WBK Industry News - Litigation Developments

3rd Circuit Finds that Unsolicited Fax was not an Advertisement Under TCPA

A panel of judges on the U.S. Court of Appeals for the Third Circuit recently ruled that an unsolicited request for commercial information via fax was not an advertisement under the Telephone Consumer Protection Act (TCPA), despite the fact that it was sent for a commercial purpose.  In so ruling, the panel affirmed the district court’s decision to grant summary judgment in favor of the defendants on the plaintiff’s putative class TCPA claim.

In this case, the plaintiff, a healthcare provider, claimed that the defendants, who maintain a national database of healthcare providers which is accessible to and available for purchase by third parties, sent a fax to the plaintiff requesting that the plaintiff respond to the fax by updating certain information that the defendants could use to keep their database current.  Under the TCPA, it is unlawful to send an unsolicited advertisement by fax unless certain conditions are met, including, among other things, that the unsolicited advertisement is from a sender that has an established business relationship with the recipient.  The plaintiff argued that although the defendants’ fax did not attempt to sell any goods or services, it should still be considered an advertisement under a third-party theory of TCPA liability because the defendants had a “profit motive” in enhancing the accuracy of their database for their third-party customers’ benefit.

The Third Circuit disagreed.  The panel ruled that the defendants’ fax was not an advertisement, noting that “a fax does not become an advertisement merely because the sender intended it to enhance the quality of its products or services and thus its profits.”  The court explained that to establish TCPA liability, there must be “a nexus between the sending of the fax and the sender’s product or services and the buyer’s decision to purchase the product or services[.]”  In other words, the communication must “attempt to influence the purchasing decisions of [a] potential buyer, whether a recipient of a fax or a third party.”  Further, the court stated that to establish third-party based TCPA liability, the plaintiff must show that the fax: “(1) sought to promote or enhance the quality or quantity of a product or services being sold commercially; (2) was reasonably calculated to increase the profits of the sender; and (3) directly or indirectly encouraged the recipient to influence the purchasing decisions of a third party.”

The court reasoned that although the defendants “sought the information in the fax to enhance the accuracy of their database and thus increase their profits,” the “TCPA only prohibits unsolicited advertisements, not any and all faxes even if sent for a commercial purpose.”  Because the request for information was not an attempt to influence the purchasing decisions of a potential buyer, the court stated that it was not an advertisement to which TCPA liability might attach.  Therefore, the plaintiff’s “claim [did] not survive [the Third Circuit’s] standard for third-party based liability or any other theory of liability under the TCPA.”  Further, the court found that the “fax was not a pretext to more commercial solicitation,” namely because any future faxes requesting information to update the database would no more be an advertisement than the original fax.

Accordingly, the Third Circuit panel affirmed the district court’s grant of summary judgment in favor of the defendants.  On June 11, 2019, the plaintiff filed a petition for rehearing by the original panel and the Third Circuit court, sitting en banc.  The court has not yet ruled on this petition.