8th Circuit Upholds TCPA

March 21, 2003. The U.S. Court of Appeals (8thCir) issued its opinion [17 pages in PDF] in Missouri v. American Blast Fax, upholding the constitutionality of the fax advertising ban contained in the Telephone Consumer Protection Act of 1991.

American Blast Fax (which the Appeals Court noted may no longer be in business) and Fax.com transmitted advertising material via facsimile on behalf of commercial clients.

Statute. The Telephone Consumer Protection Act of 1991 (TCPA), which is codified in 47 U.S.C. § 227, bans unsolicited fax advertising. 47 U.S.C. § 227(b)(1)(C) provides that "It shall be unlawful for any person within the United States ... to use any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine ..."

47 U.S.C. § 227(a)(4), in turn, defines "unsolicited advertisement" as "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission".

District Court. The state of Missouri filed a complaint in U.S. District Court (EDMO) against American Blast Fax and Fax.com alleging that they violated the fax advertising ban.

The District Court held that the fax advertising ban provision of the TCPA violates the First Amendment of the Constitution's free speech clause, and dismissed.

The District Court received evidence that "unsolicited fax advertising shifts costs to the recipients who are forced to contribute ink, paper, wear on their fax machines, as well as personnel time. There was also evidence to show that a fax advertisement interferes with the recipients' use of their machines by preempting the fax line for the time it takes to send a message." Nevertheless, the District Court held that the government failed to satisfy the test for restrictions of commercial speech contained in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980).

Court of Appeals. The Court of Appeals reversed. It also applied the Central Hudson test, but upheld the constitutionality of the statute.

The Supreme Court wrote in Central Hudson that "If the speech concerns lawful activity and is not misleading, however, we next ask ``whether the asserted governmental interest is substantial.´´ If it is, then we ``determine whether the regulation directly advances the governmental interest asserted,´´ and, finally, ``whether it is not more extensive than is necessary to serve that interest.´´ Each of these latter three inquiries must be answered in the affirmative for the regulation to be found constitutional."

So, for communications that are not unlawful or misleading, three elements must be present: (1) a substantial government interest, (2) the regulation advances that interest, and (3) it is not more extensive than necessary.

First, the Appeals Court reviewed the legislative history of the fax bills in the Congress, and concluded that "that the Government has demonstrated a substantial interest in restricting unsolicited fax advertisements in order to prevent the cost shifting and interference such unwanted advertising places on the recipient."

The Appeals Court also wrote that the government does not need to present "empirical studies to show the significance of the harm it seeks to remedy ... the legislative record and the evidence produced in the district court adequately demonstrate the potential harm of unrestrained fax advertising."

Second, the Appeals Court concluded that the "TCPA's prohibition on unsolicited commercial fax advertisements directly and materially advances the asserted governmental interest and satisfies the third element of the Central Hudson test."

And third, the Appeals Court concluded that the "TCPA restriction on unsolicited commercial fax advertisements achieves a reasonable fit between the means it adopts and the ends it seeks to serve." And hence, the TCPA satisfies the Central Hudson test.

Spam. This case dealt only with application of the fax advertising ban to unsolicited commercial fax messages. However, were the Congress to enact a ban on unsolicited commercial e-mail advertising, the analysis of its constitutionality would be very similar to the analysis in this case. But then, challenges to any such legislation are not likely to be brought in the 8th Circuit.