In certain quarters of TCPAWorld use of the fax machine is alive and well. And chiropractic-related outreach often seems involved. Still, a seemingly salutary purpose – opportunities to alleviate employee stress in these challenging times – does not exempt fax senders from the TCPA restrictions on unsolicited advertisements.

In Levine Hat Co. v. Innate Intelligence, LLC et al., 2021 U.S. Dist. LEXIS 89737, Case No. 4:16-cv-01132 SNLJ, United States District Court for the Eastern District of Missouri, May 11, 2021, the defendant Innate was an umbrella organization for advertising and managing chiropractic clinics, operating 12 chiropractic offices. It enlisted a fax broadcaster, Profax, Inc., to send a fax offering “‘a FREE Lunch ‘n Learn on Stress Management for your employees.” Another defendant, Nepute Enterprises, LLC, was among chiropractors who partnered with Innate “to facilitate the creation of…onsite wellness programs with businesses who responded” to the FREE lunch faxes.

The faxes, which carried the header “‘Stressed employees cost your business. Want to know how much,” identified the “sender ‘Innate Wellness Centers’ as a ‘group of wellness consultants dedicated to improving the health of a business one employee at a time.’” It then boasted that “‘[o]ur offices around the country offer the highest quality, proactive wellness education and care on the planet, both onsite and in our offices.’”

At the bottom of the fax was an opt-out notice/instruction on how to cease future faxes.

Levine claimed that the fax constituted an unsolicited advertisement in violation of the TCPA and brought a class action lawsuit. After lengthy discovery, the Court’s certification of a class and failed settlement efforts, Levine filed for summary judgment against all three defendants. Only ProFax opposed the motion, arguing that the faxes were not advertisements for TCPA purposes. Moreover, in any case, it was just the “broadcaster” and did not have a “high degree of involvement” – a standard set by the Federal Communications Commission (“FCC”) rules – in the alleged TCPA transgressions.

Senior District Court Judge Stephen Limbaugh bought neither ProFax argument.

First, he had little trouble concluding that an advertisement was present – noting that in 2006 the FCC had “expounded” that faxes that “‘promote goods or services even at no cost, such asfree consultations or seminars, are unsolicited advertisements under the TCPA’s definition’” (emphases in original). The FREE Lunch n’ Learn aside, the Court observed that the fax “clearly promotes the services provided by Innate Wellness Centers, which are in the business of wellness care and education.” This is advertising.

Second, as to the “involvement” of ProFax in the process, Judge Limbaugh noted a dearth of guidance on what constituted “a high degree of involvement on the part of a fax broadcaster” in the alleged unlawful transmissions. However, he seized on the fact that ProFax had “provided the entire opt-out mechanism for the subject faxes.” Indeed, it had “managed the list of opt-outs for Innate, including maintaining a website and phone number to receive opt-out requests and assigning a unique PIN to identify those that had submitted opt-out requests in response to the faxes ProFax sent for Innate.”  The Court concluded that this collective “conduct” was enough to constitute a “high degree of involvement as a matter of law.”

But Profax was not done. Presumably to reduce its exposure, it had also moved to decertify the class approved by Judge Limbaugh, arguing that its “dire financial circumstances” meant that it could not satisfy the Federal Rule requirement that a “class action is the superior method of adjudication” versus individually litigated claims. Noting that the “questions of law and fact common to class members still predominate[d],” the Court declined to “decertify a class based only on the financial position of the defendant.”

Profax next hung its hat on the FCC Consumer and Governmental Affairs Bureau’s (“Bureau”) 2019 declaratory ruling in Amerifactors Financial Group, which held that “an online fax service that effectively receives faxes ‘sent as email over the Internet’” and itself does not have the capacity of a conventional fax machine is outside the scope of the TCPA prohibition. On this matter, ProFax did score some points with the Court. Despite holding that the Bureau decision did not appear to be a “final order” of the FCC, the Court conceded that “some of the 10,000 plus members of the class likely received the subject faxes via email and not on a ‘telephone facsimile machine’” within the meaning of the TCPA. So the parties were ordered to submit additional briefing on this issue, with the prospect that the class could be narrowed.

And what about the other two defendants? – Innate and Nepute – who never responded to Levine’s summary judgement motion. Judge Limbaugh ruled that Innate was clearly the “‘sender’ of the fax based on the information on the face of the document.”  As to Nepute, it had a partnership agreement with Innate and “under Missouri law, ‘partners are liable for everything chargeable to the partnership’” and the faxes at issue “clearly relate[d] to the business enterprise to which Nepute and Innate partnered.”

The final result on TCPA liability – Levine wins the summary judgment trifecta against the three defendants. Further, the Court provides guidance to fax broadcasters who might think that helping with opt-out mechanisms is a benign level of involvement in their clients’ faxing campaigns.



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