E-Alert Case Updates
United States District Court for the District of Maryland found that FCC Regulation affected a Defendant’s Potential Liability under the Telephone Consumer Protection Act.
Asher & Simmons, P.A. v. j2 Global Canada, Inc.
In Asher & Simmons, P.A. v. j2 Global Canada, Inc., the United States District Court for the District of Maryland found that regulations promulgated by the Federal Communications Commission (“FCC”) affected defendant’s potential liability under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. Writing for the Court, Judge James K. Bredar found that the TCPA’s prohibition against the transmission of unsolicited faxes was ambiguous, and that FCC regulations interpreting those provisions were reasonable. Accordingly, the Court permitted the defendant to plead, as an affirmative defense, that it did not have a “high degree of involvement” in the alleged transmission of unsolicited facsimiles to the plaintiffs.
Asher & Simons, P.A., along with Dr. Stuart T. Zaller, LLC (collectively, “Plaintiffs”), filed suit against several individuals and corporations, including j2 Global Canada, Inc. (“j2 Canada”), j2 Global, Inc., and Wellington Wreaths, LLC (collectively, “Defendants”). In their Complaint, Plaintiffs allege that Defendants “sent, or aided and abetted or conspired to send[,]” unsolicited facsimile advertisements in violation of the TCPA, and Maryland Consumer Protection Act (“MCPA”), MD. CODE ANN., COM. LAW § 14-3201. As its tenth affirmative defense, j2 Canada pled in its Answer that “[a]ny claim alleged in the [ ] Complaint is barred because j2 Canada did not have a high degree of involvement in the sending of facsimiles at issue in the [ ] Complaint.” Asher & Simmons, P.A. v. j2 Global Canada, Inc., No. 13-0981, slip op. at 2 (D. Md. Oct. 16, 2013). Defendant j2 Canada based its affirmative defense upon a rule promulgated by the Federal Communications Commission (“FCC”), which states that a “facsimile broadcaster will be liable for violations of [the TCPA] . . . 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 transmission.” 47 C.F.R. § 64.120(a)(4)(vii). Plaintiffs moved for partial summary judgment as to j2Canada’s tenth affirmative defense, arguing that that liability under the TCPA is premised solely upon the plain language of the Act, rather than FCC regulations. The United States District Court for the District of Maryland granted Plaintiffs’ Motion for Summary Judgment on September 17, 2013, and j2 Canada filed a Motion for Reconsideration.
The Court granted j2 Canada’s Motion for Reconsideration, reversing its own decision with respect to Plaintiffs’ Motion for Summary Judgment as to j2 Canada’s tenth affirmative defense. The Court observed that the power to reconsider an order is committed to the district court’s discretion, the responsibility of which is to reach the correct judgment under the law. As a preliminary matter, the Court determined that the Chevron Doctrine applied to the issues raised by j2 Canada’s tenth affirmative defense. See Chevron, U.S.A., Inc. v. Nat’l Resources Defense Council, Inc., 467 U.S. 37 (1984). Under the Chevron Doctrine, ambiguities arising from legislation delegated by Congress to the administration of a particular agency should be interpreted generally by that agency, where its interpretation is reasonable. The Court noted that the TCPA was within the FCC’s jurisdiction to administer. The Court found that the TCPA’s prohibition against 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), was ambiguous because Congress was unclear as to whether an advertiser who pays a service to send an unsolicited advertisement over the network of a common carrier is actually sending the advertisement under the TCPA. Because the statutory language was susceptible to varying constructions, the Court looked to whether the FCC regulation was, in fact, a reasonable construction of the TCPA. In this case, the Court found the FCC’s construction of the TCPA reasonable under its regulation, 47 C.F.R. § 64.1200 (a)(4)(vii). Therefore, the Court granted j2 Canada’s Motion for Reconsideration, and denied Plaintiff’s Motion for Partial Summary Judgment.
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