Opinion ID: 4519703
Heading Depth: 2
Heading Rank: 1

Heading: The TCPA

Text: 12 Congress passed the TCPA in 1991 in order “to protect the privacy interests of residential telephone subscribers by placing restrictions on unsolicited, automated telephone calls to the home and to facilitate interstate commerce by restricting certain uses of facsimile ([f]ax) machines and automatic dialers.” S. Rep. No. 102-178, at 1 (1991); see also H.R. Rep. No. 102-317, at 2, 5-7 (1991). In the face of increasing consumer complaints to the Federal Communications Commission (“FCC” or “Commission”), S. Rep. No. 102-178, at 1, and, concerned that “telemarketers, by operating interstate, were escaping state-law prohibitions on intrusive nuisance calls,” Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 371 (2012), Congress enacted federal legislation designed to severely restrict phone and fax advertisements. The statute prohibits certain types of autodialed or artificial or prerecorded voice calls, as well as certain types of fax advertisements, 47 U.S.C. § 227(b)(1)- (2), and it directs the FCC to promulgate implementing regulations, § 227(b)(2), (c) – which it did and which are codified, as relevant here, at 47 C.F.R. § 64.1200. The statute creates a private right of action that allows persons aggrieved by violations of these prohibitions to bring suit in state or federal court for injunctions 13 and damages. 8 § 227(b)(3). As to damages, plaintiffs may recover “actual monetary loss” or $500 – whichever is greater – for each violation of the TCPA and these damages may be trebled for willful or knowing violations. § 227(b)(3). The TCPA cases that have been brought in federal and state courts in the last three decades, as well as the FCC rulings that have been issued during this period, have addressed a great variety of issues arising under statute and the implementing regulation. We are concerned here with the fax advertising provisions – specifically, those that were in force in September 2006, at the time the fax in question in this case was sent.
The TCPA, as amended by the Junk Fax Prohibition Act of 2005, Pub. L. No. 109-21, 119 Stat. 359 (2005) (codified at 47 U.S.C. § 227), prohibits junk faxes, making it “unlawful for any person” to “use any telephone facsimile machine, computer, or other device to send” an unsolicited fax advertisement, 8 In 2012, the Supreme Court resolved a circuit split, holding that federal and state courts have concurrent jurisdiction over private suits arising under the TCPA. Mims, 565 U.S. at 372, 376. 14 unless the sender and the recipient have an established business relationship, the sender obtained the recipient’s fax number through certain permissible means, the ad provides specific identifying information regarding the sender, and the ad contains a conspicuous opt-out notice that meets particular requirements. 47 U.S.C. § 227(b)(1)(C), (b)(2)(D)-(E), (d)(1)(2) (2006). The statute does not define the terms “send” or “sender.” The TCPA’s implementing regulation largely tracks the statute, providing that “[n]o person or entity may” “send” an unsolicited fax advertisement unless the criteria described above are fulfilled. 47 C.F.R. § 64.1200(a)(3)(i)-(vi) (as amended Aug. 1, 2006) (now codified at 47 C.F.R. § 64.1200(a)(4)(i)-(vi)). It also provides that “a facsimile broadcaster will be liable for violations of paragraph (a)(3) of this section . . . if it demonstrates a high degree of involvement in, or actual notice of, the unlawful activity and fails to take steps to prevent such facsimile transmissions.” § 64.1200(a)(3)(vii) (now codified at (a)(4)(vi)). The term “facsimile broadcaster” appears only in the regulation, not in the statute, and is defined as “a person or entity that transmits messages to telephone facsimile 15 machines on behalf of another person or entity for a fee.” § 64.1200(f)(6) (now codified at (f)(7)). 9 On August 1, 2006, the FCC amended the regulation to add a new term – “sender” – to the definitions section. The relevant language reads: The term sender for purposes of paragraph (a)(3) of this section means the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement. 47 C.F.R. § 64.1200(f)(8) (as amended Aug. 1, 2006) (now codified at (f)(10)).10 9 The FCC’s early TCPA-related rulings indicate the existence of some confusion regarding who qualifies as a fax broadcaster. See, e.g., FCC, Memorandum Opinion and Order: In re Rules and Regulations Implementing the TCPA, 10 FCC Rcd. 12391, 12407-08 & n.88 (Aug. 7, 1995) (“1995 Order”); FCC, Order on Further Reconsideration: In re Rules and Regulations Implementing the TCPA, 12 FCC Rcd. 4609, 4610 & n.8, 4613 (Apr. 10, 1997). In 2003, the FCC added the definition of “facsimile broadcaster” and the “high degree of involvement provision,” mentioned above, to the regulation in order to provide clarity on this question. FCC, Report and Order: In re Rules and Regulations Implementing the TCPA, 18 FCC Rcd. 14014, 14130-32 (July 3, 2003). 