Opinion ID: 4542847
Heading Depth: 3
Heading Rank: 2

Heading: Unsolicited Faxes Under the TCPA

Text: The TCPA prohibits sending a fax that is an “unsolicited advertisement” unless, among other requirements, the fax has a satisfactory opt-out notice. See 47 U.S.C. § 227(b)(1)(C).2 The TCPA creates a private right of action for recipients of unsolicited advertisements, which provides for statutory damages of $500 per violation and for injunctive relief to prevent future violations. Id. § 227(b)(3). The parties do not dispute that the fax Defendants sent to Fulton was unsolicited and lacked an opt-out provision. The issue is whether the fax qualified as an advertisement within the meaning of the TCPA. Whether a fax constitutes an unsolicited advertisement is a question of law. See Sandusky, 788 F.3d at 221. The TCPA defines an unsolicited advertisement as “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise.” 47 U.S.C. § 227(a)(5). As we acknowledged in Sandusky, the TCPA covers faxes that serve as “pretext for a commercial solicitation.” 788 F.3d at 225. In addition, and as previously described, the FCC has explained that offers for free goods or services fall within the TCPA because they are “often part of an overall marketing campaign to sell property, goods, or services.” 71 Fed. Reg. at 25973. 2 In 1991, Congress passed and President George H.W. Bush signed the Telephone Consumer Protection Act. See Pub. L. No. 102-243, 105 Stat. 2394 (1991) (codified as amended at 47 U.S.C. § 227). In 2005, Congress passed and President George W. Bush signed the Junk Fax Prevention Act, which amended the 1991 Act. See Pub. L. No. 109-21, 119 Stat. 359 (2005) (codified at 47 U.S.C. § 227). For simplicity, we refer to the combined amended legislation as the TCPA. No. 17-1380 Fulton v. Enclarity, Inc. Page 11 According to Fulton’s complaint, providing verified contact information paves the way for Defendants’ customers to “send additional marketing faxes to recipients.” This allegation finds some support in the FAQs, which confirm that Defendants’ customers use the system to, “invite [providers] to become part of a provider network” and “send[] important notifications,” among “other uses.” The potential for future advertising is also implied by Defendants’ assertion that verifying contact information will “drive more business to” providers. Defendants have not contested this allegation. The Second Circuit recently considered whether a TCPA plaintiff who claimed that a fax was pretextual had satisfied the Rule 12(b)(6) pleading standard. See Physicians Healthsource, Inc. v. Boehringer Ingelheim Pharm., Inc., 847 F.3d 92 (2d Cir. 2017). In Boehringer, a medical office received a fax inviting a doctor to a free dinner meeting to discuss certain health conditions, which was sponsored by the defendant, a pharmaceutical company. Id. at 93. The defendant had created a drug to treat those health conditions but could not legally market its treatment until it had received approval from the Food and Drug Administration (FDA). Id. at 94. The district court reviewed the FCC’s rule, acknowledged that it tracks the language of the statute, then dismissed the complaint on the basis that plaintiffs were required “to show that the fax has a commercial pretext—i.e., ‘that the defendant advertised, or planned to advertise, its products or services at the seminar.’” Id. at 95 (quoting Physicians Healthsource, Inc. v. Boehringer Ingelheim Pharm., Inc., No. 3:14-CV-405, 2015 WL 144728, at  3 (D. Conn. Jan. 12, 2015)). The Second Circuit reversed, emphasizing that at the motion to dismiss phase, a plaintiff need only plausibly allege a commercial pretext, not actually show it, and noting that a requirement of more specificity would “impede the purposes of the TCPA.” Id. at 95–96. Even though the free dinner meeting would not feature discussion of the defendant’s drug, the Second Circuit found sufficient the allegation that the defendant sent a fax on a subject that “relate[d] to [its] products or services,” which led to “a plausible conclusion that the fax had the commercial purpose of promoting those products or services.” Id. at 95. The decision in Boehringer centered on the alleged “commercial nexus” between the free dinner offered in the fax and the defendant’s “business, i.e., its property, products, or services.” Id. at 96. According to Fulton, that same nexus exists here: The fax solicits information to No. 17-1380 Fulton v. Enclarity, Inc. Page 12 verify its system of provider information, which Defendants make commercially available to other health care organizations, who may subject Fulton to future unsolicited advertising. Taking the complaint’s allegations as true and drawing all inferences in Fulton’s favor, as we must at the motion to dismiss stage, we find that Fulton has adequately alleged that the fax Fulton received was an unsolicited advertisement because it served as a commercial pretext for future advertising opportunities. Fulton has therefore stated a plausible TCPA claim under the fax-as-pretext theory. Because this conclusion is sufficient to warrant reversing and remanding the case, we need not reach Fulton’s alternative theory that the fax was an advertisement because Defendants sent it with a profit motive.