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Update on California Fax Law Case and Child Registry Laws

District Court Ruling on California Fax-Ban Law
On February 27th, the United States District Court for the Eastern District of California in a declaratory judgment upheld the California Fax Ban Law (SB 833) as it applies to intrastate commerce but found that federal law preempted its applicability to interstate commerce.  In reaching its decision, the court relied on the specific language set out in the Federal Communications Act, the Telephone Consumer Protection Act, and the Junk Fax Protection Act (JFPA).

The California law attempts to afford consumers with greater protection than the federal laws in two significant ways:  it eliminates the established business relationship (EBR) exemption, and it requires that the consumer affirmatively opt-in by “express invitation or permission” prior to the receipt of any unsolicited transmitted advertisement.

In reaching its conclusion, the Court applied the Federal Communications Act, finding no presumption against preemption and noting that there is a significant amount of federal legislation on interstate telecommunications, including unsolicited facsimile advertisements.  Moreover, the Court noted that while Congress included a savings clause stating that nothing shall preempt a state law from imposing more restrictive intrastate requirements, there was no such comparable reference to interstate commerce.  Additionally, with the enactment of the JFPA, Congress made its intention clear that its purpose was to retain the EBR exemption and the California law essentially abolishes that requirement.  Accordingly, with respect to interstate commerce, the federal law would apply.

In applying federal legislation to interstate faxes, consumers are still protected and have the ability to “opt-out” of receiving unsolicited facsimile advertisements.  And, at least in California, if faxes are sent within the state, a marketer must have the express permission of the recipient prior to faxing.

The Court’s ruling on the issue is clear; however, the state of California may well appeal the district court decision to the 9th Circuit.  Moreover, the debate as to whether interstate transmitted advertisements should be governed by state or federal law is likely to continue.  State Attorney General offices and plaintiffs will seek to enforce state telemarketing laws while trade groups will push for governance of interstate transmission of facsimile advertisements by federal law.

Update on Utah’s Child Registry Law
Utah’s legislature has passed amendments to Utah’s Child Protection Registry Act (H.B. 417).  The bill is currently awaiting signature by the Governor.  If signed, the amendments would go into effect this May.

The amendments expand the definition of contact point to include “mobile or other telephone number”; allow the registration of a contact point if used in a household in which a child is a minor; permit the transmission of a communication to a minor so long as the adult who controls the contact point first provides signed consent, and reclassify the theft of a contact point as a second degree felony.

The real purpose behind the amendments is to enhance awareness of the registry, which after 6 months has reportedly just 2000 names, and to encourage compliance. The bill allows for the implementation of a discounted compliance fee program to senders who meet “enhanced security conditions” and public disclosure of any complaints filed about a sender.  The bill also requires that the state promote the registry on its official website.  Finally, the bill allows for the third party registry to assist in any awareness campaign.

State Child Registry Laws
While Michigan is the only other state that has actually enacted a registry law, six other state legislatures have proposed bills on the table.  If enacted, these six states – Connecticut, Georgia, Hawaii, Illinois, Iowa, and Wisconsin – will have laws that may be signed by the end of 2006.

This client alert is a publication of Loeb & Loeb and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.

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