Ad groups should be vigilant in defending the right to fax

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While advertising trade groups were protecting the First Amendment rights of tobacco companies, a regional restaurant group was forced into bankruptcy because it sent out faxes with free coupons to prospective customers. The faxes, going to thousands of people in the Augusta, Ga., area, were unsolicited and attracted the ire of a local man. He instigated a class-action lawsuit against the advertiser, Hooters of Augusta restaurants. A jury ruled the faxes violated a federal law, the Telephone Consumer Protection Act of 1991, which prohibits sending ads by fax without the recipient's permission.

How could Congress pass such a clearly unconstitutional law? Couldn't it easily be struck down, especially after the U.S. Supreme Court last month reaffirmed the free-speech rights of tobacco advertisers in Massachusetts? While the Supreme Court's decision in the Massachusetts case might lessen the threat of ad curbs on alcoholic beverage and drug ads, the Hooters case, if unchecked, could apply to unsolicited e-mail ads and even TV commercials (viewers don't ask to see those ads, either).

You might argue this line of thinking carries the "slippery slope" theory too far. But nothing is too far for class-action lawyers out to make a buck on the slightest inconvenience imposed on "aggrieved" litigants. In the Hooters case, by the way, a jury awarded $12 million, forcing Hooters of Augusta to seek protection in bankruptcy.

What apparently swayed the jury was the plaintiffs' lawyers wheeling into court 42 reams of paper, representing the amount of recipients' paper consumed in printing the Hooters fax ad. Never mind that the fax to each recipient consumed one sheet of paper. I can visualize some lawyer making a similar case on behalf of millions of viewers of an unsolicited TV commercial, arguing the viewers were all forced to consume extra electricity to receive the commercial.

After reading about the Hoot-ers case in The New York Times, I imagined advertising trade associations would be jumping up and down in righteous indignation, as they did over the right of tobacco companies to engage in protected commercial speech. Jeff Perlman, exec VP of the American Advertising Federation, acknowledged the Hooters case was "kind of outrageous." What, he asked, were the damages to the people who received the fax? "It was a miniscule imposition," he said.

Jeff said the 9th U.S. Circuit Court of Appeals concluded, in a case a few years ago involving a travel agency called Destination Ventures, that commercial speech couldn't be protected if the cost of that speech was shifted to an unwilling audience. Since the advertising trade groups don't take a stand on issues until they get to the U.S. Supreme Court, they didn't protest when the 9th Circuit upheld the verdict against Destina-tion Ventures.

When Congress passed the anti-fax law, Jeff said, advertising trade groups lobbied against it. "The simple answer is we lost," he said. At the time junk faxers were an inviting target, he explained, because they were bombarding fax-machine owners with unwanted messages.

But Jeff is of the opinion that business faxes often deliver "valuable commercial information," and that the federal fax ad law "denies the opportunity to receive speech that has real value" to the recipient.

If the Hooters decision ever gets to the Supreme Court (Hooters has appealed the jury award), he said the adverting trade groups "would be far more interested in the case" and would probably file briefs supporting the right to send out fax advertising.

I got the idea Jeff and the AAF don't think it will get that far, and that probably there won't be more cases of this nature. So nobody seems very concerned.

My take is that, while it's necessary to defend the rights of the tobacco companies (if only because advertising for other "sin" products could be vulnerable), far more advertisers are affected by the anti-fax legislation. For some, it's probably the only advertising they can afford.

The advertising associations should find a way to let the ad community (both big and small spenders) know that the right to send out coupons and other material by fax is at least as important as the cigarette companies' right to advertise even when kids are sometimes exposed to their messages.

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