Those Fax Charges Can Add Up

Given the dinosaur-like status of the fax, it was a surprise that there were two North Carolina decisions last week, one from the Court of Appeals and one from the Business Court, that involved faxes. The appellate decision is a class action case; the Business Court decision addressed the more mundane subject of how much a law firm can charge for sending a fax.

The COA decision, Blitz v. Agean, Inc., involved the Telephone Consumer Protection Act.  That federal legislation was enacted 18 years ago, when fax machines were a routine means of communication.  The TCPA outlawed the annoying practice of sending unsolicited fax advertisements.  It imposed penalties of $500 per unsolicited fax, allowed for attorneys' fees, and immediately attracted class action lawyer like moths to a flame.

The Blitz case was a purported class action on behalf of 900 individuals who had received multiple faxes from the defendant, a restaurant operator in Durham.  The Business Court had dismissed the case in a 2007 ruling, holding that individual inquiries of whether the recipients had consented to the receipt of the faxes, and whether there was a "established business relationship" between the faxer and the faxees, would predominate over the common issues.  Judge Diaz also ruled that the claims were better brought in small claims court.

The Court of Appeals reversed, ruling that the need to determine consent wasn't determinative, and that the decision on whether a TCPA class action should proceed should be made on a case by case basis.  On the point about small claims court, the appellate court said that there were circumstances under which a class member's claims might exceed the $5,000 limit of small claims jurisdiction, and that the small claims court didn't have the power to enter the injunctive relief permitted under the TCPA and requested by the Plaintiff.

The other fax related ruling last week, Estwanik v. Gudeman, was a Business Court decision on a completely different subject.  The issue was a receiver's application for fees.  The application included a charge of $301 for faxes, which was attributable to 301 pages faxed by the receiver's counsel to a lawyer in response to three subpoenas. 

The receiver's counsel had asked to send the 301 pages by email, but the lawyer requesting them had insisted on getting them via fax, the same day that the subpoenas were served.  The receiver's law firm apparently charged its standard $1.00 per page fax charge. Judge Diaz rejected the $1.00 per page fee, said it was "exorbitant," and ruled that the receiver should collect it from the attorney who sent the subpoena.

Can a lawyer charge $1.00 per page for a fax?  Maybe.  This type of charge is covered in ABA Formal Opinion 93-379 (titled Billing for Professional Fees, Disbursements and Other Expenses).  The Opinion doesn't address fax charges specifically, but says the following about the allowable charge for copying by a law firm: "no more than the direct cost associated with the service (i.e., the actual cost of making a copy on the photocopy machine) plus a reasonable allocation of overhead expenses directly associated with the provision of the service (.e., the salary of a photocopy machine operator).

The ABA Opinion goes on to say "it is impermissible for a lawyer to create an additional source of profit for the law firm beyond that which is contained in the provision of professional services themselves.  The lawyer's stock in trade is the sale of legal services, not photocopy paper, tuna fish sandwiches, computer time or messenger services."

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Russ - June 9, 2009 11:57 PM

"The Court of Appeals reversed, ruling that the need to determine consent wasn't determinative, and that the decision on whether a TCPA class action should proceed should be made on a case by case basis."

They probably took into account all the relevant fax...

(smile)

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