Imhoff Investment, L.L.C. v. Alfoccino, Inc. ( 2015 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 15a0139p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
IMHOFF INVESTMENT, L.L.C., ┐
Plaintiff, │
│
│ No. 14-1704
AVIO, INC., a Michigan corporation, individually │
and as the representative of a class of similarly >
│
situated persons,
│
Plaintiff-Appellant, │
│
v. │
│
│
ALFOCCINO, INC.; D. TALIERCIO INVESTMENTS, INC.; │
FARSHID SHUSHTARI, │
Defendants-Appellees. │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 2:10-cv-10221—Gerald E. Rosen, Chief District Judge.
Decided and Filed: July 7, 2015
Before: SILER, MOORE, and STRANCH, Circuit Judges.
_________________
COUNSEL
ON BRIEF: Phillip A. Bock, BOCK & HATCH, LLC, Chicago, Illinois, for Appellant. John
R. Prew, Jason R. Mathers, HARVEY KRUSE, P.C., Troy, Michigan, for Appellees.
1
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 2
_________________
OPINION
_________________
JANE B. STRANCH, Circuit Judge. Plaintiff Avio, Inc.1 alleges that Defendant
Alfoccino violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227(b)(1)(C),
(b)(3), by hiring Business to Business Solutions (B2B) to send unsolicited facsimile
advertisements to Avio and a class of similarly situated persons. The district court granted
Alfoccino’s motion for summary judgment, dismissing Avio’s case for lack of Article III
standing. It also found—as a second, independent basis for granting Alfoccino’s motion—that
Avio could not prove Alfoccino was vicariously liable for B2B’s transmission of the faxes.
Because Avio has demonstrated that it does have Article III standing to bring its claim, and
because the pertinent FCC regulations indicate that primary, not vicarious liability attaches to
Alfoccino under the TCPA, we REVERSE the district court’s order granting summary judgment
for Alfoccino and REMAND the case to the district court for further proceedings.
I. BACKGROUND
B2B was one of several company names used by Caroline Abraham, who in 2006
conducted fax broadcasting operations for multiple clients. B2B maintained a hard drive that
documented thousands of fax transmissions successfully sent on behalf of Alfoccino and other
businesses. B2B had obtained the numbers used in the broadcast two years earlier from a
company called InfoUSA. Abraham testified that she believed it was legal to send fax
advertising to companies that had an established business relationship with the sender and
mistakenly thought the companies on the InfoUSA list met that standard. Abraham did not call
the businesses on her fax lists to seek consent to send them fax advertisements.
Alfoccino is a restaurant business with two locations. It is operated by brothers Farshid
“Tony” Shushtari and Frank Shushtari. Alfoccino, Tony, and an entity that is a part owner of
1
Imhoff Investment, L.L.C. was the original named plaintiff in this case. In May 2012, Plaintiff Imhoff and
Intervenor Avio filed a motion to intervene/substitute a new class representative, voluntarily dismiss Imhoff, and file
an amended complaint. The district court granted the motion and in August 2012 Avio filed its First Amended Class
Action Complaint, naming itself as plaintiff and class representative.
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 3
Alfoccino, Taliercio Investments, Inc., are named defendants here. Tony was responsible for
Alfoccino’s marketing and advertising and was the only person from Alfoccino who
communicated with B2B. He regularly hired a company named Value Fax to conduct fax
advertising for the restaurants, but hired other companies, including B2B, to fax his
advertisements “once or twice” as well. In 2006, Tony hired B2B because they did bulk faxing
and cost less than Value Fax had. He directed B2B to send out 20,000 faxes to local businesses
on behalf of the two Alfoccino restaurants. The ads he sent out with B2B were identical to the
ads he had previously sent out with Value Fax.
Tony stated that Value Fax told him it obtained permission from its fax recipients before
sending them ads, and that he had assumed that any company sending out faxes on his behalf
would have done the same thing because “I assume that . . . if you’re doing business you’re
doing it the right way. I didn’t know. I was naïve maybe.” He said that he did not knowingly
authorize any fax advertisement that violated the law, and that he would not have authorized the
ads had he known they violated the law. Tony, however, did not testify that he instructed B2B to
send the ads only to people who had given prior permission to receive them, and none of Tony’s
written instructions to B2B in the record mention compliance with the law. None of the
documents B2B produced include a representation about the legality of B2B’s practices or a
statement that B2B had obtained prior permission from its targets.
