GORSS MOTELS, INC., a Connecticut corporation, individually and as the representative of a class of similarly situated persons, E&G, INC., a West Virginia corporation, individually and as the representatives of a class of similarly situated persons, Plaintiffs - Appellants,
SAFEMARK SYSTEMS, LP, Defendant-Appellee.
Appeals from the United States District Court for the Middle
District of Florida D.C. Docket No. 6:16-cv-01638-GAP-DCI
WILLIAM PRYOR, NEWSOM, and BRANCH, Circuit Judges.
WILLIAM PRYOR, CIRCUIT JUDGE
consolidated appeal requires us to decide whether, under the
Telephone Consumer Protection Act, 47 U.S.C. § 227, a
fax recipient provided prior express permission to receive
faxes from a sender and, if so, whether the faxes needed to
contain opt-out notices under an agency regulation. Gorss
Motels, Inc., and E&G, Inc., operate hotels as
franchisees of Wyndham Hotel Group. In their franchise
agreements, the hotels agreed that Wyndham affiliates could
offer assistance with purchasing items for their hotels and
provided their fax numbers. Safemark Systems, a Wyndham
affiliate that provides safes to franchisees, sent two faxes
to franchisees, including Gorss and E&G. The hotels filed
a complaint against Safemark on behalf of a putative class
alleging that the faxes violated the Act, which makes it
unlawful to send certain unsolicited fax advertisements. The
district court denied class certification and concluded that
the solicited-fax rule, a regulation of the Federal
Communications Commission that required solicited faxes to
include compliant opt-out notices, 47 C.F.R. §
64.1200(a)(4)(iv) (effective until March 19, 2019), was
invalid. The district court later granted summary judgment to
Safemark. It ruled that the faxes did not violate the
prohibition on unsolicited faxes because the hotels had
provided prior express permission to receive faxes from
Safemark in their franchise agreements. And the district
court reiterated that, because the faxes were solicited, they
did not need to contain compliant opt-out notices. While
these appeals were pending, the Commission eliminated the
solicited-fax rule in the light of our sister circuit's
decision that the rule is invalid, see Bais Yaakov of
Spring Valley v. Fed. Commc'ns Comm'n, 852 F.3d
1078 (D.C. Cir. 2017), cert. denied 138 S.Ct. 1043
(2018). Because we agree that the faxes were solicited and
need not have contained opt-out notices, we affirm.
Motels and E&G operate hotels as franchisees of Wyndham
Hotel Group. To become Wyndham franchisees, both hotels
executed franchise agreements, which required them to
maintain Wyndham's standards at their hotels. Those
standards included that the hotels must purchase or obtain
certain items only from suppliers that Wyndham approved. In
section 4.4 of the franchise agreement, the hotels agreed
that Wyndham "may offer optional assistance to [them]
with purchasing items used at or in the Facility." And
the hotels agreed that Wyndham's "affiliates may
offer this service on [its] behalf." The hotels provided
their fax numbers in a later section of the agreement. Over
their years as Wyndham franchisees, the hotels also provided
their fax numbers on several "Contact Information"
assist its franchisees with purchasing items for their
hotels, Wyndham facilitated the "Approved Supplier
Program" through its wholly owned subsidiary Worldwide
Sourcing Solutions. The Approved Supplier Program benefits
franchisees by identifying suppliers with products that
conform to Wyndham's standards and by obtaining
competitive pricing on those products. Franchisees receive
communications about suppliers in the program from Wyndham.
And at Wyndham's annual conference, which franchisees
attend, approved suppliers set up booths to promote their
products. Gorss and E&G registered for these conferences
and again provided their fax numbers on their registration
who are part of the Approved Supplier Program have access to
the franchisees. To participate in the program, suppliers are
required to pay a fee, part of which creates a marketing fund
that each supplier may use for various marketing
opportunities directed at the franchisees. Suppliers also
gain access to a database containing the franchisees'
contact information. The database included the fax numbers of
Gorss and E&G.
a company that manufactures, leases, and sells safes, was an
approved supplier of safes for Wyndham franchisees. In 2013,
Safemark hired a fax broadcasting company to send a one-page
fax to the franchisees using the contact information from the
Approved Supplier Program's database. The 2013 fax
advertised Safemark's safes and promoted its booth at an
upcoming Wyndham conference. It contained no notice of how a
recipient could opt out of receiving future faxes from
Safemark. The 2013 fax was transmitted to 7, 402 recipients,
the end of 2015, Desiree Rico, a Worldwide Sourcing marketing
manager, emailed Michele Anderson, Safemark's contracts
manager, to inquire whether Safemark would like to spend the
remainder of its marketing fund for that year. Rico suggested
several marketing options, including an upcoming fax blast to
Wyndham franchisees and banner advertisements on the Wyndham
franchisee website. Anderson forwarded the email to Nancy
Wright, the Safemark Vice President of Sales. Wright later
recalled speaking to Anderson about the fax blast and
"probably said fine." Anderson responded to
Rico's email by requesting that the banner ads redirect
users who click them to a specific page on Safemark's
website, but she did not mention the fax blast. The next day,
Rico sent Anderson an email confirming that the fax blast
would occur the first week of December and attached a copy of
the Safemark fax.
the first week of December 2015, Worldwide Sourcing sent a
five-page fax to the franchisees promoting the products of
several approved suppliers, including Safemark. Each page of
the fax promoted a different supplier's product. The
bottom of each page contained an opt-out notice with a
Wyndham email and phone number. The 2015 fax was transmitted
to 3, 328 recipients, including Gorss and E&G.
filed a complaint, which E&G later joined, against
Safemark alleging that the 2013 and 2015 faxes violated the
Telephone Consumer Protection Act, 47 U.S.C. § 227.
