PENNY BROWN ROBERTS (The Advocate, 12/28/2005)

Three companies will spend more than $2 million to settle claims they illegally blasted Louisiana businesses with junk faxes.

They are among more than a dozen targets of class-action lawsuits in Baton Rouge federal court and two dozen others in East Baton Rouge and West Baton Rouge parishes, alleging they broke federal and state bans on such unsolicited advertisements.

The settlements come after the companies tried unsuccessfully to argue those laws violate the First Amendment by regulating commercial speech. U.S. District Judge James Brady rejected that argument in August 2004, refusing to dismiss the cases.

"This is important to everyone because the transmission and receipt of unsolicited faxes are costly to the recipients," said Baton Rouge lawyer Philip Bohrer, who filed the cases. "They tie up phone lines and fax lines, use toner and paper and require labor overhead costs that makes those businesses - and all recipients - less productive."

Details of settlements that have been made public in Baton Rouge federal court in recent months:

Kappa Publishing Group will pay $1.5 million. The 13,500 potential class members will get $75 in cash and a coupon for half off a one-year subscription to a company magazine. Those payouts come after the lawyers get $560,000 in fees and expenses and another $65,000 goes to pay settlement administrative expenses. The company's lawyer, Dan West of Baton Rouge, declined Tuesday to comment.

Monroe Systems for Business Inc. will set aside a settlement fund of $510,985 for the 630 potential class members - $220,000 of it for cash awards; the rest to fund $95 coupons for calculators it sells. Lawyers stand to get as much as $75,000 in fees, plus expenses.

Satellink Paging will pay $75,000 to fund awards ranging from $70 to $500, depending on how many of the 630 potential class members file claims.

Lawyers will get $25,000 of that in fees. The company's lawyer, Alex Peragine of Covington, declined to comment.

A fourth company - Rawlings Insurance Services - has scheduled a settlement conference for January before U.S. Magistrate Docia Dalby. Neither of its lawyers - Susan Daigle nor Jean Billeaud of Lafayette - were available for comment Tuesday.

Connell Archey, another Baton Rouge lawyer defending several junk fax cases, also declined to comment, saying he doesn't want to "sour ongoing settlement negotiations" or "trample" on the terms of any agreements.

At issue in the federal cases is the decade-old Telephone Consumer Protection Act, or TCPA - a federal law that at the time prohibited advertisers from sending unsolicited faxes unless the sender had prior permission. It imposes fines of $500 to $1,500 per violation.

The lawsuits liken the faxes - promising everything from cheap trips to Disney World to specials on wireless telephone service - to a postman delivering junk mail with postage due. They cite the cost of toner and paper, plus wear and tear on fax machines that count against maintenance agreements.

The Junk Fax Prevention Act of 2005 - which Congress passed in January after most of the Louisiana lawsuits were filed - eased the law by permitting the faxing of advertisements to recipients with whom the sender has an established business relationship.

This fall, California legislators passed a statute overriding that exception, but a federal judge has barred the law from taking effect Jan. 1.

Although the TCPA was enacted in 1991, it virtually was ignored until four years later. That's when the courts found in favor of a Georgia lawyer who sued Hooters after the restaurant faxed him a lunch coupon. The award: nearly $12 million to 1,093 plaintiffs.

The first Louisiana class-action lawsuit was filed in the spring of 2003.

Both U.S. Attorney David Dugas and the Louisiana Attorney General Charles Foti filed briefs in the case, urging Brady to uphold the constitutionality of the federal and state laws.

Federal cases still are pending in Baton Rouge against Clear Channel Communications, Verizon Wireless and other corporations; others have been dismissed by mutual agreement.

In a February 2004 memorandum filed in Baton Rouge federal court, lawyers Brett Furr and Brandon Black argue the lawsuits should be dismissed - in part because Congress and the Louisiana Legislature intended the issue to be settled in small-claims court and not as class actions.

Citing one Texas case, the lawyers write that the court "succinctly summarized the general distaste of the federal judiciary for attempts to use a simple consumer protection statute as a get-rich-quick scheme for 'enterprising attorneys.' "