B2B’s computer files contain copies of the documents faxed back and forth between
Alfoccino and B2B and the final version of the Alfoccino ads that were sent. They also contain
logs listing the fax numbers targeted, the time, date, and duration of each transmission, and
whether each was successfully completed. According to Avio’s expert, Robert Biggerstaff,
B2B’s fax logs show that Alfoccino’s advertisements were successfully sent 13,980 times to
7,625 unique fax numbers. The logs show that B2B faxed Alfoccino’s ad to Avio on November
13, 2006 at 1:42 a.m. and again on December 4, at 8:40 p.m. The first transmission was three
pages and the phone lines were connected for two minutes and three seconds. The second
transmission was one page and the phone lines were connected for 33 seconds. Both
transmissions were successfully completed.
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 4
Avio’s representative, David Barnett, testified at deposition that he had no personal
recollection of receiving Alfoccino’s fax or of its substance, and that he could not remember
what year it was sent, but that he would have been the person who got it off the fax machine.
Though he testified that it was his practice to keep even junk faxes after having received them,
he did not locate a physical copy of the Alfoccino ad.
The original plaintiff filed this action in January 2010. The case was dismissed for lack
of subject matter jurisdiction over TCPA claims in July 2010, but on appeal this court reversed
and remanded based on intervening circuit precedent holding that federal courts have subject
matter jurisdiction over TCPA claims.2 In 2013, Avio moved for class certification, seeking to
establish a class of the more than 7,000 unique recipients of B2B’s fax of the Alfoccino’s ad.
While that motion was pending, Alfoccino filed a motion for summary judgment, which was
granted on May 9, 2014. The district court found that Avio lacked Article III standing to pursue
its claim and, as a secondary basis for dismissal, that Alfoccino could only be held vicariously
liable—not directly liable—under the statute, and Avio failed to offer sufficient evidence for a
jury to find Alfoccino vicariously liable for the faxes B2B transmitted.
II. ANALYSIS
A. Article III Standing
Courts must resolve questions of subject matter jurisdiction before ruling on the merits of
the claim. Gross v. Hougland, 712 F.2d 1034, 1036 (6th Cir. 1983). Where the plaintiff has no
Article III standing to bring a case, jurisdiction is lacking and the court must dismiss it. TCG
Detroit v. City of Dearborn, 206 F.3d 618, 622 (6th Cir. 2000). To have Article III standing, a
plaintiff must “allege personal injury fairly traceable to the defendant’s allegedly unlawful
conduct and likely to be redressed by the requested relief.” Murray v. U.S. Dep’t of Treasury,
681 F.3d 744, 748 (6th Cir. 2012). The alleged injury must be both “concrete and particularized”
and “actual or imminent, not conjectural or hypothetical.” Friends of the Earth, Inc. v. Laidlaw
Envtl. Servs., 528 U.S. 167, 180 (2000) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555,
560-61 (1992)).
2
Charvat v. EchoStar Satellite, LLC, 630 F.3d 459, 463-465 (6th Cir. 2010); Mims v. Arrow Fin. Servs.,
LLC, 132 S. Ct. 740, 753 (2012) (resolving a circuit split and reaching the same conclusion as Charvat).
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 5
The TCPA prohibits the use of “any telephone facsimile machine, computer, or other
device to send, to a telephone facsimile machine, an unsolicited advertisement.” 47 U.S.C.
§ 227(b)(1)(C). It provides a private right of action, permitting plaintiffs to seek (1) to enjoin a
violation of the Act; (2) to recover for actual monetary loss from such a violation or to receive
$500, whichever is greater; or (3) both (1) and (2). 47 U.S.C. § 227(b)(3).
Though the TCPA does not expressly state who has a cause of action to sue under its
provisions, its descriptions of the conduct it prohibits repeatedly refer to the “recipient” of the
unsolicited fax, 47 U.S.C. §227(b)(1)(C),(b)(2)(D), and in enacting the TCPA, Congress noted
that such fax advertising “is problematic” because it “shifts some of the costs of advertising from
the sender to the recipient” and “occupies the recipient’s facsimile machine so that it is
unavailable for legitimate business messages while processing and printing the junk fax.” H.R.
