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A Marietta, Ga., insurance company faces up to $87,500 in damages for sending junk faxes to more than 1,000 local lawyers and law firms. Capitol Special Risks Inc. reached a preliminary settlement last month with Malka & Trainor and 1,051 attorneys and firms. Last year, the Malka firm sued Capitol under the Telephone Consumer Protection Act, which entitles the recipient of unsolicited, faxed advertisements of up to $1,500 in damages for each fax. Malka v. Capitol Special Risks, No. 2001-CV-37309 (Fult. Super. April 27, 2001). Holzer & Holzer’s Corey D. Holzer in Atlanta represents the plaintiff class. “The underlying motivation is to have businesses conduct themselves within the parameters of the law and to advertise within the parameters of the law,” Holzer said. “It’s not about one fax on one day,” he added. “It’s about mass dissemination of these junk faxes.” Holzer said Capitol sent a two-page fax advertisement to class members who did not request them or otherwise give permission to receive the faxes. He sued on behalf of Malka & Trainor last year and during discovery obtained Capitol’s fax recipient database containing the other 1,051 attorneys and law firms. Law firms on the list include Alston & Bird; Bondurant, Mixson & Elmore; King & Spalding; Sutherland Asbill & Brennan and Troutman Sanders. Now that Fulton Superior Court Judge Bensonetta Tipton Lane preliminarily has approved the settlement, Holzer said, the parties will wait for final approval in August. Judge Marvin S. Arrington Sr. recused himself from the case last month. His former law firm, Arrington & Hollowell, was one of the firms in Capitol’s database. The law firm members of the class — except Malka & Trainor — are being notified of their status and told that each may choose to be excluded from class designation, Holzer said. Holzer said if the settlement ultimately is approved, each class member will receive from $47 to $50 after their attorneys in this suit subtract fees and costs from the $87,500. The plaintiff and defendant arrived at the $87,500 amount after negotiation, Holzer said, and consideration of the litigation risks. The statute provides damages of $500 to $1,500 per fax. Holzer added that he and his client believe Capitol would not be able to survive a larger judgment. Womble Carlyle Sandridge & Rice associate Kelly A. Lee, who represents Capitol, said the settlement is more than sufficient considering the plaintiffs received a two-page fax. She added that the Telephone Consumer Protection Act has constitutional weaknesses because it applies only to faxed advertisements and not other types of faxes. Womble Carlyle was not one of the law firms on Capitol’s fax recipient database. Atlanta attorney Marc B. Hershovitz has waged his own war against companies that send junk faxes. In March, he filed suit against a legal recruiter for $21,000 because she sent Hershovitz 14 unsolicited ads. Hershovitz said class actions against companies that send these ads aren’t unusual. Augusta, Ga., sole practitioner Sam Nicholson filed a $12 million class action against the restaurant chain Hooters in 2000 after he received an unsolicited lunch coupon for Hooters at his law office in 1995. Nicholson v. Hooters of Augusta, No. 95-RCCV-616 (Richmond Super. dec’d March 21, 2001). The case went to the U.S. Supreme Court, which upheld a finding that Hooters violated the Telephone Consumer Protection Act. Hooters of Augusta filed for bankruptcy last year, and the class is awaiting approval of a $9 million settlement.

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