[Please be sure to review the update below. DO NOT base any decision solely on what is contained herein. This area of the law is in constant flux. Speak to an attorney familiar with this area of the law before making any decision as regards sending "junk" faxes, e-mail, etc. ]
I am frequently asked by business owners whether there is any prohibition against sending unsolicited faxes. Like so many areas of the law, there is no simple answer to that question, and a wrong course of action can land an unwary business owner in a legal quagmire.
In 1991, Congress passed the Telephone Consumer Protection Act ("TCPA"). (A detailed outline of the TCPA is set forth at the bottom of this article.) The goal of this Act was undoubtedly to rid the country of "junk faxes." It states simply that it is unlawful "to use any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine." Violation of the TCPA can result in a $500 fine per violation. In other words, every unsolicited fax could cost the sender $500. These fines can be tripled if the violations were committed "willfully or knowingly."
So, that seems clear enough -- what's the basis of the confusion? It comes from use of the word "advertisement" and the protections of the First Amendment. Congress may not make any law that abridges freedom of speech or of the press. Laws that unnecessarily "chill" free speech are prohibited by the First Amendment. Telling someone that they are subject to potentially staggering fines if their faxes are deemed to be advertisements can certainly have a chilling effect.
This is because the definition of "advertisement" is not so clear as it may seem. The TCPA defines an 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." Applying that definition to actual circumstances soon reveals the problems.
For example, a bankruptcy attorney recently faxed me a very informative newsletter she publishes. The two-page newsletter contained news items and recent developments in the law. A small box on the second page stated that the attorney was available for consultation on bankruptcy issues. Was this newsletter advertising "availability of services" and therefore in violation of the TCPA? Is our aversion to junk faxes so strong that we want to prohibit this type of information dissemination?
At least one court has expressed an unwillingness to prohibit these sort of faxes. In Lutz Appellate Services, Inc. v. Curry, the defendant sent two unsolicited faxes to plaintiff's employees, offering employment. Quite correctly, the court concluded that this sort of message was not an advertisement for property or services. More interestingly, though, the court held that the TCPA was not intended to ban all unsolicited faxes, and questioned whether Congress had the power to do so.
Therein lies the second problem with the TCPA. Even if something is clearly a commercial message, does it automatically follow that such speech can be banned? Most with a familiarity with this area of the law will reflexively answer "yes" to that question. After all, they will argue, the Supreme Court ruled long ago that commercial speech is entitled to a lower level of protection under the First Amendment. But that is only half the analysis.
The First Amendment is designed to prevent the government from censoring unpopular views. Therefore, any statute that seeks to regulate the content of speech is subject to the highest level of scrutiny, and will be permitted only where there is compelling need. The TCPA does not ban unsolicited faxes; it prohibits only unsolicited commercial faxes. Therefore, the TCPA is entirely content based. To allow the government to determine what is and is not commercial speech is a major erosion of the First Amendment, and should not be dismissed out of hand.
On that basis, some courts have struck down similar statutes. In New Jersey, for example, a statute that prohibited computerized sales calls was found to be unconstitutional on the grounds that it was content based, with no compelling need for the ban. Similarly, the Supreme Court let stand an injunction against a Cincinnati ordinance that barred commercial handbills.
So, what's a business to do? The easy answer is to get permission before sending commercial faxes, but that ignores reality. A local fax can be sent for free. With a broadcast fax service, a thousand faxes can be sent for a nominal charge. To get that many approvals from potential customers would be impractical and prohibitively expensive.
All that can be said is that if your speech is unquestionably commercial, then you would be wise to find another marketing method, or find a way to get advanced approval for your faxes. If your message is noncommercial, and promotes your business only by having your name associated with the content, such as in the case of a newsletter, then you are probably protected by the First Amendment. Even then, however, you will find little solace in this protection if you are forced to litigate the issue.
UPDATE (January 1, 2003) -- For some reason, this article generates more e-mail than any other article on our site. In most cases, the question is simple: "I received a junk fax. Can I sue for damages?" The second most frequent question is whether it is now safe to send "junk" faxes.
The answers to these questions became easier on January 1, 2003, because California's "junk fax" law was amended to better conform with the Federal statute. Here is the current California statute dealing with unsolicited faxes (and e-mails):
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17538.4 of the Business and Professions Code is
amended to read:
17538.4. (a) No person or entity conducting business in this state shall electronically mail (e-mail) or cause to be e-mailed documents containing unsolicited advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit unless that person or entity establishes a toll-free telephone number or valid sender operated return e-mail address that the recipient of the unsolicited documents may call or e-mail to notify the sender not to e-mail any further unsolicited documents.
