Carnival Corp., the world’s largest cruise ship operator, faces damages of up to $2 million following a judge’s finding that the company violated a federal statute by faxing a travel agent between 540 and 1,387 unsolicited advertisements over the course of about four years.

Eastern District of New York Judge I. Leo Glasser held that the faxes violated the Telephone Consumer Protection Act of 1991, which bars the use of any “telephone facsimile machine … to send an unsolicited advertisement.”

Even though the act is a federal statute, the present case, Gottlieb v. Carnival Corporation, 04-civ-4202, marks one of the first instances a federal court has heard a TCPA claim on diversity grounds — typically they are brought only under the Class Action Fairness Act of 2005.

The case also represents one of the last times that a federal court will address the specific issue at the center of this case, namely whether an “existing business relationship” between a faxer and a faxee creates an exception to the act’s bar on the faxing of unsolicited advertisements.

Glasser held that in the period at issue in the present case, 2000 until approximately 2004, the law did not provide such an exception. In 2005, however, Congress amended the law, codifying an established business relationship exception, which became effective in July of that year.

The plaintiff in the present case, Sherman Gottlieb, is the sole owner and operator of SMG Travel, a Staten Island, N.Y.-based travel agency.

Gottlieb initiated this suit in 2004 against Carnival Corp., the owners and operators of nearly 100 cruise ships worldwide, to protest the nearly 1,400 faxes it sent him over the previous three to four years — an average of about one per day.

Gottlieb claimed the faxes, which promoted the company’s cruises and stated its rates, violated the act, which sets forth damages of $500 for each violation, as well as treble damages for “willful and knowing” violations.

Carnival set forth a number of defenses, all of which the court rejected.

The faxes were not “unsolicited advertisements,” but rather merely “informational flyers,” Carnival contended, a contention quickly dismissed by Judge Glasser.

“[T]he argument that Carnival did not intend to encourage Gottlieb to take one of its cruises and therefore did not violate the statute is one that surely must be made with tongue in cheek,” the judge wrote. “In all other aspects, it is frivolous and specious.”

Carnival also suggested that, even in the period before Congress codified such an exception, the act exempted established business relationships, and that it had such a relationship with SMG Travel, even if Gottlieb remembered neither “registering to become Carnival’s agent [nor] providing Carnival his fax number.” The company cited the 2005 amendment as evidence that Congress “always intended for there to be such a defense.”

Glasser rejected that argument as well. The statute addressed the issue “squarely,” the language was clear and the legislative history did not support the retroactive congressional intent suggested by the cruise operator, Glasser wrote.

“Given the plain language of the TCPA and its legislative history, it is clear that Congress limited the [established business relationship] exemption to ‘telephone solicitations,’” Glasser concluded. “[T]he only exemption from the prohibition on fax advertisements required the sender to obtain the express invitation or permission of the recipient.”

The judge granted Gottlieb’s motion for summary judgment on liability, enjoined Carnival from sending him any further unsolicited faxes and referred the matter to a magistrate judge for a recommendation on damages.

Andre K. Cizmarik and Anthony J. Viola of Edwards & Angell represented Gottlieb.

Reached by phone Monday, Cizmarik said, that in the days of thermal fax machines, there was a reason that Congress did not include an exception for established business relationships.

“The paper was actually fairly expensive. When you were getting these unsolicited faxes, not only was it tying up your machine, but it was using up your toner and your thermal paper,” Cizmarik said.

With an exception for the ambiguous “established business relationships,” Cizmarik added, “for the rest of eternity [a company could] bombard people with faxes, [it] could rely on just one transaction and continue to inundate people.”

Joseph J. Saltarelli of Hunton & Williams represented Carnival. Saltarelli could not be reached for comment.

Copies of the decision were sent to the parties via e-mail — not fax — the court noted.