On December 24, 2015, the Federal Communications Commission (“FCC”) filed its respondents brief in the U.S. Court of Appeals for the D.C. Circuit in Bais Yaakov of Spring Valley, et al. v. FCC.  The case centers around the October 2014 Anda Order in which the Commission granted a retroactive waiver to twenty-five entities of its rule that requires a sender of solicited fax advertisements to include language on the advertisement to notify the recipient of his or her right to opt-out of receiving similar advertisements in the future.

The Anda Order was appealed both by class action plaintiffs – who challenged the grant of a retroactive waiver – and by recipients of the waiver – who challenged the conclusion that the opt-out rule applied to solicited faxes at all.  The parties challenging the retroactive waiver argued that the FCC did not have the authority under the Telephone Consumer Protection Act (“TCPA”) to grant a retroactive waiver for a violation, and that the FCC violated the Constitutional tenet of separation of powers by intruding on the power of the judiciary to adjudicate TCPA claims already asserted in pending judicial proceedings.  Separately, the waiver recipients argued that the TCPA applies only to unsolicited faxes, not those sent with the customer’s permission, and that the existing regulation raises First Amendment concerns.

The FCC responded to both challenges in a single brief.  First, in response to the waiver recipients, the Commission argued that although the TCPA only expressly prohibits unsolicited fax advertisements, the opt-out notice requirement for solicited faxes is a reasonable means to accomplish the goals of the TCPA by allowing recipients to easily revoke consent, thereby preventing unsolicited faxes in the future.  The Commission further asserted that the opt-out notice requirement does not violate the First Amendment because it furthers the government’s substantial interest in “ensuring that consumers are not burdened with the costs from unwanted fax advertisements” and fax solicitors incur only a minimal burden by having to include the opt-out notice language on their advertisements.

Next, in response to the class action plaintiffs, the Commission asserted that the retroactive waiver was reasonable and “the public interest was best served” by it because the order that implemented the opt-out notice requirement “could have led a reasonable advertiser to be confused about the requirement or to have a misplaced confidence that the requirement did not apply.”  It further stated that waivers are “presumptively retroactive” and often used as a means of avoiding inequitable results for a party that might otherwise be subject to liability under a particular statute or rule.  Finally, the Commission argued that, in light of the waiver being granted, there would be no enforceable TCPA “violation” for the class action plaintiffs to pursue, and therefore there was no interference with any pending judicial proceedings.

The court is expected to hear oral arguments in the case sometime this spring, but has not yet announced the date.