Summary
The Seventh Circuit affirmed summary judgment for a TCPA fax-advertising class action, holding that: (1) "prior express permission" requires the recipient to affirmatively and explicitly give ongoing consent to receive fax advertisements (mere agreement to receive "product information" or failure to opt out is insufficient); (2) such permission is not transferable when a company acquires a customer database—the acquiring entity must obtain its own permission or comply with the established business relationship safe harbor; and (3) upon a finding of liability, a court may enter judgment for statutory damages based solely on the number of faxes sent and the numbers used, without individual damages hearings. The court also ruled that defendants bear the burden of proving the affirmative defense of prior express permission, and that the TCPA must be liberally construed in favor of consumer protection.
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Practice areas
Questions Presented
- Whether the district court properly granted summary judgment on liability when AMS failed to show prior express permission and even if it did, permission was not transferable.
- Whether the district court abused its discretion in denying AMS's motion for leave to file a sur-reply.
- Whether the district court erred in entering judgment without an evidentiary hearing on damages.
- Whether the district court abused its discretion in approving the distribution plan.
Holdings
- AMS failed to demonstrate prior express permission because the affidavits did not show that recipients affirmatively and explicitly consented to receive fax advertisements on an ongoing basis.
- Prior express permission is not transferable under the TCPA.
- The district court did not err because once liability is established and the class seeks only statutory damages, the court may enter judgment upon proof of the number of faxes and the numbers to which they were sent, which were undisputed.
- The district court did not abuse its discretion because the plan adequately ensures that each class member has standing to recover.
- The district court did not abuse its discretion because PHI did not submit new evidence relevant to the court's entry of judgment in its reply brief.
Key quotations
“Express permission to receive a faxed ad requires that the consumer understand that by providing a fax number, he or she is agreeing to receive fax advertisements.” (at 7)
“the consumer must affirmatively and explicitly give the advertiser permission to send it fax advertisements on an ongoing basis” (at 10)
“even if Allscripts had received prior express permission or invitation to send the fax in question—and it did not—AMS could not rely on Allscripts' procurement of that permission” (at 14)
“we now explicitly hold that upon a finding of liability, a court may enter judgment as soon as the plaintiffs establish the amount of faxes and the numbers to which those faxes were sent” (at 16)
Factual background
In February 2010, AMS sent a fax advertisement to 11,422 numbers using an automated system. The fax advertised a new service, lacked an opt-out notice, and AMS had not sought permission from recipients. PHI, a recipient, filed a class action under the TCPA. The district court certified a class of all recipients of the fax, granted summary judgment on liability, entered judgment for $5,709,000, and approved a distribution plan.
Procedural history
PHI filed a putative class action in Illinois state court alleging TCPA violations; removed to federal court; class certified; summary judgment on liability granted to PHI; judgment entered for $5,709,000; distribution plan approved; defendants appealed.