Federal Court Follows Seventh Circuit on Sender Liability, Dismisses TCPA Suit Against Pfizer

Siding with the Seventh Circuit, a federal court in Michigan has granted Shook’s motion to dismiss a Telephone Consumer Protection Act (TCPA) complaint against Pfizer involving faxes sent by another party, finding that even though a Pfizer drug was advertised in the fax, a literal interpretation of the regulation could lead to “absurd and unintended results,” or even “sabotage litigation.” Shook, Hardy & Bacon Partner Becky Schwartz represented Pfizer in the matter.

Health One Medical Center - Eastpointe filed suit against Pfizer, Bristol-Myers Squibb and Mohawk Medical after receiving unsolicited faxes from Mohawk in 2016 advertising, among other things, Pfizer’s Depo Medrol drug. Health One claimed the faxes didn’t comply with the TCPA because they lacked an opt-out provision, and alleged common law and statutory conversion.

Under the TCPA, a “sender” who may be liable for violations of the Act includes “the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement.” Although Health One alleged that Mohawk Medical actually sent the faxes, it claimed that Pfizer also was liable because the pharmaceutical company qualifies as a sender under the language of the Act. As an initial matter, the court found that “the conclusory allegations by plaintiff, undermined by the plain text and images of the faxes, do not plausibly suggest that Pfizer, Inc. played a role in sending the faxes.”

But Health One also argued that because the language of the TCPA says a sender includes entities whose “goods or services are advertised or promoted,” Pfizer was liable because Mohawk advertised Depo Medrol in the fax. The Michigan court said although the Sixth Circuit had not yet addressed the issue and the plaintiff’s reading of the regulation might be “plausible,” the Seventh Circuit’s rejection of arguments in similar cases was “persuasive.” In Paldo Sign and Display v. Wagener Entities, 825 F.3d 793 (7th Cir., 2016) the Seventh Circuit reasoned that “a literal interpretation of the regulation ‘would lead to absurd and unintended results’ by vastly expanding the scope of liability,” holding instead that an entity “must have done something” to advertise its goods or services. Otherwise, the court said, “TCPA liability would automatically attach to any manufacturer or distributor of any product promoted.” Such a broad scope, the court said, could even lead to what it called “sabotage” liability. “For example, if a competitor of Wagener Equities sent out ten thousand unsolicited fax advertisements promoting Wagener’s services, the resulting lawsuit could bankrupt Wagener even though Wagener played no part in sending the faxes,” the court said.

The Michigan court also rejected Health One’s argument that the faxes were sent on Pfizer’s “behalf,” finding it had not alleged facts to support the “on whose behalf” test–the degree of control that the entity exercised over the preparation of the faxes, whether the entity approved the final content, or the nature and term of the contractual relationship between the parties.  The court also found that Health One “failed to plausibly allege” that Pfizer took any action that could establish its claims for conversion.

The case is Health One Medical Center Eastpointe v. Bristol-Myers Squibb Co., No. 16-13815 (E.D. Mich., opinion issued July 17, 2017.)