Man facing draconian fines over fax wording deserves day in court

by Walter Olson on December 17, 2013

Douglas Walburg faces potential liability of $16-48 million. What heinous acts caused such astronomical damages? A violation of 47 C.F.R. § 16.1200(a)(3)(iv), an FCC regulation that enables lawsuits against senders of unsolicited faxes.

Walburg, however, never sent any unsolicited faxes; he was sued under the regulation by a class of plaintiffs for failing to include opt-out language in faxes sent to those who expressly authorized Walburg to send them the faxes.

The Federal Communications Commission has now taken the position that a federal enactment known as the Hobbs Act “prevents federal courts from considering challenges to the validity of FCC regulations when raised as a defense in a private lawsuit.” The Cato Institute has joined the National Federation of Independent Business in an amicus brief seeking Supreme Court certiorari, supporting Walburg’s position “that the Eighth Circuit was wrong to deny him the right to judicial review without having to initiate a separate (and impossible) administrative review.” [Ilya Shapiro, Cato]

{ 7 comments }

1 Hugo S. Cunnongham 12.17.13 at 9:27 am

One or two paragraphs explaining what the defendant’s message said and why the plaintiffs objected would be helpful for the reader to decide whether the defendant is an honest Joe being abused on a technicality, or a sly spammer trying to get by on a technicality. The linked article does not contain this information either.

2 MattS 12.17.13 at 12:32 pm

Hugo,

If as claimed above, the recipients of the faxes explicitly authorized Mr. Walburg to send them faxes, then he isn’t a spammer. The content of the faxes are not relevant.

3 Hugo S. Cunningham 12.17.13 at 2:02 pm

Matt–
The so-called “explicit authorization” might be hidden in some of that fine print that nobody reads. The text of the message, and a summary of the addressee’s complaint would clarify whether they had a legitimate beef.

4 D 12.17.13 at 6:48 pm

The Hobbs Act (1951) is about racketeering and extortion. It appears that there is a lesser known (to Google) act regarding the FCC and of their 3-letter-acronym friends. If these are related, please deconfuddle me.

5 Bill Poser 12.17.13 at 9:14 pm

The Hobbs Act is said to forbid judicial review of FCC regulations, but if I understand the situation correctly, Walburg is not challenging an FCC regulation: he is challenging the FCC’s interpretation of a regulation, namely the applicability of the requirement of an opt-out procedure to unsolicited FAXes. Am I wrong? If not, why is the Hobbs Act relevant?

6 Hugo S. Cunningham 12.17.13 at 10:13 pm

Laws are tougher on fax spam than E-mail spam because fax spam imposes significant expenses on the recipient: costs of paper, depreciation of the fax machine, reduction of fax machine availability for desired traffic, and possible phone charges.

7 MattS 12.18.13 at 10:39 am

Hugo,

The text of the faxes is irrelevant, because if he had explicit authorization to send the faxes as claimed, that authorization would necessarily have to come from a source other than the fax messages themselves.

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