any petition for writ of certiorari would be due within 90 days of entry of judgment, which was on March 31, 2017, making that deadline June 29, 2017. Of course, that deadline could change depending on whether the FCC seeks a rehearing.
For more background concerning this decision, see https://www.classactionlawsuitdefense.com/2016/10/12/yaakov-v-fcc-will-tcpa-opt-out-requirements-be-stricken-for-permissive-faxes/.
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