Nevada Supreme Court Throws a Block for Businesses Defending TCPA Claims
 
December 8, 2006
 
A. Brian Albritton- Tampa

Businesses that market their services by telemarketing or fax are frequently subject to suits alleging violations of the Telephone Consumer Protection Act (TCPA), 47 USC § 227. Minor TCPA violations – an unsolicited call or fax here or there – can give rise to thousands of dollars of liability. In turn, plaintiffs’ attorneys are beginning to specialize in TCPA suits, and as the Wall Street Journal recently noted, this has given way to widespread “bounty hunting” for violators.

Some Hopeful News for Businesses

Businesses recently received some hopeful news in fighting TCPA cases in a case decided by the Nevada Supreme Court, Edwards v. Emperor’s Garden Restaurant, 130 P.3d 1280 (Nev. 2006). Specifically, the Nevada Court handed down a decision favoring TCPA defendants by limiting when injunctive relief may be granted, finding that the state’s statute of limitations applies to TCPA claims instead of the federal “catch all” limitation period, and rejecting the claim that receipt of an unwanted fax gives rise to claim for conversion and private nuisance.

The plaintiff in Edwards sued two different businesses claiming that the three fax advertisements he received violated the TCPA. Additionally, the plaintiff claimed that by transmitting the unwanted fax the defendants “stole” his paper and ink which constituted “conversion.” The plaintiff also alleged that the “substantial” interference of receiving an unwanted fax gave rise to a “private nuisance” claim. As defendants are often discovering in these suits, the plaintiff sought huge damages and an injunction: $3,000 for two of the faxes along with $10,000 in punitive damages.

In the face of these allegations, the Nevada Supreme Court did what few others have done: it applied common sense and reasonableness to these claims. First, the Court refused to grant the plaintiff “statutory injunctive” relief simply because the plaintiff had received two faxes. The plaintiff had to show that future violations were likely to occur, and given that the faxes had occurred three years before, it could not do so. In evaluating the question of whether future violations would occur, the Court observed that other “relevant” factors went into this question such as “the gravity of any harm caused” by the fax and whether the violation was isolated or recurrent. In short, just because there was a statutory violation, an injunction was by no means automatic.

Second, the Court found that Nevada’s shorter statute of limitations should apply to the TCPA claims and not the federal “catch all” statute, 28 USC § 1658, which imposes a four year limitation. Though the TCPA is a federal statute, TCPA claims are only permitted to be filed in state court “if otherwise permitted by [that state’s] laws or rules of court.” To be consistent with Nevada’s procedural laws, the Court found that Nevada’s two year limitations period for actions imposing penalties or forfeiture applied.

Third, the Court observed that conversion claims are normally limited “to those severe, major, and important interferences with the right to control personal property.” Yet, the “mere damage” that may have occurred due to the use of paper and toner for the receipt of one fax was so “inconsiderate” as to require the application of the common law maxim, “the law does not concern itself with trifles.” Applying this maxim, the Court observed, provided a “sensible limit” to the amount of damages alleged.

Finally, faced with the plaintiff’s claim that receipt of a fax constituted “substantial interference with the use and enjoyment of real property” or private nuisance, the Court applied common sense again and dismissed that claim as well on the grounds that receipt of a fax was not a substantial interference.

Until now, telemarketers and fax broadcasters have had few defenses to TCPA claims. As one pro-TCPA Web site accurately instructed: “very few defendants have ever won TCPA cases. Many have spent thousands of dollars on attorneys, only to lose in the end.” Edwards, however, is one of the few cases to provide a defense, and as the only state supreme court to rule on this issue, its reasoning should be considered as other states address the ever-widening application of the TCPA.

For more information, e-mail A. Brian Albritton at brian.albritton@hklaw.com or call toll free, 1-888-688-8500.