3rd Circuit: Commercial purpose does not make unsolicited fax an advertisement under TCPA
On May 28, the U.S. Court of Appeals for the 3rd Circuit, in a consolidated action, affirmed summary judgment that a health care provider database company’s (defendant) unsolicited fax did not violate the TCPA. According to the opinion, the defendant updated its database by sending unsolicited faxes to healthcare providers, requesting that they voluntarily update their contact information, if necessary. The fax included disclaimers that there was no cost to the recipient for participating in the database maintenance initiative and that it was not an attempt to sell a product. The plaintiff sued the defendant alleging a state law claim and that the fax violated the TCPA’s prohibition on sending unsolicited advertisements by fax. The district court entered summary judgment in favor of the defendant and declined to exercise jurisdiction over the state law claim.
On appeal, the 3rd Circuit affirmed the district court’s judgment, rejecting the plaintiff’s third-party liability argument that the fax should be regarded as an advertisement, even though he was not a purchaser of the company’s services. The 3rd Circuit held that to establish third-party based liability under TCPA, 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 appellate court found that, even though the defendant had a “profit motive” in sending the fax because it wanted to improve the quality of its product by making its database more accurate, “the faxes did not attempt to influence the purchasing decisions of any potential buyer,” nor did the fax encourage the recipient to influence the purchasing decisions of a third party.