The US Court of Appeals for the D.C. Circuit invalidated a rule issued by the Federal Communications Commission (FCC) in 2006 requiring businesses to include opt-out notices when the recipient has consented to receive the fax. The court held that the FCC lacked the authority under the Telephone Consumer Protection Act to require such notices given that the Junk Fax Prevention Act of 2005 only requires that notices be placed on unsolicited faxes. The court concluded that the FCC’s rule requiring opt-out notices on unsolicited faxes was improper.

The FCC had argued under former Chairman Tom Wheeler (who has since been replaced by Chairman Ajit Pai) that it could take an action, including regulating notices on solicited faxes, “so long as Congress has not prohibited the agency action in question.” In rejecting that argument, today’s opinion reasoned that the “theory has it backwards as a matter of basic separation of powers and administrative law” and that the “FCC may only take action that Congress has authorized.”

The decision is an important step towards providing businesses with more common sense guidance in complying with laws applicable to customer communications.