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&uprente

RAYMOND OMERZA, et al.

Appellants

V.

BRYANT & STRATTON COLLEGE

Appellee

On Appealfrom theOhio Court ofAppeals,

Eleventh Judicial DistrictCase No. CA 2006-L-092

MEMORANDUM IN SUPPORT OF JURISDICTIONOF APPELLANT PHILLIP BERARDINELLI INC.

JOSEPH R. COMPOLI JR.(Reg. No. 0031193)612 East 185 StreetCleveland, OH 44119Tel: (216)481-6700

F IJ

JAMES R. GOODLUCK(Reg. No. 0041346)3517 St. Albans RoadCleveland Heights, OH 44121Tel: (216) (216) 619-6329

EINOV 15 91007

CLERKOf COURTSUPREME COURT OF OHIO

MICHAEL PASCOERANDY HART

Hahn Loeser & Parks LLP3300 BP Tower, 200 Public Square

Cleveland, OH 44114

Attorneys forAppellant Attorney for Appellees

TABLE OF CONTENTS

PAGE

EXPLANATION OF WHY THIS CASE ISA CASE OF PUBLIC OR GREAT GENERAL INTEREST ..................... 1

STATEMENT OF FACTS .............................................................. 3

STATEMENTS OF CASE .............................................................. 4

ARGUMENTS IN SUPPORT OFPROPOSITIONS OF LAW ..... ......................................................... 5

Proposition of Law No. 1:

It is a violation of the Telephone Consumer Protection Act, 47 U.S.C. 227,for a commercial enterprise to transmit an unsolicited fax which promotes itself,notwithstanding the testimony of the sender that the fax was transmitted for thepurpose of business networking ......................................................... 5

Proposition of Law No. 2:

It is not a valid affirmative defense, under the Telephone Consumer Protection Act,for a commercial enterprise to claim that it transmitted an unsolicited faxfor the purpose of business networking ................................................... 11

CONCLUSION ..................................................................................... 13

CERTIFICATE OF SERVICE ................................................................. 14

APPENDIX

Opinion and Judgment Entry of the 11'h District Court of Appeals,September 28, 2007.`

* This decision is also published on the Internet, as Omerza v. Bryant & Stratton, 2007-Ohio-5215 (Lake App., Sept. 28, 2007).

EXPLANATION OF WHY THIS CASE ISA CASE OF PUBLIC OR GREAT GENERAL INTEREST

Small businesses and consumers in Ohio are inundated by unwanted junk fax

advertisements. The transmission of junk faxes is "advertising by theft", since the sender

is using the recipient's fax machine, paper and ink to print its advertisements - without

first obtaining prior consent to do so.

Today, estimates range from 17.5 to 100 million fax machines in the United States.

See, Annie Lindstrom, Fax is older than you think, AMERICA'S NETWORK, June 1, 1998;

BUSrtvESS WittE, Nov. 3, 1999, UC ALERT, June 2000 ("more than 100 million currently

installed fax machines"); MERCHANT NEW5, Apri12006.

Taking a conservative estimate of 40 million fax machines in the U.S. today, and a low

estimate that each machine receives only 2 junk faxes per week at a cost of ten cents per

fax, each year this unscrupulous practice is stealing over 400 million dollars from

unwilling recipients.

This unwanted intrusion can sometimes be very serious, even from a single junk fax.

For example, the Court Administrator for the Eleventh Circuit asked that the court's fax

number be stricken from directories out of fear that a fax advertisement would interfere

with death penalty appeals. NATIONAL LAW JOURNAL, Mar. 6, 1989, at p. 1.

Even in Lalce County, Ohio, where this case originated, junk faxes are a huge nuisance

faced by small businesses. The Lake County News Herald recently published a front-page

article which focused on the hardship and expense suffered by small business as a result of

unwanted junk faxes. See, LAKE COUNTY NEWS-HERALD, Sept. 26, 2004, at p.1.

Hence, as a result of this scourge of petty larceny, there have been hundreds of lawsuits

filed in Ohio against junk fax advertisers under the Telephone Consumer Protection Act

1

(TCPA), 47 U.S.C. § 227. T'he TCPA prohibits the transmission of faxed advertisements

unless the sender first obtains the "prior express invitation or permission" of the recipient.

The judicial enforcement of the TCPA should be a simple process. Unfortunately,

many Ohio courts are having great difficulty grappling with the implementation of this

federal law, and some are making serious errors on basic issues under the statute.

Furthermore, some courts, including the lower courts involved in the instant case,

have effectively ignored the mandate of this Supreme Court of Ohio, that the decisions of the

Federal Corrununications Commission are controlling in regard to the proper interpretation of

the TCPA. Charvat v. Dispatch Consumer Serv. Inc. 95 Ohio St.3d 505, 2002-Ohio-2838

(2002) at ¶¶ 23, 37. The laxity of these courts has compounded the problem.

The instant case is a perfect example. As shall be hereinafter shown, botli the trial and

appellate courts misinterpreted the definition of an "advertisement", which is one of the most

elementary parts of the TCPA.

It would be in the public interest, as well as in the great general interest of the State of

Ohio, for this honorable Court to accept jurisdiction in this case, in light of the widespread

nature in which the junk fax problem is negatively affecting the people and small businesses

of Ohio. In addition, by hearing this case, this honorable Court can streamline the resolution

of TCPA cases by providing helpfiil guidance to Ohio courts in the interpretation of the junk

fax restrictions of the TCPA.