10 In its order promulgating these amendments to the regulations, the FCC provided the following explanation for its adoption of this new definition: The record reveals that fax broadcasters, which transmit other entities’ advertisements to telephone facsimile machines for a fee, are responsible for a significant portion of the facsimile messages sent today. The (…continued) 16 (…continued) Commission sought comment . . . on whether to specify that if the entity transmitting the facsimile advertisement is a third party agent or fax broadcaster, that any do-notfax request sent to that agent will extend to the underlying business on whose behalf the fax is transmitted. ... We conclude that the sender – the business on whose behalf the fax is transmitted – is responsible for complying with the opt-out notice requirements and for honoring opt-out requests. Regardless of whether the sender includes its own contact information in the opt-out notice or the contact information of a third party retained to accept opt-out requests, the sender is liable for any violations of the rules. This determination is consistent with the Commission’s telemarketing rules. We take this opportunity to emphasize that under the Commission’s interpretation of the facsimile advertising rules, the sender is the person or entity on whose behalf the advertisement is sent. In most instances, this will be the entity whose product or service is advertised or promoted in the message. As discussed above, the sender is liable for violations of the facsimile advertising rules, including failure to honor opt-out requests. Accordingly, we adopt a definition of sender for purposes of the facsimile advertising rules. Under the current rules, a fax broadcaster also will be liable for an unsolicited fax if it demonstrates a high degree of involvement in, or actual notice of, the unlawful activity and fails to take steps to prevent such facsimile advertisements, and we will continue to apply this standard under our revised rules. If the fax broadcaster supplies the fax numbers used to transmit the advertisement, for example, the fax broadcaster will be liable for any unsolicited advertisements faxed to (…continued) 17 Thus, the new definition of sender that was added to the regulation is disjunctive: a “sender” is the person or entity “on whose behalf” a junk fax is sent “or whose goods or services are advertised or promoted” in the junk fax. Id. (emphasis added). Yet, the FCC’s explanation of the 2006 amendments, found in its 2006 Order promulgating those amendments, refers only to the first half of the definition, “emphasiz[ing]” the FCC’s “interpretation” that “the sender is the person or entity on whose behalf the advertisement is sent.” 2006 Order, 21 FCC Rcd. at 3808; see supra note 10. This statement in the 2006 Order, and the first half of the definition of sender, are also consistent with the FCC’s statement in its 1995 Order that “the entity or entities on whose behalf facsimiles are transmitted (…continued) consumers and businesses without their prior express invitation or permission. We find that a fax broadcaster that provides a source of fax numbers, makes representations about the legality of faxing to those numbers or advises a client about how to comply with the fax advertising rules, also demonstrates a high degree of involvement in the transmission of those facsimile advertisements. FCC, Report and Order: In re Rules and Regulations Implementing the TCPA & Junk Fax Prevention Act of 2005, 21 FCC Rcd. 3787, 3807-08 (April 6, 2006) (“2006 Order”) (emphasis added); see also FCC, Final Rule: Rules and Regulations Implementing the TCPA & Junk Fax Prevention Act of 2005, 71 Fed. Reg. 25967-01, 25971 (May 3, 2006) (summarizing the 2006 Order). 18 are ultimately liable for compliance with the rule banning unsolicited facsimile advertisements.” 1995 Order, 10 FCC Rcd. at 12407. The purpose of the second half of the definition is, however, unexplained and unclear. 2. Existing Approaches to Liability for Junk Faxes With this statutory and regulatory backdrop in mind, we turn to the case law. We focus on the federal circuit decisions that have determined whether an entity is liable for unsolicited fax ads advertising its product or service that were sent by another party, usually a fax broadcaster. 11 These circuit court decisions examine the definition of sender that was added to the regulation in 2006, and they address both strict liability and vicarious liability for violations of the TCPA’s junk fax provisions.
The Seventh Circuit has consistently rejected a strict liability approach to violations of the TCPA’s prohibition on junk faxes, “which would hold an entity 11 See supra III.A.1 and note 9 (discussing the definition of “fax broadcaster”). 19 strictly liable if its goods or services were advertised in a fax regardless of its authorization of such advertisement.” Helping Hand Caregivers Ltd. v. Darden Restaurants, Inc., 900 F.3d 884, 888 (7th Cir. 2018) (“Darden”). In Bridgeview Health Care Center, Ltd. v. Clark, the court considered a defendant business’s liability for fax ads sent by B2B in June 2006. 816 F.3d 935, 937 (7th Cir. 2016) (“Clark”). While the faxes were sent prior to the effective date of the August 1, 2006 amendments to the regulation, the court cited the definition of sender that was promulgated in those amendments – which included the language from the second half of the definition (“or whose goods or services are advertised or promoted in the unsolicited advertisement”) – but the court then implicitly rejected this language by stating, without elaboration, that a “strict liability” theory of vicarious liability would lead to “absurd results.” Id. at 938. Later that same year, in Paldo Sign & Display Co. v. Wagener Equities, Inc., the court considered faxes sent by B2B in November 2006; the court noted the holding of Clark, which “rejected a reading of the regulations that would impose strict liability on a company whose goods or services were advertised, recognizing that this would lead to absurd and unintended results.” 