What Constitutes an Advertisement Under the TCPA? Two Courts Draw the Line In Recent Opinions
Under the TCPA, the difference between “informational” messages and “advertisements,” or “solicitations,” can be a subtle one, and, on many occasions, a business’s TCPA liability – and quite possibly its financial stability – will depend on whether the message it sent is deemed an “advertisement” or “solicitation” by the courts. Consequently, it is critical for companies to understand what constitutes as “advertisement” or “solicitation” under the TCPA’s various rules for faxes, phone calls, and text messages and how the courts understand and apply this term depending on the conduit through which the message will be sent..Two recent decisions by District Courts within the Northern District of Illinois and the Western District of Washington analyze the “advertisement” and “solicitation” terms and provide helpful guidance as to how those terms apply with respect to fax messages and text messages, respectively.
Orrington v. Scion Dental, Inc.: When Is A Fax A “Pretext” to an Advertisement?
In Orrington v. Scion Dental, Inc., No. 17-cv-884, 2019 WL 4934696 (N.D. Ill. Oct. 7, 2019), the Northern District of Illinois was tasked with determining whether an insurance claims processor’s faxes offering free online webinars regarding updates to its online insurance provider portal fell within the scope of the Junk Fax Act’s “advertisement” definition.
Perhaps the regulated conduit with the broadest scope of messages that can be deemed “advertisements,” the Junk Fax Act prohibits companies from sending both faxes that contain “overt advertisements” or that are “a pretext to an advertisement” without the recipient’s prior express invitation or permission. In Orrington, there was a question as to whether the fax at issue was a “pretext to an advertisement,” for while the fax did not on its face offer any products or services for sale, the plaintiff – a dentist within the claims processor’s network – alleged that it was sent to keep the processor’s provider, United Healthcare, happy, such that the provider would retain the processor in the future and provide the processor with a “commercial benefit.” Moreover, the plaintiff argued that, under a 2006 FCC Order, all faxes promoting free goods and services, including webinars or seminars, should be considered pretexts to advertisements for which liability should attach.
Dispensing with the plaintiff’s argument that faxes offering free webinars or seminars should be deemed pretextual advertisements per se, the court recognized that a plain reading of the FCC’s 2006 Order leads to the conclusion that “there is no per se rule against all unsolicited faxes detailing free goods or services,” as that rule provides explicit exceptions for both informational and transactional faxes. Moreover, the court rejected that the underlying basis for these faxes was to increase the processor’s compensation, as webinar or portal access was not available for purchase, the processor did not receive additional financial compensation for increasing portal usage among providers, and any economic benefit it may have received from retaining its providers was “too vague and undefined to warrant a finding that the fax is a pretext to an advertisement.”
Furthermore, the court found the processor’s faxes fell squarely within both the informational and transactional exceptions, providing guidance on these terms in the process. “The fax in question is the very type of informational communication envisioned by the FCC” and “simply good customer service,” the court said. “[The processor] distributed the fax to inform providers of the new updates to the portal … [and] the only recipients of the fax were in-network providers who already had access to [the] portal.” Moreover, the faxes were transactional in nature, because FCC regulations allow for faxes that notify recipients of a change in the terms or features of an account or membership they have already purchased or are currently using, such as the online provider platform to which the plaintiff and other fax recipients received access as part of being in the processor’s network.
Vallianos v. Schulz: When Is A Text Message A “Solicitation”?
In Vallianos v. Schulz, No. C19-0464-JCC, 2019 WL 4980649 (W.D. Wash. Oct. 8, 2019), the Western District of Washington was tasked with parsing out the meaning of the term “solicitation” under the TCPA’s Do-Not-Call (“DNC”) rules and whether a presidential candidate’s text messages inviting recipients to view the homepage of his website and a livestream of his speech were in fact “solicitations.”
The TCPA’s DNC rules prohibit individuals and entities from initiating any “telephone solicitation” – which include messages “encouraging the purchase of goods” – to consumers who have registered their phone numbers on the National DNC Registry. In Vallianos, there was a question as to whether the messages at issue were “solicitations,” for while the content of the candidate’s messages and the speech advertised therein did not offer any products or services for sale, the plaintiffs contended that the hyperlink within the message directed consumers to a webpage on which the candidate’s book could be purchased, thereby “encouraging the purchase of goods” through the message. The court, however, was unpersuaded by the plaintiffs’ argument, finding that the nexus between the text message and the advertisement on the webpage was not enough to turn the message into a solicitation. As the court explained:
[T]he mere inclusion of a link to a website on which a consumer can purchase a product does not transform the whole communication into a solicitation. The option to purchase Defendant’s book was not at the top of Defendant’s homepage and was not the part of the homepage that Defendant’s text messages directed recipients to view. Rather, the invitation to purchase Defendant’s book was just a portion of Defendant’s homepage, which is not enough to turn the text message into a solicitation.”
Consequently, because the content of the message itself and what the message was directed at – i.e., the candidate’s speech – did not offer or relate to the purchase of the candidate’s book, the webpage advertisement could be ignored, leading to the court’s dismissal of the plaintiffs’ DNC claim and a beneficial result for the defendant.