2

STATEMENT OF FACTS

The underlying case arises from a claim under the Telephone Consumer Protection

Act (TCPA), 47 U.S.C. § 227. The TCPA prohibits the transmission of unsolicited

commercial advertisements via fax machine. 47 U.S.C. § 227(b)(1)(C).

The aforesaid Cornplaint alleges that, on May 22, 2003, plaintiffs Phillip Berardinelli

Inc, and Raymond Omerza received an unsolicited advertisement, transmitted via fax,

promoting the commercial availability and quality of the services offered by Bryant &

Stratton College. The strip header on this fax clearly states that it is from: "Bryant &

Stratton". A copy of this fax is attached to the First Amended Complaint. See also,

Joint Trial Exhibit 1, filed in the trial court.

The complaint alleges that this fax is an unsolicited advertisement that was

transmitted by appellee Bryant & Stratton College, in violation of 47 U.S.C. §

227(b)(1)(C) of the TCPA.r Raymond Omerza dismissed his claims prior to trial.

The trial was held on April 19, 2006. The trial court granted judgment in favor of

appellee Bryant & Stratton on May 9, 2006, holding that "the subject fax is not an

advertisement".

Notice of Appeal was filed on May 23, 2006 from the judgment of the trial court.

Subsequently, on September 28, 2007, the Ohio Court of Appeals, 11th Judicial

District, affirmed the judgment of the trial court, holding that the fax was not an

advertisement because, "according to the Bryant & Stratton employee who transmitted

the fax", the fax was not intended to commercially advertise the college, but to "develop

'The fax was accompanied by a cover page, which was also transmitted via fax.

3

relationships with businesses in the area" and "networking". Omerza v. Bryant &

Stratton, 2007-Ohio-5215, at ¶¶ 28-30.

STATEMENT OF THE CASE

The underlying Coniplaint was filed on May 24, 2005 by Phillip Berardinelli Inc.

and Raymond Omerza against Bryant & Stratton College under the TCPA, 47 U.S.C. §

227. This statute forbids the transmission of unsolicited advertisements via facsimile

("fax") machine, unless the sender first obtains the "prior express invitation or

permission" of the recipient. 47 U.S.C. § § 227(a)(4) and 227(b)(1)(C).

The trial court subsequently granted leave to file an amended complaint, and the

plaintiffs filed a First Amended Complaint on June 7, 2005. Appellee filed an Answer

on June 20, 2005.

On November 22, 2005, and on December 28, 2005, Raymond Omerza and Phillip

Berardinelli Inc., filed motions for summary judgment on the issue of whether the

Appellee's fax was an "advertisement" within the meaning of the TCPA statute. The trial

court denied the aforesaid motions on January 18, 2005. Raymond Omerza dismissed his

claims prior to trial.

A trial was held on April 19, 2006. The trial court granted judgment in favor of

appellee Bryant & Stratton on May 9, 2006, holding that "the subject fax is not an

advertisement".

Notice of Appeal was filed on May 23, 2006 from the judgment of the trial court.

Subsequently, on September 28, 2007, the Ohio Court of Appeals, 11th Judicial

District, affirmed the judgrnent of the trial court, holding that the fax was not an

advertisement because, "according to the Bryant & Stratton employee who transmitted

4

the fax", the fax was not intended to commercially advertise the college, but to "develop

relationships with businesses in the area" and for "networking". Omerza v. Bryant &

Stratton, 2007-Ohio-5215, at ¶¶ 28-30.

ARGUMENTS IN SUPPORT OF PROPOSITIONS OF LAW

Proposition of Law No. 1

It is a violation of the Telephone Consumer Protection Act, 47 U.S.C. 227,for a commercial enterprise to transmit an unsolicited fax which promotes itself,notwithstanding the testimony of the sender that the fax was transmitted for the

purpose of business "networking".

As stated above, the underlying case is a civil action under the federal TCPA, 47

U.S.C. § 227. The TCPA makes it unlawful for anyone "to use any telephone facsimile

machine, computer, or other device to send an unsolicited advertisement to a telephone

facsimile machine". 47 U.S.C. § 227(b)(1)(C). "The term `unsolicited advertisement'

means any material advertising the commercial availability or quality any property,

goods, or services which is transmitted to any person without that person's prior express

invitation or permission." 47 U.S.C. § 227(a)(4).

The TCPA is a federal remedial statute. "Legislation providing means or method

whereby causes of action may be effectuated, wrongs redressed and relief obtained is

remedial." BLAC[c's LAw DICTONAxY (6th ed., 1990); Jemiola v. XYZ Corp., 126 Ohio

Misc.2d 68 (2003) at ¶ 22. It is firmly established that a federal remedial statute must be

"construed broadly to effectuate its purposes." Tcherepnin v. Knight, 389 U.S. 332, 335

(1967) (emphasis added); Smith v. Heckler, 820 F.2d 1093, 1095 (90' Cir. 1987) (any

ambiguities in a remedial statute should be resolved in favor of those persons for whose

benefit the statute was enacted).

5

In the instant case, the underlying Complaint alleges that, on May 22, 2003,

appellee Phillip Berardinelli Inc. received an unsolicited advertisement, transmitted via

fax machine, promoting the commercial availability and quality of the services offered by

Bryant & Stratton College. Appellant Phillip Berardinelli Inc. alleges that this fax is an

unsolicited advertisement that was transmitted by appellee Bryant & Stratton College in

violation of 47 U.S.C. § 227(b)(1)(C) of the TCPA.

