(March 1, 2006) -- A federal court judge has struck down a CA law (SB 833) banning unsolicited fax advertising ("junk faxes"), saying a federal law passed by Congress last summer (which included a key exemption for some mass-advertising faxers) preempts (trumps) a tougher CA anti-junk fax law.
The CA legislation, targeting so-called "blast fax" ads (that cost recipients fax paper and fax film) was authored by southbay state Senator Debra Bowen (D., Redondo Beach), passed the CA legislature on a bipartisan vote, was signed into law by Gov. Arnold Schwarzenegger and was set to take effect January 1. The law was challenged by a "broadcast fax" company with support from a U.S. Chamber of Commerce-affiliated public policy litigation firm.
In an opinion released late in the day on Feb. 28, federal district judge Morrison England (Eastern District of CA, Sacramento area) ruled the CA law undermined uniform application of federal law and interfered with interstate commerce.
". . . SB 833 [the CA law] stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress . . . The Court recognizes that unsolicited advertisements transmitted via facsimile machines cost recipients untold resources in the form of time and money. Despite these realities, the Court cannot unilaterally raze the legal landscape carefully cultivated by Congress . . . Indeed, while SB 833 suffers from constitutional infirmity with respect to its interstate reach, the protections afforded California consumers for intrastate facsimile transmissions remain inviolate."
Sen. Bowen fumed and the U.S. Chamber applauded the ruling in dueling press releases:
"I’m amazed the court sided with a handful of junk fax outfits instead of the millions of people and businesses who are sick and tired of having their fax machines hijacked by junk faxers," said Sen. Bowen in a written release. "Junk faxing is like having a perfect stranger stroll into you house, sit down at your computer, and start printing up advertisements that you didn’t ask for and don’t want. It’s more than an annoyance, it [lets] faxers [take] money out of your pocket to pay for the paper and toner they burn up while using your fax machine to hawk their cruise package, investment service or whatever other ‘must-have’ widget they’ve got."
Stephen Bokat, Executive VP of the National Chamber Litigation Center (the U.S. Chamber's public policy law firm) which served as co-counsel in the case, said in a release, "Because of this victory, businesses nationwide will be spared the unnecessary cost and bureaucracy of navigating what would have been grossly conflicting federal and state laws." Although it's U.S. Chamber-affiliated, the Nat'l Chamber Litigation Center doesn't receive financial assistance from the U.S. Chamber and depends on its own membership dues to support its activities. NCLC's DC office says the LB Area Chamber is not listed as a member of NCLC.
In 2005, Congress passed S. 714, the "Junk Fax Prevention Act of 2005" [non-rollcall voice vote in House] includes a key exemption allowing businesses from whom a consumer bought a product or service to send the consumer unsolicited fax ads...but (critics said) without requiring the broadcast-faxer to showing that a business relationship actually existed. Calling this a major loophole and noting that it weakened a 1991 federal ban on unsolicited fax ads (in the Telephone Consumer Protection Act, TCPA), Sen. Bowen rolled the 1991 federal verbiage into her legislation...which the court ruled conflicted with the 2005 Congressional action.
"I've never had a single person say to me, 'Please, I'm begging you, don’t make it harder for junk faxers to find me and send me endless advertisements at all hours of the day and night,’" said Sen. Bowen. "Business owners up and down the state backed the junk fax ban because they’re simply fed up with junk faxers waltzing in and using their fax machine to print ads they didn’t ask for and don’t want."
The U.S. Chamber said the CA law's lack of an exemption sending faxes to recipients who had an established business relationship with the sender would have [in the words of a U.S. Chamber release] "imposed significant costs on businesses, especially smaller ones, attempting to do business with California residents or entities." The U.S. Chamber fought the case on the grounds that federal law should be surpreme when there are conflicting state laws."
"The federal law was enacted for good reason after careful consideration of the competing values at stake," said National Chamber Litigation Center VP Bokat. "Today’s decision restores the appropriate balance of sensible regulation."
Sen. Bowen's SB 833 would have banned unsolicited fax advertising in the state and given Californians the right to sue junk faxers for $500 per fax. The bill also would have let district attorneys and the Attorney General sue junk faxers on behalf of Californians. SB 833 passed the CA legislature on an overwhelmingly bipartisan vote.
The court had provisionally stayed the CA law from taking effect at the beginning of 2006, and the Nat'l Chamber Litigation Center sought a permanent injunction to enjoin the law's enforcement.
The U.S. Chamber of Commerce says it is the "world’s largest business federation, "representing more than three million businesses and organizations of every size, sector, and region." The National Chamber Litigation Center is an affiliated but separate membership organization "that advocates fair treatment of business in the courts and before regulatory agencies."
There was no immediate word on whether the CA Attorney General's office will appeal the district court decision, which can be viewed at Chamber of Commerce of the United States of America v. Lockyer.