A new California "junk fax" law1 contains the prohibitions of the federal Telephone Consumer Protection Act of 1991 (TCPA)2 without providing a state-level exception for transmissions to individuals with whom the sender has an "established business relationship."
Like the TCPA, California Senate Bill 833 bans unsolicited fax advertisements and requires sender identification on fax transmissions. However, the recent federal Junk Fax Protection Act (JFPA)3 codifies an established business relationship (EBR) exception to the prohibitions of the TCPA.4 Pursuant to the EBR exception, senders may transmit unsolicited commercial faxes without consent to recipients with whom the sender has already established a business relationship, subject to specified guidelines. Currently, the EBR exception may even extend to affiliates of the entity with whom the recipient has an established business relationship, subject to the reasonable expectations of the recipient, given the identity of the affiliate and the nature and type of goods or services offered.5 However, the scope of the EBR under the JFPA is subject to further clarification by rule of the Federal Communications Commission.
Per the TCPA, states may enact more restrictive intrastate regulation than the TCPA,6 and California has done so by enacting its version of the TCPA without an EBR exception.
The California law, which will be codified at California Business and Professions Code Section 17538.43 and is effective January 1, 2006, bans the fax transmission of "unsolicited advertisements" by persons or entities located within California and/or directed to California recipients. The California law defines an "unsolicited advertisement" as:
Any material advertising the commercial availability or quality of any property goods, or services that is transmitted to any person or entity without that person’s or entity’s prior express invitation or permission.7
As stated earlier, the California law does not include an EBR exception. Moreover, California’s law will apply extraterritorially, so long as one side of the communication — either the sender or the recipient — is located in California. Given the size of the California market, the extraterritorial reach of the California law will certainly limit the scope of the federal EBR exception and create FOCUS on the Insurance Industry Winter 2005 7 operational issues for the senders of fax solicitations. For example, "junk fax" senders operating on a national basis will likely have to design their internal systems to ensure that they exclude California area codes from any transmission issued in reliance upon the federal EBR exception.
For this reason, the U.S. Chamber of Commerce filed suit November 7, 2005 seeking an injunction barring enforcement of the California law as it applies to interstate communications.8 The complaint alleges that the California law is preempted by the Federal Communications Act of 1934 (FCA) and violates the Commerce Clause. Both allegations stem from the interstate reach of the California law. The U.S. Chamber of Commerce acknowledges that the TCPA expressly saves from preemption state law imposing more restrictive intrastate requirements or regulations,9 but asserts that "[u]nder the FCA, states lack jurisdiction to regulate interstate communications."10
The California law also provides for a private right of action to enforce its proscriptions. In addition to other remedies provided by law, including remedies under the TCPA, persons or entities may bring an action under the California law for the following: injunctive relief, the greater of $500 statutory damages or actual damages, or both injunctive relief and damages. Treble damages may be awarded for willful or knowing violations.11
In addition to the ban on unsolicited advertisement transmissions, the California law requires that the following information be included on fax transmissions sent to or from California:12
- The date and time sent
- An identification of the business, other entity, or individual sending the message
- The telephone number of the sending machine or of the business, other entity, or individual
The law contains an exemption for transmissions by taxexempt nonprofit associations to their members, provided that the member voluntarily provided his or her fax number, the fax transmission is not primarily for the purpose of advertising on behalf of third parties, and the member has not made a do-not-fax request to the association.
Footnotes
1. S.B. 833, 2005-2006 Reg. Sess. (Ca. 2005).
2 47 U.S.C. § 227; 47 C.F.R. Parts 64 and 68.
3. S. 714, 109th Cong. (2005) (amending 47 U.S.C. § 227).
4. S. 714, 109th Cong. §2(b) (2005).
5. S. 714, 109th Cong. §2(b) (2005); 47 C.F.R. § 64.1200(f)(3).
6. 47 U.S.C. § 227(e)(1).
7. S.B. 833, 2005-2006 Reg. Sess. § 1(a)(2) (Ca. 2005).
8. Chamber of Commerce of the U.S. v. Lockyer, E. D. Cal., 2:05-CV02257- MCE-KJM, complaint filed 11/7/05.
9. 47 U.S.C. § 227(e)(1).
10. Complaint at 2, Chamber of Commerce of the U.S. v. Lockyer, E. D. Cal., 2:05-CV-02257-MCE-KJM.
11. Id. at Section 1(b)(2).
12. Id. at Section 1(c).
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