Appellee transmitted the subject fax to all business members of the Willoughby

Area Chamber of Commerce. It undisputed that Phillip Berardinelli Inc. is a member of

the Willoughby Area Chamber of Commerce.2

The content of the fax is not in dispute. The subject fax was accompanied by a

cover page, which was also transmitted via fax. The appellant here asserts no claim in

regard to the cover page.

It is indisputable that the TCPA defines the term "advertisement" to mean:

"any material advertising the commercial availability or quality of any property, goods or

services..." 47 U.S.C.§ 227(a)(4). This definition must be interpreted broadly, in light

of the fact that the TCPA is a remedial statute. See, e.g., Tcherepnin v. Knight, supra,

389 U.S. at 335.

The question of whether a fax meets the TCPA definition of an "advertisement" is

one of statutory construction. See, e.g., Stern v. Bluestone, 2006 N.Y. Misc. LEXIS

2495, 236 N.Y.L.J. 48 (N.Y. Sup. Aug. 18, 2006); Travel Travel, Kirkwood, Inc. v. Jen

NY. Inc., dba Discount Tickets, 206 S.W.3d 387 (Mo. App. 2006).

2 Both of these facts are stated in the Judgment entry of the Trial Court, journalizedMay 9, 2006.

6

In other words, the sender of a fax is strictly liable, under the TCPA, if the fax

contains "any material advertising the commercial availability or quality of any property,

goods or services" (emphasis added). The only exception is if the sender first obtains the

"prior express invitation or permission" of the recipient. 47 U.S.C. § 227.

The subject fax plainly fits the TCPA definition. It is undisputed that appellee

Bryant & Stratton College is a commercial enterprise, Appellee transmitted the subject

fax to all business members of the Willoughby Area Chamber of Commerce.

Bryant & Stratton College was clearly engaging in a commercial activity, when it sent these

faxes. Bryant & Stratton College is a For-Profit corporation which sent these faxes to other

For-Profit businesses (that are both members of the very same business association), with the

stated goal of establishing "relationships with businesses in the area". Omerza., at ¶28.

The commercial nature of the Appellee's fax is unambiguously declared on the faxed

cover page, on which it is stated that the fax was transmitted in hopes of developing a

"mutually beneficial partnership, such as a referral exchange, intemships, graduate placement,

or continuing educationfor your employees." Omerza, at ¶ 7 (emphasis added). These are all

services offered by Bryant & Stratton, and they are all inherently commercial in nature.

The top of the second faxed page contains the boldface headline: "Fact Sheet". In other

words, from the outset, the fax announces that it provides qualitative facts, in regard to the

services of Bryant & Stratton College. Omerza, at ¶ 8.

More specifically, this faxed page advertises the availability of the commercial

services of Bryant & Stratton College, specifically including "lifetime placement services",

scholarships, "degree programs in fields with high level employment potential" and

"practical career preparation" (emphasis added). The fax also announces the availability of

7

enrollment at Bryant & Stratton, and the cost of the application fee ($25) for enrollment.

A copy of this fax is attached to the First Amended Complaint. See also, Joint Trial

Exhibit 1, filed in the trial court.

Hence, as described above, it is crystal clear that the subject fax contains material

that advertises the "availability" and/or "quality " of services offered by Bryant &

Stratton College, a commercial enterprise. In fact, as noted above, the commercial nature

of the fax is openly stated on the cover page which was transmitted with the fax.

Webster's New World College Dictionary (2005) defines "advertise" as meaning:

"to make something known to: notify." This is a pristine example of where the

application of the time honored "duck test" is appropriate: "If it swims like a duck and

quacks like a duck, then it's a duck." Putka v. City ofParma (Cuyahoga 1993), 90 Ohio

App. 3d 647, 651; see also, e.g., Sorah v. Sorah, 163 F.3d 397, 401 (6th Cir. 1998);

BMC Industries, Inc. v. Barth Industries Inc., 160 F.3d 1322, 1337 (11th Cir., 1998);

Hurston v. Office of Workers Compensation Programs, 989 F.2d 1547, 1549 (9th

Cir. 1993) ("if it appears to be a pier, if it is built like a pier and adjoins navigable waters,

it's a pier"). Taken as a whole, these faxes clearly are "advertising the commercial

availability or quality of property, goods or services", within the meaning of the TCPA.

It is clear that, under the statute, the sole test of whether a fax is an

"advertisement" is an objective test. There is no provision, within the junk fax

restrictions of the TCPA, which contains a subjective test, to be somehow decided on the

basis of the self-serving "intent" of the sender.

Yet, in the instant case, the Court of Appeals made its decision on the basis of the

purported "intent" of appellee Bryant & Stratton in transmitting the fax at issue. Specifically,

8

the court stated that it ascertained the Appellee's intent from the testimony of "the Bryant &

Stratton employee who transmitted the fax". Ornerza, at ¶ 28. Hence, based upon this

testimony, the court held that the Appellee's fax was not an "advertisement" under the TCPA

definition, since it was supposedly sent simply for "networking" purposes, and therefore it was

not "commercial". Id., at ¶ 30. The trial court made essentially the same ruling, on the same

basis.

However, as noted above, the TCPA contains no provision allowing exceptions on

the basis of the supposed "intent" of the sender. 'fhe question of whether a fax is an

advertisement must be decided solely on the basis of the content of the fax. See, e.g.,

Kenro, Inc. v. Fax Daily, Inc., supra, 962 F.Supp. 1162 (1997), at 1170-71; Stern v.

