DR. RICHARD E. FISCHBEIN, Appellant v. OLSON RESEARCH GROUP, INC.; JOHN DOES 1-12; ROBERT W. MAUTHE M.D., P.C., Individually and as the representative of a class of similarly situated persons, Appellant v. ITG, INC.; ITG INVESTMENT RESEARCH, INC.; M SCIENCE LLC
Nos. 19-3018 & 19-3222
United States Court of Appeals for the Third Circuit
Filed: May 15, 2020
PRECEDENTIAL. Argued March 24, 2020. On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civ. No. 2-17-cv-05601 and No. 5-18-cv-01968). District Judges: Honorable Gerald J. Pappert and Honorable Chad F. Kenney.
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 19-3018
DR. RICHARD E. FISCHBEIN,
Appellant
v.
OLSON RESEARCH GROUP, INC.; JOHN DOES 1-12
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 2-17-cv-05601)
District Judge: Honorable Gerald J. Pappert
No. 19-3222
ROBERT W. MAUTHE M.D., P.C.,
Individually and as the representative of a class of similarly
situated persons,
Appellant
v.
ITG, INC.; ITG INVESTMENT RESEARCH, INC.;
M SCIENCE LLC
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 5-18-cv-01968)
District Judge: Honorable Chad F. Kenney
Argued March 24, 2020
Circuit Judges.
(Filed: May 15, 2020)
Phillip A. Bock (Argued)
Robert M Hatch
David M. Oppenheim
Bock Hatch Lewis & Oppenheim
134 North La Salle Street
Chicago, IL 60602
Counsel for Appellant in No. 19-3018
Samantha L. Southall (Argued)
Buchanan Ingersoll & Rooney
50 South 16th Street
Two Liberty Place, Suite 3200
Philadelphia, PA 19102
Attorneys for Appellee in No. 19-3018
Phillip A. Bock (Argued)
Molly S. Gantman
David M. Oppenheim
Bock Hatch Lewis & Oppenheim
134 North La Salle Street, Suite 1000
Chicago, IL 60602
Daniel J. Cohen
P.O. Box 432040
Maplewood, MO 63143
Andrew J. Reilly
Swartz Campbell
115 North Jackson Street
Media, PA 19063
Richard E. Shenkan
Shenkan Injury Lawyers
P.O. Box 7255
New Castle, PA 16107
Attorneys for Appellant in No. 19-3222
Francis J. Earley (Argued)
Mintz Levin Cohn Ferris Glovsky & Popeo
The Chrysler Center
666 Third Avenue
New York, NY 10017
Esteban Morales
Mintz Levin Cohn Ferris
2029 Century Park East, Suite 3100
Los Angeles, CA 90067
James W. Kraus
Pietragallo Gordon Alfano Bosick & Raspanti
301 Grant Street
One Oxford Centre, 38th Floor
Pittsburgh, PA 15219
Kevin E. Raphael
Pietragallo Gordon Alfano Bosick & Raspanti
1818 Market Street, Suite 3402
Philadelphia, PA 19103
Attorneys for Appellee ITG, INC. in No. 19-3222
Patrick D. Doran (Argued)
Thomas P. Manning
Craig D. Mills
Buchanan Ingersoll & Rooney
50 South 16th Street
Two Liberty Place, Suite 3200
Philadelphia, PA 19102
Attorneys for Appellees ITG Investment Research, Inc.
and M Science LLC in No. 19-3222
OPINION OF THE COURT
GREENBERG, Circuit Judge.
I. INTRODUCTION
In this pair of appeals, we are asked to decide whether faxes soliciting participation by the recipients in market research surveys in exchange for monetary pаyments are advertisements within the meaning of the Telephone Consumer Protection Act,
II. JURISDICTION AND STANDARD OF REVIEW
The District Courts had jurisdiction under
III. DISCUSSION
The TCPA makes it “unlawful for any person within the United States, or any person outside the United States if the recipient is within the United Statеs . . . to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement[.]”
However, nothing in Optum limits an advertisement to a fax that the sender intends will facilitate the sale of a service or product to the recipient. We do not doubt that a recipient of a fax offering to buy goods or services from the recipient would consider the fax to be an advertisement. After all, a fax attempting to buy goods or services is no less commercial thаn a fax attempting to sell goods or services to the recipient and a fax that is an element of a market research survey is just as commercial as a fax attempting to sell or buy goods or services to or from the recipient. Therefore, it is obvious that a fax seeking a response to a survey is seeking a service.
