A three-page fax inviting the recipients to a dinner program could constitute an advertisement and was sufficient to establish standing, an Illinois federal court has ruled in denying a defendant’s motion to dismiss a TCPA suit.
America’s Health & Resource Center, Ltd., filed a class action in Illinois federal court alleging that on May 29, 2016, Health-Scripts and Janssen Pharmaceuticals sent a three-page fax lacking TCPA-required opt-out notices. No statements on the fax specifically promoted products or services commercially available from either defendant.
Instead, the fax—addressed to “Nurse Practitioners & Physician Assistants”—invited recipients to a free “promotional educational activity” in the form of an “Educational Dinner Program.” The fax identified Janssen as the sponsor of the event, which would feature a dinner presentation on “Treatment Options for Adult Patients with Type 2 Diabetes Mellitus.”
Included in the fax was a form to RSVP with a fine-print statement that the individual was giving Health-Scripts permission to share his or her information with third parties and make other offers.
The defendants moved to dismiss the suit, arguing that the fax did not meet the statutory definition of an “advertisement” in the TCPA and the receipt of a single fax constituted a bare procedural violation of the statute that was insufficient to confer standing after Spokeo, Inc. v. Robins.
As defined by the TCPA, an “unsolicited advertisement” is “any material advertising the commercial availability or quantity 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.” Thus, a fax promoting a free dinner seminar for certain healthcare professionals that did not advertise the commercial availability or quantity of any goods or services did not satisfy that definition, the defendants said.
But U.S. District Judge Harry D. Leinenweber of the Northern District of Illinois disagreed. The judge ruled that although Congress has not answered the question of whether a fax promoting free services can amount to an “unsolicited advertisement,” the FCC has promulgated a rule that states: “[F]acsimile messages that promote goods or services even at no cost, such as free magazine subscriptions, catalogs, or free consultations or seminars, are unsolicited advertisements under the TCPA’s definition. In many instances, ‘free’ seminars serve as a pretext to advertise commercial products and services.”
Applying that rule, Judge Leinenweber determined the plaintiff had plausibly alleged that the fax was a pretext to an advertisement. “Specifically, Plaintiffs assert that Health-Scripts (by selling registrant data) and Janssen (by drumming up interest in its pharmaceuticals and inducing medical professionals to prescribe them) utilized the free seminar to further their commercial efforts,” Judge Leinenweber wrote. “What is more, Defendants’ fax ‘d[id] not require that interested recipients be qualified and pre-screened’ but instead was merely directed to a limited universe of nurse practitioners and medical assistants.”
The standing challenge merited little consideration from Judge Leinenweber, who noted that post-Spokeo, courts in the Seventh Circuit have “repeatedly held that mere receipt of a [single] fax alleged to lack TCPA opt-out notices constitutes sufficient harm for purposes of Article III standing.”
Although the defendant lost out on the motion to dismiss the TCPA counts of the suit, the court did toss the plaintiff’s claim for conversion, ruling that the alleged damages from receipt of a single three-page fax were de minimis.
To read the opinion in America’s Health & Resource Center, Ltd. v. Promologics, Inc., click here.
Why it matters: In addition to affirming that a single fax was sufficient to establish standing for a TCPA lawsuit post-Spokeo (which is in line with many recent district-level opinions), Judge Leinenweber’s decision attempted to clarify when a fax promoting free services can amount to an “unsolicited advertisement” under the statute. While a free seminar that requires prescreening of registrants and a complaint that fails to allege the seminar was a pretext for an advertisement may avoid liability, Judge Leinenweber found the fax at issue crossed the line with the complaint’s allegations of pretext and by inviting an entire class of professionals to an event discussing medical topics related to one of the defendant’s drugs and also directing registrants to consent to the sharing of their personal information.