Eric Hernandez, left, and Arturo Martinez of Wallen Hernandez Lee Martinez (Courtesy photos)
Junk faxes may sound like a problem from the ’90s — but they can still lead to large payouts for plaintiffs.
A Miami federal judge last week gave final approval to a $1.55 million nationwide class action settlement for thousands of schools that complained about receiving reams of unsolicited faxes advertising Gorilla Glides, felt pads that go underneath chairs and tables to protect floors.
The allegations came under the Telephone Consumer Protection Act, which also covers robocalls and spam text messages. Lawsuits under the TCPA have increased dramatically in recent years, with 44 TCPA lawsuits filed in 2009 and 4,860 filed last year, according to the Wall Street Journal. The law provides for recovery of up to $500 per fax.
Gorilla Glides maker American Chemicals & Equipment Inc. sent the faxes every couple of weeks for more than a year, according to class lawyer Arturo Martinez. While most people probably don’t look at paper faxes nowadays, that doesn’t make spam less of a bother, he said.
“On the receiving end, people have it set up so you get them through email, so you don’t know what you’re getting until you actually open the email up and see that it’s junk,” said Martinez of Wallen Hernandez Lee Martinez in Coral Gables. “So the basis of all of this is the annoyance that people have to go through to determine whether this is business-related or not.”
The plaintiffs class, which includes nearly 14,000 school districts and about 90,000 schools and companies, negotiated a settlement in September just as the trial was set to begin. The case had been “fully litigated,” Wallen Hernandez partner Eric Hernandez said, including a contentious discovery battle.
Because mass fax records are constantly purged, plaintiffs counsel had to act quickly to get the information they needed.
“In this type of lawsuit, the biggest challenge discovery-wise is getting evidence of the transmissions,” Martinez said. “Faxes nowadays are sent electronically and the entities that actually send the faxes do so in batches of thousands at a time.”
Defense lawyers moved to stay discovery because of two pending U.S. Supreme Court rulings, which they argued would lead to the dismissal of the case: one on whether the plaintiffs suffered actual injuries and one on offers of judgment. The defense made a $7,500 offer of judgment to the lead plaintiff, a Miami bartending school that allegedly received five faxes, but the offer was declined.
U.S. District Judge Kathleen Williams denied the motion to stay in December 2015, just four months after the case was filed, and plaintiffs counsel started digging into the records. They found the Colorado-based company hired to send the faxes, WestFax, and received from it all the invoices for transmissions. American Chemicals & Equipment also produced its own fax logs, and plaintiffs counsel contacted a third company responsible for handling opt-out requests from fax recipients.
“That reflected people opting out and sending notices to the defendants requesting not to be sent further faxes,” Martinez said.
Just before the trial was set to start, Williams directed the parties to try to negotiate one last time, and they reached a settlement that includes an injunction against sending unsolicited faxes and a $1.55 million payout over five years. The settlement resolves two lawsuits, one filed in Miami and the other in Alabama.
Each class member will receive $500 per copy of a qualifying fax, or up to $325 for claims submitted without copies.
Williams approved about $517,000 in attorney fees and $42,000 in costs for Martinez, Hernandez, their colleague Jermaine Lee and New York co-counsel Aytan Bellin of Bellin & Associates, and Jeffrey Eilender of Schlam Stone & Dolan.
The payouts resulting from TCPA lawsuits led defense attorneys to tell the Wall Street Journal that the law’s name should stand for “Total Cash for Plaintiffs’ Attorneys,” arguing no one should receive such high sums just because they received a handful of faxes a year. But recipients say the faxes are a nuisance, and the Federal Communications Commission has logged more than 10,000 consumer complaints about junk faxes since late 2014, according to the Journal’s March article.
Defense attorneys in the Gorilla Glides case did not immediately respond to a request for comment. The case was defended by Blank Rome attorneys Ana Tagvoryan in Los Angeles, Paul Sodhi in Fort Lauderdale and Jeffrey Rosenthal in Philadelphia; Robert Brochin and Brian Ercole of Morgan, Lewis & Bockius in Miami and David Guin of Guin, Stokes & Evans in Birmingham, Alabama.