The parties in their briefs address the question of whether money is a form of property for the purposes of the TCPA. We fail to see the relevance of that question. In considering whether the sеnder of a fax has an intent to buy “property, goods, or services” available commercially, the term used in the TCPA,
Defendants argue that Optum, though in dicta, suggested that market research surveys are not advertisements within the TCPA‘s prohibition against unsolicited fax advertisements. Optum, 925 F.3d at 134. But that observation was not a legal conclusion. We merely highlighted that the FCC, at least at that time, had not considered market surveys as telemarketing by phone. Id. We also pointed out that the issue of whether paid market surveys are fax advertisements as defined by the TCPA was pending before the FCC. Id. at 134 n.3. More importantly, there is no indication of whether or not the FCC would consider paid market surveys as telemarketing.
It is an offer of payment to the recipients that transforms the solicitation of responses to market surveys into advertisements. “[A]ll commercial transactions have one thing in common: they serve to transmit economic values such as materials, products, and services from those who want to exchange them for another value, usually money, to those who need them and are willing to pay a countervalue.” Commercial Transaction, Encyc. Britannica, https://www.britannica.com/topic/commercial-transaction (last visited Apr. 6,
In our analysis it is useful to consider the case of a blood donor. Ordinarily, a person giving blood is thought to have performed a benevolent act. However, a donor may give blood at a blood bank in exchange for money. There can be no question that if a blood bank sends a fax highlighting its willingness to purchase blood for money, that fax wоuld be an advertisement. As we stated above, any fax announcing the availability of opportunities to exchange goods or services for compensation is an advertisement within the meaning of the TCPA. Even though the act of donating blood is certainly not a commercial act it would not be a non-commercial act if the sender of the fax took steps to induce or influence the recipient by converting the donation into a commercial transaction by paying for the blood.3
At oral argument before us, thе appellees brought to our attention two recent district court opinions, one from the Eastern District of Michigan and the other from the Southern District of New York, both holding that fax market surveys, paid or unpaid, are not advertisements for the purposes of the TCPA. Exclusively Cats Veterinary Hosp., P.C. v. M/A/R/C Research, L.L.C., No. 19-11228, 2020 U.S. Dist. LEXIS 45181 (E.D. Mich. Mar. 16, 2020); Machonis v. Universal Survey Ctr., Inc., No. 18-10978, 2020 U.S. Dist. LEXIS 31330 (S.D.N.Y. Feb. 21,
2020) (magistrate judge‘s report and recommendation). Neither opinion persuades us to reach a different conclusion. First, both opinions rely heavily on the same FCC interpretation of market surveys in thе telemarketing by phone context we discussed above, which are significantly different than faxes, a material difference Congress itself recognized. H.R. Rep. No. 102-317, at *10 (1991) (“This type of telemarketing [by fax] is problematic for two reasons. First, it shifts some of the costs of advertising from the sender to the recipient. Second, it occupies the recipient‘s facsimile machine so that it is unavailable for legitimate business messages while processing and printing the junk fax.“). We note yet another difference between the two—whereаs consumers can easily and quickly end telemarketing phone calls by hanging up, rarely do fax recipients end a fax “call” prematurely. Moreover, as we noted above, the FCC has never opined on whether paid market surveys, even in the telemarketing by phone context, would be considered telemarketing.
Both opinions also highlight the concern that construing fax market surveys as advertisements would somehow hinder the important purposes market researchers serve, and significantly limit their ability to collect vаluable information from consumers. This concern is contrary to the practical realities of the internet age. In fact, fax market surveys might be just about one of the least efficient forms of market surveys today. Beyond the aforementioned method of surveys by phone, now market research firms can solicit surveys via electronic mail, the world-wide web, and various other digital methods of which we, as legal jurists who admittedly are not the most technology-savvy individuals, may
Plaintiffs provide us with that very answer in their briefs. Although faxes have become almost a relic of the past for most consumers, due to patient privacy laws, healthcare professionals still rely on faxes for certain communications. This, of course, renders them a very captive and easily identifiable audience, as one of the few subgroups in the population that still commonly employ the use of a fax machine. If market researchers have a method to easily identify their target audience, and effectively reach that audience in a way that is hard for the audience to ignore, one can be sure they will exploit it. That makes healthcare professionals especially vulnerable to unsolicited faxes. While the TCPA may not protect them from all unsolicited faxes, see infra, it can do so when the market researcher converts the interaction into a commercial trаnsaction. As the Exclusively Cats court itself recognized, these firms are not offering compensation out of the goodness of their hearts—they do so for a commercial purpose, to increase the response rate of their surveys, i.e. they can buy more of what they desire. 2020 U.S. Dist. LEXIS 4181, at *5-22. Their method fits every element of liability we espoused in Optum, just in an intent to buy context. See 925 F.3d at 133.