Rep. 102–317 at 10 (1991).
In the instant case, the district court ruled that Avio lacked Article III standing, noting
that it “refuses to find that a plaintiff satisfies Article III’s injury in fact requirement when all it
knows about its alleged injury is based upon what someone else told it.” Avio, Inc. v. Alfoccino,
Inc., 18 F. Supp. 3d 882, 891 (E.D. Mich. 2014). Sixth Circuit authority filed several months
after the district court’s opinion, however, points to the opposite conclusion: that plaintiff Avio,
as the recipient of Alfoccino’s unsolicited advertising faxes, does allege an injury sufficient to
meet the requirement for Article III standing.
In American Copper & Brass, Inc. v. Lake City Indus. Products, Inc., this court affirmed
a district court decision granting class certification and ultimately summary judgment to a class
of plaintiffs who had received junk fax advertisements that B2B transmitted on behalf of the
defendant, Lake City. 757 F.3d 540, 542 (6th Cir. 2014). The pertinent facts in American
Copper are virtually identical to those of the instant case: Lake City’s president paid B2B to
transmit an advertisement on its behalf to thousands of recipients who had not been vetted by
B2B and with whom it had no prior business relationship. Id. at 542-43. American Copper sued
under the TCPA and moved for class certification, proposing a class consisting of all persons
who were successfully sent a fax from Lake City Industrial Products, Inc. on one of three dates
in February 2006. Id. To support the motion, American Copper attached a report from its expert
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 6
witness Robert Biggerstaff—Avio’s expert in the instant case as well—concluding, based on his
review of B2B’s fax records, that a total of 10,627 successful transmissions of a complete fax
were received by 10,627 unique fax numbers. Id. at 543. The district court certified the class
and ultimately granted summary judgment to American Copper, rejecting Lake City’s argument
that it should not be held liable because B2B was the actual sender of the faxes. Id.On appeal, Lake City attacked the class definition on the basis that it included plaintiffs
who lacked standing to assert TCPA claims, specifically “persons that may not have ever
received, noticed or printed the fax but who are somehow associated with a number on the hard
drive’s fax logs” and “persons that may not be (or who were) the owners of the machines or fax
number [who] may or may not have actually received [the] fax.” Id. at 544.
Lake City based its argument on a district court’s decision in Machesney v. Lar-Bev of
Howell, Inc., 292 F.R.D. 412 (E.D. Mich. 2013)—another case based on faxes sent by B2B—
which had held that only the “person or entity that owned the fax machine that received the
unsolicited fax” had standing to sue under the TCPA. American Copper, 757 F.3d at 544.
American Copper flatly rejected this argument and Machesney’s reasoning, finding instead that
the TCPA’s private right of action provision was not premised on ownership of the machine, id.,
and explaining:
The Machesney court’s conclusion that the TCPA was “intended to address . . .
the cost of the paper and ink incurred by the owner of the fax machine,”
292 F.R.D. at 427, is too narrow. True, Congress was generally concerned with
the costs associated with unsolicited fax advertisements. See id. at 426-27
(discussing the legislative history of the TCPA). But unsolicited fax
advertisements impose costs on all recipients, irrespective of ownership and the
cost of paper and ink, because such advertisements waste the recipients’ time and
impede the free flow of commerce. Ira Holtzman, C.P.A. v. Turza, 728 F.3d 682,
684 (7th Cir.2013) (“Even a recipient who gets the fax on a computer and deletes
it without printing suffers some loss: the value of the time necessary to realize that
the inbox has been cluttered by junk.”) (emphasis in original); Owners Ins. Co. v.
European Auto Works, Inc., 695 F.3d 814, 820 (8th Cir.2012) (explaining that the
TCPA was intended in part to “keep[ ] telephone lines from being tied up” by
unsolicited fax advertisements); Missouri ex rel. Nixon v. Am. Blast Fax, Inc., 323
F.3d 649, 655 (8th Cir.2003) (noting that “unsolicited fax advertising interferes
with company switchboard operations and burdens the computer networks of
those recipients who route incoming faxes into their electronic mail systems”).