(b) All unsolicited e-mailed documents subject to this section
shall include a statement informing the recipient of the toll-free
telephone number that the recipient may call, or a valid return
address to which the recipient may write or e-mail, as the case may
be, notifying the sender not to e-mail the recipient any further
unsolicited documents to the e-mail address, or addresses, specified
by the recipient. The statement shall be the first text in the body of the message
and shall be of the same size as the majority of the text of the
message.
(c) Upon notification by a recipient of his or her request not to receive any further unsolicited e-mailed documents, no person or entity conducting business in this state shall e-mail or cause to be e-mailed any unsolicited documents to that recipient.
(d) This section shall apply when the unsolicited e-mailed documents are delivered to a California resident via an electronic mail service provider's service or equipment located in this state. For these purposes "electronic mail service provider" means any business or organization qualified to do business in this state that provides individuals, corporations, or other entities the ability to send or receive electronic mail through equipment located in this state and that is an intermediary in sending or receiving electronic mail.
(e) As used in this section, "unsolicited e-mailed documents" means any e-mailed document or documents consisting of advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit that meet both of the following requirements:
(1) The documents are addressed to a recipient with whom the
initiator does not have an existing business or personal
relationship.
(2) The documents are not sent at the request of, or with the
express consent of, the recipient.
(f) As used in this section, "e-mail" or "cause to be e-mailed" does not include or refer to the transmission of any documents by a telecommunications utility or Internet service provider to the extent that the telecommunications utility or Internet service provider merely carries that transmission over its network.
(g) In the case of e-mail that consists of unsolicited advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit, the subject line of each and every message shall include "ADV:" as the first four characters. If these messages contain information that consists of unsolicited advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit that may only be viewed, purchased, rented, leased, or held in possession by an individual 18 years of age and older, the subject line of each and every message shall include "ADV:ADLT" as the first eight characters.
(h) An employer who is the registered owner of more than one e-mail address may notify the person or entity conducting business in this state e-mailing or causing to be e-mailed documents consisting of unsolicited advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit of the desire to cease e-mailing on behalf of all of the employees who may use employer-provided and employer-controlled e-mail addresses.
(i) This section, or any part of this section, shall become inoperative on and after the date that federal law is enacted that prohibits or otherwise regulates the transmission of unsolicited advertising by electronic mail (e-mail).
Thus, if you are a business owner that wants to send unsolicited faxes, or if you receive an unsolicited fax, here is what you need to look for. If the fax contains a toll free "opt out" number and address that satisfies the requirements of the section above, then no harm, no foul. There is only a problem if the recipient calls the opt-out number and then receives a subsequent fax. Alternatively, if an unsolicited fax is sent without an opt-out number and address, that is an automatic violation.
If you want to get into the junk-faxer suing business, here is the way that most people do it. Keep a folder next to your fax machine. When an unsolicited fax comes in, call the opt-out number, and note on the fax the date and time you spoke to someone, and the person you spoke to if possible. Keep a list of the names of the companies that you have called. Each time you get a fax, check it against the list. If some company sends a second fax, you have them. Write to the company demanding your $500. It is very unlikely the company will write you a check, but such a letter is a prerequisite to filing in Small Claims Court. If the company does not respond within a couple of weeks, invest $23 and file an action in small claims court. Then go to court and prove your case. If the company sends a lot of faxes, you might want to wait until you receive a few more so that you can go to court and sue for $500 for each fax. It's better to go to court one time for $2,000 than four times for $500 each.
I am actually in favor of unsolicited faxes. I have received so-called junk faxes that have saved me substantially on office supplies, travel, etc., and have notified me of seminars and computer shows that I found interesting. With that said, I also have no problem with the opt-out procedure. It is a good compromise. Businesses are free to get their message out, but if someone does not want to receive that information, there is a way to get off the list. If you are so bothered by junk faxes that you want to sue, it might be time to do a little self assessment.
