On June 6, 2017, the US Court of Appeals for the DC Circuit denied the government’s request for an en banc rehearing of a March 31, 2017, decision that invalidated a decade-old Federal Communications Commission (FCC) rule requiring that parties sending solicited faxes (sent with the recipient’s consent) must include an opt-out notice on the fax to avoid liability under the Telephone Consumer Protection Act (TCPA). The court found that the FCC did not have the authority to require an opt-out notice on faxes that were requested by or consented to by the recipient. A successful appeal to the US Supreme Court is unlikely, so the DC Circuit’s denial effectively settles an issue that has been at the heart of countless class action lawsuits for the last decade. Most importantly, businesses now have clarity on how they can communicate with customers via fax, and defendants in pending junk fax suits may have another defense in their arsenal.
The TCPA, as amended by the Junk Fax Prevention Act (JFPA), generally prohibits unsolicited fax advertisements and requires opt-out notices for unsolicited faxes. The TCPA/JFPA is silent on the question of whether solicited faxes—those sent with the permission of the recipient—also require opt-out language. In 2006, the FCC issued a rule requiring that opt-out notices must be included on all faxes, even those sent with the permission of the recipient. By adding this requirement to the TCPA, the FCC created an entirely new requirement for companies and an opportunity for plaintiffs’ attorneys.
On March 31, 2017, the DC Circuit struck down the FCC’s rule by a 2-1 vote. The decision, in Bais Yaakov v. Spring Valley v. FCC, 14-1234 (D.C. Cir. Mar. 31, 2017), has been previously analyzed by Eversheds Sutherland attorneys. See previous Legal Alert: Opting Out: TCPA Fax Opt-Out Requirement Struck Down—D.C. Circuit Says FCC Can’t Require Opt-Out Notices on Solicited Faxes and Legal Alert: Just the Fax: DC Circuit Rejects FCC Requirement of Opt-Out Language on Solicited Faxes Under the TCPA. In the March 31 decision, the court scolded the FCC for exceeding its authority in creating the additional requirement, noting that the “FCC may only take action that Congress has authorized.” The court did not elaborate on its earlier ruling in the June 6 decision, but the denial should end the appeal process, subject to an appeal to the US Supreme Court. This will give companies more certainty when evaluating whether their customer-facing practices comply with the TCPA.