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Anyone who has discovered a heap of advertisements in his fax machine will be delighted by the Brooklyn Appellate Term’s April decision. The panel reversed two lower courts and declared that a federal ban on unsolicited fax ads did not impinge on First Amendment protections for commercial speech. It is the first New York appellate ruling on the law. A three-judge panel of the Appellate Term for the Second and Eleventh judicial districts in the Second Department (covering Brooklyn, Queens, and Staten Island) unanimously overturned rulings from civil courts in Brooklyn. The lower courts had dismissed actions seeking damages under the 1991 federal law that attempted to quell annoying unsolicited ads sent to consumers’ fax machines. In an unsigned memorandum addressing two cases consolidated for appeal – Rudgayzer & Gratt v. Enine and Bonime v. Perry Johnson Inc. – the court said the Telephone Consumer Protection Act (TCPA) did not unconstitutionally bar any advertising content. “It simply forbids its transmission by fax to an unwilling recipient, while leaving open to the advertiser all other means of conveying the information,” the court said, citing a 2003 decision by the U.S. Court of Appeals for the Eighth Circuit. The Eighth Circuit had reversed the district court decision that had been relied on by the Brooklyn lower court judges in 2002. Although the law is federal, its primary enforcement is in state courts. The statute bars anyone within the United States from using “any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine.” Treble damages can be awarded if the offending transmissions were “willful or knowing.” The Appellate Term reinstated the actions that had been dismissed, granted the plaintiffs summary judgment on the issue of liability, and remanded the cases to the civil courts. The fax in the Rudgayzer & Gratt case was sent by Fax.com on behalf of Enine and announced a “strong buy” recommendation for a particular stock. It clearly fell within the statute’s definition of an “unsolicited advertisement,” the court said. The fax in the Bonime case was a closer call, the judges said, but it had “the effect and purpose of advertising.” It mentioned the defendant’s name, Perry Johnson Inc., and invited calls for further information. “We find that the TCPA restrictions upon transmission of unsolicited advertisements by facsimile are constitutional, since the statute addresses a substantial government interest, materially advances that interest, and is not more extensive than necessary to serve that interest,” the Appellate Term said. The government interest was to prevent cost-shifting from advertisers to unwilling recipients of their ads who must pay for paper and toner and to prevent fax owners from being deprived of the use of their machines by incoming advertising faxes, the court said. “Congress was entitled to find that unsolicited advertising faxes were responsible for the vast majority of the offenses to its cited interests, and thus to restrict the scope of regulation to such faxes,” said the panel. A version of this story originally appeared in New York Law Journal, a sibling publication of Corporate Counsel.

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