The Sixth Circuit recently held that standing to sue under the Telephone Consumer Protection Act (TCPA) does not require the plaintiff to have printed, or even viewed, a fax advertisement that violates the TCPA. The Court further held that direct liability—as opposed to vicarious liability, which requires proof of agency—may be imposed on the entity whose goods or services are promoted in the fax, even though that entity did not send the fax.

In Imhoff Investment, LLC v. Alfoccino, Inc., plaintiff Avio, Inc. (substituted for original plaintiff Imhoff Investment, LLC), asserted TCPA claims on behalf of a putative class against Alfoccino, which was a restaurant owner that had hired an outside company (B2B) to conduct fax advertising for its restaurants. The district court granted summary judgment for Alfoccino based on lack of standing because there was no evidence that anyone from Avio had actually printed or even viewed the faxes sent to it. The district court further based its decision on Avio’s inability to prove Alfoccino’s vicarious liability for B2B’s transmission of the faxes.

The Sixth Circuit reversed. On the issue of standing, the Court initially observed that the TCPA does not expressly state who has a cause of action, but repeatedly refers to the “recipient” of an unsolicited fax in its description of prohibited conduct.

The Court then found guidance in a recent Sixth Circuit TCPA case—American Copper & Brass, Inc. v. Lake City Indus. Products, Inc. There, the Court expressly rejected the proposition that only the “owner” of the fax machine that received the unsolicited fax had standing to sue.  In addition, the American Copper court held that a fax might have been “successfully sent”—which was a phrase used in the American Copper plaintiff’s proposed class definition—even without the fax having been received by its intended recipient, when there was evidence in the sender’s fax log that the recipient fax number received the fax, and no evidence to contradict the accuracy of the log.

In addition to finding these aspects of American Copper germane, the Court in Imhoff relied on the proposition that Congress may enact statutes creating legal rights, the invasion of which creates standing, even though no injury would exist without the statute. The TCPA, the Court concluded, is just such a statute. The Court further explained that, in American Copper, it found that Congress, through the TCPA, intended to remedy a number of problems associated with junk faxes, including the cost of paper and ink, the difficulty of the recipient’s phone line being tied up, and the stress on switchboard systems. Based on these statutory underpinnings, the Court in Imhoff concluded that printing—or even seeing—a fax advertisement is not necessary to result in a violation of the statutorily created right to have one’s phone line and fax machine free of unsolicited advertisements. The Court noted that its decision was consistent with recent TCPA decisions by the 11th, Seventh, and Eighth Circuits.

The Sixth Circuit’s decision on standing in Imhoff is very likely to be impacted by the outcome of Spokeo v. Robins. There, merits briefing is currently proceeding in the U.S. Supreme Court on the issue of whether Congress may confer Article III standing on a plaintiff who has not suffered any concrete harm by authorizing a private cause of action for a bare statutory violation. 

For our most recent alerts on Spokeo, see here and here. Alfoccino would almost certainly seek to revisit the issue of standing were Spokeo decided in favor of the defendant therein.

Turning to the issue of Alfoccino’s vicarious liability in Imhoff, the Court held that Avio was not required to prove such liability because Alfoccino was subject to direct liability under the TCPA.  The Court observed that the TCPA imposes direct liability on a “sender” of an unsolicited fax advertisement, and the FCC has defined “sender” as “the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement.” Based on the FCC’s “sender” definition, the Court concluded that direct TCPA liability attaches to the entity whose goods or services are being advertised. The Court rejected Alfoccino’s attempt to rely on other FCC authority that provides for direct liability for telemarketers, but only vicarious liability for the seller whose goods or services are being telemarketed. Citing a letter brief submitted by the FCC in another case, the Court concluded that the FCC authority cited by Alfoccino applied only to the telemarketing voice-call context, and not to the facsimile context, which is governed by different statutory language.

Ballard Spahr’s TCPA Task Force assists clients in navigating the complex and challenging issues that arise under the TCPA. The Task Force, which comprises regulatory attorneys and litigators, provides counsel on TCPA compliance and avoiding TCPA liability, including reviewing policies and practices and helping to design mobile text message and prerecorded and autodialed call campaigns. It also assists clients in handling scrutiny from regulators, including preparing for examinations, responding to investigations, and defending against enforcement actions. Task Force members also defend clients against TCPA class or individual actions. For more information, please visit www.ballardspahr.com/TCPA.

Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs).


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