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Too Clever by Half: Court Denies Summary Judgment to Defendant that Faxed CME Offers to Doctors Agreeing to Stay Licensed

This one is creative.

In order to be a medical professional (i.e. a doctor) in most jurisdictions, a certain amount of annual continuing medical education credits are required. I am told—but do not know firsthand—that CME seminars can be extremely expensive and fancy affairs set in exotic locations, and with lots of money thrown around.

Presumably, there’s a pretty good market for folks offering CME credits, but with all the rules preventing unsolicited faxes and phone calls, how is a CME service provider supposed to attract clients?

Well, one way is to partner with companies that offer referral services to doctors—or to offer such referrals yourself. Then—in theory at least—you’ll have a stable of doctors to whom you are referring patients who will have signed up for your marketing materials regarding the lucrative CME presentations you or your partners offer. The doctors need patients and CME credit, and you’re providing both and can profit both by the referral and the CME lead.  Pretty clever right?

Perhaps, but as one TCPA Defendant just found out, marketing CME credit via faxes to doctors that have partnered with you to provide medical services to referral patients, but who did not otherwise consent to receive advertisements, can land you in hot water. And, this is true even if the doctors were required to stay licensed as a condition of their referral agreement.

In Mauthe v. McMc Llc, 2019 U.S. Dist. LEXIS 80000, CIVIL ACTION NO. 18-1901 (E.D. Pa. May 13, 2019) the Defendant argued that doctors who agreed to provide services to patients they referred had consented to receive faxes regarding CME because: i) the doctors had provided their fax numbers to the service; and ii) the referral service agreement required doctors to stay licensed. Thus, the Defendant asserted, the faxes regarding CLE credit were within the scope of the consent provided by the doctors when the number was provided—it was related to the referral service agreement. The Court disagreed concluding that a jury to easily find the doctors had not consented to receive faxes related to products that were so ancillary to the referral agreement. The Court noted that the defendant was free to try to convince the jury to conclude otherwise, but the Defendant’s request for summary judgment was denied.

Mauthe is also notable because it marks it the first time a First Amendment argument was raised in a TCPA case since AAPC v FCC. In an analysis that is a bit dizzying, the Court distinguishes (doesn’t apply?) AAPC in light of Defendant’s arguments that Plaintiff fails to meet the Central Hudson test. That’s weird because Central Hudson is an intermediate scrutiny test and the TCPA is now subject to strict scrutiny. And, even under Central Hudson, it is unclear that Defendant’s constitutional concerns are washed away merely because the Plaintiff suffered a privacy invasion, as the court seems to suggest. (Article III standing is not the same as the First Amendment folks.) One might assume that the constitutional challenge was not well presented by the defense, but I have not read the briefing to figure it out. Bottom line, the First Amendment analysis in Mauthe is not something you should take to heart.

That said, Mauthe has two other important pieces that should be kept in mind. First, Mauthe joins a number of other cases in holding that a repeat TCPA Plaintiff maintains standing to assert claims even if he or she has filed a number of other suits—the issue is whether or not they are actively seeking phone calls to set up lawsuits. Second, Mauthe joins the minority position—although it may be the majority position in the Third Circuit—in holding that a TCPA Defendant can violate the statute willfully without knowing it was violating the TCPA—knowledge that the fax was sent without consent is enough. On the other hand, however, Mauthe recognizes that a good faith belief that a fax was consented to—even if it was, as a matter of law, not consented to— would be sufficient to thwart a finding of willfulness under this standard.

Mauthe is an important reminder that although cross-marketing products to existing clients can be a good way to drive up revenue, using technology regulated under the TCPA to send unsolicited messages can be a great way to go bust. Be sure to use well-worded consent and marketing disclosures in your agreements with your customers/clients/doctor friends so that you can pitch your products safely. Remember– the old EBR rules are virtually dead under the TCPA, only the proper-level of express consent can save you from potentially-devastating exposure.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Eric Troutman Class Action Attorney
Of Counsel

Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems.

Eric has built a national litigation practice based upon deep experience, rigorous...

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