FCC PROCEEDING 05-338

SEPTEMBER 11, 2014

Magna Chek, Inc. Wally Lawrence

Scott Bucholz

Swanson, Martin & Bell LLPMichael A. McCaskey

Julie D. Miller

BACKGROUNDFebruary 13, 2014

Magna Chek was sued by William Pollack in the Northern District of Illinois under the TCPA.

March 28, 2014 Magna Chek filed petition with FCC seeking a declaratory ruling and/or waiver concerning the FCC’s rules regarding opt-out notices for fax advertisements sent to a consumer who provided prior express invitation or permission.

May 5, 2014Northern District entered stay of litigation while Magna Chek’s petition is pending

September 12, 2014Next status update due to Northern District

WHO IS MAGNA CHEK? A Metropolitan Detroit Employer

Madison Heights, MI – Main Office Warren, MI

HISTORY OF MAGNA CHEK

Began as family-run business in 1971outside Detroit, MI.Formerly employed 107-110 employees prior to crash in manufacturing industry in 2009.Currently employs 35 - 40 employees.

SERVICES PROVIDED BY MAGNA CHEKInspection Types

Accreditations

•Nadcap – NAS410•ISO 17025:2005

WHAT DOES MAGNA CHEK DO?Non-destructive testing of safety critical components for

Automotive industry – Transmission, brake systems, engine components, safety sensors.Airline industry – Landing gear, cabin shell integrity, pilot controls and safety sensorsDefense Manufacturers – Armored vehicles and components, weaponry and accessoriesTrucking companies - Transmission, brake systems, engine components, safety sensors.

Determines structural integrity and quality of metal to certify the absence of any weaknesses, cracks, fractures, etc. in metal. Also, proper build for safety components after assembly.

Customers

General Motors

Ford

Chrysler

Boeing

Bombardier

BAE

Walt Disney

Arlington Stadium

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MAGNA CHEK’S FAMILY – MADISON HTS, MI

MAGNA CHEK’S FACILITY – MADISON HTS

MAGNA CHEK’S FACILITY – MADISON HTS

MAGNA CHEK’S FAMILY – WARREN, MI

MAGNA CHEK’S FACILITY - WARREN

MAGNA CHEK’S FACILITY - WARREN

In 2010, Magna Chek was fortunate to host and assisit in the development and the training of two wonderful Iraqi engineers from Baghdad, Iraq. This program lasted six months with the engineers particiating each day in the testing and day-to-day business of Magna Chek.

Sadiq ( on right ) – General Manager Al - Karama, Ministry of IndustryMuhammed ( on left )– Chief Engineer Al - Karama, Ministry of Industry

Iraqi Engineer Enhancement Program (IEEP).

Charities and Sponsored Programs

•Bridge Buddies Program –Avondale Schools

•Autism Speaks

•Team Kendals Kids

•Susan G. Komen

•Home for our Troops

•Make A Wish

Madison Hts K-9 Police Program

Past and present marketing campaigns:

•Direct Mail

•Print Advertising

•Telephone Marketing

•Social Media

•Trade Shows

MAGNA CHEK’S FAX ADVERTISINGOne database comprised of:

Current customersPast customersPast persons who requested a quoteSelected persons from purchased list that Magna Chek calls for permission prior to adding to database

Does not send faxes without consent or prior business relationship

Insert picture of all employees

Insert picture of all employees

32701 Edward Ave, Madison Heights, MI 48071 Phone: 248-597-0089 Fax: 248-597-0440 Cage Code 4X774If you wish to be removed, please call 888-876-1394

WHY RELIEF IS NECESSARYSuit brought by one experienced TCPA plaintiff who received faxes intended for a company which provided consent.Magna Chek’s faxes had phone number, email, website, fax number, address, and instructions for removal in a clear opt-out notice on the bottom of the first page.Magna Chek currently faces a putative class action for between $11 Million and $33 Million or more for its failure to include the following eight words: “failure to remove within 30 days is illegal.”

WHY RELIEF IS NECESSARYLaw provides that consent or prior business relationship has been a defense available to businesses defending a class action under the TCPA’s opt-out provisions.After the FCC’s interpretation in Nack, the opt-out provisions are now applicable to all faxes, even solicited.Without (1) a change in the Commission’s interpretation of the TCPA, (2) a waiver, or (3) a finding of substantial compliance, this defense is essentially erased.

WHY RELIEF IS NECESSARY

Magna Chek has been operating at a loss for several years. If it faces liability for faxes sent to parties who consented and/or had a prior business relationship with Magna Chek, it will be forced to enter into bankruptcy, terminate all employees, decline services to its customers, and close its doors.