After discovery ensued, the hotels moved for certification of
two classes, one for recipients of the 2013 fax and one for
recipients of the 2015 fax. To satisfy the requirement for
class actions that common questions predominate, see
Fed. R. Civ. P. 23(b)(3), the hotels argued that the question
whether the faxes contained deficient opt-out notices was
common to the class. The hotels contended that, regardless of
whether the faxes were unsolicited or solicited, they
required compliant opt-out notices because the Act requires
an opt-out notice on unsolicited faxes, 47 U.S.C. §
227(b)(1)(C), (b)(2)(D), and a regulation from the Federal
Communications Commission known as the "solicited-fax
rule" required the same opt-out notice on solicited
faxes, 47 C.F.R. § 64.1200(a)(4)(iv) (effective until
March 19, 2019). After Gorss filed its complaint, Safemark
petitioned the Commission for a retroactive waiver of the
solicited-fax rule for its faxes. See Petition of
Safemark Systems, LP for Retroactive Waiver of 47 C.F.R.
§ 64.1200(a)(4)(iv), CG Docket Nos. 02-278, 05-338
(filed Oct. 6, 2016).
district court denied class certification. It ruled that
common questions did not predominate because it would be
required to conduct individual inquiries into whether each
fax recipient had given permission for Safemark to send the
faxes-that is, whether the faxes were solicited. The district
court rejected the hotels' argument that, even if the
faxes were solicited, the solicited-fax rule required them to
contain compliant opt-out notices. The district court relied
on a decision from the District of Columbia Circuit holding
that the solicited-fax rule was unlawful, see Bais
Yaakov, 852 F.3d 1078. "Without determining whether
Bais Yaakov is binding in this Circuit," the
district court found "the opinion to be persuasive"
and declined to apply the solicited-fax rule to
Safemark's faxes-that is, if the faxes were solicited,
the district court concluded that Safemark's faxes need
not have contained opt-out notices. "Given that the
Solicited Fax Rule d[id] not apply, and the issues of consent
[could not] be resolved without individualized inquiry,"
the district court ruled that common questions did not
predominate and so class certification was inappropriate.
granted the hotels permission to appeal the denial of class
certification. But the district court denied the hotels'
motion to stay the proceedings while its interlocutory appeal
was pending. Both parties moved for summary judgment.
the Commission issued an order eliminating the solicited-fax
rule. See Order, Petitions for Reconsideration
and/or Declaratory Ruling and Retroactive Waiver of 47 C.F.R.
§ 64.1200(a)(4)(iv) Regarding the Commission's
Opt-Out Notice Requirement for Faxes Sent with the
Recipient's Prior Express Permission, 33 FCC Rcd.
11179, 11179 (Nov. 14, 2018) [hereinafter Elimination Order].
In the same order, the Commission "dismiss[ed] as moot
the ten pending petitions for retroactive waiver," which
included Safemark's petition. Id. at 11183;
see also id. at 11182 n.21 (listing pending
petitions). The elimination of the solicited-fax rule would
become effective when it was published in the Federal
Register. Id. at 11184.
next day, the district court granted summary judgment to
Safemark and denied the hotels' motion. It ruled that the
faxes were solicited and so not subject to the Act because
the hotels had given their prior express permission to
receive faxes from Safemark. It reasoned that the hotels had
given their permission by agreeing in their franchise
agreements that Wyndham and its affiliates could contact them
about purchasing items for their hotels and by providing
their fax numbers to Wyndham in the franchise agreements and
on several other occasions. And the district court relied on
its earlier ruling that solicited faxes do not require
hotels appealed the summary judgment, and we consolidated
that appeal with the earlier appeal of the denial of class
certification. While the hotels' appeals were pending,
the Commission's order eliminating the solicited-fax rule
was published in the Federal Register and so became
effective. See Rules and Regulations Implementing the
Telephone Consumer Protection Act of 1991: Regarding the
Commission's Opt-Out Notice Requirement for Faxes Sent
With the Recipient's Prior Express Permission, 84
Fed. Reg. 10266, 10266 (FCC Mar. 20, 2019).
STANDARD OF REVIEW
"review de novo summary judgment rulings and
draw all inferences and review all evidence in the light
most favorable to the non-moving party." Freixa v.
Prestige Cruise Servs., 853 F.3d 1344, 1346 (11th Cir.
2017) (quoting Craig v. Floyd County, 643 F.3d 1306,
1309 (11th Cir. 2011)). Summary judgment is appropriate
"if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment
as a matter of law." Fed.R.Civ.P. 56(a).