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Georgia residents and businesses got the green light last week to bring claims against advertisers who send unsolicited faxes. The Court of Appeals of Georgia upheld class certification of the state’s first class action involving junk faxes. An Augusta sole practitioner brought the case against the restaurant chain Hooters of Augusta Inc. In a broader sweep, the court established that a federal statute regulating faxed ads and other telemarketing efforts creates a private right of action and confers jurisdiction on state courts in Georgia. Hooters of Augusta Inc. v. Nicholson No. A00A0429 (Ct. App. Ga. July 14, 2000). Marc B. Hershovitz is an Atlanta attorney who represents plaintiffs in a similar suit against Susquehanna Radio Corp., the owner of radio station 99X. “Hooters was a resounding affirmation that these cases can go forward in Georgia,” he says. Hershovitz was waiting to proceed in his suit until Hooters resolved the key issue of whether Georgia courts may hear cases under the Telephone Consumer Protection Act. UNSOLICITED FAX ADS BARRED TCPA (47 U.S.C. 227) is a 1991 law that prohibits advertisers from sending unsolicited ads by fax. The law defines unsolicited as without prior express invitation or permission. It allows plaintiffs to sue in state court and imposes fines of $500 to $1,500 per violation. Hooters is the first TCPA case in the nation to advance through an appeal with class certification intact, say plaintiffs lawyers. It also is the only reported TCPA case in Georgia. The class is expected to comprise 2,500 to 3,000 people and businesses that received unsolicited fax advertisements, according to Harry D. Revell of Augusta’s Burnside, Wall, Daniel, Ellison & Revell. Revell represents plaintiff Sam Nicholson, who sued in Richmond County, Ga., in 1995 after receiving an unsolicited fax containing a Hooters’ lunch coupon at his law office. The flyer was faxed by Value-Fax of Augusta. Value-Fax was hired by Hooters and other businesses to distribute advertisements to Augusta-area fax machines. Hooters’ appellate attorney Frank M. Lowrey IV of Atlanta’s Bondurant, Mixson & Elmore points out that the flyer contained six to eight ads from other businesses. “It’s fairly clear that they are not trying to stop transmissions. They are trying to collect money from a solvent defendant,” Lowrey says. NO PRIVATE RIGHT OF ACTION? A Richmond County judge certified the class in 1998. Hooters appealed, arguing that the recipient of the fax had no private right of action in Georgia and that TCPA cannot reach purely intrastate communications. Hooters is not liable for the conduct of an independent contractor and the class was improperly certified, the company argued. The appeals court held in favor of the recipient on each issue. Judge John J. Ellington delivered the majority opinion. Judges John H. Ruffin Jr., Frank M. Eldridge, Anne E. Barnes and Charles B. Mikell Jr. concurred. Presiding Judges Gary B. Andrews and G. Alan Blackburn dissented. The parties had presented arguments in January to a three-judge panel, which included Andrews and Ruffin and Ellington. “We think it’s significant that it’s a full-court opinion. It’s significant that five of seven people who settled this en banc case agreed right down the line with our [position],” says Revell. MORE APPEALS EXPECTED Lowrey says Hooters will seek reconsideration in the appeals court, and, if necessary, will seek certiorari from the Supreme Court of Georgia. “The Georgia Supreme Court should and will take this case on certiorari to consider the issues of first impression involving the interpretation of the TCPA,” says Lowrey. The main issue Lowrey says Hooters will raise on appeal is whether a TCPA cause of action exists in Georgia. Hooters argues TCPA is intended to merely supplement state laws that restrict unsolicited telemarketing within the state but cannot reach interstate marketing. Because Georgia does not have a state law that explicitly provides a private right of action for intrastate unsolicited fax ads, the recipient of the fax cannot rely upon TCPA, Hooters contends. DIFFERENCES OVER INTERPRETATION The recipient, however, argued that the statute’s language — a person may bring an action “if otherwise permitted by the laws of a state” — means state courts may hear TCPA actions unless the state “opts out” by enacting a law that expressly prohibits such private actions. The trial court applied the opt-out analysis, and concluded that the provision allows states to prohibit private TCPA actions, but does not require “explicit enabling legislation,” according to the opinion. The Georgia appeals court upheld the trial court. The dissent, however, interpreted the statute’s language to require states to opt in by explicitly providing for a private right of action in state law. “The purpose of the statute was not to go beyond what the state was already doing to regulate the telemarketers, but rather to allow the states to reach those telemarketers who were evading state jurisdiction by operating interstate,” the dissent states. Hooters’ lawyer Lowrey agrees: “The statute reads ‘if otherwise permitted by state law.’ It’s our position that ‘otherwise permitted’ does not mean ‘unless prohibited.’ “ Lowrey says he is encouraged by the dissent in an unsettled area of law. But others contend the decision is in accordance with most jurisdictions and should withstand appeal. “Georgia is joining an overwhelming majority of courts nationwide,” says Hershovitz. Most courts have allowed recipients of faxed advertisements to sue under federal law without a state law that expressly gives them a private right of action, Hershovitz says. He adds that, while Hooters is the first TCPA class action to go forward in litigation, classes have settled. Additionally, individuals have settled claims and won awards at trial.

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