Bluestone, supra, 2006 N.Y. Misc. LEXIS 2495, 236 N.Y.L.J. 48. Otherwise, under the

decision of the Appellate court, any advertiser can now send thousands of junk faxes to

the businesses and individuals listed in any commercial directory or database, yet escape

any liability, by simply testifying that the faxes were "not intended to commercially

advertise", and that they were simply sent for "networking" purposes. Id.., at ¶28.

This result is obviously contrary to the whole purpose of the junk fax restrictions of

the TCPA statute. In addition, the ruling of the Appellate court will inevitably generate a

quagmire of litigation in TCPA cases over the issue of the "intent" of the sender. This

honorable Court has the ability to prevent this potential debacle by accepting jurisdiction

over this case, and hearing this matter.

It is undisputed that the Appellee's fax was transmitted to the business members of the

Willoughby Chamber of Commerce. In making its decision in the instant case,

the Appellate Court held that the TCPA did not apply to the Appellee's fax, because "the

9

fax was an invitation from one chamber member to another member who had voluntarily

supplied its fax number to all other chamber members through the directory to exchange

mutually beneficial information which in the parlance of modem-day business-speak

means `networking'." Omerza, at ¶ 30.

The decision of the Appellate court is clearly wrong, with regard to this issue, since it

is directly contrary to the holding of the FCC on the very same issue., as stated in

Rules and Regulations Implementing the Telephone Consumer Protection Act, 18 FCC

Red 14014, 2003 WL 21517853 (F.C.C., July 3, 2003), at ¶¶ 192-193. In particular,

Appellant draws the attention of the Court to the holding of the FCC, at Paragraph 193,

that: "a company wishing to fax ads to consumers whose numbers are listed in a trade

publication or directory must first obtain the express permission of those consumers."

This holding clearly shows that the TCPA applies to faxes transmitted to trade

associations, such as the Willoughby Chamber of Commerce. In this context, it should

be emphasized that the decisions of the FCC are binding on all Ohio courts, including

the 11`h District Court of Appeals, with regard to its interpretation of the TCPA statute.

Charvat v. Dispatch Consumer Serv. Inc. supra, 95 Ohio St.3d 505, 2002-Ohio-2838,

at ¶¶ 23, 37. A violator of the TCPA should not be permitted to evade liability on the

basis of an exemption which does not exist under the statute. The ruling of the 11`"

District Appellate Court is inconsistent with the Charvat decision.

In the recent case of Travel Travel Kirkwood, Inc, v. Jen N. Y. Inc., supra, 206

S.W.3d 387, the Missouri Court of Appeals dealt with much the same issue, and reached

the identical conclusion as the FCC, with regard to faxes sent to a trade association: "We

find that IATAN membership did not constitute `prior express invitation or permission'

10

under the "I'elephone Consumer Protection Act ... The language of the statute, the Federal

Communications Commission's interpretation of the statute, and the plain meaning of the

words `express' and `express consent' support the plaintiff s position that its IATAN

membership did not constitute express consent ...The defendant has cited no authority to

support its position that membership in an industry group and inclusion in the group's

directory constituted express consent."

The decision in Travel Travel Kirkwood confirms the Appellee's position that the

TCPA applies to faxed promotional materials sent to members of a trade association,

such as the Willoughby Chamber of Commerce in the instant case. The ruling of the 11 `n

Appellate District is bizarre, since there is no other judicial decision anywhere in the

United States which holds that junk faxes may be transmitted on the basis that the

advertiser had "good intentions" in sending the faxes, or that the sender's motivation was

otherwise supposedly non-commercial, notwithstanding that the fax was sent by a

commercial enterprise without the prior consent of the recipient. The ruling of the 11"'

District Appellate court stands out like a sore thumb, and is unambiguously in error.

Proposition ofLawNo. 2

In applying the Telephone Consumer Protection Act,a court errs in allowing any exception, other than "prior express invitation or

permission", for a commercial enterprise to transmit faxed promotional material,

The decision of the 11th Court of Appeals creates an affirmative defense, completely

unauthorized by the TCPA, based solely upon the self-serving "intent" of the fax sender.

There is no such exemption contained in the TCPA statute.

11

The one and only exception permitted under the TCPA is the "prior express

invitation or permission" of the recipient. The TCPA contains no exemption on the basis

of the "mens rea " of the advertiser.

Furthermore, when Congress sets forth a list of exemptions in a statute, that list is

exhaustive. "Where Congress explicitly enumerates certain exceptions to a general

prohibition, additional exceptions are not to be implied, in absence of a contrary

legislative intent". Andres v. Glover Constr. Co., 446 U.S. 608, 617 (1980) (emphasis

added); Tang v. Reno, 77 F.3d 1194 (9th Cir. 1996) (same).

Hence, it is beyond question that if Congress had intended to include an exception on

the basis of the "intent" of the sender, then Congress would have done so. Congress

clearly did not include an exemption or affirmative defense based upon the purported

"good intentions" of the advertiser.

There is absolutely no provision of the TCPA which allows a commercial enterprise

to transmit faxed promotional material on the basis that the faxes were really some sort of

"howdy-do" to the merchants or individuals who received them. It would be a waste of

judicial resources for a court to hear such testimony, particularly in light of the fact that

the definition of an "advertisement" under the TCPA is an objective standard - not a

subjective standard based on the self-serving testimony of the sender.

There are hundreds of TCPA cases filed every year in Ohio. It would be ludicrous

for courts to be bogged down in hearing arguments from the parties regarding whether

the advertiser transmitted its faxes on the basis of "noble intentions", when there is no

such exemption in the statute.

