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 user 2009-09-01 at 10:06:52 am Views: 139
  • #22550

    In $2.9 Million ‘Blast Fax’ Settlement, Plaintiffs Get Coupons and Lawyers Get Cash
    Business service and supply giant Pitney Bowes has agreed to settle a “blast fax” class action by giving $26 coupons to plaintiffs for each week they received an unwanted fax — and $950,000 to the lawyers for the class.The $2.9 million settlement ends a case originally filed in Cobb County, Ga., before being transferred to federal court. It began with Pitney Bowes’ 2007 purchase of the corporate assets of Laser Life, a Marietta, Ga.-based supplier of toner and other printer products, according to court filings.Among those assets was Laser Life’s client list, which included more than 3,000 fax-machine numbers the company used to advertise its products. When Pitney Bowes assumed the operation, it began sending out promotional advertisements for its products to those numbers, according to the original complaint.

    Among the recipients was attorney Martin K. O’Toole, a partner in Marietta’s Griffin & O’Toole, who began receiving the faxes in August 2007. In November, Decatur, Ga., attorney Henry A. Turner and Birmingham, Ala., lawyer Samuel M. Hill — who specialize in suits alleging violations of the Telephone Consumer Protection Act of 1991 — filed suit against Pitney Bowes, seeking class status with O’Toole as the class representative.Under the TCPA, a fax advertisement may be mailed only with the permission of the recipient, or if there is an existing business relationship, or EBR, between the sender and the recipient.”Their argument was that they had bought the assets and customer list of [Laser Life], and that therefore they had an EBR with everybody on that list,” said Turner.

    But, he said, the 2005 Junk Fax Prevention Act included a provision barring the transfer of EBRs.”We argued that EBRs cannot be assigned,” he said. “If they’d bought the stock of the company, that might have offered some protection … but all they bought were the assets.”There was also a problem with the mandatory “opt-out” notice, he said, which must conform to very specific guidelines, including prominent type and placement, a notice that the fax sender must comply with an opt-out request within 30 days of the request, and the inclusion of both a 24-hour opt-out telephone number and fax number. The faxes in question included an opt-out number, but it was in small type and simply read: “To be removed please call” a 1-800 number and extension.

    The parties agreed to voluntary mediation, and after two days of “some of the most intense mediation I’ve been through,” said Turner, settlement was reached under which each member of the class will receive a coupon worth $26 toward any $100 purchase of ink or toner from Pitney Bowes for each week they received one of the faxes, with a $2 million cap on redeemed coupons.Along with Turner and Hill’s $950,000, the order, signed on Aug. 3 by U.S. District Judge Harold L. Murphy, also guarantees O’Toole, as class representative, $5,000.

    Under the terms of the settlement, Pitney Bowes admitted to no wrongdoing.
    Pitney Bowes was represented by Robins, Kaplan, Miller & Ciresi partners Lisa L. Heller and Marla R. Butler and associates Meredith H. Ragains and Jennifer A. Adler. Neither Heller nor Butler responded to requests for comment, and Pitney Bowes spokeswoman Carol Wallace said that the company would have no comment.Nor could she comment on another case stemming from Pitney Bowes’ apparent efforts to recoup its expenses elsewhere. According to a suit originally filed in Fulton County then transferred to federal court, the company claims that the former owner of Laser Life, Bob N. Fox, breached the terms of the $12 million sale of his company’s assets by not disclosing that, several months before closing the deal, his company had itself violated the TCPA and been notified that a complaint might follow.

    The company is seeking $3 million in damages.
    The suit was filed by Fox when Pitney Bowes attempted to recover more than $800,000 in an escrow fund set up as part of the Laser Life sale, asserting that Fox owed the company for its losses resulting from the O’Toole settlement.”It is ironic that Pitney Bowes seeks to recover from Mr. Fox amounts which Pitney Bowes paid to settle claims which it has consistently asserted have no basis as a matter of law,” said attorney William B. Ney, who is representing Fox along with Theodore A. Erck Jr.

    While it’s true that Fox settled what Ney termed a “nuisance TCPA claim” prior to his company’s sale, the O’Toole claims all occurred afterward, said the lawyer.”The O’Toole Plaintiffs never alleged that Mr. Fox or his company had violated the TCPA in any way,” Ney said via e-mail. “Pitney Bowes never tendered the defense of the O’Toole case to Mr. Fox and never notified Mr. Fox of its contention that the O’Toole claims were indemnifiable until the eve of settlement — after Pitney Bowes had litigated the case for over a year.”The settled case is O’Toole v. Pitney Bowes, No. 1:08-cv-01645. The pending case is Fox v. Pitney Bowes, No. 1:09-cv-01028.