Considering the extent of knowledge necessary to engage in a willful or knowing violation of the Telephone Consumer Protection Act, the Eleventh Circuit Court of Appeals ruled that a plaintiff must demonstrate actual knowledge on the part of a defendant that its conduct would violate the statute.

The federal appellate panel also held that a single fax can serve as the basis for two separate violations of the statute—and twice the damages.

John Lary filed a pro se complaint in Alabama federal court against Trinity Physician Financial & Insurance Services and its owner. He claimed that the defendants used an automated telephone dialing system to send an unsolicited advertisement to Lary’s emergency telephone line in violation of the TCPA.

A practicing physician, Lary said he maintains a fax machine connected to an emergency telephone line in his health care facility. In his complaint, Lary alleged that he received just one fax on October 2, 2012, but alleged the defendants violated two separate provisions of the statute: Section 227(b)(1)(A)(i) (prohibiting the use of an ATDS to call any emergency telephone line) as well as Section 227(b)(1)(C), for unlawfully faxing an unsolicited advertisement.

Lary sought treble damages under the TCPA, accusing the defendants of willful and knowing violations of the statute. The defendants notified the court they would not mount a defense and would accept a default judgment. In a motion to the court related to damages, Lary argued he should receive $6,000, and requested treble damages for violations of two provisions of the statute, for two faxes, after adding a second fax to his complaint.

The federal district court awarded Lary a total of $1,000 in damages, or $500 per fax. The judge declined to treble the award and held that each fax constituted a single violation of the statute.

Lary appealed.

Although the Eleventh Circuit determined that the district court awarded Lary the correct amount of damages, the federal appellate panel used a different calculus. Lary’s last-minute addition of a second fax failed, as the defendants could not be held liable in a default judgment for a fax that was not alleged in the complaint, the court said.

However, the error was harmless because Lary was entitled to damages for the remaining fax for two separate violations of the TCPA.

“When [the defendants] used—or employed a third-party to use—an ‘automatic telephone dialing system’ to place a call to ‘an emergency telephone line,’ they committed a violation of the Act, regardless of what message they transmitted,” the panel wrote. “When [the defendants] used that call to ‘send’ an ‘unsolicited advertisement,’ they committed another violation of the Act, and this call would have been a violation even if they had not sent the advertisement to an emergency line.”

Nowhere does Section 277(b) suggest that a continuous course of conduct is limited to a single violation, the Eleventh Circuit said. The statute describes the remedies that a plaintiff can seek and the use of the phrase “each such violation” indicates that a plaintiff may be able to recover for multiple violations.

“In plain terms, the statute allows a person to recover ‘$500 in damages for each’ ‘violation of this subsection,’” the court said. “Section 227(b)(1) has no language limiting the recovery to $500 per ‘call’ or ‘fax,’” while other subsections of the statute suggest that damages should be awarded per “call.” The panel cited a similar holding from the Sixth Circuit Court of Appeal.

At $500 per violation for two subsections relating to a single fax, Lary was entitled to $1,000, the court concluded.

As for trebled damages, they were not available because the plaintiff “failed to allege facts or present evidence to establish that [the defendants] knew they sent a fax to an emergency line or that the advertisement was unsolicited,” the panel explained.

“The requirement of ‘willful[] or knowing[]’ conduct requires the violator to know he was performing the conduct that violates the statute,” the court wrote. “For example, to violate section 227(b)(1)(A)(i), a defendant must know that he is using an ‘automatic telephone dialing system’ to place a ‘call,’ and that the call is directed toward an ‘emergency’ line. If we interpreted the statute to require only that the violator knew he was making a ‘call’ or sending a fax, the statute would have almost no room for violations that are not ‘willful[] or knowing[].’”

Lary’s assertion that the defendants willfully and knowingly violated the TCPA was bare and the complaint lacked any allegations that defendants knew the advertisement was unsolicited or that it was sent to an emergency line, the court said.

The panel also affirmed that Lary was not entitled to a permanent injunction or costs.

To read the opinion in Lary v. Trinity Physician Financial & Insurance Services, click here.

Why it matters: The Eleventh Circuit’s decision presents something of a mixed bag for TCPA defendants. On the one hand, plaintiffs have much to like in the panel’s ruling that a single fax can result in multiple violations of the statute and additional damage awards. On the other, defendants can take some solace in the court’s requirement that a plaintiff must demonstrate that a defendant knows he or she performed the conduct that violates the statute, which can serve as a limitation on trebled damages.