FCC resolves $16M lawsuit over fax violation

A small Twin Cities publisher of legal directories has been reprieved by the Federal Communications Commission over a fax it sent to a potential client that evolved into a $16 million lawsuit.

In a ruling last week, the FCC said that Mariposa Publishing owner Doug Walburg and several other companies are not liable for possible violations of the federal Telephone Consumer Protection Act that governs unsolicited fax transmissions.

Walburg had been sued by a St. Louis lawyer for not including an opt-out clause to not receive future faxes at the bottom of a fax advertisement he sent to the lawyer for a legal directory. The lawsuit could have been tripled to $48 million if it was determined that omission of the opt-out language was intentional.

"I'm relieved," Walburg said in an interview Thursday. "It's been kind of stressful having a $48 million lawsuit against you."

Walburg was in pretty good company in his reprieve. The FCC ruling also affected large corporations as well as small businesses ranging from big box retailers to mortgage companies.

The FCC determined that a footnote in its rule on unsolicited faxes "caused confusion and misplaced confidence" for those sending faxes to parties that had given prior permission to receive them.

"It is an inconsistent footnote," the FCC said. "We find that granting a waiver would serve the public interest" and spare "subject parties to potentially substantial damages."

His legal troubles began in 2007 when one of his sales staff called a Missouri law office to inquire if it was interested in receiving an advertisement for the directory. The law firm said yes and the advertisement was faxed.

However, the ad did not have boilerplate language on the bottom telling the recipient that it could opt out of receiving future faxes.

Walburg was promptly sued by the St. Louis lawyer and the case meandered through the federal court system for several years until the FCC issued its ruling on Oct. 30.

The case became a cause célèbre in the business community. "Clearly we are dealing with a case of regulation gone wild," wrote Karen Harned, executive director of the small business legal center for the National Federation of Independent Business.

For Walburg, whose legal bills were covered by insurance, the case was a seven-year distraction that moved at seemingly glacial speeds.