Update: Sixth Circuit Limits Scope of “Unsolicited Advertisement” under the TCPA
By Joseph C. Wylie II, Molly K. McGinley, and Nicole C. Mueller
The Sixth Circuit recently held that a facsimile which lacks commercial components on its face does not constitute an advertisement under the Telephone Consumer Protection Act and ruled that the possibility of remote economic benefit to a defendant is “legally irrelevant” to determining whether the fax violates the TCPA. The Sixth Circuit’s narrow rule stands out among decisions from other courts that have adopted an expansive interpretation of “advertisement” under the TCPA, and demonstrates that the scope of the TCPA is indeed subject to limitations.
In Sandusky Wellness Center, LLC v. Medco Health Solutions, Inc., the defendant, a pharmacy benefits manager, sent two unsolicited faxes to the plaintiff, a chiropractor. The faxes informed plaintiff that medications covered by defendant’s health plans could help lower costs for plaintiff’s patients, and directed plaintiff to a complete list of “plan-preferred medications” on defendant’s website. The faxes, however, did not promote defendant’s services or solicit business from plaintiff. Nor did the faxes contain pricing, ordering or sales information. Notably, defendant did not offer for sale any of the identified medicines, either in the faxes themselves or on defendant’s website.
In reaching the conclusion that the faxes did not constitute “advertisements” under the TCPA, the Sixth Circuit focused on the statute’s definition of that term: namely, “any material advertising the commercial availability or quality of any property, goods, or services.” 47 U.S.C. § 227(a)(5). The Court rejected plaintiff’s argument that the faxes were advertisements because defendant could benefit from the faxes “several locks down the stream of commerce” and determined that the fact that the sender might gain “an ancillary, remote, and hypothetical economic benefit later on does not convert a noncommercial, informational communication into a commercial solicitation.”
The Court distinguished the faxes from other indirect means of advertisement, such as a flyer for a free seminar that contains a picture of a product for sale by the sender. The faxes at issue, by contrast, brought defendant’s “plan-preferred medications” to plaintiff’s attention, but the record showed that defendant had no interest in soliciting business from plaintiff and in fact would not receive any benefit if plaintiff did purchase the medications listed. To be an advertisement, the Court concluded, the faxes “must at least be an indirect commercial solicitation, or pretext for a commercial solicitation.”
The Sixth Circuit also affirmed the district court’s denial of plaintiff’s request for discovery that would show defendant’s pecuniary interest in the medications and the circumstances that lead to the advertisements on the ground that the requested discovery did not touch on a material question of fact. In reaching its holding, the Court reasoned that “the possibility that future economic benefits will flow from a non-commercial fax, ancillary to the content of the fax, is legally irrelevant to determining whether the fax is an ad.”
This decision also highlights the different standards applicable to facsimiles and phone calls under the TCPA. The Eighth Circuit recently took a more expansive view of what may constitute “telemarketing” under the TCPA, holding that the content of telephone calls controls whether the calls were advertisements, but the purpose of telephone calls determines whether the calls were telemarketing calls. (In contrast to the TCPA’s prohibition on sending unsolicited advertisements by facsimile, the TCPA and regulations promulgated thereunder prohibit both advertising and telemarketing robocalls to both residential landline and wireless phone numbers without prior consent.) In Golan v. Veritas Enter., LLC et al., plaintiffs brought a TCPA action after receiving two prerecorded messages the stated purpose of which was to conduct a survey, but were ostensibly sent for the purpose of promoting a movie. After the action was dismissed for lack of standing because the district court concluded the messages the plaintiffs had received did not contain “an advertisement, telemarketing message, or telephone solicitation,” in violation of the TCPA, the Eighth Circuit reversed. Although the Eighth Circuit agreed that the messages did not contain an advertisement because they “did not mention property, goods, or services,” the Court found that neither the TCPA nor its implementing regulations “require an explicit mention of a good, product, or service where the implication of an improper purpose is clear from the context” and the context of the calls “indicates that they were initiated for the purpose of promoting [property, goods or services].”