825 F.3d 793, 797 (7th Cir. 2016) (“Wagener”). While the Wagener court acknowledged the “literal language of the regulation” (the second half of the sender definition, quoted above) could be held to impose strict liability, it found “no reason to doubt the holding of Clark.” Id. at 20 797-98. Finally, the court revisited the question of strict liability in Darden, which involved a defendant that, in 2014, directly sent out unsolicited faxes using another company’s logo, apparently in an attempt to boost the defendant’s own business – despite the other company never agreeing to the use of its name or logo. Darden, 900 F.3d at 885-87. The Darden court again took note of the second half of the definition of sender in the post-2006 regulation, but reaffirmed its prior holdings. It rejected a “strict liability approach,” finding that it could lead to sabotage liability: “a competitor could send out thousands of unsolicited [faxes] promoting another company’s goods or services, thereby bankrupting that company, even though the company played no part in sending or authorizing the faxes.” Darden, 900 F.3d at 888; see infra note 15. As discussed below, in each of these cases, the Seventh Circuit held that agency law is the correct rubric for determining liability for unsolicited fax ads, including those that are transmitted by a third party. By contrast, the Sixth Circuit initially adopted a strict liability approach, but then later appeared to retreat from it. In Imhoff Investment, L.L.C. v. Alfoccino, Inc., a case in which B2B sent faxes in November and December 2006, the court quoted the regulation as amended on August 1, 2006, which included the new, more expansive definition of sender. 792 F.3d 627, 630, 634 (6th Cir. 2015). In a somewhat puzzling passage, the court stated that “[t]he FCC’s codification of this 21 definition of ‘sender’ is in accord with its earlier uncodified interpretation: ‘the entity or entities on whose behalf facsimiles are transmitted are ultimately liable.’” Id. at 634 (quoting 1995 Order, 10 FCC Rcd. at 12407-08) Thus, the Imhoff court did not recognize that the newly codified definition of sender expanded the FCC’s earlier uncodified interpretation by adding the second clause (“or whose goods or services are advertised or promoted”). Nevertheless, the court proceeded to strictly construe the definition of sender, relying on the second half of the sender definition to hold that the defendant business was the “sender” of the faxes in question because it was “the party whose goods or services [were] advertised” – meaning it was liable for B2B’s transmission of unsolicited fax ads, regardless of how the fax transmissions came about. Id. at 637. Three years later, in Health One Medical Center Eastpointe P.L.L.C. v. Mohawk, Inc., the court appeared to move away from a strict liability approach. 889 F.3d 800, 801 (6th Cir. 2018) (“Mohawk”). That case involved unsolicited faxes sent in 2016 by a pharmaceutical wholesaler, which advertised the products of certain drug manufacturers, and which were sent without the knowledge of those manufacturers. Id. The court was required to consider whether the companies whose products were advertised (the drug manufacturers) could be held liable, even though they were uninvolved and unaware of the wholesaler’s transmission of 22 the fax ads. Id. The Sixth Circuit acknowledged the possibility of strictly construing the second half of the definition of sender in the 2006 amendment to the regulation to find that the manufacturers qualify as senders because they are entities “whose goods or services are advertised or promoted.” Id. at 802. Reading the regulation in context with the statute and with the FCC’s 2006 Order, however, the court held that it was clear that the TCPA intends to allocate liability primarily to the entity on whose behalf a junk fax was sent – and to secondarily allocate joint liability to fax broadcasters only if these broadcasters were “knowingly” involved in sending junk faxes. 12 Id. The Mohawk court held that the drug manufacturers could not be liable as “senders” because they were not in any way involved in sending the faxes. Id. It summarily dismissed any suggestion that this holding was in tension with its prior holdings in Imhoff, discussed above, or in Siding and Insulation Co. v. Alco Vending, Inc., 822 F.3d 886, (6th Cir. 2016) (“Alco”), discussed below. The Mohawk court stated: “In both those cases [Imhoff and Alco,] the defendant in fact hired a fax broadcaster to send out the junk faxes. And thus in neither case did we hold, or have occasion to hold, that an innocent party – 12 The statement regarding “knowing[]” involvement was presumably a reference to the “high degree of involvement” language in the regulation and discussed in the 2006 Order, 21 FCC Rcd. at 3808, as the Mohawk court cited the summary of this discussion that appeared in the FCC’s May 3, 2006 final rule (see supra note 10). Mohawk, 889 F.3d at 802 (citing 71 Fed. Reg. at 25971). 23 like [the drug manufacturers] here – could by some legal alchemy be held liable for having ‘sent’ the faxes.” Id. (citations omitted). Thus, the Sixth Circuit appears to have joined the Seventh Circuit in recognizing that a strict liability approach is inappropriate for determining liability for fax transmissions that violate the TCPA. 13
