United States District Court, D. New Hampshire
Menachem Raitport and Crown Kosher Meat Market, Inc., Plaintiffs
Harbour Capital Corporation, Defendant
Y. Bellin, Esq. Michael J. Sheehan, Esq. William E. Christie,
J. McAuliffe United States District Judge.
proposed class action arises out of Harbour Capital's
allegedly improper transmission of facsimile advertisements
to Menachem Raitport and/or his business, Crown Kosher Meat
Market (collectively, “Raitport”), in violation
of the Telephone Consumer Protection Act and FCC regulations
promulgated pursuant to that statute. By order dated
September 12, 2013, the court stayed this action, pending
completion of collateral administrative proceedings before
the FCC likely to resolve critical questions of law
underlying this litigation. See Order Imposing Stay
(document no. 85). See generally Petitions, FCC
Proceeding Nos. 02-278 and 05-338.
administrative proceedings have been completed and,
accordingly, Raitport moves the court to lift the stay.
Raitport also seeks leave to file a brief addressing whether,
under the Hobbs Act, this court has jurisdiction to follow a
decision issued by the Court of Appeals for the D.C. Circuit
arising out of the FCC administrative proceedings. He also
seeks leave to amend his motion for class certification to
add a third subclass of plaintiffs. Also pending before the
court is Raitport's motion for class certification, which
the parties have fully briefed.
reasons discussed, Raitport's motion to lift the stay
(document no. 98) is granted in part, and denied in part. His
motion for class certification (document no. 42) is denied.
The Governing Statute and Regulations.
Telephone Consumer Protection Act of 1991, as amended by the
Junk Fax Prevention Act of 2005 (collectively, the
“TCPA”), prohibits the use of any device to send,
to a telephone facsimile machine, an “unsolicited
advertisement.” 47 U.S.C. § 227(b)(1)(C). The
statute 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, in writing or
otherwise.” 47 U.S.C. § 227(a)(5).
statute does, however, provide an exception to that general
prohibition on unsolicited fax advertisements, if: (a) the
sender has an established business relationship with the
recipient; (b) the sender obtained the recipient's fax
number through voluntary communication or a directory; and
(c) the unsolicited fax includes an opt-out notice meeting
certain statutory requirements. 47 U.S.C. §
227(b)(1)(C). In short, then, under certain circumstances a
business may send an “unsolicited advertisement”
by fax to a third party, but that fax must include the
statutorily-mandated opt-out language. See Id.
§ 227(b)(2)(D) (providing that such opt-out language
must be “clear and conspicuous” and “on the
first page of the unsolicited advertisement, ” it must
state that the recipient may opt out from future unsolicited
advertisements, and must include a “cost free mechanism
to send an opt-out request to the sender of the unsolicited
2006, the FCC issued what has come to be known as the
“Solicited Fax Rule.” 47 C.F.R. §
64.1200(a)(4)(iv). That rule requires the sender of a
facsimile advertisement to include the statutory opt-out
language even when the fax is sent to a “recipient that
has provided prior express invitation or permission
to the sender.” Id. (emphasis supplied).
“In other words, the FCC's new rule mandates that
senders of solicited faxes comply with a statutory
requirement that applies only to senders of
unsolicited faxes.” Bais Yaakov of Spring
Valley v. FCC, 852 F.3d 1078, 1080 (D.C. Cir. 2017)
(emphasis in original). On its face, the Solicited Fax Rule
would certainly seem to exceed the FCC's statutorily
vested authority to regulate this area. See 47
U.S.C. § 227(b)(2). See also Nack v. Walburg,
715 F.3d 680, 682 (8th Cir. 2013) (noting that “it is
questionable whether the regulation at issue  properly
could have been promulgated under the statutory section that
authorizes a private cause of action.”). But,
challenging the validity of that rule is, to say the least,
difficult - in part because federal district courts lack
jurisdiction to declare that rule invalid.
as the Court of Appeals for the Eighth Circuit recognized,
even if the Solicited Fax Rule is plainly beyond the
regulatory authority of the FCC, court's (including the
courts of appeals) must enforce it as written, unless and
until it is properly challenged in an appeal arising from
agency action and deemed unenforceable by a court of
The Administrative Orders Review Act (“Hobbs
Act”), 28 U.S.C. § 2342 et seq., precludes us from
entertaining challenges to the regulation other than on
appeals arising from agency proceedings (except arguably in
extenuating circumstances not at issue in this case). Without
addressing such challenges, we may not reject the FCC's
plain-language interpretation of its own unambiguous
Nack v. Walburg, 715 F.3d 680, 682 (8th Cir. 2013).