12

Just like a written contract speaks for itself, the content of a junic fax speaks for

itself. There is no need to waste the court's time by hearing testimony over the supposed

true purpose of a fax transmission, when the statute clearly says what is allowable, and

what is not.

It would clearly be in the interest of judicial economy for this court to accept

jurisdiction over this case, for the purpose of preventing courts from spending

unnecessary time in litigating or hearing testimony regarding the purported "intent" of the

sender, rather than simply examining the content of the fax at issue. This wasplainly

the desire of Congress with regard to the TCPA.

Moreover, in this context, it camrot be emphasized too strongly that the TCPA was

enacted as a remedial statute. Jemiola v. XYZ Corp., supra, 126 Ohio Misc.2d 68, at

¶ 22. Exemptions from provisions of such remedial statutes "are to be construed

narrowly to limit exemption eligibility." Hogar v. Suarez-Medina, 36 F3d 177, 182 (lst

Cir 1994). The decision of the appellate court is directly at odds with this principle,

since the ruling rips a gigantic hole in the smooth fabric of the TCPA, and thereby opens

the way for fax advertisers to circumvent the requirements of the law. In addition, this

decision, if allowed to stand, will create unnecessary additional headaches for Ohio

courts in having to hear and weigh testimony regarding the alleged "good" or "bad"

motives of the sender of junk fax.

CONCLUSION

This Court's review of this case would provide this Supreme Court with an

opportunity to streamline the adjudication of TCPA cases in Ohio trial and appellate

courts. It would be in the great public interest for this Court to hear this case, because the

13

appeals court ruling, if left to stand, would establish a very narrow interpretation of the

statute, notwithstanding that the TCPA is a remedial law that must always be construed

liberally in favor of the public, and not in a manner which creates new hurdles for victims

of junk faxes to overcome when pursing their rights in Ohio courts.

The ruling of the Appellate court will harm enforcement of TCPA claims in Ohio,

since the parties will be bogged down in litigating the intent or motive of the fax

advertiser, rather than simply adjudicating the statute as written.

Because the legal issues presented in this case are matters of great importance for

all Ohio litigants, the Appellant Phillip Berardinelli Inc. respectfully requests that this

Court accept jurisdiction over this appeal.

Respectfully submitted,

JOS PH R. COL^I I JR.(Reg. No. 0031193)

JAMES R. GOODLUCK(Reg. No. 0041346)612 East 185 Street

Cleveland, OH 44119Tel: (216) 481-6700Fax: (216) 481-1047

Attorneys for Appellants

CERTIFICATE OF SERVICE

A copy of the foregoing was sent to Randy D. Hart and Michael Pascoe Attorneysfor Defendant, at Hahn Loeser & Parks, 3300 BP Tower, 200 Public Square, Cleveland,OH 44114, by regular U.S. mail, first class, postage prepaid, on this 41 day ofNovember 2007.

EPH R. COMPOLI JR.JAMES R. GOODLUCKAttorneys for Appellants

14

APPENDIX

Opinion and Judgment Entry of 11t" District Court of Appeals,journalized September 28 2007.*

This decision is also published on the Intemet, as Omerza v. Bryant & Stratton, 2007-Ohio-5215 (Lake App., Sept. 28, 2007).

15

THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT

LAKE COUNTY, OHIO

RAYMOND OMERZA,

Plaintiff,

PHILLIP BERARDINELLI, INC.,

Plaintiff-Appellant,

- vs -

BRYANT & STRATTON,

Defendant-Appellee.

OPINION

CASE NO. 2006-L-092

FILt DCOURT OF APPEALS

SEP w ^ 20Ca7

LYNPJ5 L, MAZ5IKACLEAK OF COURT

Lf+KZ COUNTY, OHIO

Civil Appeal from the Court of Common Pleas, Case No. 05 CV 001237.

Judgment: Affirmed.

Joseph R. Compoli, Jr., 612 East 185th Street, Cleveland, OH 44119 and James R.Goodluck, 3517 St. Albans Road, Cleveland Heights, OH 44121 (For Plaintiff-Appellant).

Yuri R. Linetsky and Randy J. Hart, Hahn, Loeser & Parks, L.L.P., 3300 BP Tower, 200Public Square, Cleveland, OH 44114-2301 ( For Defendant-Appellee).

MARY JANE TRAPP, J.

{¶1} Phillip Berardinelli, Inc. ("PBI"), appellant, appeals the Lake County Court

of Common Pleas' decision granting judgment in favor of appellee, Bryant & Stratton

College ("Bryant & Stratton").

{12} This case was originally filed by Raymond Omerza alleging that Bryant &

Stratton violated provisions of the Telephone Consumer Protection Act of 1991

("TCPA"), Section 227(b), Title 47, U.S. Code, and the Ohio Sales Practices Act

("CSPA"), R.C. Chapter 1345, by transmitting to his business, PBI, an "unsolicited

advertisement" via facsimile ("fax").' Omerza subsequently filed an amended complaint

naming PBI as a plaintiff. On the first day of trial, Omerza voluntarily dismissed his

claims. PBI's claim that Bryant & Stratton violated the TCPA was initially tried to a jury,

but prior to closing arguments both sides agreed to submit the case to the bench.

{¶3} The evidence established that on May 22, 2003, Bryant & Stratton, as a

member of the Willoughby Area Chamber of Commerce ("chamber"), sent a two page

fax to PBI and other members who were listed in the organization's directory.