The Eleventh Circuit has found that a defendant business may be vicariously liable for unsolicited fax ads transmitted by a third party – though without specifying any particular standard for determining vicarious liability. In Palm Beach Golf Center – Boca, Inc. v. John G. Sarris, D.D.S., P.A., the court considered a fax transmitted by B2B in 2003; it therefore applied the pre-2006 regulatory language, which did not contain a definition of sender. 781 F.3d 1245, 1249, 1254 & n.9 (11th Cir. 2015) (“Sarris”). Seeking to clarify whether the defendant business qualified as a “sender” under the pre-2006 regulation, the court solicited a letter brief from the FCC, which averred that its pre-2006 treatment of 13 Indeed, in Darden, the Seventh Circuit observed that, “after Mohawk it is clear that the Sixth Circuit interpretation of the statute is not inconsistent with our caselaw recognizing that a defendant who has no connection whatsoever to the sending of the fax cannot be held liable under the TCPA.” 900 F.3d at 889. 24 fax advertisements was set forth in its 1995 Order – which, as noted above, stated that the entity “on whose behalf” faxes are sent is “ultimately liable” for TCPA violations. Id. at 1254-55. The Sarris court held that, given the statutory ambiguity as to the definition of “send” or “sender” and the reasonableness of the FCC’s interpretation, that interpretation was entitled to deference. Id. at 1255-57. It concluded that, “[b]y construing the sender as the party ‘on whose behalf facsimiles are transmitted,’ the FCC has placed liability at the source of the offending behavior that Congress intended to curtail.” Id. at 1257 (quoting 1995 Order, 10 FCC Rcd. at 12407). The Sarris court then reversed the district court’s grant of summary judgment, finding that, on the facts of that case, the question of whether the unsolicited fax was sent “on behalf of” the defendant must be submitted to a jury. Id. at 1257-58. Relying on the Eleventh Circuit’s decision in Sarris, the Middle District of Florida issued a decision in Cin-Q Automobiles, Inc. v. Buccaneers Ltd. Partnership, No. 8:13-cv-01592-AEP, 2014 WL 72224943 (M.D. Fla. Dec. 17, 2014), which, though unpublished, has been cited by several other courts. 14 The 14 The Eleventh Circuit initially issued Sarris on October 30, 2014. Palm Beach Golf Center – Boca, Inc. v. John G. Sarris, D.D.S., P.A., 771 F.3d 1274 (11th Cir. 2014). On March 9, 2015, the court, sua sponte, vacated and superseded that opinion with an opinion that was nearly identical – the most notable change (…continued) 25 Cin-Q court rejected both a strict liability approach and an agency law approach. Id. at -7. 15 It “conclude[d] that ‘on whose behalf’ is a standard lying somewhere in the middle – more forgiving than a blanket application of per se liability but somewhat more stringent than vicarious liability through common law agency.” Id. at . Finally, citing the Sarris court’s analysis of the facts before it, which led it to remand, the Cin-Q court extrapolated and elaborated factors to be considered in determining whether a third party sent a fax “on behalf of” another person or entity. Id. The Seventh Circuit, for its part, has consistently employed an agency law approach to determining vicarious liability. As discussed, in Clark, the Seventh (…continued) being that three paragraphs of the analysis of standing were removed (a change that is not relevant here). Sarris, 781 F.3d at 1250-53. In December of 2014, after Sarris first came down but before the Eleventh Circuit vacated and reissued the opinion, the Middle District of Florida issued its Cin-Q decision, which relied on the portions of Sarris relevant here. 15 In Cin-Q, because the faxes were sent in 2009, the court invoked the definition of “sender” contained in the post-2006 regulatory language. 2014 WL 7224943, at . But it rejected the second half of the definition, finding that strictly construing a “sender” as a person or entity “whose goods are services are advertised” would not only be inconsistent with the FCC’s own 2006 Order, see supra note 10, but would lead to “absurd results” – including “sabotage liability,” in which a business could expose a competitor to damages by blasting out junk faxes advertising its competitor’s products, without the competitor’s agreement or even awareness. Id. at . 26 Circuit rejected the notion that the second half of the definition of “sender” contained in the regulation could give rise to strict liability. Clark, 816 F.3d at 938. Instead, the court focused on the first half of the sender definition and held, without elaboration, that “agency rules are properly applied to determine” whether faxes were sent “on behalf of” an entity. Id. Similarly, in Wagener, the court rejected strict liability, holding that, “to be liable as a sender, a person must have done something to advertise goods or services,” Wagener, 825 F.3d at 797 and it reaffirmed that “‘agency rules are properly applied to determine whether an action is done “on behalf” of a principal.’” Id. (quoting Clark, 816 F.3d at 938). Finally, in Darden, the Seventh Circuit reaffirmed its prior holdings in Clark and Wagener that “agency rules should be applied.” Darden, 900 F.3d at 888. The Sixth Circuit, building upon the Eleventh Circuit’s decision in Sarris and the Middle District of Florida’s unpublished decision in Cin-Q, has adopted a vicarious liability approach that it has termed “on whose behalf” liability. In Alco, the court considered faxes that were sent by B2B in 2005 and 2006, before the 2006 regulatory amendments took effect; after engaging in a lengthy retroactivity analysis, the court concluded that the pre-August 1, 2006 regulatory language was 27 applicable. 822 F.3d at 889, 891-96, 898. 16 Rejecting the agency law approach adopted by the Seventh Circuit in Clark because it was “unsupported by any analysis,” id. at 897, the Alco court held that the FCC’s “on whose behalf” language from its 1995 Order controls, and it relied on Sarris and Cin-Q to define the contours of the “on whose behalf” standard. Id. at 897-99. Echoing Cin-Q, the Alco court stated that “the ‘on-whose-behalf’ standard thus exists as a middle ground between strict liability and vicarious liability,” id. at 898, and labeled “onwhose-behalf” a “term of art that blends (1) federal common-law agency principles . . . and (2) policy considerations designed to address which entity was most culpable.” Id. at 899. 