To the extent that facsimiles remain communications vehicles of choice, can a tangential “profit motive” be the basis for a TCPA violation? Imaginative theory, but hold the fort in effect said a unanimous panel of the United States Court of Appeals for the Third Circuit this week in Mauthe v. Optum Inc.

Dr. Mauthe received an unsolicited fax from Optum, Inc. and Optum Insight, Inc. (together, “Optum”), which maintain and update a national database of healthcare providers, containing providers’ contact information, demographics, specialties, education and related data. Optum then markets, sells and licenses the database typically to healthcare, insurance and pharmaceutical companies. The fax, which asked the good doctor to his update “practice information,” specifically said, on its face, “this is not an attempt to sell you anything.” Case closed? Not yet.

The Third Circuit, in affirming summary judgment for Optum, conceded that on its face the fax contained no advertisement if the meaning of that term was “viewed in a conventional way.” However, the Court went on to examine a theory of “third-party based [TCPA] liability,” such as where a fax might urge a doctor to prescribe a particular drug for his patients, even though the patients, not the doctor, are the likely purchasers of the senders’ product. Adding his own twist to this concept, Dr. Mauthe argued that, even though he was not a purchaser of Optum’s products or services, the defendants had violated the TCPA “because they had a profit motive in sending him the fax” and, therefore, the unsolicited request for a data update “should be regarded as an advertisement.”

The Third Circuit started its analysis with the unquestionable proposition that the “TCPA only prohibits unsolicited advertisements, not any and all faxes even if sent for a commercial purpose” (emphasis supplied). It then added that “a fax does not become an advertisement merely because the sender intended it to enhance the quality of its products or services and thus its profits.”

With that launching point, the Court set forth the showing required to establish third-party based liability under the TCPA – at least in the Third Circuit. So listen up.

“…[T]he plaintiff must show that the fax: (1) sought to promote or enhance the quality or quantity of a product or service being sold commercially; (2) was reasonably calculated to increase the profits of the sender; and (3) directly or indirectly encouraged the recipient to influence the purchasing decisions of a third party.”

Emphasizing this last component, “[i]t is not enough that the sender sent a fax with a profit motive – in order to show that the sender is trying to make a sale, there must be a nexus between the fax and the purchasing decisions of an ultimate purchaser whether the recipient of the fax or a third party.” Otherwise, for example, commercial entities conducting research who use faxes to collect data still might  be deemed to violate the TCPA, even though the transmissions “would not promote the sale of any products or services, or seek to influence the purchasing decisions of a potential buyer.” In a final elaboration, the Court noted that this nexus requirement “accomplishes the TCPA objective without infringing on other commercial activities.” It further “avoids the risk of extending too far the prohibitions that the TCPA established.” Well said.

In Dr. Mauthe’s case, however, there was no such nexus to be shown (i.e., no attempt to influence the purchasing decision of any potential buyer and no encouragement to influence such decisions by any third party). So, while appreciating the “annoyance and/or harassment” to the doctor, the Court declined to “distort the meaning of ‘advertisement’ to accommodate Dr. Mauthe’s case.” Nor did the Court find that the fax was a pretext to future transmissions that actually included an unsolicited advertisement.

Summary judgment affirmed. For those sending unsolicited faxes in the Third Circuit, particularly relating to information gathering of this sort, the framework for analysis of any potential for “third-party based liability” is now in place.