Tuesday, February 28, 2023

COVID-related communications are ads where they tout D's services

Steven A. Conner DPM, P.C. v. Fox Rehabilitation Servs., P.C., 2023 WL 2226781, No. 2:21-cv-1580-MMB (E.D. Pa. Feb. 24, 2023)

Conner is a podiatrist who uses a fax machine at his practice for treating patients, primarily as a communication destination for incoming lab results. Fox offers a variety of physical, occupational and speech therapy services in the form of house-calls to patients; it receives patients through, among other things, referrals from doctors.

The question was whether eight faxes that Dr. Conner’s practice received from Fox during the early days of the COVID-19 pandemic were illegal junk faxes (“unsolicited advertisements”) under the federal Telecommunications and Consumer Protection Act of 1991.

Each fax contained the headline “Helping Flatten The Curve With House Calls.” Fox’s defense was that, with the healthcare system in disarray, Fox wanted to reassure its partners and providers that Fox was open for business and its services could be counted on. There was testimony that, in the early days of the pandemic, many of Fox’s referral sources had reached out to Fox asking for information, and that Fox was primarily seeking to inform providers that Fox was adhering to existing COVID guidelines. The costs of the fax campaign ultimately came out of Fox’s informational technology budget because of its internal status as an information communication.

Out of the roughly 20,000 recipients, less than thirty requested Fox to stop sending such faxes. Two healthcare office managers testified that they had received Fox’s faxes and found them to be very helpful in assuring their own practices that Fox remained open for business, was comporting with COVID protocols and was “taking steps to bring additional services to my attention.” They also testified that they did not see the faxes as advertisements because the faxes “weren’t trying to sell me something” and they “state things helpful to my practice.”

The TCPA defines an “unsolicited advertisement” as being “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.” Dr. Conner credibly testified that he did not give permission to Fox to send the faxes. “Liability must be based on an objective standard—neither the intentions of the sender nor the opinions of the recipient factor into the equation.” The Third Circuit has also stated that courts can spot illegal junk faxes by considering if the advertisement has “profit as an aim,” if it promotes a discount or price, if it comes with a sales contact, or if it contains “testimonials, product images, or coupons.” The FCC has also defined non-offensive fax messages that contain only “information” as opposed to commercial promotion: “[F]acsimile communications that contain only information, such as industry news articles, legislative updates, or employee benefit information, would not be prohibited by the TCPA rules.”

The court held that the larger context of the pandemic wasn’t part of the objective test for what was an ad; the “reasonable recipient” standard “considers only that material contained within the four-corners of the fax.”

The court held that it was clear

that all eight faxes are promoting Fox’s services in a way that suggests … Fox is trying to secure referrals from providers. The faxes tout a specific “model” of care used by Fox and which Fox describes as high quality and unique. While the faxes certainly describe capabilities of Fox’s services as they pertain to dealing with the challenges of COVID, that is still a promotion of quality and not solely and informational exercise.


Even the first fax, which posed the closest question, was not just informational:

[W]hile the majority of the fax message appears to be on the informational side, it still promotes qualities of Fox’s proprietary “house call” model, trademarked and therefore presumably proprietary of Fox. The bullet points describe the quality of Fox’s services—even though these descriptions are within the context of dealing with the challenges of the pandemic, they are still promoting the commercial quality of the services offered. Here—and with the other seven faxes—there is an embedded profit motive to gain referrals from past providers, because the more referrals Fox receives the more revenue they are hoping to receive from the patients’ insurance.

Subsequent faxes went further, promoting the proprietary “Fox Model” for treatment of patients and going beyond just informing the recipient that was open for business or even that Fox was adhering to COVID-preventive protocols. Having a middle informational segment that would be fine on its own didn’t change the advertising nature of the whole fax. Promoting new capabilities wasn’t just “informational,” even if they were health-related.

The court also rejected a First Amendment challenge to the TCPA.

But the court didn’t find willfulness entitling Conner to enhanced damages; “Fox’s witnesses were credible when they testified that their intent was to inform their past referral providers of their additional COVID capabilities, not to gain referrals in spite of TCPA restrictions.”

 


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