17 While the Eleventh Circuit did not announce a specific standard or test in Sarris, the Sixth Circuit drew upon the analysis in Sarris to define the “on whose behalf” standard as follows: To decide whether one entity . . . broadcast a potentially unauthorized fax “on behalf of” another entity . . ., courts have considered a variety of factors. These factors include the degree of control that the latter entity 16 Alco, decided the year after Imhoff, found Imhoff’s strict liability approach “easily distinguishable” because “[i]n Imhoff, the defendant’s faxes were transmitted after the August 1, 2006 date on which” the 2006 amendments to the regulation – which added the definition of sender – “became effective.” Alco, 822 F.3d at 895. 17 See also Compressor Eng’g Corp. v. Mfrs. Fin. Corp., 746 Fed. App’x 460, 463-64 (6th Cir. 2018) (adopting and applying the Alco court’s approach). 28 exercised over the preparation of the faxes, whether the latter entity approved the final content of the faxes as broadcast, and the nature and terms of the contractual relationship between the fax broadcaster and the latter entity. Alco, 822 F.3d at 898-99 (citing Sarris, 781 F.3d at 1258). 18 To summarize, the Eleventh Circuit has not explicitly endorsed or rejected any particular theory of vicarious liability for junk faxes, the Seventh Circuit has asserted that traditional agency law principles furnish the proper inquiry, and the Sixth Circuit has adopted a formulation that it calls the “on whose behalf” 18 The Alco court also quoted this language from Cin-Q: Circumstances to be considered include, but are not limited to, the degree of input and control over the content of the fax(es), the actual content of the fax(es), contractual or expressly stated limitations and scope of control between the parties, privity of the parties involved, approval of the final draft of the fax(es) and its transmission(s), method and structure of payment, overall awareness of the circumstances (including access to and control over facsimile lists and transmission information), and the existence of measures taken to ensure compliance and/or to cure non-compliance with the TCPA. Alco, 822 F.3d at 899 (quoting Cin-Q, 2014 WL 7224943, at ). 29 standard, which it characterizes as more exacting than a common-law agency analysis but less severe than strict liability. 19 3. This Court’s Approach to Liability for Junk Faxes i. REJECTING STRICT LIABILITY As an initial matter, we join the Sixth and Seventh Circuits in rejecting a strict liability approach to construing the definition of sender. See Darden, 900 F.3d at 885-87; Mohawk, 889 F.3d at 802. This rejection of strict liability applies to faxes that were sent at any time, including those (like the fax at issue in this case) that were sent after August 1, 2006. 19 The Third Circuit has taken note of, but not ruled on, this specific question, as it was not presented in the case before the court. See City Select Auto Sales Inc. v. David Randall Assocs., 885 F.3d 154, 160-61 (3d Cir. 2018). The only state high court decision we have found that directly addresses this issue appears to be consistent with the Seventh Circuit’s interpretation: in Ex parte Lary, which involved fax ads sent in 2002, the Alabama Supreme Court found that, because the plaintiff had alleged that the unsolicited fax ads it received were sent by the defendant business or “on its behalf,” this sufficed to state a claim for a TCPA violation because actions authorized pursuant to the TCPA “implicitly include the doctrine of vicarious liability, whereby employers are liable for the acts of their agents and employees.” 951 So. 2d 635, 637 (Ala. 2006) (citation and internal quotation marks omitted). 30 As discussed, see supra III.A.1, the August 1, 2006 amendments to the regulation defined “sender” as “the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement.” 47 C.F.R. § 64.1200(f)(8) (as amended Aug. 1, 2006) (now codified at (f)(10)). However, imputing liability based on the second half of this disjunctive definition – referring to the person or entity “whose goods or services are advertised or promoted” – makes little sense in light of the statute and regulation’s prohibition on the “use” of a fax machine (or other device) to “send” unsolicited fax ads, 47 U.S.C. § 227(b)(1)(C); 47 C.F.R. § 64.1200(a)(3) (as amended Aug. 1, 2006) (now codified at (a)(4)), as the second half of the sender definition requires no use of a fax machine and refers only to the actual content of the fax ad. See Mohawk, 889 F.3d at 802. Moreover, the second half of the sender definition cannot be squared with the language of the FCC’s own order promulgating these amendments, in which it referred to “the sender” as “the business on whose behalf the fax is transmitted” and further “emphasize[d] that under the Commission’s interpretation of the facsimile advertising rules, the sender is the person or entity on whose behalf the advertisement is sent,” which, “[i]n most instances . . . will be the entity whose product or service is advertised or promoted in the message.” 2006 Order, 21 FCC 31 Rcd. at 3807-08. Indeed, the Commission’s statement that the “sender” will, “in most instances,” “be the entity whose product or service is advertised,” appears to confirm that, at least in some instances, the entity whose product or service is advertised is not the sender – because the fax was not sent on behalf of that entity. It would therefore be inappropriate to automatically or universally impose liability on an entity simply because its product or service was advertised in a fax. Nor can the second half of the sender definition be reconciled with the FCC’s pre-August 1, 2006 interpretation of sender as “the entity or entities on whose behalf facsimiles are transmitted,” and who “are ultimately liable for compliance with the rule banning unsolicited facsimile advertisements.” 