Olsen v. Siddiqi

LAWRENCE E. MOONEY, Judge.

I respectfully dissent.

When you receive an unsolicited fax, you lose paper. You lose toner. You lose the use of your fax machine. See, e.g., Park Univ. Enters., Inc. v. Am. Cas. Co. of Reading, PA, 442 F.3d 1239, 1244-45 (10th Cir.2006)(noting losses incurred from unsolicited faxes); Missouri ex rel. Nixon v. Am. Blast Fax, Inc., 323 F.3d 649, 654-55 (8th Cir.2003)(discussing TCPA legislative history identifying the range of harms created by junk faxes). These losses fit squarely within American Family’s policy definition of “property damage.”

The United States Congress enacted the TCPA to protect facsimile machine owners from unsolicited advertisements. Terra Nova Ins. Co. v. Fray-Witzer, 449 Mass. 406, 869 N.E.2d 565, 575 (2007). The legislative history of the TCPA identifies numerous problems associated with unsolicited facsimile advertising, including shifting costs to the recipient and the interference with the recipient’s equipment:

[W]hen an advertiser sends marketing material to a potential customer through regular mail, the recipient pays nothing to receive the letter. In the case of fax advertisements, however, the recipient assumes both the cost associated with the use of the facsimile machine and the cost of the expensive paper used to print out facsimile messages. It is important to note that these costs are borne by the recipient of the fax advertisement regardless of their interest in the product or service being advertised.

In addition to the costs associated with fax advertisements, when a facsimile machine is receiving a fax, it may require several minutes or more to process and print the advertisement. During that time, the fax machine is unable to process actual business communications.

H.R.Rep. No. 102-317 (1991), p. 25; see also, Prime TV, LLC v. Travelers Ins. Co., 223 F.Supp.2d 744, 750 (M.D.N.C.2002)(discussing legislative history); Am. Blast Fax, 323 F.3d at 655 (noting unsolicited fax advertisements shift significant costs to the fax recipients per year, interfere with company switchboard operations, and burden recipients’ computer networks).

The monetary impact of a single unsolicited fax may seem minor to some, but “it is nevertheless a cost borne by the recipient and recognized by Congress as a compen-sable harm.” Universal Underwriters Ins. Co. v. Lou Fusz Auto. Network, Inc., 401 F.3d 876, 880 (8th Cir.2005). To that end, the TCPA allows recovery for actual monetary loss, or statutory damages of $500, whichever is greater, for each violation. 47 U.S.C. § 227(b)(3); Karen S. Little, L.L.C. v. Drury Inns, Inc., 306 S.W.3d 577, 581 (Mo.App. E.D.2010). The trial court is allowed to treble these damages if it finds the violation to be willing or knowing. Id. Congress designed the statutory remedy to provide “adequate incentive for an individual plaintiff to bring suit on his own behalf.” Forman v. Data Transfer, Inc., 164 F.R.D. 400, 404 (E.D.Pa.1995). The statutory damages “serve to liquidate uncertain actual damages and to encourage victims to bring suit to redress violations.” Universal Underwriters Ins. Co. v. Lou Fusz Automotive Network, Inc., 300 F.Supp.2d 888, 893 (E.D.Mo.2004). Because the.actual losses associated with individual violations of the TCPA may be small, the added incentive of statutory damages is necessary. Universal Underwriters, 401 F.3d at 881.

American Family and the majority acknowledge that in seeking the fixed statutory damages, rather than actual damages, plaintiff acted consistently with the TCPA. They tacitly admit that coverage would exist for plaintiffs loss if only plaintiff had sought actual damages. But, the majority reaches the novel conclusion that the fixed statutory damages are penal in nature, and thus no coverage exists here, for the same loss that would be covered if plaintiff had sought actual damages. The fixed statutory amount of damages serves more than purely punitive or deterrent goals; the fixed award is a liquidated sum for actual harm and/or an incentive for aggrieved parties to act as private attorneys general. Universal Underwriters, 401 F.3d at 881. Also, that Congress elected to make treble damages available — separate from fixed damages — strongly suggests that the fixed statutory damages serve additional goals other than deterrence and punishment. Universal Underwriters, 401 F.3d at 881. Moreover, interpreting the TCPA’s fixed statutory remedy as penal in nature is counter to the clear admonition of Missouri law to interpret insurance contracts liberally in favor of the insured, to furnish, rather than to exclude, coverage. Lou Fusz, 300 F.Supp.2d at 894.

The TCPA is a remedial statute intended to address misdeeds suffered by individuals. See Terra Nova, 869 N.E.2d at 575 (holding TCPA is remedial statute, and that statutory damages are not punitive damages); see also Prime TV, 223 F.Supp.2d at 750 (holding unsolicited fax advertisements constituted “property damage” under policy with language similar to the policy here); USA Tax Law Center, Inc. v. Office Warehouse Wholesale, LLC, 160 P.3d 428, 434 (Colo.App.2007)(noting TCPA is a remedial statute).

Finding no error, I would affirm the award of property damages.