Less than a year ago, the U.S. Supreme Court in Facebook v. Duguid, 141 S. Ct. 1163 (2021), dealt a significant blow to the Telephone Consumer Protection Act (TCPA) plaintiff's bar, when it adopted a narrow interpretation of the term automatic telephone dialing system (ATDS). On Jan. 6, 2022, the U.S. Court of Appeals for the Second Circuit dealt another blow in Bruce Katz MD PC v. Focus Forward LLC, Case No. 21-12234. The court found that an unsolicited faxed invitation to participate in a market research survey in exchange for money does not constitute an "unsolicited advertisement" as defined by the TCPA.
At issue was whether two facsimiles offering $150 in exchange for participation in a market research study constituted an "unsolicited advertisement" subject to the TCPA, as amended by the Junk Fax Protection Act of 2005 (the JFPA). As the court explained, Focus Forward LLC is a for-profit limited liability company that conducts market research through surveys to collect information for its clients. The trial court granted Focus Forward's motion to dismiss finding that "[t]he Faxes . . . are requests for information which 'do not advertise the 'commercial availability or quality' of anything. Instead, they seek to obtain something—the [plaintiff]'s survey responses.'") Bruce E. Katz, M.D., P.C. v. Focus Forward LLC, No. 20-CV-2897 (PAC), 2021 WL 1268509, at *4 (S.D.N.Y. Apr. 6, 2021) (quoting Fischbein v. Olson Research Group, Inc., 959 F.3d 559, 563 (3d Cir. 2020), (Jordan, J., dissenting)). The Second Circuit affirmed the trial court's granting of the motion to dismiss, finding it critical that neither of the facsimiles sought to sell anything or even to promote the quality of the defendant's market research services.
The TCPA, as amended by the JFPA, prohibits the use of "any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement." 47 U.S.C. §227(b)(1)(C). Notably, in its opinion, the Second Circuit criticized recent Third Circuit precedent that referenced an encyclopedia definition of "commercial transaction" in its finding that market research facsimiles constitute "unsolicited advertisements" under the TCPA. See Fischbein, 959 F.3d 559 at 563-564. The Second Circuit rejected that argument, finding that the better approach is to "focus on the definition of 'advertisement' that the TCPA and FCC regulations provide" (Bruce E. Katz, M.D., P.C., Case No. 21-1224 (2d Cir.) at 10). The Second Circuit followed the dissent in Fischbein, which explained that the "commercial nature of a fax is only material to the extent it is connected to the availability of property, goods, or services." (Fischbein, 959 F.3d at 565–66 (Jordan, J., dissenting)). Other courts outside of the Third Circuit have rejected the majority in Fischbein and instead followed the dissent too. See, e.g., Podiatry in Motion, Inc. v. Interviewing Servs. of Am., LLC, No. 20 C 3159, 2020 WL 5909063) (finding Fischbein dissenting opinion persuasive and disagreeing with the Fischbein majority opinion that "a fax seeking to purchase goods or services is just as much a commercial advertisement as a fax offering to sell property, goods, or services,"); Advanced Dermatology v. Fieldwork, Inc., No. 19 C 05821, 2021 WL 3077663, at *2 (N.D. Ill. July 21, 2021) (rejecting argument that the defendant's willingness to pay the fax recipients was a "commercially available" service and agreeing with the dissent in Fischbein); Cf. Exclusively Cats Veterinary Hosp., P.C. v. M/A/R/C Research., L.L.C., 444 F. Supp. 3d 775, 780 (E.D. Mich. 2020) ("[t]o be an ad, the fax must promote goods or services that are for sale, and the sender must have profit as an aim.") (internal quotation and citation omitted).
This is a trend that will likely continue. As the Seventh Circuit put it "[f]ax paper and ink were once expensive, and this may be why Congress enacted the TCPA, but they are not costly today" and "[a]s a result, what motivates TCPA suits is not simply the fact that an unrequested ad arrived on a fax machine." Rather, "there is evidence that the pervasive nature of junk-fax litigation is best explained this way: it 'has blossomed into a national cash cow for plaintiff's attorneys specializing in TCPA disputes.'" Bridgeview Health Care Ctr., Ltd. v. Clark, 816 F.3d 935, 941 (7th Cir. 2016) (citing Yuri R. Linetsky, Protection of "Innocent Lawbreakers": Striking the Right Balance in the Private Enforcement of the Anti "Junk Fax" Provisions of the Telephone Consumer Protection Act, 90 Neb. L.Rev. 70, 97 (2011)).