Missouri v. American Blast Fax, Inc.

323 F.3d 649, 28 Communications Reg. (P&F) 1119, 2003 U.S. App. LEXIS 5469
CourtCourt of Appeals for the Eighth Circuit
DecidedMarch 21, 2003
Docket02-2705
StatusPublished
Cited by2 cases

This text of 323 F.3d 649 (Missouri v. American Blast Fax, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Missouri v. American Blast Fax, Inc., 323 F.3d 649, 28 Communications Reg. (P&F) 1119, 2003 U.S. App. LEXIS 5469 (8th Cir. 2003).

Opinion

323 F.3d 649

State of MISSOURI, ex rel. Jeremiah W. (Jay) NIXON, Attorney General, Plaintiff-Appellant,
United States of America, Intervenor/Plaintiff-Appellant,
v.
AMERICAN BLAST FAX, INC., a Texas corporation not authorized to transact business in Missouri as a foreign corporation, Defendant-Appellee,
Fax.com, Inc. Movant-Appellee.
State of California; State of Alaska; State of Arkansas; State of Connecticut; State of Colorado; District of Columbia; State of Florida; State of Idaho; State of Illinois; State of Iowa; State of Kentucky; State of Maryland; State of Michigan; State of Minnesota; State of New Mexico; State of Oregon, State of South Dakota; State of Texas; State of Vermont; State of West Virginia, Amici Curiae on behalf of Appellants,
American Business Media; Wal-Mart Stores, Inc.; ACS Systems, Incorporated; Micro General Corporation, Amici Curiae on behalf of Appellees.

No. 02-2705.

No. 02-2707.

United States Court of Appeals, Eighth Circuit.

Submitted: January 13, 2003.

Filed: March 21, 2003.

Jill C. LaHue, argued, Jefferson City, MO, for appellant State of Missouri.

Mark B. Stern, argued, Dept. of Justice, Washington DC, for appellant U.S.

Stuart A. Banner, argued, Los Angeles, CA, for appellee Fax.com.

Jeffrey S. Sutton, argued, Columbus, OH, for amicus, Wal-Mart Stores.

Before WOLLMAN and MURPHY, Circuit Judges, and GRITZNER,1 District Judge.

MURPHY, Circuit Judge.

In these two consolidated cases the State of Missouri sued American Blast Fax, Inc. and Fax.com, Inc. for violating statutory restrictions on unsolicited fax advertising. The district court held that the relevant part of the Telephone Consumer Protection Act of 1991 (TCPA), 47 U.S.C. § 227(b)(1)(C) (2000), violated the First Amendment guarantee of freedom of speech, and dismissed the action.2 Missouri ex rel. Nixon v. Am. Blast Fax, Inc., 196 F.Supp.2d 920, 934 (E.D.Mo.2002). Intervenor United States and Missouri appeal (collectively "the Government"). We reverse.

I.

American Blast Fax3 and Fax.com (FC) provide promotional services by transmitting client advertisements to the fax machines of potential customers. In response to numerous consumer complaints, Missouri sought injunctions and civil penalties against the two companies, alleging that they had violated the provision of TCPA making it unlawful "to send an unsolicited advertisement to a telephone facsimile machine." 47 U.S.C. § 227(b)(1)(C). An "unsolicited advertisement" is defined in the statute as "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission." Id. § 227(a)(4).

The fax companies moved to dismiss the complaints, arguing that § 227(b)(1)(C) was an unconstitutional restriction on their freedom of speech. The district court decided that the legislative record was insufficient to decide the constitutional questions and ordered an evidentiary hearing, converting the motions to ones for summary judgment. It also granted the motion of the United States to intervene.

At the hearing, the Government presented evidence that unsolicited fax advertising shifts costs to the recipients who are forced to contribute ink, paper, wear on their fax machines, as well as personnel time. There was also evidence to show that a fax advertisement interferes with the recipients' use of their machines by preempting the fax line for the time it takes to send a message. Witnesses testified on behalf of the attorneys general of Florida and Washington that their offices had been receiving increasing numbers of complaints about unsolicited fax advertisements. The defendant companies presented evidence that technological advances had reduced the amount of costs and interference experienced by recipients and that fax advertising benefits both advertisers and consumers.

The district court approached the constitutional questions by applying the four part test for restrictions on commercial speech under Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 566, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980). The court questioned whether the government had shown that there was a substantial governmental interest in restricting unsolicited fax advertising. It noted the absence of empirical data on costs or evidence that the majority of unsolicited fax advertisements involved commercial speech. It also observed that complaints about unsolicited faxes had increased despite the legislation and that several less restrictive options were available, such as a national no fax database, and it concluded that the Government had not demonstrated that the § 227(b)(1)(C) restriction would materially alleviate the asserted harm or that it was sufficiently narrow. After concluding that § 227(b)(1)(C) violated the First Amendment, the district court granted the pending motions and dismissed the action.

The United States and Missouri appeal. They argue that the statute is constitutional and that the district court erred in its application of the Central Hudson test. They contend that there was sufficient evidence to demonstrate a substantial government interest in restricting unsolicited fax advertisements and that TCPA materially advanced that interest and was not more extensive than necessary. They argue that technological changes have not eliminated the burdens imposed on recipients of unwanted fax advertising and that the district court was wrong to substitute its own judgment for the conclusion of Congress that the restriction was the minimum necessary to protect the public. They also point out that no other federal court has found this statute unconstitutional. See Destination Ventures, Ltd. v. FCC, 46 F.3d 54, 57 (9th Cir.1995), aff'g 844 F.Supp. 632 (D.Or.1994); Texas v. Am. Blast Fax, Inc., 121 F.Supp.2d 1085, 1092 (W.D.Tex.2000); Kenro, Inc. v. Fax Daily, Inc., 962 F.Supp. 1162, 1169 (S.D.Ind. 1997).

II.

The parties agree that the fax advertisements in question are commercial speech, and the Supreme Court has recently indicated that Central Hudson remains the test for the constitutionality of a restriction on commercial speech. See Thompson v. W. States Med. Ctr., 535 U.S. 357, 122 S.Ct. 1497, 1504, 152 L.Ed.2d 563 (2002). Under Central Hudson

we ask as a threshold matter whether the commercial speech concerns unlawful activity or is misleading. If so, then the speech is not protected by the First Amendment.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
323 F.3d 649, 28 Communications Reg. (P&F) 1119, 2003 U.S. App. LEXIS 5469, Counsel Stack Legal Research, https://law.counselstack.com/opinion/missouri-v-american-blast-fax-inc-ca8-2003.