Accordingly, to the extent that Lake City relies on Machesney for the proposition
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 7
that owners (and only owners) of fax machines have standing to sue under the
TCPA, we reject Lake City’s argument.
American Copper, 757 F.3d at 544-45.
The American Copper panel also rejected Lake City’s attack on the meaning of
“successfully sent” in the class certification adopted by the district court. It found that a fax
might be “successfully sent” without being received by its intended recipient: Biggerstaff’s
report showed that exactly 10,627 faxes were received by 10,627 different fax numbers. Id. at
545. Biggerstaff counted only “error-free transmissions” and the defendant failed to “offer[] any
reason to think that [the defendant’s] fax machines recorded the codes inaccurately or that its
software maintained the log incorrectly.” Id. (quoting Ira Holtzman, 728 F.3d at 685).
Alfoccino argues that American Copper is not dispositive on the standing issue here
because it was presented in a different procedural posture and merely rejected defendant’s
argument concerning standing without touching on other issues pertinent to this case. But
American Copper applied de novo review to the grant of summary judgment to the plaintiff, and
its findings concerning who has standing to sue under the TCPA and what it means for a fax to
be “successfully sent” are germane to the Article III standing question at the heart of this case.
Congress may not confer jurisdiction on Article III courts to issue advisory opinions,
Sierra Club v. Morton, 405 U.S. 727, 732 n.3 (1972), and Congress cannot convert a generalized
grievance “into an ‘individual right’ vindicable in the courts,” Lujan v. Defenders of Wildlife,
504 U.S. 555, 576-77 (1992). Congress may, however, “enact statutes creating legal rights, the
invasion of which creates standing, even though no injury would exist without the statute.”
Linda R.S. v. Richard D., 410 U.S. 614, 617 n.3 (1973). Thus, once “a statute confers new legal
rights on a person, that person will have Article III standing to sue where the facts establish a
concrete, particularized, and personal injury to that person as a result of the violation of the
newly created legal rights.” Palm Beach Golf Ctr.-Boca, Inc. v. Sarris, 781 F.3d 1245, 1251
(11th Cir. 2015).
The TCPA is just such a statute: it gives recipients of unsolicited fax advertising the legal
right to recover damages and obtain injunctive relief from the senders of those faxes. 47 U.S.C.
§ 227(b)(1)(C), (b)(3). American Copper found that through the TCPA, Congress intended to
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 8
remedy a number of problems associated with junk faxes, including the cost of paper and ink, the
difficulty of the recipient’s telephone line being tied up, and the stress on switchboard systems.
Thus, viewing or printing a fax advertisement is not necessary to suffer a violation of the
statutorily-created right to have one’s phone line and fax machine free of the transmission of
unsolicited advertisements. Here, there is sufficient evidence in the record to conclude that the
plaintiff suffered an injury on two occasions: a fax transmission on November 13, 2006, and
another fax transmission on December 4, 2006.
The Sixth Circuit’s holding in American Copper is not an outlier. Our sister circuits also
hold that there is no need for a plaintiff to have printed the fax ad to have Article III standing.
Reversing a district court decision to the contrary, in Palm Beach Golf Center-Boca, Inc. v.
Sarris, the Eleventh Circuit concluded that “the specific injury targeted by the TCPA is the
sending of the fax and resulting occupation of the recipient’s telephone line and fax machine, not
that the fax was actually printed or read,” and that the plaintiff “has Article III standing sufficient
to satisfy the injury requirement because it has suffered a concrete and personalized injury in the
form of the occupation of its fax machine for the period of time required for the electronic
transmission of the data (which, in this case was one minute).” 781 F.3d at 1250-51. Similarly
the Seventh Circuit held that there is no need for a plaintiff to prove he printed the offending fax
to recover under the TCPA, and that electronic confirmation of transmission suffices as proof
absent evidence to the contrary. Holtzman, 728 F.3d at 684. And the Eighth Circuit, though not
ruling on the precise issue, noted that the TCPA promotes an “interest in seclusion, as it also
keeps telephone lines from being tied up . . .” Owners Ins. Co., 695 F.3d at 820.
