Ambassador Animal Hospital, Ltd. v. Elanco Animal Health Incorporated ( 2023 )


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  •                               In the
    United States Court of Appeals
    For the Seventh Circuit
    ____________________
    No. 22-1304
    AMBASSADOR ANIMAL HOSPITAL, LTD.,
    Plaintiff-Appellant,
    v.
    ELANCO ANIMAL HEALTH INC.
    and ELI LILLY & CO.,
    Defendants-Appellees.
    ____________________
    Appeal from the United States District Court for the
    Northern District of Illinois, Eastern Division.
    No. 20-cv-2886 — Mary M. Rowland, Judge.
    ____________________
    ARGUED OCTOBER 28, 2022 — DECIDED JULY 24, 2023
    ____________________
    Before SCUDDER, KIRSCH, and JACKSON-AKIWUMI, Circuit
    Judges.
    KIRSCH, Circuit Judge. Ambassador Animal Hospital, Ltd.,
    brought a putative class action suit against Elanco Animal
    Health Inc. and its parent company Eli Lilly & Co., alleging
    that Elanco sent Ambassador two unsolicited fax advertise-
    ments in violation of the Telephone Consumer Protection Act,
    
    47 U.S.C. § 227
    . The district court dismissed the amended
    2                                                   No. 22-1304
    complaint for failure to state a claim, concluding that the faxes
    did not constitute unsolicited advertisements under the
    TCPA. We affirm, holding that the faxes do not indicate—di-
    rectly or indirectly—to a reasonable recipient that Elanco was
    promoting or selling some good, service, or property as re-
    quired by the TCPA.
    I
    Elanco Animal Health (an animal health products and ser-
    vices company) sent Ambassador Animal Hospital two unso-
    licited faxes inviting Ambassador’s veterinarians and its
    owner to RSVP for two free dinner programs. The faxes listed
    the topics of the dinner programs—one titled “Canine and Fe-
    line Disease Prevention Hot Topics” and the other “Rethink-
    ing Management of Osteoarthritis”—and indicated that both
    programs had been approved for continuing education cred-
    its. The faxes also provided the names of the programs’ pre-
    senters. The top left and bottom right corners of each invita-
    tion included the trademarked “Elanco” logo, and the bottom
    of each fax contained a notice encouraging recipients to con-
    sult their state or federal regulations or ethics laws about re-
    strictions on accepting industry-provided educational and
    food items.
    Ambassador filed suit in state court, alleging violations of
    the TCPA, 
    47 U.S.C. § 227
     and state law. Ambassador argued
    that the two faxes were unsolicited advertisements under the
    TCPA because the free dinner programs were used to market
    or sell Elanco’s animal health goods and services. Elanco re-
    moved the case to federal court and moved to dismiss the
    complaint for failure to state a claim under Federal Rule of
    Civil Procedure 12(b)(6). The district court dismissed the
    No. 22-1304                                                    3
    TCPA claim with prejudice and relinquished jurisdiction over
    the state law claims under 
    28 U.S.C. § 1367
    (c).
    II
    We review Rule 12(b)(6) dismissals de novo, accepting all
    well-pleaded factual allegations as true and drawing all rea-
    sonable inferences in the plaintiff’s favor. Rock River Health
    Care, LLC v. Eagleson, 
    14 F.4th 768
    , 772 (7th Cir. 2021). We also
    review questions of statutory interpretation de novo. Bern-
    stein v. Bankert, 
    733 F.3d 190
    , 199 (7th Cir. 2013).
    With limited exceptions not relevant here, the TCPA pro-
    hibits sending unsolicited advertisements by fax without the
    recipient’s consent. 
    47 U.S.C. § 227
    (a)(5), (b)(1)(C). The TCPA
    defines an unsolicited advertisement as “any material adver-
    tising 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.” 
    Id.
    § 227(a)(5).
    The sole question in this case is whether the two faxes
    Elanco sent to Ambassador fall within this definition. Ambas-
    sador argues that they do because, although they mentioned
    no products or services, Elanco’s goal was to advertise the
    commercial availability or quality of its goods or services. Re-
    lying on facts external to the faxes, Ambassador asserts that
    Elanco chose subjects for the seminars that overlapped with
    products it sold, offered free dinners and continuing educa-
    tion credits to encourage local veterinarians to attend, and as-
    signed sales managers to receive RSVPs. In short, the free ed-
    ucational dinners were a ploy to advertise Elanco’s products
    and services.
    4                                                    No. 22-1304
    We start and end with the plain language of the statute.
    Section 227 asks whether the content of a fax advertises the
    commercial availability or quality of a thing. See Florence En-
    docrine Clinic, PLLC v. Arriva Med., LLC, 
    858 F.3d 1362
    , 1366–
    67 (11th Cir. 2017). It does not inquire of the seller’s motiva-
    tion for sending the fax or the seller’s subsequent actions. The
    absence of any reference to the sender’s purpose in § 227 is
    particularly significant because the TCPA expressly considers
    a sender’s purpose in other provisions. See, e.g., id. § 227(a)(4)
    (defining “telephone solicitation” as “the initiation of a tele-
    phone call or message for the purpose of encouraging the pur-
    chase or rental of, or investment in, property, goods, or ser-
    vices”); id. § 227(b)(2)(B)(i) (authorizing the FCC to adopt an
