Overview
While many businesses are aware that the Telephone Consumer Protection Act (TCPA) applies to calls and text messages (or, at least, they should be), less well-known is that the TCPA also extends to facsimile advertisements. More specifically, the Junk Fax Prevention Act of 2005 (JFPA) amended the TCPA and prohibits the “use [of] any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.” In recent years, a question has emerged: given technological advancements over the past decade, does the JFPA extend to so-called “e-faxes” (online fax services that receive faxes over the Internet and convert them to email or attachments to email)? Yesterday, in a published decision in Career Counseling, Inc. v. Amerifactors Financial Group, LLC, No. 22-1119, -- F.4th --, 2024 WL 220377 (4th Cir. Jan. 22, 2024), the Fourth Circuit answered that question clearly and conclusively in the negative, finding that e-faxes, as a matter of law, are not subject to the JFPA’s general prohibition on the sending of unsolicited fax advertisements because the faxes themselves are not received on a traditional fax machine. The cherry on top was the appellate court’s conclusion that, at the certification stage in a putative JFPA class action, thousands of mini-trials would be needed in order to determine which purported class members received a fax on a traditional fax machine as opposed to via e-fax, making class treatment inappropriate. Amerifactors is a terrific, well-reasoned ruling and, given the massive aggregated and uncapped statutory damages awards that can be doled out in TCPA and JFPA cases, should be kept front-of-mind by any company finding itself on the wrong side of the “v.” in a junk fax class action.
The facts in Amerifactors were straight-forward and followed the typical path: defendant sends an unsolicited facsimile advertisement to plaintiff; plaintiff, in turn, sues on behalf of a putative class of all recipients of the same and similar faxes and seeks up to $1,500 per fax in statutory damages. After the lawsuit was filed, the defendant petitioned the Federal Communications Commission (FCC), the agency tasked with construing the TCPA and JFPA, seeking a declaratory ruling that faxes received over email (e-faxes) are not protected by the JFPA. In December 2019, the FCC issued its order reaching that same conclusion. Thereafter, the district court denied class certification, holding that it would be required to go recipient-by-recipient in order to determine whether a fax was received on a traditional fax machine or not. The Fourth Circuit affirmed. Specifically:
- The court found that none of the appellant’s class certification arguments were “meritorious.”
- It rejected the appellant’s argument that “ascertainability” is not a class certification requirement within the Fourth Circuit. It is.
- The court did not wade into whether and what level of deference needs to be given to the December 2019 FCC Order. Rather, it applied a “plain language” analysis, holding that the JFPA on its face does not apply to e-faxes. The court explained that, while faxes may be sent by means other than a traditional “telephone facsimile machine” (such as by “computer, or other device”), to be actionable, a fax must be received on a traditional fax machine. The court also found that, while not necessary to resort to the statute’s legislative history, that legislative history, too, supports the same conclusion. The fact that the Fourth Circuit applied a plain language analysis is important given that the Supreme Court is currently deciding whether to do away with or modify Chevron (agency) deference altogether. (Oral argument in that case was held last week; we covered it here.) Thus, the Supreme Court’s forthcoming decision should not impact the Amerifactors
- The court rejected a Sixth Circuit case, Lyngaas v. AG, 992 F.3d 412 (6th Cir. 2021), that the JFPA plaintiffs’ bar has been shopping around in other cases, finding that Lyngaas “is not helpful to [appellant] . . . in that it defined an ‘efax’ as something different from an online fax service and specifies that an efax ‘is sent over a telephone line’ rather than ‘as an email over the Internet.’”
- The Fourth Circuit held that e-faxes do not qualify as faxes received on a “telephone facsimile machine” as a matter of law.
Amerifactors is a welcome decision in the telemarketing litigation defense space. It makes class certification in JFPA cases very difficult and provides a level of litigation parity in these types of cases.