Capital never filed a timely administrative challenge to the
Solicited Fax Rule with the FCC. So, says Raitport, this
court's job is straightforward: unless and until the
Court of Appeals for the First Circuit (or the Supreme Court)
invalidates the Solicited Fax Rule in a proceeding arising
out of a proper administrative challenge to that rule, this
court is bound to apply the rule as written. As discussed
below, application of the Solicited Fax Rule is critical to
Raitport's claims in this case.
to the amended complaint (document no. 34), beginning on May
5, 2005, Harbour Capital sent “well over
ten-thousand” unsolicited fax advertisements that
failed to include the opt-out language required by the TCPA.
Id. at paras. 15-16. Then, more than a year later,
beginning on August 1, 2006, Harbour Capital again sent
“well over 10, 000” unsolicited and/or solicited
fax advertisements that failed to bear the required opt-out
language. Id. at paras. 17-18.
proposed subclasses of plaintiffs that Raitport seeks to
certify do not distinguish between “solicited”
and “unsolicited” faxes. Instead, those
subclasses include all recipients of faxes sent by Harbour on
or about two dates (October 4, 2006 and November 7, 2006).
See Motion for Class Certification (document no. 42)
at 2. No distinction is drawn because, according to the
Amended Complaint (citing both the TCPA and the Solicited Fax
Rule), all fax advertisements sent by Harbour
Capital - both solicited and unsolicited - were required to
contained opt-out language. And, says Raitport, although
Harbour Capital's faxes did include opt-out language,
that language did not strictly comply with the statutory
anyone who sends a fax advertisement that improperly omits
the required opt-out language, the TCPA provides a private
right of action and imposes statutory damages of $500 per fax
(which can be trebled, if the court concludes the statutory
violation was willful or knowing). 47 U.S.C. §
227(b)(3). So, based upon Raitport's allegations and the
number of facsimile advertisements Harbour Capital reportedly
sent, Harbour Capital faces potential class action damages of
between roughly $15 and $45 million.
assertion that all of the faxes sent by Harbour Capital were
required to bear the statutorily mandated opt-out language is
central to his claims. But, that assertion turns upon the
continued enforceability of the FCC's Solicited Fax Rule.
If that rule is invalid, there is a substantial problem with
certifying either of Raitport's original proposed
subclasses, since each would contain both individuals who
received unsolicited faxes (which, under the TCPA, must have
included the required opt-out language) as well as
individuals who received solicited faxes (to which such a
requirement would not apply). His proposal to add a third
subclass faces obstacles as well.
The FCC's “Solicited Fax Rule” is
courts have recognized the Solicited Fax Rule as being beyond
the scope of the FCC's regulatory authority. But, by
virtue of the Hobbs Act, those such courts were nonetheless
required to enforce the rule as written. That, in turn, led
to the certification of numerous class action lawsuits in
which millions or even tens of millions of dollars
(“bet the company” damages) were at issue.
See generally Creative Montessori Learning Centers v.
Ashford Gear LLC, 662 F.3d 913, 915 (7th Cir. 2011).
Indeed, the requirements imposed by the TCPA and the
Solicited Fax Rule have proved lucrative for class action
plaintiffs and their counsel, but posed high financial risk
for businesses engaged in direct advertising programs.
See, e.g., Physicians Healthsource, Inc. v.
Allscripts Health Solutions, Inc., 2017 WL 2391751 at
*1, n.1 (N.D. Ill. June 2, 2017) (“Teaming up with the
Law Firm Anderson & Wanca, representing it here, the
plaintiff has, in just the last four years, sued at least
eighteen different companies in federal courts in Illinois,
Indiana, Michigan, Missouri, California, Pennsylvania, New
Jersey, Connecticut, Massachusetts, North Carolina, and
Florida. And that includes only those cases in which written
opinions were published on Westlaw. Counsel tells us
plaintiff has brought more than twenty such cases
2017, however, the legal landscape changed. Significantly.
The Court of Appeals for the Eighth Circuit described the
historical and procedural background to that change as
Petitioner Anda is a company that sells generic drugs. As
part of its business, Anda faxes advertisements to small
pharmacies. Anda's fax advertisements convey pricing
information and weekly specials to the pharmacies. Many
pharmacies have given permission to Anda for Anda to send
In 2010, Anda sought a declaratory ruling from the FCC
clarifying that the [TCPA] does not require an opt-out notice
on solicited fax advertisements - that is, those that are