The Turn of a Phrase: Meaning of “On Whose Behalf” Advertising is Done Stands Between Potential Millions in Liability and End of the Case in Fax Advertising Cases.

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May 15, 2015
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Against the backdrop of burgeoning Telephone Consumer Protection Act (“TCPA”) litigation, SmithAmundsen’s Class Action Practice Group recently obtained summary judgment in the Northern District of Ohio. Plaintiff had filed a complaint alleging a class of persons had received unsolicited fax advertisements from the defendant.

Prior to a decision on whether the matter could proceed as a class, SmithAmundsen moved for summary judgment, arguing, in part, that the third-party that had allegedly sent any fax advertisements had done so in contravention of what defendant authorized. Quite simply, no fax advertisement had been sent on behalf of the defendant-company. In an order adopting a magistrate judge’s recommendation, the federal court found that since the third-party fax broadcaster exceeded the scope of its authority in purportedly transmitting an unsolicited advertisement to plaintiff, defendant was not liable to plaintiff, as a matter of law. The Siding and Insulation Co. v. Alco Vending, Inc., Case No. 1-11-cv-01060-LW (Apr. 22, 2015 Order).

The Northern District of Ohio decision is in keeping with Uesco, an Illinois Appellate Court decision. In that fax advertising case, the Appellate Court found that since the factual record contained explicit instructions on the advertising to be done by a third-party and the third-party exceeded that authority by sending an advertisement to the plaintiff, the advertisement was not sent on behalf of defendant. Uesco Indus., Inc. v. Poolman of Wisconsin, Inc., 2013 IL App (1st) 112566, ¶ 67, 993 N.E.2d 97, 113-14 appeal denied, 996 N.E.2d 24 (Ill. 2013) and cert. denied, 134 S. Ct. 1323, 188 L. Ed. 2d 307 (2014). But for this decision in favor of the defendant, the matter would have proceeded as a class action with over $6.1 million potentially at stake.

The foregoing highlights the defensibility of TCPA matters involving third-parties as a plaintiff must show more than a defendant’s goods or services are advertised. Lack of authority—whether an advertisement was sent on behalf of a company—is a critical part of the calculus. Companies that unwittingly find themselves in the mire of class litigation due to the advertising of their goods or services by third-parties need to partner with counsel that can marshal the evidence to advance this defense. Such a defense can be what stands between an early end to litigation and potentially annihilating damages.