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Supreme Court Declines to Hear Fax.com Case

The U.S. Supreme Court said yesterday that it will not hear a case challenging restrictions on unsolicited faxes. The justices made no comment in rejecting the case filed by Fax.com against Missouri attorney general Jeremiah W. Nixon.

After receiving numerous consumer complaints, Nixon sued Fax.com, accusing it of violations of the Telephone Consumer Protection Act of 1991, which banned junk-fax advertising.

Fax.com argued that the law was unconstitutional, representing a government ban on First Amendment free speech. U.S. District Court judge Stephen N. Limbaugh agreed with Fax.com and now-defunct American Blast Fax in 2002 and overturned the rule.

But the 8th Circuit Court of Appeals overturned that decision, ruling that the government has a substantial interest in protecting consumers from unwanted fax ads. The case now goes back to Limbaugh to assess damages.

The status of Fax.com, however, was unknown yesterday. Fax.com’s attorney in the case, Jonathan K. Stock, declined comment on any questions regarding Fax.com, and the company’s Web site was down yesterday afternoon. Stock expressed disappointment that the court chose not to hear the case.

“We had some good arguments. I thought we presented them in a strong fashion … but it was not to be,” he said. “The TCPA imposes a fairly onerous restriction on any attempt to communicate via facsimile. Because of that restriction, we thought that this might be a good way to call the court’s attention to some of the less-restrictive alternatives out there, including the do-not-call list, which could have been used for a do-not-fax list much the same way since they’re both phone numbers.”

Stock also wondered about the implications this decision might have on the lawsuits surrounding the national no-call registry.

“There’s two ways to analyze this,” he said. “One, a cert petition being denied doesn’t directly reflect on the merits and indicate whether the court agreed with the 8th Circuit. There’s a number of reasons it can be denied. That’s the literal effect.

“The practical effect is it’s significant when you have this type of commercial speech restriction being upheld by the 8th Circuit and not reviewed by the Supreme Court. This may be viewed as a signal as to the degree of commercial speech restrictions that the court is willing to tolerate. That is the real issue that’s going to come up with the do-not-call list … whether this case becomes a signpost for the level of restrictions that are tolerable on commercial speech.”

Fax.com has seen its share of bad news lately. Last week, the Federal Communications Commission slapped the company with a $5.4 million fine, the largest telemarketing fine ever imposed by the agency, on complaints of junk-fax rule violations. The FCC said Fax.com violated the TCPA, which bans all unsolicited commercial faxes, on 489 occasions and is subject to fines of $11,000 for each violation.

Other states and individuals have sued Fax.com, including California, Idaho and Propel Software CEO Steve Kirsch, who is seeking $2.2 trillion from Fax.com in conjunction with activist policy group Redefining Progress.

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