    exemption for “calls that are not made for a commercial pur-
    pose”). “Where Congress includes particular language in one
    section of a statute but omits it in another section of the same
    Act, it is generally presumed that Congress acts intentionally
    and purposely in the disparate inclusion or exclusion.” Rus-
    sello v. United States, 
    464 U.S. 16
    , 23 (1983) (cleaned up). Ac-
    cordingly, to be an unsolicited advertisement under the
    TCPA, the fax itself must indicate—directly or indirectly—to
    a reasonable recipient that the sender is promoting or selling
    some good, service, or property. In other words, the “material
    … which is transmitted”—the faxed document—must per-
    form the advertising. An unsolicited advertisement “does not
    depend on the subjective viewpoints of either the fax sender
    or recipient, and thus an objective standard governs whether
    a fax constitutes an unsolicited advertisement.” Robert W.
    Mauthe M.D., P.C. v. Millennium Health LLC, 
    58 F.4th 93
    , 96 (3d
    Cir. 2023).
    Ambassador argues that Elanco’s faxes did, in fact, contain
    advertising content. Namely, Ambassador emphasizes that
    No. 22-1304                                                     5
    Elanco included its name and logo on the faxes, the seminar
    topics related to products sold by Elanco, and the invitations
    targeted recipients and requested RSVPs of particular em-
    ployees. But none of these features transformed Elanco’s invi-
    tations to free dinners and continuing education programs
    into advertisements for a good, service, or property. Use of
    Elanco’s trademarked logo on the invitations did not reason-
    ably encourage readers to buy any of Elanco’s products or ser-
    vices. Nor did simply mentioning subject matter related to
    Elanco’s business. The TCPA does not go so far as to prohibit
    sending faxes on company letterhead to promote free educa-
    tion on topics that relate to the sender’s business—it prohibits
    advertising products or services. And even if Elanco targeted
    veterinarians familiar with its products or directed RSVPs to
    individuals in the marketing or sales departments, Elanco’s
    faxes did not contain the promotional quality necessary for an
    advertisement.
    The faxes certainly promoted goodwill for Elanco and
    helped the company manage its brand and image. And there
    could be situations in which a similar fax message would
    qualify as an indirect advertisement—perhaps if Elanco had
    said something like “Join us for a free dinner discussion of
    how Alenza [Elanco’s product] can help manage canine in-
    flammation” or “RSVP for a free event hosted by Elanco on
    the best medication available for canine osteoarthritis.” But
    not only did these faxes lack that promotional aspect, nothing
    in them directly or indirectly alluded to the commercial avail-
    ability or the quality of Elanco’s products, as the statutory def-
    inition requires.
    Ambassador also argues that the invitations served as a
    pretext for unsolicited advertising and asks us to follow the
    6                                                    No. 22-1304
    Federal Communications Commission’s guidance on the stat-
    ute. See In the Matter of Rules & Reguls. Implementing the Tel.
    Consumer Prot. Act of 1991, Junk Fax Prevention Act of 2005, 21
    FCC Rcd. 3787 (April 6, 2006) (hereinafter 2006 Order). The
    2006 Order states that fax messages “that promote goods or
    services even at no cost, such as free magazine subscriptions,
    catalogs, or free consultations or seminars, are unsolicited ad-
    vertisements under the TCPA’s definition.” 
    Id. at 3814
    . Ac-
    cording to the FCC, “[i]n many instances, ‘free’ seminars
    serve as a pretext to advertise commercial products and ser-
    vices.” 
    Id.
    As a preliminary matter, we need not decide whether the
    pretext portion of the 2006 Order is interpretive guidance or
    a legislative rule. But see Carlton & Harris Chiropractic, Inc. v.
    PDR Network, LLC, 
    982 F.3d 258
    , 263–64 (4th Cir. 2020) (con-
    cluding that the pretext portion of the 2006 Order is non-
    binding interpretive guidance). Because we conclude that it
    conflicts with the statutory text, the pretext provision is not
    entitled to deference. See Utility Air Regulatory Grp. v. E.P.A.,
    
    573 U.S. 302
    , 321 (2014).
    The text of the TCPA creates an objective standard nar-
    rowly focused on the content of the faxed document. The
    FCC’s interpretation, however, asks us not only to assume
    subjective motivations behind faxes that advertise no goods
    or services, but to assume that subsequent conduct of senders
    is relevant to the TCPA analysis. Moreover, the TCPA is lim-
    ited to advertisements that promote “commercial” property,
    goods, and services. 
    47 U.S.C. § 227
    (a)(5). A bare offer for a
    free good or service is not an advertisement unless the fax also
    promotes something that the reader can acquire in exchange
    for consideration. See Mauthe, 58 F.4th at 96 (“Nowhere in the
    No. 22-1304                                                  7
    fax is a discussion of anything that can be bought or sold—
    the fax speaks only about a free event.”). We therefore decline
    to manufacture a pretext element unsupported by the TCPA’s
    text.
    AFFIRMED
    

Document Info

Docket Number: 22-1304

Filed Date: 7/24/2023

Precedential Status: Precedential

Modified Date: 7/24/2023