On October 30, 2014, the FCC released an order that effectively resolves nearly half of the Telephone Consumer Protection Act (“TCPA”) petitions pending before it. This order addresses 24 petitions seeking clarification of the Commission’s rules requiring individuals and entities that send fax advertisements to include certain information on the fax to allow recipients to “opt-out” of receiving such transmissions in the future. The FCC denied all of the petitions insofar as they requested the FCC to rule that the “opt out” language requirement did not apply to faxes sent with the prior express consent of the recipient, but granted a retroactive waiver to the petitioners and other similarly situated parties because the scope of the opt-out requirement was previously unclear. The order thus will address a key issue in many pending TCPA class action cases. Moreover, by permitting similarly situated parties to seek the same waiver, the FCC essentially sets the stage to remove this issue from all TCPA cases involving fax transmissions. Any party facing a claim based on opt-out notices should take note of this order.

The FCC’s order primarily addresses an Application for Review filed by Anda, Inc. (“Anda”). Anda’s petition, like the other fax petitions, involves faxes sent to persons that granted permission to receive faxes. Plaintiffs that received these so-called “solicited” faxes sued under the TCPA alleging that the faxes either lacked sufficient opt-out language or failed to include opt-out language altogether. Anda sought a declaratory ruling on the issue from the FCC in 2012 but the Consumer and Governmental Affairs Bureau (“CGB”) dismissed the petition because it was untimely. In its Application, Anda sought a reversal of the CGB’s decision and reiterated its request for clarification of the opt-out rule. Specifically, Anda asked for a ruling that “(1) the Commission lacked any authority to adopt a rule requiring an opt-out notice on fax ads sent with the recipient’s express prior consent; or (2) in the alternative, section 227(b) of the Act is not the statutory basis for the rule.” Since Anda’s petition was dismissed by the CGB, at least 25 additional petitions have been filed seeking substantially the same clarification on these TCPA-implementing rules. The Commission addressed 23 of these petitions in addition to the Anda application through its order.

The order expressly rejects the assertion that the FCC lacks the authority to implement the opt-out notice rule and clarifies that the TCPA is in fact the basis for the rule. The Commission also found that fax ads that “comply substantially” with the rule will not allow the sender to avoid liability for a violation. As justification for its finding that the opt-out notice requirements apply to all fax advertisements, including those sent with the prior express consent of the recipient, the Commission explained “absent a requirement to include an opt-out notice on fax ads sent with prior express permission, recipients could be confronted with a practical inability to make senders aware that their consent is revoked.” The order also noted that the opt-out notice requirement is consistent with the FCC’s implementation of the TCPA in other areas, including robocalls.

The Commission recognized, however, that “inconsistency between a footnote contained in [an order amending the rules concerning fax transmissions] and the [opt-out notice] rule caused confusion or misplaced confidence regarding the applicability of this requirement to faxes sent to those recipients who provided prior express permission.” Specifically, the footnote in question states that the requirement applies only to “unsolicited” fax ads, and many senders have construed this to mean that the opt-out notice was only required on faxes sent without the recipient’s prior express permission. This confusion “left some businesses potentially subject to significant damage awards under the TCPA’s private right of action or possible Commission enforcement.” In light of this recognition, the Commission determined that “granting a retroactive waiver [of the requirement] would serve the public interest.” As such, the petitioners are not subject to liability for “inadvertent violations” of the rule leading up to the order and have an additional six months to come into compliance with it. Similarly situated parties may petition the Commission for a waiver as well, and are also beneficiaries of the six-month grace period for compliance.

Because the FCC resolved this issue via a waiver, individual parties facing the issue would be advised to seek their own waivers as well. We expect to see a second wave of such petitions arriving in the near future.