Here, the district court adopted the reasoning of the district court decision in Palm Beach
Golf Ctr.-Boca, Inc. v. Sarris, 981 F. Supp. 2d 1239 (S.D. Fla. 2013), emphasizing that
Plaintiff’s injury is outside of “its own personal knowledge” because it did not remember nor did
it produce the faxes. Avio, 18 F. Supp. 3d at 889. Subsequently, however, the Eleventh Circuit
reversed its district court, as explained above. Under our precedent, therefore, and that of other
circuits, Biggerstaff’s report is adequate to establish that Avio was a recipient of Alfoccino’s two
unsolicited faxed advertisements and has standing.
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 9
The opinion below correctly notes that the TCPA bans unsolicited faxed advertisements,
not all unsolicited faxes. But its conclusion that a “plaintiff must see the fax to discern whether
it is an advertisement or not,” id. at 890, is incorrect. Biggerstaff’s report indicates that B2B
faxed two particular advertisements to Avio and 7,624 other recipients. And Alfoccino concedes
that it hired B2B to fax advertisements on its behalf and that it ultimately paid B2B for doing so.
On these facts, a reasonable trier of fact could find by a preponderance of the evidence that the
content of the two faxes at issue was advertising material prohibited by the TCPA.
Circuit precedent in American Copper and the text and legislative history of the TCPA
itself point to the conclusion that Avio has Article III standing to bring its claim against the
defendants.
B. Direct Liability
We now address the district court’s second, independent basis for granting Alfoccino’s
motion for summary judgment: that the TCPA provides only for indirect—not direct—liability,
and that Avio had failed to meet its burden of production with regard to Alfoccino’s indirect
liability. The pertinent FCC regulations, however, indicate that Alfoccino may be held directly
liable for the faxes sent to Avio at issue here, and Avio has presented sufficient evidence to
create a triable issue of fact on that point.
The TCPA makes it unlawful “to use any telephone facsimile machine, computer, or
other device to send, to a telephone facsimile machine, an unsolicited advertisement”3 unless the
“sender” has an “established business relationship with the recipient” and meets several other
requirements. 47 U.S.C. § 227(b)(1)(C). The FCC regulation defines “sender” with respect to
the TCPA’s prohibition of unsolicited fax advertisements as being “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.” 47 C.F.R. § 64.1200(f)(10).
The FCC’s codification of this definition of “sender” is in accord with its earlier
uncodified interpretation: “the entity or entities on whose behalf facsimiles are transmitted are
3
The statute defines an “unsolicited advertisement” as “any material advertising the commercial
availability or quality of any property, goods, or services which is transmitted to any person without that person’s
prior express invitation or permission, in writing or otherwise.” 47 U.S.C. § 227(a)(5).
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 10
ultimately liable for compliance with the rule banning unsolicited facsimile advertisements, and
that fax broadcasters are not liable for compliance with this rule.” In the Matter of Rules &
Regulations Implementing the Tel. Consumer Prot. Act of 1991, 10 F.C.C. Rcd. 12391, 12407-08
(¶35) (1995).
The plain language of the TCPA and the FCC’s accompanying definition of “sender”
together establish that under the TCPA direct liability attaches to the entity whose goods are
advertised as opposed to the fax broadcaster.4 Alfoccino is not entitled to summary judgment
because Avio has presented evidence that Alfoccino was the entity “whose goods or services are
advertised or promoted in the unsolicited advertisements” it received from B2B on two occasions
in late 2006. It could therefore be directly liable to Avio as the sender of the fax.
Rather than applying the FCC’s codified definition of “sender” to the TCPA, the district
court applied the FCC’s decision in DISH Network, 28 F.C.C. Rcd. 6574 (2013). The DISH
Network decision, however, applies in a different context: the determination of direct and
vicarious liability for telemarketing voice calls. The TCPA makes it unlawful in certain
circumstances to “initiate” a telephone call to a residential telephone line using an artificial or
prerecorded voice. 47 U.S.C. § 227(b)(1)(B). And an FCC regulation makes it unlawful in
certain circumstances to “initiate” a telephone call to a residential subscriber whose number is
registered on the national do-not-call registry. 47 C.F.R. § 64.1200(c)(2).