1995 Order, 10 FCC Rcd. at 12407. Similarly, the letter brief submitted by the FCC in Sarris asserted that “the definition of sender promulgated in 2006 is consistent with the Commission’s pre-existing uncodified interpretation” – from the 1995 Order – “that the entity or entities on whose behalf facsimiles are transmitted are ultimately liable for compliance with the rule banning unsolicited facsimile advertisements.” Alco, 822 F.3d at 894 (quoting FCC Letter Brief, 2014 WL 3962595,  (July 17, 2014) (internal quotation marks omitted)). While a letter brief submitted by the FCC in a pending case does not have the force of a regulation or an order, this statement suggests that, in interpreting and applying the 32 regulation, the FCC was ignoring the second half of the definition of sender. Indeed, in Alco, the Sixth Circuit declined to accord deference to the FCC’s 2014 letter brief because only by ignoring the second half of the definition of sender could the FCC assert that that definition was consistent with the 1995 Order. Id. at 894-95. 20 Most importantly, we find nothing in the TCPA or its legislative history – or crucially, in the FCC record – that indicates an intent to create a strict liability regime for the sending of unsolicited fax ads. To the contrary, other language in the regulation suggests that a party must play an active part in transmitting unsolicited fax ads to be properly construed as a “sender,” and the FCC record indicates that the Commission was attempting to avoid rigidity and to promote a 20 Reading the statute and the regulation together with the 1995 Order, the 2006 Order, the 2006 amendment to the regulation that added the definition of sender, and the 2014 letter brief, one might speculate that the FCC intended to make the definition of sender conjunctive rather than disjunctive, i.e., to require both conditions to be satisfied. In other words, a sender would be “the person or entity on whose behalf a facsimile unsolicited advertisement is sent and whose goods or services are advertised or promoted in the unsolicited advertisement.” One might speculate that perhaps a drafting error led to the use of the word “or” instead of “and.” This may explain the Eleventh Circuit’s (perhaps inadvertent) statement that “a person whose services are advertised in an unsolicited fax transmission, and on whose behalf the fax is transmitted, may be held liable directly under the TCPA’s ban on the sending of junk faxes.” Sarris, 781 F.3d at 1254 (emphasis added). 33 nuanced, fact-based approach to apportioning responsibility for TCPA compliance – and liability for TCPA violations – between businesses and the fax broadcasters they hire. See 2006 Order, 21 FCC Rcd. at 3807-08. Further, we agree with the courts, including the Sixth and Seventh Circuits, that have concluded that a strict liability regime would allow for absurd results, including sabotage liability, in which companies could impose crippling penalties on their competitors by sending unsolicited faxes advertising their competitors’ products and services – all without the competitors’ consent or even knowledge. 21 It would be bizarre indeed if Congress or the FCC intended to create such a state of affairs. 22 21 Cf. Creative Montessori Learning Ctrs. v. Ashford Gear LLC, 662 F.3d 913, 915-916 (7th Cir. 2011) (observing that “draconian penalties for multiple faxes,” combined with the potential for class actions, can “impose[] potentially very heavy penalties on its violators”). 22 FDS’s arguments notwithstanding, the Hobbs Act, 28 U.S.C. § 2342(1) (2018), is not relevant here. The Hobbs Act confers exclusive jurisdiction on federal courts of appeals to enjoin, suspend, or determine the validity of certain final orders of the FCC. PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., 139 S.Ct 2051, 2055 (2019). As the Supreme Court has recently noted, it is unclear whether the FCC’s 2006 Order is subject to the Hobbs Act. Id. at 2055-56. In any event, neither the trial court nor this court seek to invalidate or suspend the 2006 Order. To the contrary, we seek to read the relevant regulation consistently with itself and with the 2006 Order – as well as with the 1995 Order and, to the extent it may be probative, with the FCC’s 2014 letter brief in Sarris. 34 We therefore reject a strict liability approach that would hold a person or entity vicariously liable for unsolicited fax ads transmitted by third parties (fax broadcasters or otherwise) simply because that person or entity’s products or services were advertised in the faxes. Rather, we find that, in order for a person or entity to be subject to vicarious liability as the sender of a junk fax, the fax must have been sent on behalf of that person or entity. For the reasons discussed below, we join the Seventh Circuit in holding that an agency law analysis is the appropriate vehicle for determining “on whose behalf” an unsolicited fax advertisement was sent. ii. UTILIZING AGENCY LAW TO DETERMINE VICARIOUS LIABILITY Agency law is, in essence, a means of determining whether one party acted on behalf of another party. See, e.g., United States v. Weitzel, 246 U.S. 533, 542 (1918) (“[T]he term ‘agent’ is ordinarily used as implying appointment by a principal on whose behalf he acts.”) (emphasis added); Davey v. King, 595 A.2d 999, 1002 (D.C. 1991) (“The hallmark of an agency relationship is that the agent takes action on behalf of the