NJ Business Hit With $22 Million Judgment for Sending Unsolicited Facsimiles

A New Jersey roofing company is on the hook for more than $22 million dollars in damages for sending unsolicited facsimiles.

The class-action suit alleged that the company violated the Telephone Consumer Protection Act (TCPA) by sending more than 4,000 fax advertisements via a marketing company.

The Legal Background

The TCPA is a federal statute that 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 key 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. Running afoul of the TCPA can be costly because the statute authorizes statutory damages of $500-$1,500 per violation, regardless of the actual damages suffered by the recipient.

The Facts of the Case

The class-action suit alleged that Defendants David/Randall Associates, Inc. (Randall) transmitted unlawful facsimile advertisements 44,832 times to 29,113 different fax numbers, through a third-party entity Business to Business Solutions (B2B). The fax at issue in City Select Auto Sales, Inc. v. David Randall Associates, Inc. stated “ROOF LEAKS??? REPAIRS AVAILABLE,” and directed recipients in “Eastern PA, NJ, and Mid-State DE” to call David/Randall for “the repair and maintenance of most major roofing systems.” The fax stated that the advertisement had been sent to the recipient because some “person” at the recipient’s business “supplied the fax number and permission to send faxes.” It also purported to “a toll free ‘Remove’ number” for recipients to be removed from the distribution list.

Following the first fax blast, which targeted 12,000 recipients, Randall received numerous complaints, many of which stated that the remove hotline seemed ineffective and/or unavailable, and suggested that the advertisements violated applicable law. Randall directed B2B to remove the complaining recipients from any future distribution lists. Despite continued complaints, Randall authorized three additional campaigns. Ultimately, one of the aggrieved recipients, City Select Auto Sales, Inc., filed suit. It was eventually certified as a class action.

The Court’s Decision

The court granted summary judgment in favor of the plaintiffs and imposed a $22,405,000 fine. In reaching its decision, the court found that 1) the defendant utilized a “telephone facsimile machine” to send “one or more faxes;” (2) that the transmissions constituted “‘advertisements;’” and (3) that the defendant sent the transmissions without the recipient’s consent, absent application of one of the statutory exceptions.

The court rejected Randall’s argument that the company had an established business relationship with the recipient and/or obtained the fax number through their website. As noted by the court, “Publishing a fax number on a website does not, by itself, constitute consent to receive unsolicited fax advertisements under the [TCPA].”

The court further found that the advertisements failed to contain a statutorily-compliant opt-out notice because they “contain no statement that the law obligates the sender to comply with any removal requests within a reasonable time, nor do the advertisements provide a toll-free domestic facsimile number for purposes of submitting such requests.” As noted by the court, the faxes provided only a domestic contact telephone number, but no alternative fax number, and did not clearly and conspicuously advise the recipient of its legal right not to receive such unsolicited faces.

The Message for New Jersey Businesses

As discussed in a prior post, TCPA violations are attractive to plaintiffs’ class-action lawyers because the law authorizes significant statutory damages. Accordingly, New Jersey businesses should avoid sending out advertisements via fax unless you have a pre-existing business relationship with the recipients. In addition, it is also wise to review any new advertising campaign with experienced counsel and investigate any potential marketing firm that may act on your behalf.