The FCC regulations governing these voice calls create distinctions that do not apply to
fax transmissions. They identify who “initiates” these voice calls by distinguishing between the
“telemarketer” and the “seller.” The “telemarketer” is defined as “the person or entity that
initiates a telephone call or message for the purpose of encouraging the purchase or rental of, or
investment in, property, goods, or services, which is transmitted to any person.” 47 C.F.R.
§ 64.1200(f)(11). By contrast, the “seller” is defined as “the person or entity on whose behalf a
telephone call or message is initiated for the purpose of encouraging the purchase or rental of, or
4
The fax broadcaster can be held liable under the TCPA in some cases. In addition to providing for the
liability for the “sender” of an unsolicited advertisement 47 C.F.R. § 64.1200(a)(4)(i), the regulations provide that
the broadcaster “will be liable . . . if it demonstrates a high degree of involvement in, or actual notice of, the
unlawful activity and fails to take steps to prevent such facsimile transmissions.” § 64.1200(a)(4)(vii). This
regulation provides additional confirmation that the FCC consistently distinguishes between the sender of a fax and
the broadcaster of a fax.
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 11
investment in, property, goods, or services, which is transmitted to any person.” 47 C.F.R.
§ 64.1200(f)(9). The DISH Network ruling applied these regulatory definitions of “seller” and
“telemarketer” to hold that the party that is directly liable for unlawfully “initiat[ing]” such a call
is the telemarketer that “takes the steps necessary to physically place a telephone call,” not the
seller whose goods or services the telemarketer promotes. DISH Network, 28 F.C.C. Rcd. at
6575 ¶ 3, 6583 ¶¶ 26-27. The DISH Network decision further found that the seller may be
vicariously liable for such violations under federal common law agency principles. Id. at 6584-
93 ¶¶ 28-47.
The DISH Network analysis is inapplicable to the fax transmissions at issue here. The
words “seller” and “telemarketer” are not used in the sections of the TCPA and accompanying
regulations that apply to unsolicited fax advertisements, and DISH Network did not address the
FCC’s definition of “sender” codified at 47 C.F.R. § 64.1200(f)(10). The FCC has subsequently
made it clear that DISH Network pertains only to voice telephone calls, and that DISH Network
had not altered the FCC’s interpretation of the TCPA itself or the plain language of the FCC’s
accompanying regulations pertaining to unsolicited fax advertisements. The district court in
Palm Beach had applied DISH Network to reach the same conclusion as the district court in the
instant case. Palm Beach Golf Ctr.-Boca, Inc. v. Sarris, 781 F.3d at 1253-54. But when Palm
Beach was appealed, the Eleventh Circuit contacted the FCC, referenced DISH Network, and
asked the Commission to address its position “on whether the [TCPA] and its accompanying
regulations allow a plaintiff to recover damages from a defendant who sent no facsimile to the
plaintiff, but whose independent contractor did.” FCC Letter Br., Palm Beach Golf Center-Boca,
Inc. v. Sarris, No. 13-14013, 2014 WL 3962595 (11th Cir. July 17, 2014), at *1.5
In a letter brief, the FCC responded in the affirmative and explained that “[t]he DISH
Network ruling did not address or alter the treatment of facsimile transmissions under the TCPA
or the Commission’s implementing regulations.” Id. The FCC’s letter brief first discussed the
voice-call-related TCPA provisions and accompanying regulations at issue in the DISH Network
decision as described above, id. at 2-3, then contrasted them with the statutory and regulatory
provisions pertaining to fax advertisements. It explained that:
5
The FCC letter brief cited here was filed as an attachment to the plaintiff-appellant’s opening brief in the
instant case. App. Dkt. 12 at A-08.
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 12
The TCPA uses different language governing facsimile transmissions.
