The Seventh U.S. Circuit Court of Appeals declined to follow Federal Communications Commission (FCC) guidance when it ruled that faxes offering a “free dinner” did not run afoul of the Telephone Consumer Protection Act (TCPA).
Elanco Animal Health, an animal health products and services company, sent Ambassador Animal Hospital two unsolicited faxes inviting Ambassador’s veterinarians and its owner to RSVP for two free dinner programs.
The faxes listed the topics of the dinner programs—one titled “Canine and Feline Disease Prevention Hot Topics” and the other “Rethinking Management of Osteoarthritis”—and indicated that both programs had been approved for continuing education credits, as well as provided the names of the programs’ presenters.
On the top left and bottom right corners of each invitation appeared the trademarked “Elanco” logo, and the bottom of each fax contained a notice encouraging recipients to consult their state or federal regulations or ethics laws about restrictions on accepting industry-provided educational and food items.
Ambassador filed suit, alleging violations of the TCPA, arguing that the two faxes were unsolicited advertisements because the free dinner programs were used to market or sell Elanco’s animal health goods and services.
Elanco moved to dismiss on the grounds that the faxes did not constitute unsolicited advertisements under the statute.
A district court granted the motion, and the Seventh Circuit affirmed.
“[T]he faxes do not indicate—directly or indirectly—to a reasonable recipient that Elanco was promoting or selling some good, service, or property as required by the TCPA,” the court wrote.
The panel was not persuaded by Ambassador’s contention that Elanco chose subjects for the seminars that overlapped with the products it sold as an advertisement ploy, instead focusing on the plain language of the statute.
“Section 227 asks whether the content of a fax advertises the commercial availability or quality of a thing,” the court wrote. “It does not inquire of the seller’s motivation for sending the fax or the seller’s subsequent actions.”
The absence of any reference to the sender’s purpose in Section 227 is particularly significant because the TCPA expressly considers a sender’s purpose in other provisions, the court pointed out.
Therefore, the faxed document itself must contain the advertising and an unsolicited advertisement does not depend on the subjective viewpoints of either the fax sender or recipient. The Seventh Circuit determined that the actual content of the at-issue faxes was not commercial in nature.
“Use of Elanco’s trademarked logo on the invitations did not reasonably encourage readers to buy any of Elanco’s products or services,” the court wrote. “The TCPA does not go so far as to prohibit sending faxes on company letterhead to promote free education on topics that relate to the sender’s business—it prohibits advertising products or services. And even if Elanco targeted veterinarians familiar with its products or directed RSVPs to individuals in the marketing or sales departments, Elanco’s faxes did not contain the promotional quality necessary for an advertisement.”
Ambassador directed the court to a 2006 Order from the FCC, which stated that fax 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,” as “[i]n many instances, ‘free’ seminars serve as a pretext to advertise commercial products and services.”
However, the Seventh Circuit determined that the pretext provision was not entitled to deference because it conflicts with the TCPA’s statutory text.
“The text of the TCPA creates an objective standard narrowly focused on the content of the faxed document,” the court wrote. “The FCC’s interpretation, however, asks us not only to assume subjective motivations behind faxes that advertise no goods or services, but to assume that subsequent conduct of senders is relevant to the TCPA analysis.”
In addition, the TCPA is limited to advertisements that promote “commercial” property, goods and services, the panel said, and a bare offer for a free good or service is not an advertisement unless the fax also promotes something that the reader can acquire in exchange for consideration.
“We therefore decline to manufacture a pretext element unsupported by the TCPA’s text,” the court said.
To read the opinion in Ambassador Animal Hospital, Ltd. v. Elanco Animal Health Inc., click here.
Why it matters: Courts have historically given FCC interpretive rulings on the TCPA substantial “Chevron” deference. Relying on the plain language of the TCPA, the Seventh Circuit held that the fax at issue was not an advertisement and refused to apply guidance from the FCC’s 2006 Order, which it said conflicts with the text of the statute.