Question of ‘Sender’ One for the Jury

TCPA Connect

A New York federal court has adopted the multifactor test favored by the U.S. Court of Appeals for the Sixth and Eleventh Circuits to determine whether a defendant is the “sender” of a fax for purposes of Telephone Consumer Protection Act liability.

It is a violation of the TCPA to “send” an unsolicited advertisement via fax, but the statute does not define “send” or “sender.” The Federal Communications Commission (FCC) regulations define “sender” as “the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement.” Circuits have split on how to interpret this definition, and now one court in the Southern District of New York has weighed in.

In 2008, Education Testing Service, a nonprofit corporation that administers the SAT, PSAT and AP exams, granted Houghton Mifflin Harcourt the exclusive right to distribute, market and advertise ETS’ Criterion product. ETS retained the power to approve HMH’s marketing materials, and the agreement provided that the relationship between the parties was that of independent contractors.

In 2012, HMH decided to market Criterion via fax. HMH conceived of, designed and physically drafted the fax, which was then sent to ETS. An ETS employee approved the fax without suggesting any changes or alterations. On November 15, 2012, the fax was transmitted to 17,710 numbers.

One of the faxes was sent to religious corporation and high school Bais Yaakov of Spring Valley, a frequent TCPA plaintiff. Bais Yaakov filed a putative class action against ETS, alleging that it never provided consent to receive faxed advertisements and that the opt-out notice on the fax violated the TCPA.

After several years of litigation, ETS moved for summary judgment. U.S. District Court Judge Kenneth M. Karas first determined that Bais Yaakov had standing to bring the lawsuit and then turned to the issue of liability as a “sender” under the TCPA.

Other circuits have split on how to interpret the FCC’s definition of “sender.” The Seventh Circuit has adopted a test applying agency law principals. The Sixth and Eleventh Circuits have adopted a fact-specific multifactor test. The U.S. Court of Appeals for the Second Circuit has not ruled on the appropriate approach or test for determining the meaning of a “sender” under the statute when a fax has been sent by one entity on behalf of another.

Judge Karas deferred to the FCC’s interpretation of its own regulations and opted for the multifactor test. He noted that the Seventh Circuit had failed to consider a letter from the FCC that explained that agency law principles did not apply in the TCPA unsolicited fax context.

“In its review of TCPA case law and FCC regulations, the court has found nothing to suggest that Congress or the Commission intended to impose the burden of proving the existence of an agency relationship on a plaintiff as part of proving that a fax was sent on behalf of a person or entity for TCPA purposes,” he wrote.

The factors in the test include: 1) the degree of input and control over the content of the fax; 2) the actual content of the fax; 3) contractual or expressly stated limitations and scope of control between the parties; 4) privity of the parties involved; 5) approval of the final draft of the fax and its transmission; 6) the method and structure of payment; 7) overall awareness of the circumstances (including access to and control over fax lists and transmission information); and 8) the existence of measures taken to ensure compliance and/or to cure noncompliance with the TCPA.

These factors cut in both directions. Factors suggesting that ETS was not the sender included the facts that ETS did not participate in generating the idea for the HMH fax, determine the recipients and reach of the HMH fax campaign, draft the HMH fax, engage or pay the companies that transmitted the fax, or direct any other person or entity to send the fax. But some facts suggested that ETS was the sender, including the fact that ETS employees knew HMH was planning on launching a fax campaign to recipients in ten states, reviewed and approved the fax and use of the ETS logo, and retained the right to revise it. The fax itself promoted ETS’ product on its face.

“Given ample evidence to support both sides’ positions, the court concludes that the question of on whose behalf the fax advertisement was sent is a question to be decided by a jury,” the court wrote. “Therefore, the court denies defendant’s motion for summary judgment with respect to plaintiff’s TCPA claim.”

To read the opinion and order in Bais Yaakov of Spring Valley v. Educational Testing Service, click here.

Why it matters: As the Second Circuit has yet to weigh in on the applicable standard for determining who is a “sender” of a challenged fax under the TCPA, the New York federal court followed the path of the Sixth and Eleventh Circuits by adopting a multifactor test and rejected the agency standard used by the Seventh Circuit. Judge Karas’s decision, for now, remains the best guidance in the circuit.



pursuant to New York DR 2-101(f)

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