DC Circuit Strikes Down FCC’s Opt-Out Rule for Solicited Fax Advertisements

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On March 31, the Court of Appeals for the District of Columbia Circuit (DC Circuit) stuck down the Federal Communications Commission’s (FCC) requirement that solicited fax advertisements must include information on how to opt-out of future advertisements. The Telephone Consumer Protection Act (TCPA) bans most unsolicited fax advertisements and requires permitted unsolicited advertisements to carry an opt-out notice that informs the recipient how to stop future unsolicited messages. In 2006, the FCC extended those opt-out notice requirements to solicited fax advertisements.

The DC Circuit’s decision stems from an FCC decision in 2014 (2014 Decision) reaffirming its 2006 decision (2006 Decision). In the 2014 Decision, the FCC denied a petition for clarification asking the FCC to acknowledge that the TCPA does not authorize it to require opt-out notices for fax advertisements for which a recipient provides “prior express invitation or permission.” While the FCC rejected the argument that it lacks authority to regulate solicited fax advertisements in the 2014 Decision, it did grant a number of fax advertisers a retroactive waiver to the opt-out requirement for solicited ads based on confusion caused by the 2006 Decision. A group of TCPA plaintiffs then argued that the FCC’s retroactive waiver was impermissible and appealed the 2014 Decision. A number of businesses also appealed the 2014 Decision. All of the appeals were consolidated in the DC Circuit.

The DC Circuit’s decision makes clear that it applies only to the FCC’s authority to regulate solicited fax ads under the TCPA. Viewed in that light, the FCC’s opt-out requirement for solicited fax ads clearly oversteps the agency’s authority. The TCPA explicitly bans unsolicited fax ads and requires opt-out notices only where an exception to the ban on unsolicited fax ads applies. The act is silent with respect to solicited fax ads.

Therefore, the Court found the TCPA unambiguously grants the FCC power to regulate unsolicited, but not solicited, fax ads. Because the TCPA is unambiguous in this context, the Court gave little deference to the FCC’s rationale or policy arguments in support of its rules governing solicited fax ads.

While the decision represents a significant victory for potential TCPA defendants, companies that send or rely on fax advertisements should still develop internal compliance plans to deal with the TCPA. For example, companies should develop a robust database documenting a recipient’s consent to receive a fax ad. If companies send unsolicited fax ads, employees should understand when unsolicited fax ads may be sent as an exception to the general ban on such faxes, and any unsolicited fax advertisement must carry an appropriate opt-out notice.

If you have any questions about the FCC’s opt-out notice rules for unsolicited fax advertisements or would like more information on the impact of the TCPA on your business, please contact Seth L. Williams as slw@commlawgroup.com, Jane L. Wagner at jlw@commlawgroup.com, or Nathaniel J. Hardy at njh@commlawgroup.com.

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