Eastern District of Michigan Dismisses Claim Because Fax Was Not An Advertisement

The Eastern District of Michigan recently dismissed a TCPA claim with prejudice after finding that the single fax at issue did not constitute an advertisement. See Matthew N. Fulton, D.D.S., P.C. v. Enclarity, Inc., No. 16-13777, 2017 U.S. Dist. LEXIS 28439 (E.D. Mich. Mar. 1, 2017). In doing so, it reaffirmed the Sixth Circuit’s position that, in deciding whether a fax is an advertisement, courts should not look beyond the four corners of the document and should ask whether it “‘promote[s] goods or services to be bought or sold’” and “‘ha[s] profit as an aim.’” Id. at *4 (citation omitted).

In Fulton, a Michigan dental practice argued that the defendants had violated the TCPA by transmitting an unsolicited fax advertisement. The fax at issue stated that its purpose was “to help preserve the privacy and security” of patients’ information by “[v]erifying the practice address, phone number and . . . secure fax number(s)” of the recipient in order to “minimize the potential privacy risks that could arise from information sent to an unsecured location.” The fax then asked the recipient to either confirm or correct the information on the fax.

Citing an unpublished decision in Comprehensive Health Care Sys. of the Palm Beaches, Inc. v. M3 USA Corp., No. 16-80967, 2017 WL 108029 (S.D. Fla. Jan. 11, 2017), the plaintiff argued that the fax was an advertisement because it “‘was an indirect commercial solicitation or a pretext for commercial solicitation sent as an overall marketing campaign for the purposes of making a profit.’” Fulton, 2017 U.S. Dist. LEXIS 28439, at *5 (citation omitted). According to the plaintiff, the fax was an advertisement because the website referenced at the bottom of the fax contained advertising, and because the contact information that was collected from recipients could be sold to third parties that could then market goods or services to the recipients.

The defendants moved to dismiss and argued that the fax was not an advertisement because it did not “‘advertis[e] the commercial availability or quality of any property, goods, or services.’” Id. at *4 (quoting 47 U.S.C. § 227(a)(5)). Instead, the fax sought “only to verify or validate contact information related to Plaintiff, namely the location, practice, and contract information of Plaintiff (and health care providers who receive like faxes).” Id.

The court agreed with the defendants and found that, as a matter of law, the fax “does not constitute an advertisement.” Id. at *6. Relying heavily on the Sixth Circuit’s decision in Sandusky Wellness Ctr., LLC v. Medco Health Sols., Inc., 788 F.3d 218 (6th Cir. 2015), the court held that the fax “‘lacks the commercial components inherent in ads’” because it “does not offer—or even mention—any product, good, or service.” Id. at *6-7 (quoting Sandusky, 788 F.3d at 223). The court recognized that the defendants may have intended to sell the recipients’ contact information to third parties that would then market goods or services to the recipients. But it held that, based on Sandusky and the plain language of the statute, the TCPA does not prohibit commercial conduct that does not qualify as an “advertisement.”

In rejecting the plaintiff’s arguments, the court held that potential future profits are irrelevant to whether a communication is an advertisement. It also found that, even if a website listed on a fax contains advertising material, printing a web address on a fax does not in and of itself constitute an advertisement. Finally, it held that Comprehensive Health Care Systems of the Palm Beaches was factually distinguishable and, in any event, inapplicable because “the Florida court relied on documentation outside of the four corners of the fax,” which is contrary to Sixth Circuit precedent. Id. at *10. It then found that the TCPA claim should be dismissed with prejudice, as no amount of amendment would “change the content of the Fax,” which was “insufficient to constitute an advertisement, as a matter of law.” Id.

The defendants are currently working to achieve the same result in a nearly identical case currently pending before the Northern District of Illinois. See Florence Mussat, M.D. S.C. v. Enclarity, Inc., No. 16-7643 (N.D. Ill. filed July 28, 2016). If they are successful, both results will echo the outcome of a similar case in which the Eastern District of Arkansas dismissed a TCPA claim after finding that the fax at issue was “not a direct commercial solicitation” and the defendant “failed to allege facts from which the Court reasonably could infer that the fax . . . was either an indirect commercial solicitation or a pretext for a commercial solicitation.” ARcare v. IMS Health, Inc., No. 16-0080, 2016 U.S. Dist. LEXIS 125262, at *9 (E.D. Ark. Sept. 15, 2016). We will continue to monitor the status of that motion and other courts’ treatment of these issues.