Gorss Motels, Inc. v. Safemark Systems, LP
931 F.3d 1094
| 11th Cir. | 2019Background
- Gorss Motels and E&G operated Wyndham franchise hotels and, in franchise agreements, agreed that Wyndham and its affiliates could offer assistance with purchasing items and provided their fax numbers.
- Wyndham’s Approved Supplier Program gave approved suppliers (including Safemark) access to a franchisee contact database and marketing opportunities.
- Safemark (an approved supplier) sent a 2013 unsolicited advertising fax (no opt-out) and participated in a 2015 multi-supplier fax (which included an opt-out contact for Wyndham).
- Hotels sued Safemark under the TCPA (47 U.S.C. § 227) alleging unlawful unsolicited fax advertisements; district court denied class certification and later granted summary judgment for Safemark, finding the faxes solicited.
- While appeals were pending, the FCC eliminated its “solicited-fax rule” (which had required opt-out notices on solicited faxes) in response to the D.C. Circuit’s decision in Bais Yaakov; the Eleventh Circuit affirmed summary judgment for Safemark.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether hotels provided prior express permission so faxes were solicited under the TCPA | Hotels: No express permission to Safemark; faxes were unsolicited and thus prohibited | Safemark: Franchise agreements and repeated provision of fax numbers to Wyndham/Approved Supplier Program constitute prior express permission | Held: Agreements (permission for Wyndham affiliates + fax numbers) communicated clear prior express permission; faxes were solicited |
| Whether solicited faxes must contain FCC-prescribed opt-out notices (validity/application of solicited-fax rule) | Hotels: Even if solicited, FCC rule required compliant opt-out notices on solicited faxes | Safemark: Either rule invalid or inapplicable; faxes solicited so no TCPA liability absent rule | Held: FCC eliminated the solicited-fax rule during appeals (adopting D.C. Cir. holding that the rule was unlawful); therefore opt-out requirement no longer applies |
| Whether district court erred under the Hobbs Act by declining to apply the FCC rule | Hotels: District court improperly refused to apply/validate the FCC rule, implicating Hobbs Act review limits | Safemark: District court appropriately treated the rule as invalid (consistent with Bais Yaakov) and later FCC elimination mooted waiver proceedings | Held: Court did not need to decide Hobbs Act error because FCC eliminated the rule and dismissed waivers as moot; result affirmed on that basis |
| Effect of FCC elimination on retroactive liability for pre-repeal faxes | Hotels: Repeal should be prospective; Safemark liable for past violations while rule was in effect | Safemark: FCC’s elimination (and dismissal of waiver petitions) accepted Bais Yaakov’s holding that the rule was unlawful and thus abated past liability | Held: FCC’s action and rationale treated the rule as never legally in force; elimination abated liability, so Safemark entitled to judgment as a matter of law |
Key Cases Cited
- Bais Yaakov of Spring Valley v. Fed. Commc’ns Comm’n, 852 F.3d 1078 (D.C. Cir. 2017) (held FCC’s solicited-fax rule unlawful to the extent it required opt-out notices on solicited faxes)
- Mais v. Gulf Coast Collection Bureau, 768 F.3d 1110 (11th Cir. 2014) (held district courts may not entertain challenges to agency orders covered by the Hobbs Act)
- Self v. Bellsouth Mobility, Inc., 700 F.3d 453 (11th Cir. 2012) (applied Hobbs Act to bar district-court review of agency orders in enforcement contexts)
- PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., 139 S. Ct. 2051 (2019) (Supreme Court concurrence and opinions questioning Eleventh Circuit’s broad Hobbs Act holdings and limiting their scope)
- Cort v. Ash, 422 U.S. 66 (1975) (federal courts decide cases according to law existing at time of decision)