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Green v. Anthony Clark International Insurance Brokers

February 1, 2010


The opinion of the court was delivered by: Matthew F. Kennelly, District Judge


Robert Green has sued Anthony Clark International Insurance Brokers, Ltd. ("Anthony Clark Brokers") and John Podorieszach asserting claims under the federal Telephone Consumer Protection Act (TCPA) and the Illinois Consumer Fraud and Deceptive Business Practices Act, as well as a claim for conversion under Illinois common law. Defendants moved to dismiss Green's complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).

The Court previously denied defendants' motion to dismiss in part. See Green v. Anthony Clark Int'l Ins. Brokers, Ltd., No. 09 C 1541, 2009 WL 2515594 (N.D. Ill. Aug. 17, 2009). The Court assumes familiarity with that decision. Remaining for determination is defendants' argument that the TCPA is unconstitutional. The Court deferred consideration of that argument so that defendants could give notice to the Attorney General of the claim of unconstitutionality. The Court granted the Attorney General's motion to intervene, and he submitted a brief in opposition to defendants' motion. For the reasons stated below, the Court denies the remainder of defendants' motion to dismiss.


To survive a motion to dismiss under Rule 12(b)(6), the complaint must include enough facts to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009). A claim is plausible on its face "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1949. When considering a motion to dismiss a complaint, the Court accepts the facts stated in the complaint as true and draws reasonable inferences in favor of the plaintiff. Hallinan v. Fraternal Order of Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009).

The TCPA prohibits sending an unsolicited advertisement to a telephone facsimile (fax) machine, unless the sender has an established business relationship with the recipient. 47 U.S.C. § 227(b)(1)(C). A recipient of an unsolicited advertisement has a private right of action for an injunction and "to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater." Id. § 227(b)(3). If a violation is proven to be willful or knowing, the damages may be trebled. Id.

Defendants contend that section 227(b)(1)(C) violates the First Amendment because it excessively restricts protected commercial speech and because it is unconstitutionally vague. Defendants also contend that the statutory entitlement to damages of $500 to $1,500 per infraction violates the Fifth Amendment's Due Process Clause and amounts to an excessive fine violative of the Eighth Amendment. The Court considers each constitutional challenge in turn.

1. First Amendment Challenge

Defendants contend that the TCPA is a prohibited ban on commercial speech violative of the First Amendment. The constitutionality of a restriction on commercial speech is evaluated under the test established in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980). Commercial speech is not protected by the First Amendment if it concerns unlawful activity or if it is misleading. Id. at 566. If, however, the government restricts commercial speech that concerns lawful activity and is not misleading, the party seeking to uphold the restriction must show that the asserted governmental interest is substantial and that the regulation directly advances and is not more extensive than necessary to serve that interest. Id. Because the parties do not argue that the speech concerns unlawful activity or is misleading, the Court considers only the remaining elements of the Central Hudson test.

a. The Nature of the Government's Interest

Defendants contend that the government cannot prove a substantial interest because the costs associated with receiving an unwanted facsimile, at pennies per page, are comparable to or less than the cost of receiving a telemarketing call or disposing of direct mail. Defendants rely on Bolger v. Youngs Drug Products Corp., 463 U.S. 60 (1983), to support their position that the government cannot prohibit commercial speech unless the cost imposed on recipients is more than de minimis. Id. at 72 ("[The] journey from mail box to trash can . . . is an acceptable burden.").

The government's stated interests in Bolger, however, were based on the content of the mailings (contraceptive advertisements), not the costs imposed on recipients. In adopting the TCPA, Congress asserted an interest in protecting the recipients of unsolicited advertisements from the actual costs (in paper and toner, for instance) that the senders of the facsimiles impose on them. H.R. Rep. 102-317, at 10-13 (1991). It also asserted an interest in ensuring that "the recipient's facsimile machine . . . is [not rendered] unavailable for legitimate business messages while processing and printing the junk fax." Id. Prior to enacting the TCPA, businesses had "begun to express concern about the interference, interruptions and expense that junk fax ha[d] placed on them." Id. The Court finds that the federal government has a substantial interest in preventing the costs and burdens associated with receiving unsolicited faxed advertisements.*fn1 See, e.g., Missouri ex rel. Nixon v. Am. Blast Fax, Inc., 323 F.3d 649, 654-55 (8th Cir. 2003).

b. Whether the TCPA Directly Advances the Government's Interest

Defendants contend that because the TCPA does not impose a ban on both commercial and noncommercial unsolicited facsimiles, it suffers from the same constitutional infirmity as the restriction at issue in City of Cincinnati v. Discovery Network, 507 U.S. 410 (1993). In Discovery Network, the city asserted an interest in the safety and aesthetics of its sidewalks when it adopted an ordinance prohibiting commercial newsracks, but not newspaper newsracks, on sidewalks and streets. Id. at 412-16. The Supreme Court found that the ordinance "ha[d] absolutely no bearing on ...

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