principal and subjects himself to the orders of the principal.”) (emphasis added); Smith v. Jenkins, 452 A.2d 333, 335 (D.C. 1982) (“Generally an agency relationship results when one person authorizes another to 35 act on his behalf subject to his control, and the other consents to do so.”) (emphasis added). Indeed, the Restatement of Agency, upon which this court has often relied to clarify principles of agency law, 23 begins with the premise that “[a]gency is the fiduciary relationship that arises when one person (a “principal”) manifests assent to another person (an “agent”) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consents so to act.” Restatement (Third) of Agency § 1.01 (Am. Law Inst. 2006) (emphasis added). The comment to this section goes on to specify: The concept of agency posits a consensual relationship in which one person, to one degree or another or respect or another, acts as a representative of or otherwise acts on behalf of another person with power to affect the legal rights and duties of the other person. The person represented has a right to control the actions of the agent. Agency thus entails inward-looking consequences, operative as between the agent and the principal, as well as outward-looking consequences, operative as among the agent, the principal, and third parties with whom the agent interacts. 23 See, e.g., Jenkins v. Strauss, 931 A.2d 1026, 1032 (D.C. 2007); Rose v. Silver, 394 A.2d 1368, 1371 (D.C. 1978); Ezersky v. Survis, 43 A.2d 294, 295 (D.C. 1945). 36 Id. § 1.01 cmt. c (emphasis added). An agency relationship, as described above, may be created through actual authority (either express or implied), apparent authority, or ratification. Id. §§ 2.01–4.08. As to the “outward-looking consequences” resulting from the agent’s interactions with third parties, “[a]n employer is subject to liability for torts committed by employees while acting within the scope of their employment” – with employee being defined as “an agent whose principal controls or has the right to control the manner and means of the agent’s performance of work.” Id. § 2.04, 7.07; see also Respondeat Superior, Black’s Law Dictionary (11th ed. 2019) (“The doctrine holding an employer or principal liable for the employee’s or agent’s wrongful acts committed within the scope of the employment or agency.”). These principles clearly bear on the situation we examine here, i.e., vicarious liability vel non for a business as a result of the actions of a fax broadcaster it has hired. As discussed, the Sixth Circuit in Alco asserted that an agency law analysis was inappropriate for assessing vicarious liability and that it was more appropriate to employ a novel “on whose behalf” standard, which it found involves the consideration of several factors, including “the degree of control that the latter entity exercised over the preparation of the faxes, whether the latter entity approved the final content of the faxes as broadcast, and the nature and terms of 37 the contractual relationship between the fax broadcaster and the latter entity.” Alco, 822 F.3d at 898. Yet, these factors are no different than those that would be considered in an agency law analysis. As alluded to above, the determination of whether an agent was acting on behalf of a principal requires a fact-bound inquiry that involves consideration of several factors, including the degree of control the principal exercises over the agent, the statements and actions of the principal vis-à-vis the agent, and the existence and scope of a contract or agreement between the principal and the agent. See, e.g., Restatement (Third) of Agency §§ 1.01, 1.01 cmts. b-c & e, 2.02, 2.02 cmts. c-e, 2.03 cmt. c, 2.04 cmt. b, 7.07, 7.07 cmts. b-c; see also id. § 1.02 (“Whether a relationship is characterized as agency in an agreement between parties or in the context of industry or popular usage is not controlling.”); id. § 1.02 cmt. a (“Whether a relationship is one of agency is a legal conclusion made after an assessment of the facts of the relationship and the application of the law of agency to those facts.”). As we have previously stated: Whether an agency relationship exists in a given situation depends on the particular facts of each case. The factors to be considered include (1) the selection and engagement of the servant, (2) the payment of wages, (3) the power to discharge, (4) the power to control the servant’s conduct, (5) and whether the work is part of the regular business of the employer. Of these factors, the 38 determinative one is usually whether the employer has the right to control and direct the servant in the performance of his work and the manner in which the work is to be done. The cases emphasize that the right to control, rather than its actual exercise, is usually dispositive of whether there is an agency relationship. In deciding this question, courts will look both to the terms of any contract that may exist and to the actual course of dealings between the parties. Judah v. Reiner, 744 A.2d 1037, 1040 (D.C. 2000) (citations and internal quotation marks omitted); see also Slater v. Berlin, 94 A.2d 38, 42 (D.C. 1953) (the existence of an agency relationship “is usually a question of fact”). Moreover, an agency relationship can exist for limited purposes and periods, see, e.g., Restatement (Third) of Agency § 3.09; W. W. Chambers, Inc. v. Audette, 385 A.2d 10, 14 (D.C. 1978), meaning that these factors can be considered to determine whether an agent was acting on behalf of a principal during a particular occurrence or transaction – such as the transmission of unsolicited fax ads. In short, agency principles provide flexible standards for assessing the nature of the relationship between the parties in order to determine the legal consequences of actions taken by the agent. See, e.g., Moseley v. Second New St. Paul Baptist Church, 534 A.2d 346, 348 (D.C. 1987); Penn Cent. Transp. Co. v. Reddick, 398 A.2d 27, 30-32 (D.C. 1979); Johnson v. M.J. Uline Co., 40 A.2d 260, 262-63 (D.C. 1944). 