Faxing Without Opt-Out Leads to $1.35M Payment to Get Out of TCPA Class Action

By Amanda J. Katzenstein, Jean Marie R. Pechette, and Jarno J. Vanto

Florida-based radiology provider, SRA Ventures, and two units of Canada-based cardiology and imaging service provider, KMH Labs, have agreed to pay Medical & Chiropractic Clinic Inc. $1.35 million to settle a proposed class action lawsuit after the providers faxed nearly 5,600 advertisements that did not contain necessary opt-out language, allegedly in violation of the Telephone Consumer Protection Act (“TCPA”), as amended by the Junk Fax Prevention Act of 2005 (“JFPA”), and FCC regulations.

According to the notice of settlement agreement filed in the United States District Court for the Middle District of Florida, on May 2, 2017, defendants SRA Ventures, a Florida-based radiology provider doing business as WestCoast Radiology, and two units of KMH Labs, a Canadian cardiology and imaging service provider, will pay the amount into a settlement fund to be distributed to class members who received the faxes, in addition to attorneys’ fees, costs, administering the settlement, and incentive awards.

Under the JFPA, it is unlawful for a person to use a telephone fax machine, computer or another device to send an unsolicited advertisement to a telephone fax machine. Additionally, the JFPA requires that senders of faxed advertisements place a clear and conspicuous notice on the first page of the transmission regarding the ability to opt-out. In this case, the sender did not include the opt-out notice and did not meet any of the exceptions such as a prior business relationship.

The faxes at issue were sent to 1,805 different fax numbers during four days in early February and early March 2016. Settlement class members who submit timely claims will receive proportional shares of the fund, up to $500 per fax received, which is the same amount they would receive as statutory damages.

The use of faxes has decreased in recent years, but litigation regarding junk faxes that violate the TCPA is not likely to go away anytime soon. On the same day Medical & Chiropractic Clinic, Inc. v. KMH Cardiology Centers, Inc. et al. was decided, an Illinois appellate court ruled on a different case regarding a settlement reached regarding alleged junk faxes in CE Design Ltd. v. HealthCraft Inc. et al. Although the court upheld the trial court’s decision not to revive an eight-year legal battle about the indemnification of a Canadian home health-support company regarding the alleged junk faxes, each case underscores the spectrum of complex issues involved in TCPA cases.

For further TCPA questions, please contact a member of Polsinelli’s Privacy and Data Security team.