Finding that a fax promoting the commercial availability of the defendant’s referral and discount network could be an unsolicited advertisement, a federal court in the Western District of New York denied the defendant’s motion to dismiss in Lackawanna Chiropractic v. Tivity Health Support—a putative Telephone Consumer Protection Act (TCPA) class action.
Lackawanna Chiropractic alleged that Tivity Health Support sent unauthorized and unwanted fax advertisements in violation of the TCPA. The plaintiff claimed that it received a fax from Tivity on March 2, 2018, that promoted the commercial availability of Tivity’s SilverSneakers, PrimeFitness and WholeHealth Living program networks for members over the age of 50.
According to the plaintiff’s complaint, Tivity is a provider of fitness and wellness program networks whose core business is connecting healthcare and wellness providers with potential patients and clients. The fax at issue allegedly solicited recipients to join Tivity’s networks, make use of its marketing and patient matching services, and compensate Tivity in return. Recipients would pay Tivity a $20 “new patient finder fee” and offer an ongoing discount to Tivity network members, for which members would compensate Tivity.
Tivity moved to dismiss, arguing that the fax was not an unsolicited advertisement because its purpose was not to promote the commercial availability and quality of Tivity’s referral and discount network. Instead, the purpose of the fax was to recruit healthcare providers such as Lackawanna Chiropractic to its network, the defendant told the court.
But U.S. District Judge Lawrence J. Vilardo was not persuaded, denying the motion to dismiss.
“Without a doubt, those services are the subject of the fax Tivity sent to Lackawanna Chiropractic,” Judge Vilardo said. “So the fax had the commercial purpose of promoting Tivity’s services and the complaint states a plausible claim for relief under the TCPA.”
Accepting the complaint’s allegations as true, the court said that the fax was an unsolicited advertisement asking recipients to join Tivity’s networks and use its marketing and patient matching services.
“The fax ‘promote[s] the advantages of Tivity’s patient-matching ‘services,’” Vilardo wrote. “It invites recipients to ‘Grow your business!’ by joining Tivity’s network. It mentions the number of patients in Tivity’s network, the age of targeted members and the ease of signing up.”
Judge Vilardo rejected the defendant’s contention that the fax was simply a recruitment message because it informed recipients of an opportunity and attempted to recruit the recipient to provide services, distinguishing case law relied upon by Tivity because the communications in those cases did not contemplate that the recipient would pay the sender any money for its products or services.
Recipients effectively paid Tivity a $20 “new patient finder fee” by accepting a nonreimbursable voucher when a member first visits, and Tivity asked participants to offer its members an ongoing 10-30 percent discount, the court noted.
“In both ways, participants compensate Tivity for its services, and that revenue suffices to plausibly allege the ‘commercial purpose’ of the fax,” Judge Vilardo said. “[T]he plaintiffs have plausibly alleged that Tivity sent a fax with a commercial purpose of advertising the commercial availability and quality of its goods and services and that the fax therefore was commercial in nature.”
To read the decision and order in Lackawanna Chiropractic v. Tivity Health Support, LLC, click here.
Why it matters: Based on the allegations in the complaint, the court determined that, on its face, the fax was more than an offer of employment or noncommercial information. This is a common problem in the TCPA world, where a transmission might have a dual purpose—i.e., on the surface it is not an ad or marketing (at least according to the sender), but it could be viewed that way if you dig a little deeper (at least according to the recipient)—which is why senders of unsolicited faxes need to be very cautious about the content. This case also shows that fax-related TCPA litigation is still alive and well, particularly in the medical world.