A Check in the Mail Doesn't End a Junk Fax Case: Bais Yaakov v. ACT

That school, Bais Yaakov of Spring Valley, sued on behalf of a class of fax recipients. ACT estimated statutory damages could exceed $400 million. The First Circuit opened its opinion by saying Bais Yaakov had pursued ACT "with a zeal that would impress even Hugo's Inspector Javert."

Eight years later, in Bais Yaakov of Spring Valley v. ACT, Inc., No. 20-1537, 12 F.4th 81 (1st Cir. Aug. 30, 2021), the U.S. Court of Appeals for the First Circuit handed down a split decision. Judge Kayatta wrote it, joined by Judges Lynch and Barron.

Ruling 1: No opt-out notice needed on faxes people asked for

Federal Communications Commission (FCC) rules used to require an opt-out notice even on faxes people had invited. The court agreed with the D.C. Circuit that the regulation was invalid. The Telephone Consumer Protection Act (TCPA) only requires opt-out notices on unsolicited fax ads. The FCC has since rescinded the regulation.

Ruling 2: No class, because consent varies school by school

Here's the thing. Bais Yaakov had filled out an ACT form back in 2005, gave its fax number and checked a box asking for ACT publications. Many other schools had done the same.

ACT brought in declarations from seventy-eight schools. They said the faxed materials were "integral to" their work with ACT and that ACT "would have had permission" to fax that kind of information. Out of thousands of schools, Bais Yaakov was apparently the only one to complain.

The court was careful here. Silence is not express permission. But all that evidence meant that figuring out who actually consented would take a school-by-school look. Bais Yaakov didn't offer any practical way to sort that out. The court affirmed the denial of class certification.

Judge Barron wrote a concurrence. He agreed but stressed that the court's precedent still leaves room to certify classes even when proof is individualized.

Ruling 3: A check is not a payment

After the class was denied, ACT sent Bais Yaakov a check for the most it could recover. ACT called the payment "unconditional and irrevocable." It also promised not to send any more faxes that violate the TCPA. Bais Yaakov declined the check and the district court dismissed the case as moot.

The First Circuit vacated that dismissal. Under the Supreme Court's Campbell-Ewald decision, an unaccepted settlement offer is "a legal nullity." The court said a mailed check isn't much different. Bais Yaakov had a promise, not money. As the court noted, "There's many a slip 'twixt the cup and lip."

So the damages claim stays alive. The request for an injunction didn't survive, though. ACT hadn't faxed the school since 2012, deleted the number and admitted any more faxes would make it liable.

Why should you care?

Two big lessons.

First, consent records are your best defense against a fax class action. ACT prevailed on class certification because schools had sought publications and provided fax numbers.

Second, you can't make a case go away by mailing a check. Want to end an individual claim? Talk to your lawyer about real payment options, not a check in an envelope.

What to do this week

• Keep your consent forms. The 2005 form mattered in 2021.
• Match what you send to what people asked for.
• Put opt-out notices on your fax ads anyway. They're cheap insurance.
• Don't assume a settlement check ends the case.

Read the First Circuit's opinion in Bais Yaakov v. ACT.