The Florence Endocrine Clinic, PLLC v. Arriva Medical, LLC , 858 F.3d 1362 ( 2017 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 16-17483
Non-Argument Calendar
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D.C. Docket No. 3:16-cv-01289-AKK
THE FLORENCE ENDOCRINE CLINIC, PLLC,
Plaintiff-Appellant,
versus
ARRIVA MEDICAL, LLC,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
_______________________
(June 5, 2017)
Before HULL, MARCUS, and WILLIAM PRYOR, Circuit Judges.
WILLIAM PRYOR, Circuit Judge:
This appeal requires us to decide whether an order form faxed to a doctor by
a company that supplies a medical product purchased by that doctor’s patient
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constitutes an “unsolicited advertisement” within the meaning of the Telephone
Consumer Protection Act, 47 U.S.C. § 227(a)(5). Arriva Medical, LLC, supplies
medical products to individuals by mail. To receive an insurance reimbursement,
the individual who orders a product from Arriva must obtain confirmation from the
individual’s doctor that the product is necessary for the individual’s treatment. To
facilitate this process, Arriva communicates directly with that individual’s doctor
to request approval for the order. So after patients of The Florence Endocrine
Clinic, PLLC, ordered products from Arriva, Arriva sent faxes to the clinic
requesting that physicians complete an order form. The clinic complained that the
faxes were “unsolicited advertisements” sent in violation of the Telephone
Consumer Protection Act, id. § 227(a)(5). Arriva moved to dismiss the complaint,
which the district court granted. The district court ruled that the faxes were not
“unsolicited advertisements.” We agree. Because the faxes do not promote the sale
of Arriva products, the faxes are not unsolicited advertisements, and we affirm.
I. BACKGROUND
Arriva supplies medical products by mail to persons with diabetes and other
diseases. Arriva markets its products to individuals who then buy the products
from Arriva. If the individual would like his insurer to reimburse him for the
product, the individual’s doctor must confirm that the product is appropriate to
treat the individual’s medical condition.
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After an individual orders a product, to facilitate reimbursement, Arriva
requests the contact information for that individual’s physician. Arriva then sends a
fax to the physician explaining that a patient has ordered an Arriva product, such as
a heating pad or a back brace. The fax includes an order form that the physician
must complete and return to Arriva before Arriva will ship the product to the
patient. Some faxes also include a product information form that describes the
requested product. For example, a fax sent on behalf of a patient who requested a
back brace from Arriva included a product information form that described two
different back braces that the doctor could prescribe to the patient.
On four separate occasions in July 2016, The Florence Endocrine Clinic
received faxes sent by Arriva to doctors working at the clinic. In August 2016, the
clinic filed a complaint against Arriva that alleged that the faxes were “unsolicited
advertisements” sent by Arriva in violation of the Telephone Consumer Protection
Act, 47 U.S.C. § 227. The Act prohibits the use of a fax machine to send an
unsolicited advertisement unless the sender is in “an established business
relationship with the recipient,” the sender obtained the fax number from the
recipient, or the advertisement contains a notice meeting the requirements of the
statute. Id. § 227(b)(1)(C). The clinic also moved for class certification, seeking to
represent a class consisting of all recipients of faxes from Arriva on or after a
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specified date where the faxes promoted its goods or services for sale and did not
contain a compliant opt out notice.
Arriva moved to dismiss the complaint on the grounds that the clinic lacked
standing and that the faxes were not unsolicited advertisements. Arriva argued that
the clinic lacked standing because it failed to “allege it suffered a concrete,
particularized injury as a result of Arriva’s purported TCPA violation.” It argued
that the clinic instead alleged a “bare violation of the statute, which does not satisfy
Article III.” Arriva argued in the alternative that the faxes it sent were not
“unsolicited advertisements” because the faxes were “not directed to physicians for
the purpose of marketing [Arriva] medical products” and the faxes “do not attempt
to sell anything” to the clinic.
The district court granted the motion for failure to state a claim. It reasoned
that the clinic had standing to bring the complaint based on our precedent in Palm
Beach Golf Center-Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d 1245 (11th
Cir. 2015), but that the faxes were not “unsolicited advertisements” within the
meaning of the Act. The district court explained that the faxes were not
advertisements because the patients of the clinic had already purchased the
products described in the complaint, and nothing in the complaint “allege[d] that
Arriva intended the faxes to promote the products’ commercial availability to”
doctors at the clinic.
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II. STANDARD OF REVIEW
We review the grant by a district court of a motion to dismiss de novo,
“taking as true the facts as they are alleged in the complaint.” Doe v. Pryor, 344
F.3d 1282, 1284 (11th Cir. 2003).
III. DISCUSSION
We divide our discussion in two parts. First, we explain that the clinic has
standing based on circuit precedent. Second, we explain that the faxes sent by
Arriva are not unsolicited advertisements within the meaning of the Act.
A. The Clinic Suffered a Concrete Injury.
The Constitution limits the jurisdiction of the federal courts to actual cases
or controversies. U.S. Const. Art. III, § 2; see also Raines v. Byrd, 521 U.S. 811,
818 (1997). “One element of the case-or-controversy requirement is that
[plaintiffs], based on their complaint, must establish that they have standing to
sue.” Raines, 521 U.S. at 818. The doctrine of standing, “rooted in the traditional
understanding of a case or controversy, . . . developed . . . to ensure that federal
courts do not exceed their authority as it has been traditionally understood.”
Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). “[T]he ‘irreducible
constitutional minimum’ of standing consists of three elements.” Id. (quoting
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)). “The plaintiff must have
(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct
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of the defendant, and (3) that is likely to be redressed by a favorable judicial
decision.” Id. Before the district court, the parties disputed whether the clinic
established that it suffered an injury in fact.
Under our precedent, the clinic suffered an injury in fact. “[W]here a statute
confers new legal rights on a person, that person will have Article III standing to
sue where the facts establish a concrete, particularized, and personal injury to that
person as a result of the violation of the newly created legal rights.” Palm Beach
Golf, 781 F.3d at 1251. The Telephone Consumer Protection Act “creates such a
cognizable right.” Id. at 1252. And, as the district court explained, in the context of
the Act, the plaintiff suffers a concrete injury because the plaintiff’s fax machine is
occupied while the unsolicited fax is being sent and the plaintiff must shoulder the
cost of printing the unsolicited fax. See id. at 1252–53. The clinic alleged in its
complaint that it received unsolicited faxes from Arriva. See The Florence
Endocrine Clinic Compl. 6, ECF No. 1. (“Plaintiff must leave its fax equipment on
and ready to receive authorized urgent communications.”). Because the clinic’s fax
machine was occupied and rendered unavailable for legitimate business while
processing the unsolicited fax, the clinic established that it suffered a concrete
injury. See id. at 1252.
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B. The Faxes Are not “Unsolicited Advertisements.”
The Telephone Consumer Protection Act prohibits the use of a fax machine
to send an unsolicited advertisement, subject to exceptions not relevant to this
appeal. 47 U.S.C. § 227(b)(1)(C). The Act defines “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). Because
the faxes Arriva sent to the clinic were “unsolicited,” that is, sent without the
“prior express invitation or permission” of the clinic, id. § 227(a)(5), we must
determine whether the faxes were “advertisements.” They were not.
To determine whether the faxes were advertisements, we must determine
whether the faxes constituted “any material advertising the commercial availability
or quality of any property,” id. “Advertising” is “[t]he action of drawing the
public’s attention to something to promote its sale.” Advertising, Black’s Law
Dictionary 59 (8th ed. 2004); see also Sandusky Wellness Ctr., LLC v. Medco
Health Sols., Inc., 788 F.3d 218, 222 (6th Cir. 2015) (“So to be an ad, the fax must
promote goods or services to be bought or sold, and it should have profit as an
aim.”); Advertise, Webster’s New International Dictionary 39 (2d ed. 1961)
(defining advertising as “to call public attention to, esp. by emphasizing desirable
qualities, in order to arouse a desire to purchase, invest, patronize, or the like”);
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Advertise, Oxford English Dictionary (online ed. 2017) (defining advertise as “to
describe or present (a product, service, or the like) in order to promote sales”). To
fall within the Act, the fax must draw attention to the “commercial availability or
quality” of Arriva products to promote their sale.
The faxes do not promote the sale of Arriva goods because, as the district
court explained, the fax only requests information to complete an order already
made. Arriva sent the faxes to the physician of the patient who requested the
product. Each fax included an instruction page that explained which patient
requested the Arriva product and requested that the physician complete an attached
order form. As the district court explained, these order forms “operate as vehicles
for patients to provide Medicare with proof that they have a medical need for the
product[s]” that they requested. The clinic neither alleged that Arriva intended that
the faxes induce the physicians at the clinic to prescribe Arriva products to other
patients that had not already requested the products from Arriva nor that the faxes
request that the doctors purchase the products. To the contrary, the complaint
alleges that “Arriva engages in aggressive direct marketing of its products to
patients,” not the doctors. The faxes do not “promote the sale” of any Arriva
product, but instead request information from physicians in connection with orders
already placed by patients of those physicians.
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The decisions cited by the clinic do not persuade us otherwise. Those
decisions do not involve faxes sent on behalf of a patient who already ordered a
product, but instead involve transmissions that encouraged the recipient of the fax
to prescribe the drug to patients or that invited the recipient to attend a program
where the products or services would be promoted. See, e.g., Physicians
Healthsource, Inc. v. Stryker Sales Corp., 65 F. Supp. 3d 482, 489, 499 (W.D.
Mich. 2015) (refusing to grant summary judgment because a question of fact
existed regarding whether a fax that invited the recipient to a free seminar was an
advertisement); Bais Yaakov of Spring Valley v. Alloy, Inc., 936 F. Supp. 2d 272,
282–83 (S.D.N.Y. 2013) (explaining that a fax that requested that the recipient sign
up for a free television service financed by commercials played during the news
program was an advertisement because, like a free seminar, it was part of an
overall campaign to sell property, goods, or services); cf. Elan Pharm. Research
Corp. v. Emp’rs Ins. of Wausau, 144 F.3d 1372, 1378 n.11 (11th Cir. 1998)
(explaining in a different context that a communication intended to encourage a
doctor to prescribe a drug to a patient would qualify as advertising). The clinic
cites no decision that determines that a fax requesting that a physician complete an
order form at the behest of a specific patient qualifies as an “advertisement” under
the Act.
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The faxes sent by Arriva to the clinic are not “advertisements” within the
meaning of the Act. Each fax relates to a specific order already placed by a patient
of the clinic and requests only that the doctor of the patient fill out an order form to
facilitate a purchase made by that patient. The complaint does not allege that the
purpose of the faxes was to induce the clinic to purchase Arriva products, nor does
it allege that the purpose of the faxes was to induce the physicians to prescribe
those products to patients who had not already requested those products from
Arriva. We agree with the district court that the complaint filed by the clinic fails
to state a claim on which relief may be granted.
IV. CONCLUSION
We AFFIRM the dismissal of the complaint.
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