Michigan Court Refuses to Dismiss Fax Case on Pleadings Despite Agreeing that Fax Did not Describe Anything “Bought or Sold”

The TCPA only prohibits “advertisements” sent using a fax machine.  So if a fax is not an advertisement, there is no liability. Simple, right?

Not always.  In a nuanced and fact-specific decision out of the United States District Court for the Eastern District of Michigan, the Court declined to dismiss a TCPA junk fax case even though all parties agreed that the “prescription savings card itself” that the Defendant fax described a “free program that is not bought or sold.”  Mich. Urgent Care & Primary Care Physicians, P.C. v. Medical Sec. Card Co., 2020 U.S. Dist. LEXIS 223665 (E.D. Mich. Nov. 30, 2020).

Despite that, the Court considered the fax an “advertisement” because the program described in the fax was not “one being run by a charity, non-profit, or philanthropic entity”; rather, Defendant is a “for-profit limited liability corporation.”  Accordingly, at least to the Court in this case, the thing being bought or sold was “access to negotiated rates on discount drugs, and access to more consumers and their overall purchasing power.”  The Court concluded, the “fax is trying to cause doctors to recommend a service to their patients (even if that service comes at no cost to the doctors or patients) which, if the patients use it, will financially benefit Defendant.”  With that, the Plaintiff’s stated a claim for receiving an unsolicited “advertisement,” and the Court refused to dismiss.

The Court’s holding about “advertisement” is relatively fact-specific, but is important for two reasons.  First, by focusing on the downstream consequences of information shared via fax and the identity of the sender, the decision pays little fidelity to the plain language of the TCPA’s definition of “advertisement.”  See 47 U.S.C. 227(a)(5) (defining advertisement as “any material advertising the commercial availability or quality of any property, goods, or services”).  Second, the decision sits uneasily (and the Court expressly distinguished) the Sixth Circuit’s binding precedent in Sandusky Wellness Ctr., LLC v. Medco Health Sols., Inc., 788 F.3d 218 (6th Cir. 2015), which held that a fax that “did not solicit business for a commercially available product or service” did not qualify as an advertisement.

In another wrinkle worth noting, the Court also accepted Plaintiff’s allegations as true and concluded that the “fax was received on an ink-and-paper telephone facsimile machine as opposed to by email.”  Defendant’s attempt to argue otherwise by parsing Plaintiff’s Complaint failed because the Court read Plaintiff’s complaint “in the light most favorable to Plaintiff,” as it always does at the pleading stage.

The “advertisement” issue in this case is one to watch.

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