I Can See Clearly Now: Court Holds It’s “Abundantly Clear” That the TCPA Requires “Sender” of Fax to Either Physically Transmit or Cause It to Be Sent

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Back in May 2017, Garner Properties & Management, LLC (“Plaintiff”) filed a class action against Defendants Marblecast of Michigan, Inc. (“Marblecast”) and American Woodmark Corporation (“American Woodmark”) in the Eastern District of Michigan alleging that the Defendants violated the TCPA by sending unsolicited fax advertisements (the “Fax”).  This week, the claims against American Woodmark were dismissed with prejudice because the Court found it “abundantly clear” that American Woodmark did not send or cause the Fax to be sent.

Marblecast is a kitchen and bath contractor. American Woodmark is a kitchen and bath cabinet manufacturer.  Plaintiff alleged that it received the Fax, unsolicited, in November 2016. The Fax apparently referenced Marblecast’s line of countertops as well as “Waypoint Cabinetry,” a brand of cabinetry manufactured by American Woodmark, and the Waypoint website.  However, the Fax also provided Marblecast’s website and contact information to reach someone at Marblecast named “Bud.”

American Woodmark entered into a distributorship with Marblecast requiring Marblecast to promote, maintain and increase sales of American Woodmark products. The agreement did not explicitly address whether Marblecast was authorized or prohibited from advertising American Woodmark’s products via fax and Marblecast hired a fax broadcaster without consent or direction from American Woodmark.

The TCPA makes it unlawful to send unsolicited fax advertisements. 47 U.S.C. § 227(b)(1)(c). In 47 C.F.R. § 64.1200(f)(10), the Federal Communications Commission (“FCC”) defined the “sender” of a fax 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.” Thus, early on in this case, the Court held that Plaintiff plausibly stated a strict liability cause of action against American Woodmark, as a “sender” of the Fax under the TCPA, because its goods were advertised or promoted in the Fax.

Things changed, however, after the Sixth Circuit held that to hold a party liable as a “sender” of a fax under the TCPA, the party must have either physically transmitted the fax or caused the fax to be sent. See Health One Medical Center, Eastpointe P.L.L.C. v.Mohawk, Inc., 889 F.3d 800 (6th Cir. 2018)(“Send” has two relevant meanings when used as a transitive verb: (1) to cause to be conveyed by an intermediary to a destination, i.e. to send a message by courier, and (2) to dispatch, as by a communications medium, i.e., to send a message via radio.)  The Sixth Circuit held that the FCC’s ruling had been read out of context and that in reading the statute itself it is clear that the “the regulation does not purport to impose liability upon parties that did not ‘send’ the fact at all.” Id. at 801.

After that decision, American Woodmark filed for summary judgment (“Motion”) on the basis that it did not qualify as a “sender” because Plaintiff failed to offer evidence that it “sent” the Fax.

In opposition to the Motion, Plaintiff cited the FCC’s 47 C.F.R. § 64.1200(f)(10), Imhoff Inv., L.L.C. v. Alfoccino, Inc., 792 F.3d 627 (6th Cir. 2015) and Siding & Insulation Co. v. Alco Vending, Inc., 822 F.3d 886 (6th Cir. 2016) for the premise that an entity is liable under the TCPA – lack of knowledge notwithstanding – even if it’s only involvement with an unsolicited fax is that its goods/services were advertised on the fax.  Plaintiff also argued that to the extent Imhoff and Siding conflicted with Health One the Court must follow the earlier precedent (Hmmm?).

The Court was unpersuaded. In the Health One decision the Sixth Circuit explicitly rejected an intra-circuit conflict and reconciled its decision with its precedent in Imhoff and Siding noting that in Imhoff and Siding the defendants hired a fax broadcaster to send out the “junk faxes.”  The Health One defendant – much like American Woodmark – did not “convey” or “dispatch” the faxes.

Further, the Court held that factual differences aside, Imhoff and Siding should not be followed because the Sixth Circuit did not hold in either case that “an innocent [unknowing] party … could by some legal alchemy be held liable for having ‘sent’ the faxes.” Id. (Internal citations omitted). Thus, based on “American Woodmark’s clear lack of knowledge and involvement – and the evidence showing that Marblecast … would have sent [the Fax] even had it never contracted with American Woodmark – no reasonable juror could find that American Woodmark ‘sent’ the Fax.” Id. at *8.

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