Violations of statutes such as the Controlling the Assault of Non-Solicited Pornography and Marketing Act (“CAN-SPAM”) or the Telephone Consumer Protection Act (“TCPA” or “Blast-Fax”) generally cause minimal actual damages, and the individually recoverable statutory awards are relatively small; however, when such violations are aggregated into class actions for thousands of violations, the potential damages can be enormous.

The Telephone Consumer Protection Act (TCPA), also referred to as “the Blast-Fax law,” prohibits the use of automatic dialing machines or prerecorded messages to make unsolicited calls, as well as the sending of unsolicited advertisements to fax machines. 47 U.S.C § 227. The act provides a private right of action to recipients of prohibited calls or faxes. In such an action, the recipient can recoup the greater of either the amount of any actual monetary loss or $500 for each violation. Where the defendant “willfully and knowingly” violates the act, the court can, at its discretion, increase the award up to three times the amount otherwise available.

Class actions under the TCPA have resulted in multi-million dollar awards and settlements. As an example, a class action brought by recipients of unsolicited faxed advertisements from a Hooters restaurant in Georgia resulted in a jury award of nearly $12 million. Hooters of Augusta, Inc. v. American Global Ins. Co., 272 F.Supp.2d 1365, 368 (S.D.Ga. 2003). That case later settled for $9 million. Courts in several jurisdictions have already addressed TCPA claims in opinions with varying results. TIG Ins. Co. v. Dallas Basketball, Ltd., 129 S.W.3d 232 (Tex. Ct. App. 2004), reh’g denied, April 4, 2004, pet. for rev. denied, February 11, 2005, pet. for reh’g of pet. for rev. filed, February 28, 2005; American States Ins. Co. v. Capital Assoc. of Jackson County, 392 F.3d 939 (7th Cir. 2004), pet. for reh’g denied, January 11, 2005.

The Controlling the Assault of Non Solicited Pornography and Marketing Act, or CAN-SPAM Act, became effective in January 2004. 18 U.S.C. § 1037, 15 U.S.C. §§ 7701-7713. The act prohibits: (1) accessing another’s computer without authorization and transmitting e-mail messages from or through it; (2) accessing another’s computer to send e-mail messages so to deceive recipients about the true sender; (3) falsifying the header information in commercial e-mails; (4) registering five or more e-mail accounts or two or more domain names “using information that materially falsifies the identity of the actual registrant” and initiating multiple commercial messages from those accounts or domain names; and (5) falsely representing oneself to be the registrant on five or more Internet Protocol Addresses and initiating commercial e-mail from them. The act also sets out specific requirements for commercial e-mail advertising designed to ensure that the true sender of the e-mail is identified, that the e-mail is clearly marked as an advertisement, that the subject header is not misleading and that consumers can opt-out of receiving future e-mails. CAN-SPAM authorizes criminal fines and jail time for violators. States can enforce the act against violators through civil actions.