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In $2.9 Million 'Blast Fax' Settlement, Plaintiffs Get Coupons and Lawyers Get Cash
Fulton County Daily Report
September 01, 2009
Business service and supply giant Pitney Bowes has agreed to settle a "blast fax" class action by giving $26 coupons to plaintiffs for each week they received an unwanted fax -- and $950,000 to the lawyers for the class.
The $2.9 million settlement ends a case originally filed in Cobb County, Ga., before being transferred to federal court. It began with Pitney Bowes' 2007 purchase of the corporate assets of Laser Life, a Marietta, Ga.-based supplier of toner and other printer products, according to court filings.
Among those assets was Laser Life's client list, which included more than 3,000 fax-machine numbers the company used to advertise its products. When Pitney Bowes assumed the operation, it began sending out promotional advertisements for its products to those numbers, according to the original complaint.
Among the recipients was attorney Martin K. O'Toole, a partner in Marietta's Griffin & O'Toole, who began receiving the faxes in August 2007. In November, Decatur, Ga., attorney Henry A. Turner and Birmingham, Ala., lawyer Samuel M. Hill -- who specialize in suits alleging violations of the Telephone Consumer Protection Act of 1991 -- filed suit against Pitney Bowes, seeking class status with O'Toole as the class representative.
Under the TCPA, a fax advertisement may be mailed only with the permission of the recipient, or if there is an existing business relationship, or EBR, between the sender and the recipient.
"Their argument was that they had bought the assets and customer list of [Laser Life], and that therefore they had an EBR with everybody on that list," said Turner.
But, he said, the 2005 Junk Fax Prevention Act included a provision barring the transfer of EBRs.
"We argued that EBRs cannot be assigned," he said. "If they'd bought the stock of the company, that might have offered some protection ... but all they bought were the assets."
There was also a problem with the mandatory "opt-out" notice, he said, which must conform to very specific guidelines, including prominent type and placement, a notice that the fax sender must comply with an opt-out request within 30 days of the request, and the inclusion of both a 24-hour opt-out telephone number and fax number. The faxes in question included an opt-out number, but it was in small type and simply read: "To be removed please call" a 1-800 number and extension.
The parties agreed to voluntary mediation, and after two days of "some of the most intense mediation I've been through," said Turner, settlement was reached under which each member of the class will receive a coupon worth $26 toward any $100 purchase of ink or toner from Pitney Bowes for each week they received one of the faxes, with a $2 million cap on redeemed coupons.
Along with Turner and Hill's $950,000, the order, signed on Aug. 3 by U.S. District Judge Harold L. Murphy, also guarantees O'Toole, as class representative, $5,000.
Under the terms of the settlement, Pitney Bowes admitted to no wrongdoing.