According to the chamber's executive director, one of the main purposes of the

chamber is to strengthen and increase business for its members through networking

opportunities. With this purpose in mind, the executive director further testified that the

chamber publishes a directory where members may list their address, telephone

number, fax number, and e-mail address so that they may "readily contact each other"

for a needed product or service. Members may also purchase advertisements in the

directory at a cost of between $1,000-3,000, and, in fact, Bryant & Stratton did purchase

such an advertisement.

{¶4} Shawn Conley ("Conley"), employed by Bryant & Stratton, testified that the

fax he transmitted to PBI and to other chamber members on behalf of the college "was

sent out as a business connect to the Chamber of Commerce members" and was being

used as a way to help its graduates or students secure internships or employment

positions. Mr. Conley further testified that the faxed document "does not correspond

1. Pursuant to Section 227(b)(3)(B), Title 47, U.S. Code, any person or entity may bring a TCPA action instate court. Relchenbach v. Financial Freedom Centers, Inc., 6th Dist. No. L-03-1357, 2004-Ohio-6164,¶27.

2

with what we would use to advertise" the college and that all advertising is done out of a

New York City advertising agency.

{¶5} The first page of the two page fax transmission was in letter form and

stated in pertinent part:

{¶6} "Dear Fellow Chamber Members[,]

{I[7} "We would like to formally introduce Bryant & Stratton College to you.

Please take a moment to review our fact sheet for some basic information. ` We

would also welcome you to share any information about your organization with us.

Perhaps we can develop some type of mutually beneficial partnership, such as a

referral exchange, internships, graduate placement, or continuing education for your

employees."

{¶8} The second page was a "fact sheet" listing information such as the

student/faculty ratio, admission requirements, admissions process, career services,

scholarship opportunities and program offerings.

{¶9} After hearing the evidence, the trial court concluded that the transmitted

fax was not an advertisement and therefore did not violate the TCPA. The court did not

reach the issue of whether the document was unsolicited. Appellant filed a timely

appeal raising the following assignment of error for our review:

{¶10} "The trial court erred in granting judgment in favor of appellee."

{¶11} Standard of Review

{¶12} The issue in this appeal, whether the faxed document was an

advertisement under the purview of the TCPA, presents a mixed question of law and

fact; thus, "[w]e accept facts as found by the trial court on some competent, credible

evidence, but freely review the application of the law to the facts." State v. Kist, 11th

3

Dist. No. 2006-G-2745, 2007-Ohio-4773, at ¶18, where we applied the mixed standard

of review where speedy trial issues were at issue. Under a mixed standard of review,

an appellate court will not disturb the trial court's findings of fact if the record contains

competent, credible evidence to support such findings. Stevenson v. Bernard, 11th

Dist. No. 2006-L-096, 2007-Ohio-3192, at ¶38. The underlying rationale in giving

deference to the trial court's findings of fact is that the trial court "is best able to view the

witnesses and observe their demeanor, gestures and voice inflections, and use these

observations in weighing the credibility of the proffered testimony." State, ex rel. Pizza

v. Strope (1990), 54 Ohio St.3d 41, 46, quoting Seasons Coal, supra. With respect to

the legal issues we employ a de novo standard of review. Bernard at ¶38.

{¶13} The Enactment of the TCPA and its Purpose

{¶14} On December 20, 1991 Congress enacted the TCPA in response to the

"abuses by the telemarketing industry," including the pervasive problems associated

with the receipt of unwanted telemarketing calls and the receipt of unsolicited faxes.

Sorkin, Unsolicited Commercial E-Mail and the Telephone Consumer Protection Act of

1991 (1997), 45 Buffalo L.Rev. 1001, at 1017. The Act, which stems from the

culmination of years of legislative proposals and hearings2 arose from an array of

complaints surrounding the "growing number of telephone marketing calls and certain

telemarketing practices thought to be an invasion of consumer privacy and even a risk

of public safety." Federal Communications Commission Report and Order In the Matter

of Rules and Regulations Implementing the Telephone Consumer Protection Act of

1991, 18 FCC Rcd. 14014, at 4-5. The TCPA addressed these concerns by imposing

2. The 101" and 102°d Congress considered several bills concerning telemarketing practices. The finalbill that became the TCPA combined parts of H.R. 1304, S. 1410 and S. 1462 that were before the 102ntlCongress.

4

restrictions on these telemarketing practices by limiting "the use of an automatic

telephone dialing systems, artificial and prerecorded messages, and telephone facsimile

machines to send unsolicited advertisements." Id. at 5.

{¶15} Prior to the Act's passage, Congress was made aware that "a 'festering

problem [had] arisen from the so-called 'junk fax' *** [and that] the 'proliferation of fax

machines has been accompanied by explosive growth in unsolicited facsimile

advertising, or 'junk fax."' Grady v. Lenders Interactive Svcs., 8th Dist. No. 83966,

2004-Ohio-4239, at ¶32-33. Specifically, Congress heard testimony where witnesses

warned of the potential for abuse regarding "junk fax" and the need to protect individuals

and businesses from receiving these unwanted faxes.

