U.S. Seventh Circuit - The FindLaw 7th Circuit Court of Appeals Opinion Summaries Blog

Confirmed, Again: $4.2M Class Action Award for Junk Faxes

The Seventh Circuit Court of Appeals was tasked again with reviewing a class action matter that involved an attorney who sent thousands of unsolicited "junk faxes" to prospective clients. This is the third time that this same junk fax case has been before this circuit.

While sending unsolicited solicitations can run amok of ethical rules, the attorney at the center of it all actually found himself facing allegations of violating the Telephone Consumer Protection Act, which requires "junk faxes" to contain an "opt-out" provision. This last appeal, though unsuccessful, presented another, albeit much more novel, approach to gutting the potential $4.2 million award.

An Ad Is an Ad

The case involved an attorney that focused on representing CPAs. He retained a marketing firm that sent out a newsletter fortnightly to 200 different CPAs. The newsletter contained generalized legal news and advice for CPAs, and, by the attorney's own admission, was only approximately 25% advertisement.

But the Seventh Circuit in 2013 decided (in this same case) that: "That 75% of the page is not an ad does not detract from the fact that the fax contains an advertisement." The 2013 appeal affirmed the decision against the attorney on the merits, but remanded the matter with instructions as to how the damages should be paid.

In 2016, another appeal in the same case reached the circuit court, where the damages were potentially and practically gutted. In that appeal, the attorney argued that class attorney fees should not be available unless the class members claimed their individual awards. Basically, because each fax results in a $500 statutory damages award, each recipient would receive $333 with the remainder going to the class attorneys. Surprisingly, the court agreed, explaining that if the class member didn't claim the benefit, the attorney should not benefit for a class member that does not benefit.

The 2017 Appeal

This last appeal was a further attempt to limit damages by making it harder for the class members to collect damages. The attorney argued that class members should have to confirm:

  • Their fax numbers,
  • That they received the faxes,
  • That they never agreed to receive the faxes, and
  • That they agreed to be represented by class counsel.

This time around the court was not convinced. Since the class members are easily identifiable, the court reasoned that all they had to do was accept or reject the award, and nothing else.

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