Sixth Circuit Holds Faxes Seeking Recipient’s Information Are a Pretext to Advertisement and Thus Within the Purview of the TCPA

The Sixth Circuit in Matthew N. Fulton, D.D.S., P.C. v. Enclarity, Inc., on remand from the Supreme Court, upheld its previous ruling that faxes seeking the recipient’s information are considered a “pretext” to an advertisement, and thus fall within the scope of the Telephone Consumer Protection Act (TCPA). The June 19, 2020 decision relies upon a 2006 Federal Communications Commission (FCC) Order stating that “any surveys that serve as a pretext to an advertisement are subject to the TCPA’s facsimile advertising rules.”

The fax requested that the recipient verify or update its information with Defendant LexisNexis “for clinical summaries, prescription renewals, and other sensitive communications.” Plaintiff’s Complaint alleged that this constituted a pretext to send additional marketing materials to recipients, as well as obtain the recipient’s involvement in Defendant LexisNexis’s database. Plaintiff asserted that Defendants and third parties would use the recipient’s data to send information “regarding products, services, competitions, and promotions,” thereby constituting “a pretext to increase awareness and use of Defendants’ proprietary database service and increase traffic to Defendants’ website.” Defendants moved to dismiss, arguing that the fax did not constitute an advertisement as defined by the TCPA. The Michigan district court dismissed, finding that since the fax did not state that anything was available for purchase or sale, it “lack[ed] the commercial components inherent in ads.” Thereafter, the Sixth Circuit reversed, finding that the Plaintiff adequately alleged that the received fax “was an unsolicited advertisement because it served as a commercial pretext for future advertising opportunities,” and remanded the case for additional proceedings. The Supreme Court granted certiorari, vacated, and remanded, directing the Sixth Circuit to reconsider the appeal in light of PDR Network, LLC v. Carlton & Harris Chiropractic, Inc.

In PDR Network, the Supreme Court had granted certiorari to consider the Fourth Circuit’s ruling that the district court was required by the Hobbs Act to follow the FCC’s 2006 Order interpreting “advertisement” under the TCPA “to include any offer of a free good or service.” The Supreme Court in PDR Network was thus confronted with the question of whether the Hobbs Act, which vests “exclusive jurisdiction” in the courts of appeal to “enjoin, set aside, suspend” or “determine the validity of” FCC “final orders,” rendered the 2006 FCC Order binding authority in private TCPA actions. However, the Supreme Court did not actually resolve the issue, and instead remanded the case to the Fourth Circuit to consider (1) whether the 2006 Order is a “legislative rule” with “the ‘force and effect of law’” or simply an “interpretive rule” that “advises the public of the agency’s construction of the statues and rules which it administers” and (2) whether the defendant had a “‘prior’ and ‘adequate’ opportunity to seek judicial review of the order.”

After considering the outcome of PDR Network, the Sixth Circuit determined that it did not impact the resolution of the case, reasoning that its previous “opinion did not cite or construe the Hobbs Act, defer to the 2006 Order to dispose of the appeal, nor require that the district court strictly adhere to the 2006 Order regardless of the TCPA’s text,” and, accordingly, reinstated Plaintiff’s Complaint.

Judge Gibbons authored a dissent, agreeing with the majority’s conclusion that PDR Network had “no bearing” on the case, yet disagreeing with the majority’s conclusion that the fax at issue was an unsolicited advertisement, “because its primary purpose was to improve the [Defendants’] service and not to solicit business or sales from, or through” Plaintiff.

The Sixth Circuit’s holding diverges from the Third Circuit’s view, most recently set forth in Robert W. Mauthe, M.D., P.C. v. Optum Inc., which does not endorse the pretext theory of liability under the TCPA.

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