Physicians Healthsource, Inc. v. Cephalon, Inc.

• Citation: 954 F.3d 615
• Decision Date: 30 March 2020
• Docket Number: No. 18-3609,18-3609
• Parties: PHYSICIANS HEALTHSOURCE, INC., an Ohio Corporation, individually and as the representative of a class of similarly-situated persons, Appellant v. CEPHALON, INC.; Cephalon Clinical Partners, L.P. ; Cephalon Development Corporation ; Scimedica Group, LLC ; Scimedica Group Marketing Research and Consulting, LLC; John Does 1-10 and Scimedica Group, LLC ; Scimedica Group Marketing Research and Consulting, LLC, Third-Party Plaintiffs v. Blitz Research, Inc., Third-Party Defendant
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

954 F.3d 615

PHYSICIANS HEALTHSOURCE, INC., an Ohio Corporation, individually and as the representative of a class of similarly-situated persons, Appellant

v.CEPHALON, INC.; Cephalon Clinical Partners, L.P. ; Cephalon Development Corporation ; Scimedica Group, LLC ; Scimedica Group Marketing Research and Consulting, LLC; John Does 1-10andScimedica Group, LLC ; Scimedica Group Marketing Research and Consulting, LLC, Third-Party Plaintiffs

v.Blitz Research, Inc., Third-Party Defendant

No. 18-3609

United States Court of Appeals, Third Circuit.

Submitted Under Third Circuit L.A.R. 34.1a October 21, 2019

Opinion Filed: March 30, 2020

OPINION OF THE COURT

GREENAWAY, JR., Circuit Judge.

In this digital age with myriad forms of communication, faxes no longer dominate, as they once did. Yet, faxes are the focus of our attention today. Although complicated by a phalanx of parties, the essence of this dispute is whether a pharmaceutical company violated a federal statute by impermissibly sending two faxes to a doctor.

The plaintiff-appellant in this case is Physicians Healthsource, Inc. ("PHI"), the prior employer of the doctor, who was the recipient of the faxes. The appellees in this case are Cephalon, Inc., Cephalon Clinical Partners, L.P., and Cephalon Development Corporation (collectively "Cephalon"), and SciMedica Group, LLC and SciMedica Group Marketing Research and Consulting, LLC ("SciMedica" collectively with Cephalon "Defendants").¹ Cephalon drug representatives met with the PHI doctor on multiple occasions to discuss various pharmaceutical drugs. The two faxes in dispute were sent to the PHI doctor on behalf of Cephalon.

PHI believes these faxes were unsolicited and thus sent in violation of the Telephone Consumer Protection Act of 1991 ("TCPA"), Pub. L. No. 102-243, 105 Stat. 2394, as amended by the Junk Fax Prevention Act of 2005 ("JFPA"), Pub. L. No. 109-21, 119 Stat. 359 (codified as amended at 47 U.S.C. § 227, collectively referred to herein as the "TCPA"). Additionally, PHI argues that if the faxes are found to be solicited , they nevertheless violated the TCPA by failing to include opt-out language.

The District Court granted summary judgment in favor of Defendants, finding that there was no genuine dispute of material fact that the faxes were solicited and that the TCPA does not require solicited faxes to contain opt-out notices. For the reasons detailed below, we will affirm.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

In 2009, two faxes were sent to Dr. Jose Martinez on behalf of Cephalon.² At the time, Dr. Martinez worked for PHI, practiced in the area of pain management, and met with Cephalon drug representatives on various occasions to discuss different Cephalon drugs. During certain visits, Cephalon representatives asked Dr. Martinez if they could follow up with him and "send [him] things," after which faxes were sometimes then sent, faxes that Dr. Martinez never told Cephalon or its representatives to stop sending. JA195. Here though, only two faxes are in dispute.

The first fax at issue, addressed to Dr. Martinez, was an invitation to a dinner meeting program on a drug called AMRIX®. The second fax was an invitation to a promotional product lunch on FENTORA

®. Both drugs are pain medications, and both are drugs that Dr. Martinez had discussed with Cephalon representatives previously. Indeed, at his request, Dr. Martinez had received samples of AMRIX® on multiple occasions. Neither fax included opt-out language (i.e. , language informing the recipient that he or she could decline future faxes).

Importantly, it is undisputed that PHI provided its fax number to Defendants via business cards. PHI concedes that "at best, Defendants marshalled enough evidence at summary judgment to show ... [PHI’s] voluntary communication " of its fax number to Defendants. Appellant’s Br. 24 (internal quotation marks omitted) (emphasis added). And during his deposition, Dr. Martinez noted that the business cards, with the fax number in question, were made available to drug representatives, so that they could get in touch with him.

