An Illinois federal court held a corporate officer liable for millions of dollars in damages under the Telephone Consumer Protection Act (TCPA). This case exemplifies the personal liability corporate executives face when violating the TCPA.

Physicians Healthsource, Inc. vs. A-S Medication Solutions LLC

In 2012, the plaintiff, Physicians Healthsource, Inc. (PHI), filed a suit against A-S Medication Solutions LLC (ASMS) claiming that the company violated TCPA rules by faxing unsolicited advertisements to them. Further, PHI sought to hold the CEO of PHI, Walter Hoff, personally liable by faxing an advertisement to recipients without their prior express consent.

This alleged violation occurred after a sale of assets in 2009 when ASMS acquired a piece of a medication dispensing company called Allscripts. They claim that Allscripts only possessed fax numbers of customers who permitted contact and provided testimony which demonstrated the policy Allscripts had used to obtain said permission.

In 2010, an ASMS marketing employee directed another worker to send fax advertisements to the 15,666 numbers in Allscript’s database. The direction was given via an email that claimed the CEO said the distribution was “Good to Go!”. Later, the employee testified that Hoff instructed her what the fax should say and that it was then delivered successfully to 11,422 fax numbers, of which PHI was a recipient.

ASMS never received permission from the recipients of this fax, and CEO Hoff said that he believed “A-S Medical Solutions didn’t need to. We were part of Allscripts’ joint marketing arrangement.” PHI sued for a summary judgment on liability for both ASMS and Hoff which were both granted by U.S. District Judge Matthew F. Kennelly of the Illinois Northern District Court.

What Types of Faxes are Permitted Under the TCPA?

First, Judge Kennelly found the fax was an advertisement since it referenced “The A-S Medication Solutions Quality Service Guarantee” and described “the quality and value of the sender’s products and services,” which made it “unquestionably an advertisement.” After applying the preponderance of the evidence standard, the judge found that ASMS did not meet it. The defendants’ argument that they had permission because Allscripts was part of their company and obtained it on their behalf was a failure because even if that were valid, they still didn’t prove Allscripts got permission prior to sending the fax.

The court said that “A-S Solutions concedes that it never obtained prior express permission to send faxed advertisements. Rather, it relied on whatever Allscripts had done before. But there is no indication that Allscripts ever attempted to document, contemporaneously or otherwise, whatever permissions it claimed to have obtained. Perhaps just as importantly, A-S Solutions has not pointed in its brief to any evidence that it did any real due diligence on this point at the time it purchased Allscripts’ business other than simply taking Allscripts’ word for it.”

When making the same decision about Hoff’s personal liability, Judge Kennelly quickly used the same reasoning. ASMS testified that Hoff told them what to write in the fax, and then authorized an employee to distribute it. Further, there was no disputing the evidence once Hoff’s testimony said the same. Hoff testified that he “approved” sending the fax, leaving no dispute as to his direct, personal participation in authorizing it.

Hoff attempted to argue that an officer’s liability would only involve knowingly or willfully committing the violation, but the court didn’t agree and found him personally liable for violating the TCPA. The response given said “Neither the TCPA nor the common law requires knowing or willful violations of the TCPA as a prerequisite to officer liability. Direct participation or authorization is sufficient.”

The Lesson of this Case

This case highlights how quickly the court sided with the plaintiffs in finding a company’s CEO personally liable in a TCPA case. The damages that Hoff could potentially pay for illegally sending some 11,422 faxes could be anywhere from $5.7 million to upwards of $17 million if figured under the TCPA. For future defendants in such cases, there is no bearing if the officer was aware or not of violating the TCPA. This lesson teaches an important lesson about compliance and how businesses must consider working with a reputable TCPA legal team when deciding on how to approach marketing communications to consumers.

It’s also a valuable lesson to consumers about their rights and a court’s attitude towards companies violating the TCPA with or without knowledge of the guidelines.

TCPA Attorneys in Florida

If you are receiving unsolicited calls and communication from companies that you believe violate the TCPA, contact a reputable TCPA attorney as soon as possible. The Law Offices of Jibrael S. Hindi focuses exclusively on consumer protection in the state of Florida.  

At our law office, our experience in protecting consumers from harassing phone calls and robocalls will allow us to put up a fight. Under the Telephone Consumer Protection Act (TCPA), you may be entitled to up to $1,500 per call or text. Contact us today, and we’ll help you stop the harassing phone calls now. You don’t pay anything unless we recover.

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