Physicians Healthsource Inc v. Cephalon Inc
954 F.3d 615
| 3rd Cir. | 2020Background
- PHI (Physicians Healthsource) sued Cephalon and related entities after two 2009 fax advertisements were sent to Dr. Jose Martinez (PHI’s former employee) promoting AMRIX® and FENTORA®.
- PHI alleged the faxes were unsolicited and lacked required opt-out language under the TCPA (as amended by the Junk Fax Prevention Act), and sought statutory or actual damages on behalf of a putative class.
- It is undisputed that PHI provided its fax number on business cards that were available to drug representatives, and Dr. Martinez had ongoing contacts with Cephalon representatives (including receiving samples and follow-up communications).
- The District Court granted summary judgment for Defendants, concluding the faxes were solicited (prior express permission/invitation) and that solicited faxes need not contain opt-out notices.
- On appeal, the Third Circuit affirmed: voluntary provision of a fax number (when the fax relates to why the number was given) constitutes prior express invitation/permission, and the TCPA does not permit the FCC to require opt-out notices on solicited faxes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether voluntary provision of a fax number constitutes "prior express invitation or permission" (i.e., makes a fax solicited) | PHI: Passive availability of business cards and lack of a specific request for these faxes show no express permission | Defendants: PHI voluntarily provided the fax number to reps and the faxes related to prior discussions, so consent/invitation existed | Held: Voluntary provision of a fax number constitutes express consent/invitation when the fax relates to the reason the number was provided; faxes were solicited |
| Whether the terms "express consent" and "prior express invitation or permission" are interchangeable for calls and faxes under the TCPA | PHI: "Express consent" (calls) differs from "invitation or permission" (faxes); telephone precedents are inapposite | Defendants: The TCPA and FCC usage treat the phrases interchangeably; same standard should apply | Held: The phrases are interchangeable; the voluntary provision standard applies to faxes as to calls |
| Whether solicited faxes must include opt-out notices (FCC 2006 Solicited Fax Rule) | PHI: Even if solicited, FCC rule requires opt-out language on solicited faxes | Defendants: TCPA is silent for solicited faxes; FCC exceeded authority by requiring opt-out on solicited faxes | Held: Bais Yaakov and the Court hold the FCC exceeded its authority; TCPA is silent on solicited faxes and does not require opt-out notices on solicited faxes |
| Whether genuine disputes of material fact precluded summary judgment (i.e., whether consent was genuinely disputed) | PHI: Facts (passive card placement, ambiguous deposition testimony) create genuine factual disputes | Defendants: PHI conceded at most that the fax number was voluntarily provided; record establishes solicitation as a matter of law | Held: Court found no genuine dispute of material fact because PHI voluntarily provided the fax number and faxes related to prior contacts, so summary judgment affirmed |
Key Cases Cited
- Daubert v. NRA Grp., LLC, 861 F.3d 382 (3d Cir. 2017) (holding that knowingly releasing a phone number can constitute prior express consent to calls related to the reason the number was given)
- Bais Yaakov of Spring Valley v. Fed. Commc’ns Comm’n, 852 F.3d 1078 (D.C. Cir. 2017) (held FCC exceeded its authority by requiring opt-out notices on solicited faxes)
- Sandusky Wellness Ctr., LLC v. ASD Specialty Healthcare, Inc., 863 F.3d 460 (6th Cir. 2017) (discussing the FCC rule and agreeing with limits on FCC authority over solicited faxes)
- Fober v. Mgmt. & Tech. Consultants, LLC, 886 F.3d 789 (9th Cir. 2018) (applying the transactional-context test: providing a number implies consent to calls related to why number was given)
- True Health Chiropractic, Inc. v. McKesson Corp., 896 F.3d 923 (9th Cir. 2018) (addressing TCPA consent issues and FCC authority questions)
- Gorss Motels, Inc. v. Safemark Sys., LP, 931 F.3d 1094 (11th Cir. 2019) (finding express permission to receive faxes from contractual inclusion of fax number in a business context)
- Mauthe v. Optum Inc., 925 F.3d 129 (3d Cir. 2019) (TCPA framework precedent cited by the court)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (standard for summary judgment: genuine dispute exists if reasonable jury could return a verdict for nonmoving party)