Unsolicited Fax Case May Have Skirted TCPA Rules10 Sep, 2013 By: John Waller, Blank Rome LLP, Jeffrey Richter
In October 2009, The RTC Group sent an unsolicited facsimile (fax) to Addison Automatics inviting Addison to attend a free technical seminar on embedded computer technology. The fax described the agenda of the seminar, as well as its hosts: Microsoft, Intel and Avnet. Microsoft’s, Intel’s and Avnet’s logos were prominently displayed on the facsimile.
Addison filed suit against RTC, Microsoft, Intel and Avnet alleging various violations, including a violation of the Telephone Consumer Protection Act (TCPA). In its complaint, Addison alleged that it never consented to receiving the fax, that it did not include an opt-out notice, and that the four defendants intended to use the seminar to market their products and services to the attendees.
The defendants moved to dismiss the complaint on various grounds, including that the fax in issue did not constitute an “advertisement” within the meaning of the TCPA and that the complaint did not adequately allege that RTC was acting as the agent for Microsoft, Intel and Avnet when it sent the facsimile. The U.S. District Court for the Northern District of Illinois denied the defendants’ motions to dismiss with respect to those grounds, finding their arguments “unpersuasive.”
The TCPA prohibits the use of “any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.” The TCPA defines “unsolicited advertisement” as “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise.”
The court noted that facsimiles that are “purely informational” documents are not advertisements under the TCPA. However, the court also noted that facsimiles promoting free seminars might not necessarily be purely informational as such seminars are often a pretext for marketing products or services. In this case, the court observed that the fax in issue stated that “[t]his unique preview opportunity will get you up-close to the experts to glean knowledge and know-how for your next design decision” and concluded that it was therefore plausible that the defendants intended to market their products and services at the seminar so that the attendees would purchase those products and services when they made their next design decision. A related website also stated that the defendants would be launching new products at the seminar. The court found these allegations sufficient to state a claim that the unsolicited fax Addison received from RTC constituted a violation of the TCPA.
The court also held that the complaint adequately alleged that Microsoft, Intel and Avnet were vicariously liable because it adequately alleged the existence of an agency relationship between RTC and Microsoft, Intel and Avnet with respect to the issuance of the unsolicited fax to Addison. Among other things, the complaint alleged that Microsoft, Intel and Avnet approved, authorized and participated in the scheme to issue the facsimile such that they controlled the manner and method of work carried out by RTC. The complaint also alleged that Microsoft, Intel and Avnet were the hosts of the seminar.
Marketers need to remember that the fact that the vehicle for promoting their products is “free” does not automatically mean that it is not an “advertisement” and does not therefore insulate either them or their agents from complying with the requirements of the TCPA.