Business groups are working feverishly to get a California law banning unsolicited commercial faxes killed before it goes into effect on Jan. 1.
The National Chamber Litigation Center—the public policy law firm of the U.S. Chamber of Commerce—early last month filed a lawsuit in federal court in California seeking a preliminary injunction to prevent California from enforcing its law.
At about the same time, the Fax Ban Coalition—an ad hoc, broad-based group of trade associations and businesses—filed a petition with the Federal Communications Commission aiming to get the FCC to rule that California’s fax ban is out of the state’s jurisdiction.
The FCC last week called for comment on the petition.
California Gov. Arnold Schwarzenegger on Oct. 7 signed an unsolicited commercial fax ban making it illegal for businesses in California to send commercial faxes to the rest of the United States or within California without prior written consent from recipients. It is also illegal under California law for companies outside the state to fax into California without prior written consent from recipients.
The Fax Ban Coalition contends California’s law runs afoul of the federal Junk Fax Protection Act of 2005, which President Bush signed in July. The Junk Fax Protection Act amended the Telephone Consumer Protection Act of 1991 by permitting businesses or entities to send unsolicited faxes to consumers and businesses with whom the sender has an established business relationship.
Congress passed the Junk Fax Protection Act of 2005 in reaction to the FCC deciding in 2003 that the Telephone Consumer Protection Act of 1991’s language did not support a prior-business-relationship exemption, an interpretation under which businesses had been operating under for more than 10 years.
California’s law eliminating the pre-existing-business-relationship exemption is “extremely cost prohibitive and will do nothing to stop junk faxes,” said Jade West , senior vice president, government relations for the National Association of Wholesaler Distributors. “The kind of junk faxes that people hate getting are already illegal.”
West, who is also director of the Fax Ban Coalition, said a ban on commercial faxes without prior written consent would prevent businesses from faxing customers such routine communications as sale and price-change notices, and inventory-availability material such as closeout-pricing notices.
“Pharmaceutical wholesalers are not sure they would be able to fax their retail customers information on pharmaceutical drugs,” she said. Companies would also be prohibited from faxing material safety data sheets—product safety information sheets prepared by manufacturers and marketers of products containing toxic chemicals—if those so-called MSDS’s contained any information about the commercial availability or pricing of the product.
Critics of the prior-business-relationship exemption, such as JunkFax.org, contend that the law allows businesses to unfairly shift the costs of their pitches to the recipient.
“Instead of sending you a direct mail piece that would cost them a whopping 37 cents plus printing costs or calling you on the phone or sending you an email, they can now send you that same advertisement for less than 3 cents each because virtually all the costs are shifted from the advertiser onto the recipient. And there’s nothing you can do to prevent it,” says copy in a Q and A section of the site. “It's simply cheaper advertising for businesses because they can now send you ads you don't want at your expense without your consent.”
Meanwhile, the Junk Fax Protection Act of 2005 also requires senders of fax advertisements to include a notice and contact information on the first page of the fax informing the recipient how to “opt-out” of any future fax advertisements from the sender.
California’s ban also requires faxes to identify the sender and the date and time the fax was sent. However, it exempts faxes sent to members by trade associations in “furtherance of the association’s tax exempt purposes” as long as the fax isn’t primarily intended to advertise a third party’s product or service, and the recipient voluntarily provided their fax number and hasn’t asked the association to stop faxing them.
One of the most troublesome aspects of California’s fax ban, according to critics, is that it gives individuals the right to sue senders for $500 for each violation. It also allows the court to triple damages if the violation was “willful.”
West estimates that 25 or 30 states either have or are considering anti-commercial fax legislation.
“However, California’s is the most egregious because it goes back to a stricter regulation than what the FCC envisioned,” West said.
