Beware of Sending Unsolicited Faxes!

New Jersey businesses should be aware that sending unsolicited faxes could open you up to significant liability.

We have recently learned that several law firms in this area are filing class action lawsuits and preying on local companies, and even non-profit organizations, alleging violations of New Jersey law. On the federal and state level, several statutory prohibitions were enacted with the good intention of stopping the clogging of our fax machines with unsolicited faxes of advertisements by the masses. While that is a good intention of legislators and regulators, some mercenary sole practitioners are seizing on the wording of these business regulations in order to demand damages they have not suffered that they allege should be ordered by local courts on behalf of the purported class of aggrieved recipients.

In New Jersey, the state’s Junk Fax Act prohibits the use of any telephone facsimile machine, computer, or other device to send an unsolicited fax to a telephone facsimile machine within the state. The law includes some exceptions to protect non-profit organizations, including professional or trade associations. Businesses who violate the statute face damages of up to $1,000 for each transmission. Violations also constitute an unlawful trade practice under the state’s Consumer Fraud Act.

The federal Telephone Consumer Protection Act (TCPA) prohibits the use of “any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement․” The statute contains three notable exceptions: (1) if a prior business relationship exists between the parties; (2) if the recipient voluntarily makes its fax number available for “public distribution”; or, (3) if the advertisement contains a notice informing the recipient of the ability and means to avoid future unsolicited advertisements.

In addition to authorizing regulatory enforcement, the TCPA provides a cause of action. Because the TCPA authorizes statutory damages of $500-$1,500 per violation, which generally exceeds the recipient’s actual damages, violations are attractive to plaintiffs’ class-action lawyers.

In 2013, a New Jersey federal judge certified a class-action lawsuit alleging violations of the TCPA. The case, A & L Indus., Inc. v. P. Cipollini, Inc., involved fax advertisement sent by a roofing company to more than 4,000 recipients via a marketing company. In certifying the class, the federal court declined to follow a New Jersey state court decision that had concluded that “a class action suit is not a superior means of adjudicating a TCPA suit.”

Given the potential for liability, we caution New Jersey businesses against sending out advertisements via fax unless you have a pre-existing business relationship with the recipients. In addition, it is important to understand that many of the same prohibitions also apply to unsolicited text messages.