June 1, 2012

Pharmaceutical Company Must Defend Against Private Suit Brought by Class-Action Firm After Sending Facsimiles to Physicians

Holland & Knight Alert
William F. Gould

Earlier this year in Mims v. Arrow Financial Services LLC, the U.S. Supreme Court clarified that private plaintiffs beleaguered by unwanted telephone solicitations or facsimile advertisements may bring suit under the Telephone Consumer Protection Act (TCPA) in both state and federal courts when the TCPA requirements for telephone solicitations and facsimile advertisements have not been met. In May 2012, in one of the first federal TCPA suits post-Mims, a federal judge in Pennsylvania refused to dismiss a case brought by a putative TCPA class-action plaintiff against a prominent pharmaceutical company, allowing the case to proceed. The putative class representatives are two physicians who allegedly received unsolicited advertisements on their office facsimile machines that were sent by either the defendant drug company or its distributor.

Background of the TCPA

The TCPA, passed in 1991, governs the conduct of telephone solicitations and facsimile advertisements. Among the TCPA’s provisions is a prohibition on the transmission of unsolicited telephone solicitations and facsimile advertisements unless a statutory exception is met. For example, an unsolicited advertisement may be permissible under the TCPA if the sender has an established relationship with the recipient, or if the recipient voluntarily agreed to make their facsimile number available for public distribution. Unsolicited facsimile advertisements may also be permissible if the advertisement is accompanied with a notice consistent with the statute’s requirements. One provision of the TCPA that is notable (and perhaps nettlesome) is the statute’s private right of action permitting private plaintiffs to recover between $500 and $1,500 in damages for each violation of the Act.

Harbinger of Things to Come

In light of the potentially substantial cumulative monetary damage awards under the TCPA, companies seeking to engage in telephone or facsimile direct-marketing campaigns should be mindful of the risk of becoming caught up in this type of litigation. Any company sending advertisements by facsimile or calling customers by telephone is well advised to implement procedures that ensure their facsimile and telephone marketing activities are consistent with the TCPA.

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