One final word. For some reason, there is a misunderstanding among the population that will apparently exist until the end of time. Contrary to what many believe, receiving a fax does not cost you anything (except for the three cents worth of paper and ink or toner). Unless for some strange reason your fax machine is hooked up to a cell phone, there is never a charge for an incoming call. To this day, I still receive e-mails from people who are angry that they received a fax because they believe the phone company will add a special charge to their bill. Similarly, I get calls from people that want unsolicited faxes to be banned entirely because of their specific circumstances. For example, they will tell me that their fax machine is next to their bed, and shares the same line as their phone, so unsolicited faxes are an incredible hardship since they wake them up at 3:00 a.m. and tie up the phone line. For dramatic effect, some will tell me how they missed the birth of their child because their wife was unable to reach them because a junk fax was coming in at that moment. Another person told me he nearly died due to a junk fax, because he was suffering a heart attack and could not call for help because of the incoming fax.
This mentality makes me nuts. Some people are perfectly willing to limit the freedom of everyone if it makes their own life somehow marginally better. In a civilized society, we all need to tolerate annoyances for the greater good. We wish the neighbor wouldn't play his music so loud, but we understand that we don't want the police running around with decibel meters, telling us what we can play and how loud. We wish the neighbor's car -- the one he insists on parking in front of our house -- wasn't such a piece of junk, but we don't want legislation defining what is an acceptable looking automobile. And, yes, we wish we didn't get junk faxes at 3:00 a.m., but we are smart enough to recognize that if we choose to put the fax machine next to our bed we might be disturbed. We shouldn't, however, desire to make it illegal for someone to send a fax to that machine.
UPDATE (June 5, 2003) -- The fun never ends (and it is amazing what people will take the time to write about). Someone wrote to us about the paragraph that proceeds this one, stating that the loud music example doesn't make sense, because the police do have decibel meters, and they do tell you how loud you can play your music. He suggested that we find a better example.
Actually it is a great example, and the reader obviously missed the point. The point that is being made is that even if we
have the "right" to control someone's behavior, freedom is better served if we
don't unnecessarily exercise that right. Noise ordinances are available when a neighbor gets out of control,
but the reasonable person recognizes that if we invoke the power to turn off
his music, then we must accept that we give up the right to occasionally
turn up
our own music when the mood hits. In other words, "We wish the neighbor
wouldn't play his music so loud, but we understand that we (read reasonable
people wanting to live in a free society) don't WANT the police running around
with decibel meters, telling us what we can play and how loud." The illustration
is especially on point because it
makes reference to the police telling us WHAT we can play. That was the point
of the article. Under the guise of limiting "junk" faxes, the government is
actually defining what can and can't be sent. Look also at the
recent
campaign reform measure, which specifically dictates what you can say x number of days
before an election. It is far better to tolerate the junk faxes from
your local pizza shop if
it means a little less government intrusion on your speech.
The Telephone Consumer Protection Act
The Telephone Consumer Protection Act (TCPA), a federal law, imposes restrictions on the use of automatic telephone dialing systems (also called autodialers), artificial or prerecorded voice messages, and fax machines to send unsolicited advertisements. The FCC adopted rules and regulations, effective December 20, 1992, implementing the TCPA. Different rules and regulations apply to calls placed to homes and calls placed to businesses. The rules do not apply to messages sent via e-mail or the Internet. The rules include a prohibition against calling a consumer at home who has asked not to be called again. (As noted earlier, there is some overlap between the "do not call" provisions of the FCC's rules and the FTC's Telemarketing Sales Rule.)
Terms you should know to protect your rights
Your Rights
During a "live" call placed to your home, a telemarketer must tell you:
A telemarketer cannot:
The FCC's Do-Not-Call Rules require companies to keep a record of your request not to receive future sales calls for ten years.
To stop future "live" calls to your home :
Exceptions to the Do-Not-Call Rule Requirements
Rules that Apply to Computerized Calls
Artificial (computerized) or prerecorded voice calls cannot be placed to your home, except for the following:
(Prerecorded calls to business numbers are not prohibited but two or more lines of multi-line businesses cannot be tied up at the same time.)
Information that must be provided for those computerized or prerecorded calls that are not prohibited:
Rules that apply to autodialed, artificial or prerecorded voice calls placed to emergency, cellular telephone and pager numbers
The FCC's rules prohibit the use of autodialers, artificial or prerecorded voice messages to call numbers assigned to:
These prohibitions do not apply in the following situations:
Rules that Apply to Unsolicited Faxes
Rules applying to unsolicited fax advertisements sent to your home and business fax machines:
Information that must be placed either on the first page or on each page of a fax:
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Aaron P. Morris is an attorney with The Morris Law Firm, located in Costa Mesa, California. He can be reached at (714) 546-2388.