United States: Econo-Med Pharmacy Settles Class Action With Roche

Noncompliant “opt-out” notices weaponize fax machines

Just the Fax

Few would deny that unwanted faxes waste money and cause aggravation. Unlike the single call or text that sets off a multimillion-dollar TCPA class action, junk faxes cause tangible wear and damage to the underlying technology, using up expensive ink, paper and toner.

David v. Goliath

Econo-Med Pharmacy, a small, family-owned pharmacy in Cherokee Village, Arkansas, claims that it had received multiple junk faxes from Indiana-based Roche Diagnostics Corporation, a medical equipment company. One exemplary fax from Roche touted the “Accu-Chek Test Strip” product and its attachment to a major insurer.

The faxes, however, had not been solicited by Econo-Med; they also failed to include a TCPA-compliant opt-out notice that would give the receiver some measure of control over the number of faxes it received. Based on these allegations, Econo-Med launched a class action on behalf of recipients of similar ads from Roche. The action was filed in the Southern District of Indiana in April 2016, claiming violations of the TCPA and the Indiana Deceptive Consumer’s Sales Act, which incorporates the TCPA, and specifically referencing the disruption the faxes caused Econo-Med’s business.

In August, Roche and Econo-Med finalized a settlement, the terms of which were first worked out in mediation back in February. Pharmacies and other recipients of at least one unsolicited fax ad from Roche would receive around $1,100. The deal covered faxes received between April 2012 and March 2017; altogether, the settlement cost Roche $17 million, $5.6 million of which was set aside for attorneys’ fees.

The Takeaway

It is important to note that the Roche faxes received by Econo-Med and its fellow class members did have an opt-out notice; the issue in the action was not the lack of a notice, but that the notice did not comply with the TCPA’s guidelines. Companies that are faxing advertisements or other business-related missives must carefully comply with the TCPA rules on the matter or risk expensive blowback from similar class actions. To comply with the law, an opt-out notice must (1) inform the recipient that the recipient may opt out of receiving future faxes by contacting the sender; (2) provide both a domestic telephone number and a facsimile machine number – one of which must be cost-free – that the recipient may contact to opt out of future faxes; and (3) inform the recipient that the sender’s failure to comply with an opt-out request within 30 days is a violation of law.

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