39 Accordingly, agency principles are suitable for addressing the Sixth Circuit’s concern that the vicarious liability analysis employed in the junk fax context should reflect “policy considerations designed to address which entity was most culpable in causing a TCPA violation” and “target[] the entity primarily responsible for such conduct.” Alco, 822 F.3d at 899. A vicarious liability analysis utilizing agency principles would, by its very nature, “place[] liability at the source of the offending behavior that Congress intended to curtail.” Id. (quoting Sarris, 781 F.3d at 1257). 24 24 Indeed, there is some indication that Congress itself intended agency principles to inform a vicarious liability analysis under the TCPA, as another provision of Title 47 of the U.S. Code – which has not been amended since 1934 and is entitled “Agents’ acts and omissions; liability of carrier” – provides: In construing and enforcing the provisions of this chapter, the act, omission, or failure of any officer, agent, or other person acting for or employed by any common carrier or user, acting within the scope of his employment, shall in every case be also deemed to be the act, omission, or failure of such carrier or user as well as that of the person. 47 U.S.C. § 217 (2006 & 2018) (emphasis added). This provision and the TCPA, which is codified at 47 U.S.C. § 227, appear within the same chapter (Chapter 5) and the same subchapter (Subchapter II) of Title 47. An action under the TCPA is therefore an “action construing and enforcing the provisions of this chapter” under 47 U.S.C. § 217, which, by its own terms, creates vicarious liability for the acts of an agent. While the federal circuit court decisions interpreting the junk fax provisions of the TCPA do not mention this provision, at least one state court decision has relied on it to find that an agency analysis is appropriate for assessing (…continued) 40 This conclusion is consistent with the proposition that “[f]ederal statutory tort actions, such as those authorized under the TCPA, typically are construed to incorporate federal common law agency principles of vicarious liability where, as here, the language of the statute permits such a construction and doing so would advance statutory purposes.” In re DISH Network, LLC, et al., 28 FCC Rcd. 6574, 6584 (May 9, 2013); see, e.g., Staub v. Proctor Hosp., 562 U.S. 411, 418-422 (2011) (noting that “general principles of . . . agency law . . . form the background against which federal tort laws are enacted” and applying agency principles, as articulated in the Restatement, to determine vicarious liability for violations of the Uniformed Services Employment and Reemployment Rights Act); Meyer v. Holley, 537 U.S. 280, 285-91 (2003) (applying agency principles, as articulated in the Restatement, to determine vicarious liability for violations of the Fair Housing Act); Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 754-66 (1998) (applying agency principles, as articulated in the Restatement, to determine vicarious liability for violations of Title VII of the Civil Rights of 1964); Am. Soc. of Mech. Eng’rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 565-575 (1982) (applying agency (…continued) vicarious liability for violations of the TCPA’s prohibition on junk faxes. Uesco Indus., Inc. v. Poolman of Wis., Inc., 993 N.E.2d 97, 110-11 (Ill. App. 2013). 41 principles, as articulated in the Restatement, to determine vicarious liability for violations of the Sherman Act). 25 In sum, we discern no meaningful difference between a traditional agency law analysis and the so-called “on whose behalf” standard, and we find that principles of agency law are adequate to fulfill the purpose and intent of the TCPA. We therefore apply agency law in determining whether a person or entity is 25 The FCC’s DISH Network ruling concerned the telemarketing provisions of the TCPA. Relevant federal circuit court decisions and the FCC’s 2014 letter brief filed in Sarris have rejected the DISH Network analysis as inapplicable to the junk fax provisions of the TCPA. Alco, 822 F.3d at 896-97; Clark, 816 F.3d at 938; Imhoff, 792 F.3d at 635; Sarris, 781 F.3d at 1254-55. Yet, it is not readily apparent why there are not instructive parallels between the TCPA’s telemarketing provisions, which use the term “initiate” with respect to a phone call, 47 U.S.C. § 227(b)(1)(B), and the TCPA’s fax provisions, which use the term “send” with respect to a fax, 47 U.S.C. § 227(b)(1)(C). (This is especially so given that another part of the TCPA, the “Technical and procedural standards” subsection, also uses the term “initiate” with respect to a fax. 47 U.S.C. § 227(d)). To the contrary, DISH Network’s analysis of vicarious “on behalf of” liability appears to be quite relevant to the junk fax context, particularly the FCC’s statement that the “concepts” that define the term “on behalf of” “easily can be read to encompass common law agency principles.” DISH Network, 28 FCC Rcd. at 6585. In any event, the FCC’s general statement in DISH Network – that agency law principles of vicarious liability are typically applied in the context of federal statutory tort actions – stands, as demonstrated by the Supreme Court decisions cited above. 42 vicariously liable for the actions of a third party, such as a fax broadcaster, that sends unsolicited fax ads on its behalf. 26