That Blasted $7 Billion Fax
Eighty Houston Businesses Sued
for Sending Unwanted Faxes

Eight companies settled and another eight were dismissed in the $7 billion Houston “junk fax” lawsuit.

Reportedly, the settling defendants collectively paid $125,000 to avoid litigating the matter. In April, Houston Cellular agreed to settle claims against it for $400,000, in what the Houston Chronicle reported to be the first settlement of its kind in the country.

On September 3, District Judge Harvey Brown dismissed eight of the more than eighty defendants because a four-year deadline to file suit had expired.

Chair King, a Houston furniture dealer, and eleven other named plaintiffs, annoyed by receiving unwanted fax advertisements, filed suit in state court in 1995 claiming the sending of unwanted fax sales pitches violates the federal Telephone Consumer Protection Act. The plaintiffs are seeking dollar damages ranging from a low of $500 against Houston car dealer Don McGill and Chelsea Court Apartments for allegedly sending a single fax to a high of $1.4 billion against car dealer John Eagle Honda in Clearlake, who reportedly sent nearly a million faxes to Texas businesses within a three-year period.

Fourteen advertising firms that specialize in the sending of mass or blast faxes, as they are commonly known, were also sued. However, no money damages are being sought.

The plaintiffs argue that the sending of unwanted faxes is illegal and charge a conspiracy existed between the defendant advertisers and their advertising agencies. Not only does the sending of unsolicited faxes violate federal law, they charge, but it also violates the plaintiffs’ right to privacy and deprives them of the full use of their fax machine for legitimate business messages.

Chair King and the other named plaintiffs are seeking $500 for every unwanted fax sent by the defendants to any business. Additionally, they are asking for triple damages if it can be proven that the defendants acted willfully and maliciously.

Defense attorney Steven Zager claims the lawsuit is without merit because there is no evidence that the plaintiffs received unwanted faxes from the defendants.

Many of the broadcast faxes were allegedly sent in 1994 and early in 1995.

A similar suit, filed by Chair King, was dismissed in federal court in April of 1995, but that dismissal was vacated by the Fifth Circuit Court of Appeals in January of the following year. The appeals court held that the federal courts lacked subject matter jurisdiction over Telephone Consumer Protection Act suits, and the suit should be heard by a state court.

The plaintiffs are asking that the suit be certified as a class action. A motion for summary judgment in the Chair King case will be considered by Judge Brown on September 24.

Defendants argue no laws were broken. The advertisers were assured that each fax recipient had signed a consent form agreeing to receive discounts and incentives to local, upscale business, restaurant and entertainment establishments. Further, as part of their service, fax advertisers had offered to deliver free fax paper to promotion recipients on a regularly scheduled basis.

A state law governing the sending of unwanted faxes went into effect September 1. Judge Brown has urged the plaintiffs attorney Dennis Herlong to take out a large ad in the Houston Chronicle explaining the new law.

See the following page for a listing of the defendants in the case and the money damages demanded.

Click here for a listing of additionally named plaintiffs in the suit.

Citizens Against Lawsuit Abuse

2500 City West Boulevard, Suite 300 • Houston, Texas 77042
E-mail: sosueme@ • Administrative: (713) 267-2302 • Fax: (713) 267-2267