As we alluded to above, our opinion must be cabined. We realize that a recipient may regard a fax soliciting participation in an unpaid market survey to be no less intrusive or annoying than а fax that offers to pay the recipient for participating in the survey. But as we recognized in Optum, “we are constrained in reaching our decision by what the TCPA actually prohibits—it does not prohibit all unsolicited faxes, just advertisements.” Id. at 135. And the TCPA, as noted above, defines advertisement as including property, goods, or services that are “commercially available.”
In view of our analysis, we will reverse the District Courts’ dismissals of these cases by orders dated August 26, 2019, and August 29, 2019, and remand the cases to the District Courts for further proceedings. We express no opinion as to the viability of the plaintiffs’ class action claims.
JORDAN, Circuit Judge, dissenting.
In these consolidated appeals, my colleagues in the Majority conclude that sending a fax that offers a small honorarium in exchange for the completion of a
I. BACKGROUND
Dr. Mauthe operates a medical practice in Pennsylvania. He is a frequent litigant; one might say he has a sub-specialty in suing people under the TCPA. See Robert W. Mauthe M.D., P.C. v. Spreemo, Inc., No. 19-1470, 2020 WL 1492987 (3d Cir. Mar. 25, 2020); Robert W. Mauthe, M.D., P.C. v. Optum Inc., 925 F.3d 129 (3d Cir. 2019); Mauthe M.D., P.C. v. Nat‘l Imaging Assocs., Inc., 767 F. App‘x 246 (3d Cir. 2019). Between August of 2014 and March of 2015, he received five faxes from ITG Market Research (“ITG“). Three of them offered $200 in exchange for an hour of Mauthe‘s time participating in a telephone survey about catheter usage in spinal cord injury patients. The other two faxes offered him $60 for taking a 25-minute internet survey on neurological movement disorders. Both sets of faxes stated that “[t]his message is not a solicitation or advertisement for purchase/sale of any products and/or services from ITG Market Research.” (ITG App. 32-37). ITG is a company that provides data to various healthcare providers to aid in their decision-making processes.
Dr. Fischbein is a psychiatrist with a private practice in Pennsylvania. In May of 2017, he received a fax from defendant Olson Research offering him $150 in exchange for his pаrticipation in a study on the management of disorders in neurological patients. Olson Research is a marketing research firm, with healthcare as one of its specialties.
II. DISCUSSION
Neither the faxes to Mauthe nor the one to Fischbein should qualify as “unsolicited advertisements” under the TCPA. In saying that they do, the Majority makes two fundamental errors. First, it reads the text of the statute to include words that are not there, a misstep that makes all the difference. Second, it misreads our own precedent.
A. The Statute
“Under the TCPA, it is unlawful to send an unsolicited advеrtisement by fax.” Optum, 925 F.3d at 132. The word “advertisement” is crucial – the TCPA “does not prohibit all unsolicited faxes, just advertisements.” Id. at 135. And because that statutory term is so important, the TCPA provides its own definition of “unsolicited advertisement,” defining it to mean “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person‘s prior express invitation or permission, in writing or otherwise.”
Armed with that statutory text, we have everything we need to decide this case. The text should lead us to сonclude that the faxes presently at issue are not “unsolicited advertisements,” since they do not advertise the “commercial availability or quality” of anything. Instead, they seek to obtain something – the doctors’ survey
That conclusion is bolstered by the federal regulations associated with the TCPA. Those regulations state that the word “sender... means the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement.”
My colleagues, however, eschew a straightforward reading of the statute and substitute their own definition of “unsolicited advertisement” for the one written by Congress. They justify that substitution by saying they “do not doubt that a rеcipient of a fax offering to buy goods or services from the recipient would consider the fax to be an advertisement.” (Majority Op. at 7.) That may be true, but what fax recipients think about the faxes they get is not legally relevant. The meaning of a statutory term does not depend on the subjective perception of litigants. That is especially so when, as here, the statute provides its own precise definition for the term in question.
