On March 31, 2017, the D.C. Circuit issued its long-awaited
decision in Bais Yaakov of Spring Valley, et al., v. Federal
Communications Commission, et al., No. 14-1234, invalidating
the FCC's rulings that required opt-out language on both
solicited and unsolicited fax advertisements. The split decision,
which was authored by Circuit Judge Kavanaugh, joined by Senior
Circuit Judge Randolph and from which Circuit Judge Pillard
dissented, will likely face challenges going forward.
With respect to fax transmissions, the TCPA prohibits the use of
a fax machine to send an "unsolicited advertisement"
unless the advertisement: (1) is sent to a recipient with whom the
sender has an established business relationship; (2) the fax number
was obtained either directly from the recipient or the recipient
voluntarily agreed to make it available for public distribution;
and (3) contains an opt-out notice as described in 47 U.S.C. §
227(b)(2)(D). See 47
U.S.C. § 227(b)(1)(C). In 2006, the FCC held that
any fax advertisement "sent to a recipient that has
provided prior express invitation of permission to the sender must
include an opt-out notice." 21 FCCR 3787, 3812 (2006) (the
After its 2006 Order, the FCC received various petitions
challenging its finding. On October 30, 2014, the FCC rejected
those petitions and confirmed its 2006 Order, holding again that
any fax advertisement, regardless of whether it was
solicited or unsolicited, must contain an opt-out notice.
See 29 FCCR 13998, 14005 (2014) (the "2014
Order"). However, and citing footnote 154 of the 2006 Order,
which stated that "the opt-out notice requirement only applies
to communications that constitute unsolicited
advertisements[,]" the FCC created a retroactive waiver of the
requirement to include an opt-out notice on a solicited
advertisement. See id., at 14008-12.
Importantly, then-Commissioner Pai dissented from the 2014
Order, stating that "[t]o the extent that our rules require
solicited fax advertisements to contain a detailed opt-out notice,
our regulations are unlawful. And to the extent that they purport
to expose businesses to billions of dollars in liability for
failing to provide detailed opt-out notices on messages that their
customers have specifically asked to receive, they depart from
common sense." Today, the D.C. Circuit adopted
then-Commissioner Pai's argument and found that the FCC's
ruling requiring an opt-out notice on solicited fax advertisements
In its decision, the D.C. Circuit strictly interprets the TCPA.
First, it notes that the TCPA regulates only an
"unsolicited advertisement," a term defined by the
statute. Second, the Court holds that while the TCPA
permits the FCC to issue regulations to implement its prohibitions,
it does not permit the FCC to require opt-out notices on solicited
fax advertisements. Third, it rejects the FCC's
arguments that the statute does not expressly prohibit the FCC from
enacting such a rule and that the rule furthers the purpose of the
TCPA. The Court states that it is up to Congress to revise the
express language of the statute, should it see fit to do so.
While this is a victory for senders of fax advertisements, it
may also be a sign of things to come as the D.C. Circuit next
addresses challenges to the July 2015 omnibus ruling (in ACA
International v. Federal Communications Commission, No. 15
1211, which is briefed, argued and submitted). Of note, Circuit
Judge Pillard is one of the three Judges who will decide ACA
International, along with Judge Srinivasan and Judge Edwards.
We remain hopeful that the appointment of Chairman Pai signals a
shift in the FCC's attitude towards the impact of the TCPA on
legitimate business communications. By quoting from
then-Commissioner Pai's dissent in its opinion, the D.C.
Circuit has certainly taken notice as well.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Marketers and their agencies are seeing increased regulatory scrutiny of their influencer campaigns as the popularity of influencers continues to grow and influencer networks become a greater marketing force.
The continuing growth in native advertising is leading to increasing regulatory scrutiny into whether consumers can distinguish native advertisements from surrounding non-paid content, and whether disclosures are being used effectively.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).