The Sixth Circuit Narrows What It Means To Be An “Advertisement” Under the TCPA
By: Isaac Colunga and David Oberst
The Telephone Consumer Protection Act (TCPA) prohibits “unsolicited advertisements” sent to fax machines. 47 U.S.C. § 227(b)(1)(C). But when is a fax considered an “advertisement” for purposes of the TCPA? Several district courts have attempted to answer this question, and we finally have some appellate court guidance. On June 3, 2015 the Sixth Circuit in Sandusky v. Medco
, No. 3:14-cv-00583, found that unsolicited faxes that “lacked the necessary commercial aspects of ads,” were not “advertisements” for purposes of the TCPA, and thus not actionable under the Act. In light of this decision, companies that send out unsolicited faxes can do so without fear of violating the TCPA so long as their faxes are only informational and not perceived as promotional or marketing ploys to profit from.
, Medco sent two faxes to a chiropractor (Sandusky), listing lower-priced prescription medications available in the health plans of Sandusky’s patients. As a pharmacy benefit manager, Medco services (including keeping and updating a list of medicines, known as the “formulary”) plan sponsors that enable the plans to offer more informed and less expensive prescription drug benefits to their members. Medco also sends the formulary to healthcare providers that prescribe medications to its clients’ members, allowing the providers to know which medications are covered by their patients’ healthcare plans. After Medco sent two formularies in June and September 2010, Sandusky sued (individually and on behalf of a proposed class) Medco claiming each fax was an “unsolicited advertisement” prohibited by the TCPA.
The district court granted summary judgment to Medco, and against the court’s warning, Sandusky appealed. The Sixth Circuit examined the TCPA’s definition of “advertisement”, refining it to mean “any material that promotes the sale (typically to the public) of any property, goods, or services available to be bought or sold so some entity can profit.” The court reasoned that because an advertisement must promote something to the public for sale, an ad (under the TCPA) is fundamentally commercial and seeks a profit. The court found that Medco’s faxes contained “only information—parts of the formulary—and do not seek to promote products or services to make a profit.” Thus, the court held that Medco’s faxes, as a matter of law, were not “advertisements,” did not violate the TCPA, and affirmed summary judgment for Medco.
Sandusky argued that the Act’s definition should be interpreted more broadly; that the court should follow the Seventh Circuit on the issue; and that all publicity is apparently financially good publicity. However, the court found all three of these arguments unpersuasive. Sandusky’s proposed definition of “advertisement” was “any that ‘makes known’ the quality or availability of a good or service”, which the court said was too broad and would include non-commercial messages. Next, the court differentiated this case from the Seventh Circuit, because in that case, the fax sent was for promotional and marketing reasons. The faxes solicited business from the public, whereas Medco’s faxes did not seek a profit nor did they seek any actual, potential or future commercial transaction. Lastly, the court held that Sandusky could not rely on potential or future benefits to Medco’s business from the two faxes to show that they were somehow commercial in nature.
decision provides helpful guidance on a thorny issue, and certainly narrowed the scope of what it means to be an “advertisement” for purposes of the TCPA. Stay tuned for further appellate decisions on this issue.
Isaac J. Colunga has extensive experience in the TCPA and its corresponding regulations. He actively defends companies against class actions in federal courts nationwide stemming from fax advertisements, autodialed calls and texts to cell phones, and calls to registrants on the national Do Not Call list. He can be reached at 312-726-1567 or firstname.lastname@example.org