{¶16} Representative Edward J. Markey, who introduced the Facsimile

Advertising Regulation Act, the predecessor to the TCPA, expressed the overriding

concern and the problems inherent with the receipt of unsolicited advertisements sent

via the fax machine as follows:

{¶17} "Unsolicited advertising is beginning to clog fax lines, restricting the

owners' ability to use their machines for the purposes they originally bought them for

and generating operating costs the users can't control. Unlike junk mail, which can be

discarded, or solicitation phone calls, which can be refused or hung up, junk fax ties up

the recipient's line until it has been received and printed. The recipient's machine is

unavailable for business and he or she incurs the high cost for supplies before knowing

whether the message is either wanted or needed." 135 Cong. Rec. E 1462 (May 2,

1989, statement of Rep. Edward Markey, 101st Cong.) Representative Markey further

testified: "To quote an article from the Washington Post, 'receiving junk fax is like getting

junk mail with postage due.' Succinctly put, using a facsimile machine to send

5

unsolicited advertising not only shifts costs from the advertiser to the recipient, but

keeps an important business machine from being used for its intended purpose." 136

Cong. R. H 5818 (July 30, 1990), 1015t Cong. 2nd Sess., statement of Rep. Markey, p.

5).

{1f18} Thus, a major impetus behind Congress's decision to restrict unsolicited

advertisements sent by fax was "the fact that costs were being shifted from advertisers

to recipients" and that " [s]uch advertisements could tie up a machine when its owner

had a ' legitimate' use for it." Sorkin at 1018. In fact, Congress was warned that the

threat posed by the failure to regulate unsolicited advertisements was a potentially

massive one, because, according to research presented to the Congressional

subcommittee, "at least one fax advertiser could routinely send [] 60,000 fax

advertisements per week." Missouri v. American Blast Fax, Inc. (C.A. 8, 2003), 323

F.3d 649, 655. Furthermore, evidence presented to the 102"d Congress demonstrated

that "unsolicited fax advertisements can shift to the recipient more than one hundred

dollars per year in direct costs "" [and] that the costs and amount of interference

resulting from unrestrained fax advertising continue to be significant." Id.

{¶19} With these concerns in mind, Congress enacted the TCPA, which, under

former Section 227(B)(1)(C) of the Act, which was modified slightly with no substantive

changes3, makes it unlawful "to use any telephone facsimile machine *** to send an

unsolicited advertisement to a telephone facsimile machine **` unless the sender has

an established business relationship with the recipient or has " prior express invitation or

permission of the recipient" to receive the fax. Section 227(B)(1)(C), Title 47, U.S.

3. This lawsuit was filed on May 24, 2005 and the former version of the TCPA therefore applies.However, on July 9, 2005, the Act was modified. Included within the changes were amendments toparagraph (1)(C) .

6

Code.4 When a violation of the TCPA is found, the sender is fined a minimum of $500

for each violation. Section 227(b)(3)(B), Title 47, U.S. Code. Treble damages may be

imposed if the recipient can prove that the "defendant willfully or knowingly violated this

subsection or the regulations prescribed under this subsection, ""'." Id.

{¶20} Although the receipt of one "unsolicited advertisement" may violate the

TCPA, (see Reichenbach at ¶29), what Congress did not intend as a result of the

passage of the TCPA was the creation of a cottage industry for litigation. Nevertheless,

this is precisely what has transpired. "The private right of action and statutory damage

provisions of the TCPA have spawned an industry of junk fax litigation." Caswell,

Regulating Faxing Activity Under State and Federal Law (2005), 34 Colo. Law. 63, 65.

As one commentator has noted: " It seems that although Congress and the FCC were

not necessarily panning for gold when they passed the TCPA, plaintiffs may have a

different agenda." Carey, Fax Blasting at the OK Corral: Is the FCC Shooting from the

hip? (2005), 18 Loy. Consumer L.Rev. 1, 39. Particularly where class actions are

pursued successfully, junk fax suits have resulted in multi-million dollar verdicts. Id. at

40.

{¶21} What Constitutes an Unsolicited Advertisement Under the TCPA

{¶22} The TCPA defines "unsolicited advertisement" 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, in

writing or otherwise." Section 227(a)(5), Title 47, U.S. Code.

4. The July 2005 amendments were part of Congress's passage of the Junk Fax Prevention Act (JFPA),which inter alia codified the principle that unsolicited faxes could be sent if there was an establishedbusiness relationship and further provided that the recipient's prior express permission or invitation neednot be in writing. See Section 227, Title 47, U.S. Code.

7

{123} In this case, the trial court found that the faxed document was not an

advertisement because it "was sent for the purpose of exchanging information between

members of the Chamber of Commerce to network and develop a mutually beneficial

partnership. The essence of the document was not commercial in nature. It was

informational and descriptive, but it did not make qualitative statements or promote

defendant's services as one would generally find in a commercial solicitation or

marketing materials. The document was one which reflected a desire to network

businesses, consistent with a mission of the chamber of commerce, not to commercially

advertise defendant's services. The court cannot conclude that the facsimile is an

advertisement. Having found that the subject facsimile is not an 'advertisement,' it is

not necessary for the court to determine whether the facsimile was'unsolicited."'

{¶24} The sole issue before this court is whether there was competent, credible

evidence to support the court's conclusion that the faxed document was not an

"advertisement" under the TCPA's definition. PBI argues that the since the document is

commercial in nature, advertises the availability of Bryant & Stratton services, makes

quality statements about the benefits offered by the college, and contains qualitative

facts about the college, it is an advertisement. For support, PBI relies on Charvaf v.

Crawford, 155 Ohio App.3d 161, 2003-Ohio-5891 and Margulis v. P & M Consulting,

Inc. (2003), 121 S.W.3d 246. However, we find that these decisions are readily

distinguishable from the case at hand.

