Recently, the Northern District of Illinois dismissed a TCPA putative class action without prejudice, finding that faxes inviting recipients to attend free continuing education veterinary seminars did not constitute advertisements on their face because they did not promote products or services and they were not sufficiently alleged to be a pretext for an underlying commercial purpose. Ambassador Animal Hosp., Ltd. v. Elanco Animal Health, Inc., No. 20-cv-2886, 2021 WL 633358 (N.D. Ill. Feb. 18, 2021).
In Ambassador Animal Hospital, plaintiff alleged that defendants violated the TCPA by sending it “two unsolicited faxes” inviting “recipient veterinary professionals to attend presentations hosted by” one of the defendants regarding particular animal health topics. Id. at *1. The seminars were free and were represented to have “been approved for continuing education credit.” Id. Plaintiff alleged that it did not give defendants permission to send the faxes, and that “the faxes did not contain any opt-out notice.” Id. While plaintiff conceded that its employees did not register for or attend the programs, it maintained that “the advertised presentations were used . . . to market [defendant’s] animal health products and services.” Id.
Adopting the two-step process applied by courts in the Northern District of Illinois with respect to TCPA fax claims, the court looked first to whether the faxes were advertisements on their face, and second to whether the faxes, if not advertisements on their face, were nevertheless a pretext for an underlying commercial purpose.
Here, the court determined that on their face, the faxes did not advertise products because, while they included a defendant’s “name and logo,” they did “not mention any of the company’s products or services” or “contain contact information beyond a phone number to RSVP for the event.” Id. at *3. The court rejected plaintiff’s argument that the commercial availability of products and services could “be inferred by the recipient veterinarians because of their familiarity with [defendant’s] business,” finding that it was “in clear tension with this district’s precedent that the presence of a name and logo does not transform a fax into an advertisement,” and that plaintiff cited “no authority for the proposition that a reader’s possible knowledge can transform an otherwise benign fax into an advertisement.” Id.
Additionally, the court held that plaintiff did not show that the faxes and free seminars were a pretext for an underlying commercial purpose. Applying prior decisions from courts in the Northern District of Illinois and invoking the reasoning of the FCC, the court found that promotions for free seminars can constitute advertisements under the TCPA, but only if they are “a pretext for some other commercial motive.” Id. at *2. Thus, “[w]hen evaluating whether an unsolicited fax advertising some free product or service violates the TCPA, the dispositive question is whether the free offering was a pretext for the fax’s true, commercial purpose,” which is “found when the fax-sender ‘promoted its products and services’ using the free offering.” Id. at *3 (citation omitted). “The presence of a company’s name or logo on a fax,” however, “is not, by itself, sufficient to infer a commercial purpose.” Id.
Employing this standard, the court rejected plaintiff’s allegations that the seminars were used to market defendant’s goods and services, finding that those allegations were “‘mere labels and conclusions’ insufficient to survive a motion to dismiss” because plaintiff admitted that it did not attend the presentations and so did not know their content. Id. It also distinguished this case from others “where a free seminar was found to be a pretext for some commercial purpose” because it determined that in most of those instances, “the plaintiff was either required to opt-in to the defendant’s future marketing to attend the seminar . . . or the seminar itself contained specific references to the defendant’s products.” Id. at *4. The court further declined to adopt an assumption of “a commercial purpose at the pleading stage whenever ‘it is alleged that a firm sent an unsolicited fax promoting a free seminar discussing a subject that relates to the firm’s products or services,’” id. (quoting Physicians Healthsource, Inc. v. Boehringer Ingelheim Pharm., Inc., 847 F.3d 92, 95 (2d Cir. 2017)), finding both that the Seventh Circuit has not used “this expansive standard in fax cases” and that “while the Court shares the . . . concern about fax recipient plaintiffs not knowing whether the seminar was used for purposes of advertising,” such reasoning was “less compelling here where . . . the free seminar was certified for continuing education credit and thus has educational value.” Id. Finally, the court rejected plaintiff’s argument that the seminars “served a commercial purpose by generating goodwill for the company,” holding that “[t]he possible goodwill generated by offering a continuing education seminar is not, on its own, enough to imbue a fax with commercial purpose.” Id.
Accordingly, the court granted defendants’ motion to dismiss without prejudice, concluding that because plaintiff did “not adequately allege that the faxes were ‘unsolicited advertisements’ as defined by the TCPA,” it “failed to plead a non-speculative” TCPA violation. Id.