A federal judge in Missouri ordered the Federal Communications Commission to back off its pursuit of $5.38 million in fines against Fax.com, a company it accused of sending unsolicited commercial or “junk” faxes on 489 occasions.
U.S. District Court Judge Stephen Limbaugh's court order said that the FCC no longer had the right to pursue charges against Fax.com under the TCPA after Limbaugh declared its junk-fax ban provisions unconstitutional in March. The writ, filed Sept. 20, could weaken the FCC's ability to enforce anti-junk fax rules while the constitutionality question remains in the air.
A FCC spokesman would say only that the agency is “abiding by the judge's ruling.” He declined further comment.
Fax.com was named along with American Blast Fax in 2000 by the Missouri attorney general's office in a lawsuit alleging TCPA violations due to junk faxing. The FCC later became party to the lawsuit because the constitutionality of the junk-fax ban was under challenge.
American Blast Fax since has gone out of business, leaving Fax.com the sole defendant. In March 2002, Limbaugh ruled that the FCC and Missouri attorney general had failed to prove a substantial interest in regulating fax advertising and failed to show evidence that unsolicited commercial faxes unfairly place the cost of advertising on recipients.
Limbaugh's decision is not binding outside of his jurisdiction, which is based in St. Louis and covers the eastern half of Missouri. The Missouri attorney general and the FCC are appealing the decision in the U.S. 8th Circuit Court of Appeals.
In August, the FCC began its own proceedings against Fax.com, saying the company had continued violating the TCPA despite repeated warnings and seeking $11,000 per violation. The FCC also issued letters to 100 Fax.com clients warning them that they faced similar penalties if they continued sending unsolicited commercial faxes through Fax.com.
At that point, Fax.com asked Limbaugh to intervene. Limbaugh issued a temporary stay in late August, which was made permanent with the writ in September.
“We were like, 'How can you do this? You've lost,'” Mary Anne Wymore, an attorney for St. Louis law firm Greensfelder, Hemker & Gale, which is representing Fax.com in the case, said of the FCC. “We've argued this case already.”
The broader implications of Limbaugh's decision have yet to be seen. Prior to his ruling, three other federal judges in Oregon, Texas and Indiana ruled that the junk-fax ban is constitutional.
Wymore acknowledged that many see Limbaugh's opinion as an aberration. However, Limbaugh has noted what might be flawed thinking by the other federal judges who have considered the constitutionality issue, she said.
“Limbaugh was the first to say, 'Wait a minute, this analysis is wrong,' ” she said.
Fax.com also faces a trillion-dollar civil suit under the TCPA and state law in California filed by Silicon Valley entrepreneur Steve Kirsch. While Limbaugh's decision may not be binding on that case, or any other junk-fax case in court now or to come, other federal judges will consider it, and state judges often defer to federal court rulings on matters of federal law, Wymore said.
Fax.com's legal briefs in the pending appeal of Limbaugh's decision were due Oct. 7, and the government was scheduled to reply no later than Oct. 21. A hearing likely will follow two to three months later, and a decision may be released in the spring, Wymore said.