{¶25} In Crawford, the plaintiff received two phone calls at his residence from

the defendant company via a prerecorded message player. The content of the calls

asked the recipient if he or she would like to receive free information. The message

stated that the company was "looking for 25 people in the Columbus area to train" and

8

that individuals would have the ability to work at home and earn "up to five hundred to

twenty five hundred dollars a month without interfering with what you're presently

doing." Id. at ¶5. The trial court granted summary judgment in defendant's favor. The

Tenth District reversed on appeal. The court held that "a prerecorded message that

contains free offers and information about services and that asks the consumer to call a

toll-free number to learn more is an unsolicited advertisement under the TCPA if sent

without the called party's express invitation or permission." Id. ¶16.

{¶26} In the P & M Consulting decision, the plaintiff brought suit under the TCPA

after receiving from defendant company a prerecorded telemarketing call telling her that

she was eligible to receive complimentary vacation packages. The trial court granted

summary judgment in favor of the consumer. The court of appeals affirmed, finding that

"[t]he text here clearly falls within the type of messages the FCC wanted to prohibit in

amending 42 U.S.C. Section 227 to include 'telephone solicitations'; the call actually

describes a vacation destination and contains a purported 'free offer."' Id. at 251.

{¶27} In both the Crawford and P & M Consulting cases, the prerecorded

messages were telephone solicitations rather than transmitted faxes. It is important to

recognize that "the TCPA treats fax advertising differently than it does telemarketing

calls." 2004 FCC LEXIS 3184, at 3. With telemarketing calls, if a customer asks to be

placed on a "do not call" list the company must honor that request. With faxes,

"[n]either the statute nor the legislative history contemplates a mechanism for

[recipients] to 'opt out' of unwanted fax transmissions, as is the case with telemarketing

calls." Id.

{¶28} Regardless of this distinction, we still would find that the decisions relied

on by PBI are unpersuasive. The FCC has determined that with respect to telephone

9

solicitations, "the prerecorded message rule should not turn on the caller's

characterization of the call, but on the purpose of the message." Id., citing Rules and

Regulations Implementing the Tel. Consumer Prot. Act of 1991, Part II, 68 Fed, Reg. at

44162. The prerecorded messages in the Crawford and P & M Consulting cases were

delivered to the recipients in order to encourage them to purchase their services. In

contrast, the document faxed by Bryant & Stratton, which was directed only to Chamber

of Commerce members, including PBI, was not intended to commercially advertise the

college or to specifically have persons enroll in Bryant & Stratton. Rather, according to

the Bryant & Stratton employee who transmitted the fax, the fax was sent in order to

"develop relationships with businesses in the area." Although page two of the fax

contained factual information about the college, the letter (page one) explained Bryant &

Stratton's desire to "develop some type of mutually beneficial partnership, such as a

referral exchange, internships, graduate placement, or continuing education for your

employees

{¶29} The fact that PBI may have objected to the receipt of the fax in question

does not mean that the fax itself was an advertisement or a piece of "junk fax"

prohibited under the Act. The legislative history demonstrates that the TCPA was

passed in order to restrict the influx of unwanted junk fax, to reduce an advertiser's

ability to tie up a business owner's fax lines, and to prevent the advertising from

spreading the costs to the business owner. In essence, the Act was designed to ban

"nuisance faxes" and to stop "the junk advertiser [who] is a nuisance who wants to print

its [advertisement] on your paper ... [and] seizes your fax machine so that it is not

available for calls you want or need." American Blast Fax, Inc. at 655.

10

{¶30} When read in context, we find that the faxed document sent by Bryant &

Stratton differs from the genre of faxed documents the TCPA intended to ban. The

Bryant & Stratton fax was not a "junk fax" intended to promote and entice its recipient

into purchasing its product or service. Simply put, in contrast to those documents

clearly prohibited under the TCPA as unsolicited advertisements, the faxed document

here was not being sent as a mere solicitation "advertising the commercial availability or

quality of any property, goods, or services." Rather, the fax was an invitation from one

chamber member to another member who had voluntarily supplied its fax number to all

other chamber members through the directory to exchange mutually beneficial

information which in the parlance of modern-day business-speak means "networking."

{¶31} Therefore, we conclude that the faxed document was not the type of fax

the TCPA was intended to prohibit. As evidenced from the legislative intent, the Act

was designed to ban junk faxes, not to encourage a cottage industry to encourage

overly zealous litigants or their attorneys from profiting from the unintended

consequence of the Act. Consequently, based upon the evidence presented, including

the fax itself and the underlying circumstances surrounding its transmission, we find that

there was competent credible evidence to support the trial court's conclusion that the

document was not an "advertisement" for purposes of the TCPA.

{¶32} We overrule PBI's assignment of error.

{133} The judgment of the Lake County Court of Common Pleas is affirmed.

CYNTHIA WESTCOTT RICE, P.J., concurs,

DIANE V. GRENDELL, J., concurs in judgment only.

11

STATE OF OHIO ))SS.

IN THE COURT OF APPEALS

COUNTY OF LAKE

RAYMOND OMERZA,

) ELEVENTH DISTRICT

Plaintiff,

PHILLIP BERARDINELLI, INC.,

Plaintiff-Appellant,

-vs-

BRYANT & STRATTON,

Defendant-Appellee.C-LspK dv^ 44UFCT

LAKE CCUN'FY1 OHIO

JUDGMENT ENTRY

CASE NO. 2006-L-092

S.^=p °p 8 21107

- I.YNNLz L.

For the reasons stated in the opinion of this court, appellant's assignment

of error is without merit. It is the judgment and order of this court that the

judgment of the Lake County Court of Common Pleas is affirmed.

CYNTHIA WESTCOTT RICE, P.J., concurs,

DIANE V. GRENDELL, J., concurs in judgment only.

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