Document Type

Working Paper

Publication Date

8-4-2010

SSRN Discipline

Economics Research Network; Legal Scholarship Network; Public Choice & Political Economy eJournals; Industrial Organization & Regulation eJournals; Law School Research Papers - Legal Studies; Litigation, Procedure & Dispute Resolution eJournals; Corporate Governance Network; Antitrust & Regulated Industries eJournals; LSN Subject Matter eJournals; ERN Subject Matter eJournals

Abstract

Under the Telephone Consumer Protection Act of 1991 TCPA recipients of socalled "junk faxes" can sue the sender in state court to recover statutory damages of up to 500 per fax 1500 if the fax was sent "willfully" But these high statutory damage provisions have led to severe negative consequences to "innocent lawbreakers" small businesses who unintentionally run afoul of the Act's prohibitionsThough Congress with the best intentions set out to regulate conduct that it believed shifted the costs of advertising form the advertiser to the recipient who was forced to pay for paper and ink to print unwanted advertisements the inclusion of a private right of action led to the development of a cottage industry of plaintiffs lawyers for whom filing TCPA claims is a significant source of revenue This Article argues that the unintended effects of the antijunk fax provisions of the TCPA are most detrimental to small businesses that are placed at risk of significant financial harm for causing only nominal damages to owners of facsimile machines This is especially true after the real targets of the legislation large "blast faxers" have been driven out of business through the enforcement of the ActThis Article argues that by properly interpreting that Act's definition of a "facsimile machine" and applying traditional litigation requirements and equitable doctrines courts can fulfill Congress' intention that the Act's harshest penalties are reserved for truly willful violators It goes on to suggest that class actions should be eliminated because when combined with the Act's statutory damages provision its effects are devastating to small businesses It also argues that states should restrict private TCPA enforcement actions to smallclaims courts as Congress envisioned Thus innocent lawbreakers can be better protected without negatively affecting enforcement against intentional violators of the Act

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