In a recent decision, the U.S. Court of Appeals for the DC Circuit struck down the FCC’s 2006 Solicited Fax Rule. The Solicited Fax Rule required the sender of a fax to include a clear and conspicuous statement that the recipient has a right to opt-out of future faxes, including those the recipient had provided prior express consent to receive. Under the Telephone Consumer Protection Act (TCPA), failure to comply with the Solicited Fax Rule was subject to a minimum of $500 in statutory damages for each fax. Under the FCC’s interpretation of the rule, many advertisers subject to class action suits faced multi-million dollar penalties.
The 2-1 panel ruled that the FCC did not have the authority under the Junk Fax Prevention Act of 2005, which amended the TCPA, to regulate solicited faxes because the statute only addressed unsolicited faxes. The FCC argued that its interpretation of the term “prior express invitation or permission” meant that such permission only lasts until it is revoked and the Solicited Fax Rule provided a means to revoke that permission. The court disagreed, stating that, “[i]f you are finding the FCC’s reasoning on this point difficult to follow, you are not alone. We do not get it either. The phrase ‘prior express invitation or permission’ tells us what it may take for a fax to be considered solicited rather than unsolicited. The FCC can reasonably define that concept within statutory boundaries. The FCC can also reasonably provide, as it has, that a recipient may revoke previously granted permission by sending a request to the sender . . . . But what the FCC may not do under the statute is require opt-out notices on solicited faxes – that is, opt-out notices on those faxes that are sent with the prior express invitation or permission of the recipient.”
The court also rejected the FCC’s argument that the opt-out notice requirement for solicited faxes was “good policy,” emphasizing that the text of the TCPA does not support the FCC’s decision. The court therefore vacated the Solicited Fax Rule and remanded it for further proceedings.
This ruling eliminates the potential for lawsuits against companies that send sales, marketing, or other advertising communications via fax per the request or invitation of the recipient. Senders will still have to honor a recipient’s request to withdraw the recipient’s consent, but the fax cover sheet no longer has to include an opt-out notice and instructions.