Specifically, the TCPA prohibits the “use [of] any telephone facsimile machine
. . . to send, to a telephone facsimile machine, an unsolicited advertisement.” 47
U.S.C. § 227(b)(1)(C) (emphasis added). In contrast with the Commission’s
construction of “initiate” in the robo-call and do-not-call contexts—where FCC
rules describe the directly-liable call “initiat[or]” as the “telemarketer” that
physically makes the call—the FCC defines the directly-liable “sender,” for
purposes of the TCPA’s unsolicited facsimile advertisement prohibition, 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.” 47 C.F.R. § 64.1200(f)(10). In other words, under the plain text
of that definition—and unlike the robo-call and do-not-call contexts—direct
liability for sending an unsolicited facsimile advertisement attaches to the entity
(defined as the “sender”) whose goods or services are being promoted, and not
generally to the entity that physically transmits the facsimile.
FCC Letter Br., Palm Beach Golf Center-Boca, 2014 WL 3962595, at *3 (underlined emphasis
added). After further elaborating on the history of the FCC’s regulations pertaining to fax
transmissions and on the differences between those regulations and the definition of “seller” and
“telemarketer” at issue in DISH Network, the FCC’s letter brief concluded that:
the [Palm Beach] district court misapplied the TCPA, the DISH Network ruling,
and FCC regulations regarding unsolicited facsimile advertisements to the extent
that it ruled, as a matter of law, that the defendant . . . may not be directly liable
under the TCPA for any unsolicited facsimile advertisement sent to the plaintiff
. . . unless the defendant actually transmitted the fax.
Id. at *7. The instant case turns on a fact pattern effectively identical to Palm Beach, so the FCC
decision in DISH Network is likewise inapplicable here.
Given that DISH Network does not have any bearing on the FCC’s regulations pertaining
to fax transmissions, liability turns on the plain language of the FCC’s definition of “sender” in
47 C.F.R. § 64.1200(f)(10). Because this definition includes those “whose goods or services are
advertised or promoted in the unsolicited advertisement,” Alfoccino is a “sender” under the
FCC’s regulations implementing the TCPA. Direct liability may therefore attach to Alfoccino if
an unsolicited advertisement for its goods or services was faxed to an entity with which it had no
existing business relationship.
No. 14-1704 Imhoff Investment, et al. v Alfoccino, et al. Page 13
On appeal, Alfoccino notes that the TCPA’s language concerning junk faxes makes it
unlawful “to use any telephone facsimile machine . . . to send . . . an unsolicited advertisement
. . . .” Appellees’ Br. 30 (quoting 47 U.S.C. § 227(b)(1)(C) (emphasis added)). According to
Alfoccino, because it did not itself “use” (in the sense of physically operate) a fax machine to
send advertisements to Avio, it escapes direct liability under the TCPA. But the word “use” in
the statute is directly tied to the word “send.” Alfoccino’s focus on the word “use” is therefore
unconvincing in light of the FCC’s regulation defining “sender,” which has resolved the issue.
Neither the FCC’s Palm Beach letter nor its regulations explain why the FCC has
attached direct liability to the “telemarketer” that actually places a voice call while requiring
proof of vicarious liability for the “seller” on whose behalf the call was made, yet has attached
direct liability to the “sender” on whose behalf a fax advertisement was sent by a third party.
Nonetheless, though Alfoccino questioned the reasoning of the FCC’s letter brief and its
application to this case, it has not directly challenged the legitimacy of the FCC’s definition of
sender in § 64.1200(f)(10). Nor is such a challenge likely to be viable because the Hobbs Act
confers jurisdiction on Courts of Appeal to review FCC regulations only by direct appeal from
the FCC. 28 U.S.C. § 2342(1); Leyse v. Clear Channel Broadcasting, Inc., 545 F. App’x 444,
454-58 (6th Cir. 2013); La Voz Radio de la Communidad v. FCC, 223 F.3d 313, 320 (6th Cir.
2000); CE Design, Ltd. v. Prism Bus. Media, Inc., 606 F.3d 443, 448-49 (7th Cir. 2010).
The pertinent FCC regulations are explicit that the party whose goods or services are
advertised—and not the fax broadcaster—is the sender. We therefore find that Alfoccino is a
party subject to direct liability for the unsolicited Alfoccino advertisements B2B transmitted to
Avio in violation of the TCPA.
III. CONCLUSION
For the foregoing reasons, we REVERSE the district court’s grant of summary judgment
to Alfoccino and REMAND the case to the district court for further proceedings in accordance
with this opinion.