The United States Court of Appeals for the Third Circuit set forth its test for when the sender of a fax advertisement could face liability under the TCPA if the recipient of the fax was not the ultimate purchaser of the sender’s goods or services, but rather such ultimate purchaser was a third-party.

In Robert W. Mauthe M.D., P.C. v. Optum Inc., the plaintiff healthcare corporation sued defendants for sending unsolicited faxes. The defendants maintain a national database of healthcare providers containing contact, demographic and other information. Defendants sent the faxes at issue to verify and update the information contained in their provider database. The faxes advised the recipients that “[t]here is no cost to you to participate in the data management initiative. This is not an attempt to sell you anything.” Plaintiff alleged that the fax he received from defendant was an unsolicited advertisement in violation of the TCPA.

The Court determined that “there is no basis on which defendants can be held to have violated the TCPA on the basis of the fax if the meaning of the word advertisement is viewed in a conventional way” because plaintiff admitted that he was not a potential direct purchaser of defendants’ database. The Court then considered whether a “possible broader basis for liability” could exist predicated on the fact that the case involved third parties beyond the plaintiff and defendants, i.e., the users of the defendants’ database.

The Court provided an example when such broader “third-party based liability” could exist: When a “fax [is] sent to a doctor encouraging the doctor to prescribe a particular drug to the doctor’s patients who, rather than the doctor, are the likely purchasers of the sender’s product.”

The Court set forth the following test to establish third-party based liability under the TCPA: The plaintiff must establish that the fax: “(1) sought to promote or enhance the quality or quantity of a product or services 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.” In other words, “the fax must convey the impression . . . that a seller is trying to make a sale” and that the sender may have had a profit motive is not enough, but rather “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.”

The Court explained that its third-party based liability standard “hinges on whether the fax was somehow intended to influence a potential buyer’s decision in making a purchase, irrespective of whether the sender sent the fax to the potential buyer or to a third party and must have been intended to or at least be capable of influencing a buyer’s purchasing decision.”

The Court rejected plaintiff’s claim that the fax at issue was an advertisement under the third-party based liability standard. It noted that “[c]ommercial entities conducting research sometimes do so by sending faxes.” Such faxes, like the one at issue in Mauthe, do “not promote the sale of any products or services, or seek to influence the purchasing decisions of a potential buyer.” Instead, the “defendants intended their faxes to obtain information enhancing the quality of their services . . . the faxes did not attempt to influence the purchasing decisions of any potential buyer, whether a recipient of the fax or a third party.” Accordingly, the Court held that the faxes at issue were not advertisements and affirmed summary judgment.

The case is Robert W. Mauthe, M.D., P.C. v. Optum Inc., ---F.3d ---, 2019 WL 2262706 (3d Cir. 2019).