Nevertheless, believing these faxes were sent in violation of the TCPA, PHI subsequently filed a putative class action complaint asserting damages, as "[u]nsolicited faxes damage their recipients ... [who] lose[ ] the use of [their] fax machine, paper, and ink toner." Docket 1. PHI thus asserted that it was entitled to either its actual monetary losses or statutory damages, whichever was greater, because Defendants sent unsolicited faxes that failed to contain opt-out notices.

Defendants filed summary judgment motions claiming the two faxes were not subject to the TCPA’s requirements because they were sent with prior express permission, meaning they were solicited and thus not prohibited by the TCPA, and also arguing that solicited faxes did not need to contain opt-out notices.³ The District Court granted both summary judgment motions. See Physicians Healthsource, Inc. v. Cephalon, Inc. , 340 F. Supp. 3d 445, 453–54 (E.D. Pa. 2018). PHI timely appealed.

II. JURISDICTION AND STANDARD OF REVIEW

The District Court had jurisdiction under 28 U.S.C. § 1331, and we have jurisdiction under 28 U.S.C. § 1291. Our review of a district court’s grant of summary judgment is plenary, and we apply the same standard as the district court to determine whether summary judgment was appropriate. Jester v. Hutt , 937 F.3d 233, 238 (3d Cir. 2019). Summary judgment is appropriate only when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual dispute is genuine if the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is material if it "might affect the outcome of the suit under the governing law." Id. We view all "the facts in the light most favorable to the nonmoving party and draw all inferences in that party’s favor." Stone v. Troy Constr., LLC , 935 F.3d 141, 147 n.6 (3d Cir. 2019).

III. ANALYSIS

This case presents no genuine dispute of material fact regarding whether the faxes sent were solicited—they were—and whether solicited faxes needed to contain opt-out language—they do not. As such, we will affirm the District Court’s grant of summary judgment in favor of Defendants.

A. The Two Faxes Were Solicited

In this case, the issue of whether the two faxes were solicited or unsolicited boils down to whether the voluntary provision of a fax number, akin to the voluntary provision of a telephone number, constitutes express consent, invitation, and permission, and whether "express consent" and "express invitation or permission"—as found in the TCPA—are interchangeable. Because we find that—and because PHI concedes to the fact that—there was a voluntary provision of a fax number to Defendants, and because we find that "express consent" and "express invitation or permission" are interchangeable, we conclude that the voluntary provision of a fax number constitutes express consent, invitation, and permission, such that the two faxes in this case were solicited .⁴

i. Voluntary Provision of a Number

Under the TCPA, it is unlawful to send an unsolicited fax advertisement unless three conditions are met. 47 U.S.C. § 227(b)(1)(C)(i)-(iii) ; see also Mauthe v. Optum Inc. , 925 F.3d 129, 132 (3d Cir. 2019). Specifically, the statute prohibits "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). An "unsolicited advertisement," is that which is sent "to any person without that person’s prior express invitation or permission , in writing or otherwise." Id. § 227(a)(5) (emphasis added). Thus, fax advertisements sent with the recipient’s prior express invitation or permission (i.e. , solicited faxes) are not violative of the TCPA. Id.

The voluntary provision of a number—phone or fax—by a message-recipient to a message-sender, constitutes express consent such that a received message is solicited and thus not prohibited by the TCPA, if the message relates to the reason the number was provided. See, e.g. , Daubert v. NRA Grp., LLC , 861 F.3d 382, 389 (3d Cir. 2017) ; see also Fober v. Mgmt. & Tech. Consultants, LLC , 886 F.3d 789, 793 (9th Cir. 2018) (concluding that the provision of a phone number and receipt of a call that relates to "the reason why the called party provided his or her phone number in the first place" constitutes express consent such that the calls were deemed solicited); KHS Corp. v. Singer Fin. Corp. , No. 16-55, 2018 WL 4030699, at *4 (E.D. Pa. Aug. 23, 2018) (concluding the same, but in the context of fax advertisements, and collecting cases).

In Daubert , a plaintiff alleged a violation of the TCPA due to the receipt of sixty-nine calls that he alleged were unsolicited. 861 F.3d at 387. The defendant argued that the district court was wrong in granting summary judgment on the plaintiff’s TCPA claim, contending instead that a jury could conclude the plaintiff had provided his "prior express consent" to receive calls regarding a medical bill. Id. at 389. This Court proceeded to analyze the TCPA’s scope "guided by the statute’s text, the Federal Communications Commission’s (FCC’s) interpretations of the statute, the statute’s purpose, and our understanding of the concept of consent as it exists in the common law." Id. at 389. We first afforded express consent its ordinary meaning. Id. Then, we noted that: "On the issue of prior express consent the FCC has found that ‘persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.’ " Id...