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Hooters of Augusta, Inc., v. Nicholson: Hooters Busted for Unsolicited Faxes

A Georgia appellate court considered whether a private right of action exists in the state for violations of the federal Telephone Consumer Protection Act ("Act").

Sam Nicholson filed a class action lawsuit against Bambi Clark d/b/a Value Fax of Augusta ("Fax Operator") and Hooters of Augusta, Inc. ("Company"). Nicholson's lawsuit alleged that the Fax Operator was sending out unsolicited advertisements on behalf of the Company and that these faxes violated the Act. The trial court certified Nicholson as the class representative, and denied a motion to dismiss and motion for judgment filed by the Company. The Company appealed.

The Court of Appeals of Georgia affirmed the trial court's rulings. The court first considered whether Nicholson could bring a lawsuit under the Act. The Act became law in 1991, and recognizes the privacy rights of telephone customers. The FCC established rules to enforce the Act that protect telephone subscribers from unwanted telephone solicitations. For example, telephone solicitors only may make calls to residences during certain times. In addition, the Act imposes restrictions on the use of telephone facsimile machines and other electronic devices, including a prohibition on the use of such devices to transmit unsolicited advertisements. Click here to read a summary of the Act.

The Act contains a provision allowing individuals to bring private lawsuits against violators of the Act. The Act allows these lawsuits to be brought in a state court "if otherwise permitted by the laws or rules of court of a State." The Company argued that because Georgia had not enacted laws which specifically permitted these types of lawsuits to proceed for purely intrastate activities, Nicholson could not bring this lawsuit in a Georgia court. The court rejected this argument, ruling that a private right of action existed in Georgia without the Georgia legislature enacting legislation authorizing such a cause of action. The court ruled that a private right of action exists so long as the legislature has not prohibited this type of lawsuit. Therefore, the court ruled that the trial court properly denied the Company's motion to dismiss.

Next, the court considered whether the Act was intended to reach these types of purely intrastate actions. It ruled that Congress had intended to reach intrastate actions because it authorized a private right of action in state courts.

The final argument before the court was whether the Company could be liable for the actions of the Fax Operator. The Company argued that the Fax Operator was an independent contractor, and therefore was the only party liable for violations of the Act. The court rejected this argument, ruling that this was a factual determination which needed to be made by a jury. Therefore, the court affirmed the trial court's rulings.

Hooters of Augusta, Inc., v. Nicholson, 245 Ga. App. 363, 537 S.E.2d 468 (Ga. Ct. App. 2000).