The Majority goes on to note that “a fax attempting to buy goods or services is no less commercial than a fax attempting to sell goods or services to the recipient[.]” (Majority Op. at 7.) Again, that may be true. But again, it is irrelevant. “[T]he TCPA only prohibits unsolicited advertisements, not any and all faxes even if sent for a commercial purpose.” Optum, 925 F.3d at 133 (emphasis in original). And, under the TCPA, a fax is only an advertisement if it advertises “the commercial availability or quality of any property, goods, or services[.]”
In the end, the Majority edits the statute to proscribe advertising “the availability of an opportunity... to exchange goods or services[.]” (Majority Op. at 8.) I agree that, if the statute actually said that, it would prohibit the faxes at issue here. Perhaps the Majority‘s version is bettеr than the law passed by Congress, but, since our job is to apply the laws Congress passes, I would affirm the judgments of the District Courts.
B. Our Precedent
I would affirm the rulings on appeal for an additional reason as well. Our own precedent,
In Optum, just as here, the defendаnts were in the business of maintaining healthcare related databases. Id. at 131. The Optum defendants “market[ed], [sold], and license[d] the database typically to health care, insurance and pharmaceutical companies, who use[d] it to update their provider directories, identify potential providers to fill gaps in their network of providers, and validate information when processing insurance claims.” Id. at 131-32. They ensured the accuracy of the database by sending faxes to healthcare
providers, “requesting them to respоnd and correct any outdated or inaccurate information.” Id. at 132.
The plaintiffs in that case argued that the faxes were unsolicited advertisements and thus prohibited by the TCPA, but we held that “there is no basis on which defendants can be held to have violated the TCPA if the meaning of the advertisement is viewed in a conventional way.” Id. We concluded that just because the faxes sought to improve the quality of the sender‘s product did not mean that they were unsolicited advertisements as defined by the TCPA. And we established a test for determining when a fаx crosses the line into forbidden advertising. For a plaintiff to successfully make the case that a fax is an unsolicited advertisement, he must “show that the sender is trying to make a sale” by demonstrating “a nexus between the fax and the purchasing decisions of an ultimate purchaser whether the recipient of the fax or a third party.” Id. at 133. Applying that test to the facts then at hand, we held that the claims did not survive under “any... theory of liability under the TCPA.” Id. at 134. That was because “the faxes did not attempt to influence the purchasing decisions of any potential buyer[.]” Id. at 135.
A simple application of Optum should lead to affirmance here.2 The defendants before us also maintain
healthcare databases, and they earn their profits by selling access to those databases to third parties not implicated in these disputes. The only difference is that, in this case, the faxes offered small sums of money in exchange for completion of the surveys. But that should make no difference under Optum. Our analysis there turned on the lack of a nexus between the faxes and the purchasing decision of potential buyers. We nowhere mentioned a lack of monetary compensation as a significant factor in our conclusion that there was no nexus. And the faxes here equally lack that nexus. They did not seek to influence Mauthe or Fischbein in any purchasing decision. Nor did they seek to cause Mauthe or Fischbein to influence the purchasing decisions of others. The faxes were thus not “unsolicited advertisements,” as that term is defined in the TCPA and was interpreted in Optum.
The Majority‘s analogy to blood donations proves the point. It is true that a blood bank offering cash in exchange for donations renders the transaction less eleemosynary than
would be so if the blood bank relied simply on the kindness of people to secure its supply of blood. But the distinction between charitable and mercenary motives highlighted by my colleagues is nowhere featured in the TCPA. Consider two hypothetical faxes sent by a blood bank: the first seeks blood from willing donors, and the second offers money in exchange for the donations. Can either fax be said to be advertising the “commercial availability” of blood? Of course not. The blood banks do not have enough blood available. That‘s why they need the donations. The proffered monetary incentive does not change that fundamеntal point.
In sum, both the text of the statute and our prior decision in Optum foreclose the result the Majority reaches. It is “our job to apply faithfully the law Congress has written[.]” Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718, 1725 (2017). We should do so and affirm the judgments of the District Courts. Because that is not the result here, I respectfully dissent.
Notes
The Exclusively Cats court had it right. “Surveys, such as the one Defendant proffered to veterinarians employed at Plaintiff‘s firm, are offering no good or service ‘for sale.‘” Exclusively Cats, 2020 WL 1249232, at *3. They are thus outside the scope of the TCPA.