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The “notices of apparent liability” or “NALs” are effectively a series of essentially identical orders alleging that the company or companies cited in each sent unsolicited fax advertisements in violation of the FCC’s junk fax rules numbering anywhere from one to over 350 unlawful transmissions. In all cases, the NAL recites that, prior to the faxes that landed the companies in hot water, the FCC sent each a citation indicating the agency had received complaints the company was sending faxes in violation of the rules, and that further violations would subject them to fines (such citations are statutorily required prerequisites to fining entities that do not hold FCC licenses or authorizations for, for example, use of airwaves, construction of a telephone line, or sale of devices that emit radio waves). Each NAL recounts the number and type of faxes the company is alleged to have sent in violation of the rules, and gives the recipient thirty days to oppose the imposition of a fine, after which the FCC typically issues an order imposing a fine (though in some cases based on the NAL recipient’s response it may reduce the proposed amount or decline to impose a fine altogether).

The NALs are somewhat opaque affairs. As noted, they are all effectively identical except in the handful of particulars unique to each case, i.e., number of faxes sent, goods or services advertised, relevant dates, etc. The NALs recite, without providing any detail, that the faxes at issue were advertisements (the law reaches only faxes that reference the commercial availability or quality of goods or services) and that the recipients did not have an established business relationship with the senders, which is in certain circumstances an exception under which companies may send such commercial faxes. The orders are mildly intriguing insofar as they establish a pattern that the FCC will impose a “base” fine of $4,500 per fax (out of a possible maximum $11,000) for simply sending it in violation of the rule, but will adjust the fine upward to $10,000 per fax for each transmission sent to recipients who already had communicated to the sender a desire not to receive further faxes.

The orders are most notable, though, to the extent it appears the FCC targets for fines two “fax broadcasters,” i.e., companies engaged in mass faxing of materials on behalf of others. The three biggest proposed fines, of $2,168,500, $1,377,000, and $1,133,000 (the next closest proposed fine is for $130,500), for, respectively, Hot Lead, LLC, Extreme Leads, Inc., and Mexico Marketing, LLC and its affiliated entities, target what appear in the first two cases to be fax broadcasters. In both cases, the FCC recites that, rather than being for a single product as is the case for the rest of the NALs, Hot Lead and Extreme Leads allegedly sent faxes for a variety of products and services, including mortgage services and other financial services, health and life insurance, credit and debit card services, interior shutters, and custom-logo shirts. 

Since fax broadcasters are liable under FCC’s junk fax rules only where there is a high degree of involvement by them in the unlawful activity, or they had actual notice of it and failed to take steps to prevent it, the facts underlying the alleged violations could prove highly significant. The FCC’s ensuing orders imposing fines or otherwise resolving the cases could be highly influential, as the cases (if, as assumed, they target fax broadcasters) will be the first FCC enforcement actions that interpreting the rules as they apply to fax broadcasters since its $5 million-plus fine in 2002 against Fax.com, Inc., and the first since it updated its junk fax rules. The progress of the NALs, especially those carrying the highest “price tags,” accordingly is well worth monitoring.