TCPAWorld never stops surprising.
In the latest unexpected news, the Seventh Circuit Court of Appeals just completely disregarded an FCC order imposing a subjective element to assessing whether a fax was sent for marketing purposes, and this is a really big deal–and not just in fax cases.
So basic facts here, a company was sending “free dinner” faxes to folks to invite them to attend seminars–with food–on topics that aligned with goods and services sold by the company sending the faxes. Plaintiff argued that the faxes were sent with the “intent” to market–people would show up at the conference and learn things that would make them want to buy the goods and services of the faxer.
But the fax itself did not actually offer any good or service for sale or rent.
Well in Ambassador v. Elanco, 2023 WL 4699507 (7th Cir. 2023) the appellate court looked at the language of the statute and determined there was not subjective element built in. Instead, a fax solicitation is “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.” (You will notice this rule mirrors that for telephone calls and texts–so pay attention all ye non-faxers!) And the Court had little trouble concluding the faxes at issue did not contain any such content–the faxes did not mention the availability or quality of any good or service.
But what about the FCC’s ruling back in 2006 that said faxes “that promote goods or services even at no cost, such as free magazine subscriptions, catalogs, or free consultations or seminars, are unsolicited advertisements under the TCPA’s definition?”
The Court said–no. In fact, the Court said more than “no.” It said:
As a preliminary matter, we need not decide whether the pretext portion of the 2006 Order is interpretive guidance or a legislative rule. Because we conclude that it conflicts with the statutory text, the pretext provision is not entitled to deference.
The text of the TCPA creates an objective standard narrowly focused on the content of the faxed document. The FCC’s interpretation, however, asks us not only to assume subjective motivations behind faxes that advertise no goods or services, but to assume that subsequent conduct of senders is relevant to the TCPA analysis. Moreover, the TCPA is limited to advertisements that promote “commercial” property, goods, and services. 47 U.S.C. § 227(a)(5). A bare offer for a free good or service is not an advertisement unless the fax also promotes something that the reader can acquire in exchange for consideration. We therefore decline to manufacture a pretext element unsupported by the TCPA’s text.
Holy moly. You see that?
Ok, maybe it is not as clear to everyone as it is to me.
So let me back up.
There is this thing called the Hobbs Act. It is supposed to prevent courts from reviewing things the FCC does under the Communications Act where the TCPA lives. Except, maybe it isn’t.
The issue went to the Supreme Court, which basically held it couldn’t solve the issue because it needed more information. Specifically whether the ruling is a final legislative ruling and whether a Defendant had a chance to oppose the rule at the time it went into effect.
But the Seventh Circuit said nuts to that. It skipped the analysis the Supreme Court handed down in PDR Resources, and simply decided it would not give deference to the ruling–PERIOD–because it conflicted with the language of the TCPA.
Now this is the right analysis in circumstances where the Hobbs Act does not apply. But here the Hobbs Act DOES apply…or it should. So the Seventh Circuit took a stunning unauthorized shortcut here.
So does this mean the Hobbs Act is all the way dead in the 7th and the TCPA’s express language now takes precedent over FCC rulings?
Why does it matter?
Lots of reasons.
Spend a few minutes reading the THOUSANDS of articles on TCPAWorld and you will quickly discern that TCPA law is half language of the TCPA and CFR, half FCC rulings and half black magic. Put it in a pot and stir it up and you get… whatever.
But if the FCC’s rulings are out then you’re just left with the text of the statute and the black magic part, which matters in dozens of contexts.
For more on this reach out and we can discuss. And you can always read more in Deserve to Win the magazine.