Fischbein v. Olson Research Grp., Inc.

• Decision Date: 15 May 2020
• Docket Number: No. 19-3018, No. 19-3222,19-3018
• Citation: 959 F.3d 559
• Parties: 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
• Court: U.S. Court of Appeals — Third Circuit

959 F.3d 559

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

No. 19-3018

No. 19-3222

United States Court of Appeals, Third Circuit.

Argued March 24, 2020

Filed: May 15, 2020

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 payments are advertisements within the meaning of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (b)(1)(C) ("TCPA"), which prohibits the transmission of unsolicited fax advertisements. Applying our recent precedent in Mauthe v. Optum, Inc., 925 F.3d 129 (3d Cir. 2019), the District Courts dismissed both cases under Federal Rule of Civil Procedure 12(b)(6) as the Courts concluded that such surveys are not advertisements within the TCPA because they did not attempt to sell anything to their recipients. We hold, however, that solicitations to buy products, goods, or services can be advertisements under the TCPA and the solicitations for participation in the surveys in exchange for $200.00 by one sender and $150.00 by the other sender were for services within the TCPA.¹ Defendants characterize the proposed payments as "honorariums" or "gifts". Consequently, we will reverse the District Courts’ dismissal of these cases by orders dated August 26, 2019, in Fischbein v. Olson Research Group, No. 19-3018, and August 29, 2019, in Mauthe v. ITC, Inc., No. 19-3222, and will remand the cases to the District Courts for further proceedings.²

II. JURISDICTION AND STANDARD OF REVIEW

The District Courts had jurisdiction under 28 U.S.C. §§ 1331 and 1332 and we have jurisdiction under 28 U.S.C. § 1291. We review de novo a district court's dismissal under Rule 12(b)(6) for failure to state a claim on which relief may be granted. Geness v. Cox, 902 F.3d 344, 353 (3d Cir. 2018). In determining whether a plaintiff sufficiently has stated a claim to survive a motion to dismiss under Rule 12(b)(6), "we accept all well-pleaded allegations as true and draw all reasonable inferences in favor of the plaintiff .... However, we disregard threadbare recitals of the elements of a cause of action, legal conclusions, and conclusory statements." City of Cambridge Ret. Sys. v. Altisource Asset Mgmt. Corp., 908 F.3d 872, 878-79 (3d Cir. 2018) (internal quotations and citations omitted). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Zuber v. Boscov's, 871 F.3d 255, 258 (3d Cir. 2017) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) ).

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 States ... to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement[.]" 47 U.S.C. § 227(b)(1)(C). It defines an "unsolicited advertisement" as "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." Id. § 227(a)(5). As we held in Optum, "to be an ad, the fax must promote goods or services to be bought or sold, and it should have profit as an aim." 925 F.3d at 133 (citation omitted). In the context where an entity sends a fax attempting to make a sale, we held that "there must be a nexus between the fax and the purchasing decisions of an ultimate purchaser." Id.

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 than 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 sender of a fax has an intent to buy "property, goods, or services" available commercially, the term used in the TCPA, 47 U.S.C. § 227(a)(5), means the property, goods or services being bought or sold, not the money offered to buy them. The defendants appear to construe unsolicited advertisement which the TCPA defines as "any material advertising the commercial availability or quality of any property, goods, or services"—as requiring that the offer itself, in this case money, to be the "property, goods, or services" commercially available. Id. We do not construe the statute so narrowly. Any fax announcing the availability of an opportunity for the recipient to exchange goods or services for compensation is "material advertising the commercial availability or quality of any property, goods, or services," within the TCPA. Id. We reiterate that a fax offering the opportunity to sell is just as commercial in character as a fax offering the recipient the opportunity to buy property, goods, or services.

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, 2020); see United States v. Bishop, 66 F.3d 569, 602 (3d Cir. 1995) (Becker, J., concurring in part and dissenting in part) ("[T]he preferable definition of commercial transaction requires an activity involving a voluntary economic exchange." (emphasis added)).

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 would 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, the 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, ––– F.Supp.3d ––––, 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 the 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—whereas 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 valuable information from consumers. This concern is contrary to the practical realities of the internet age. In fact, fax...