Junk Fax Claim Fails Due to “Established Business Relationship” Exception — Cardinal Partners v. Fernandez Discipline

[Post by Venkat]

Cardinal Partners, Ltd. v. Fernandez Discipline, LLC, Case No. L-10-1180 (Ohio Ct. App.; Nov. 19, 2010)

Background: Toledo chiropractor Dr. William J. Houttekier II shared a fax number with Cardinal Partners (they both apparently had the same fax number). Houttekier received a fax (advertising an upcoming two day marketing seminar) sent by Fernandez Discipline, a marketing consulting firm. [It’s interesting to see marketing consultants advertise their services via communications that turn out to be unwelcome. I would think this does not engender much trust in the consulting services, but that’s neither here nor there.] Houttekier threatened suit but offered to settle for $3,000. The parties did not settle, and ultimately Cardinal Partners (not Houttekier) filed a class action lawsuit alleging junk fax violations.

The procedural details are murky, but it appears the trial court dismissed (or denied certification of) the class action, and Cardinal Partners appealed. While the appeal was pending, the parties both moved for summary judgment. Cardinal Partners voluntarily dismissed its appeal, and the case moved forward on an individual basis in the trial court. The trial court granted summary judgment in favor of Fernandez Discipline, on the basis that Fernandez Discipline had an established business relationship with Houttekier, who “co-used the telephone number at which [the fax to Cardinal Partners] was received.”

Discussion:

Was the “established business relationship exception” defense available?: The first question was whether the “established business relationship” was available as a defense to the fax at issue. The court looks at the TCPA (enacted in 1991), as amended by the Junk Fax Prevention Act (enacted in 2005), and concludes that although it was unclear as to whether the TCPA (as implemented by the FCC regulations) provided for an “established business relationship” exception to faxes, the enactment of the Junk Fax Prevention Act cleared this up, and since the fax at issue was sent after enactment of the Junk Fax Prevention Act, the exception was available.

Did Fernandez Discipline put forth sufficient evidence to demonstrate that it was entitled to the “established business relationship” exception?: In support of its motion for summary judgment, Fernandez Disciple submitted pages from an online directory which showed that Houttekier and Cardinal Partners shared the same telephone number. This evidence was uncontested. Although there were hearsay problems with the remainder of the evidence submitted by Fernandez Discipline, the court concluded that there was enough competent evidence to show that Fernandez Discipline had an “established business relationship” with Houttekier (who had attended several Fernandez Discipline seminars). Based on this, the court affirms the trial court’s dismissal of the claims.

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The case raises two questions, which the court does not really dig into. First, who has the cause of action when people share a telephone number? Presumably, the person or entity who the number was assigned to (in this case Cardinal Partners) does. Second, if two people share a number, does consent from (or a business relationship with) one undermine a cause of action for the other?

Related posts:

“Latest Junk Fax Lawsuit–Adler v. Vision Lab Telecommunications”

“Junk Fax Doesn’t Create Conversion Claim–Edwards v. Emperor’s Garden”

“One Judge’s Derisive View of Junk Faxes as Conversion”

“Ghostwritten Attorney Newsletter is an “Ad” for TCPA Junk Fax Law Purposes–Holtzman v. Turza”