Robert W. Mauthe, M.D. P.C. v. Optum, Inc.
Opinion
I. INTRODUCTION
This matter comes on before this Court on the appeal of plaintiff Robert W. Mauthe M.D. P.C. challenging the District Court's grant of summary judgment against its complaint brought under the Telephone Consumer Protection Act,
II. FACTUAL BACKGROUND
The facts of this case are essentially undisputed. Defendants maintain a national database of healthcare providers, containing providers' contact information, demographics, specialties, education, and related data. Defendants market, sell, and license the database typically to health care, insurance and pharmaceutical companies, who use it to update their provider directories, identify potential providers to fill gaps in their network of providers, and validate information when processing *132 insurance claims. Obviously, it is important that the information contained in the database be accurate and Mauthe, who is a healthcare provider, does not contend otherwise.
One of the ways defendants update and verify the information in their database is to send unsolicited faxes to healthcare providers listed in the database, requesting them to respond and correct any outdated or inaccurate information. The faxes inform the recipients that:
As part of ongoing data maintenance of our Optum Provider Database product, Optum regularly contacts healthcare practitioners to verify demographic data regarding your office location(s). This outreach is independent of and not related to your participation in any Optum network. By taking a few minutes to verify your practice information is current, your information will be promptly updated in Optum Provider Database.
This data is used by health care related organizations to aid in claims payment, assist with provider authentication and recruiting, augment their own provider data, mitigate healthcare fraud and publish accurate provider directories.
Optum
,
III. STANDARD OF REVIEW
We exercise
de novo
review on this appeal.
See
Bradley v. West Chester Univ. of Pa. State Sys. of Higher Educ.
,
IV. DISCUSSION
Under the TCPA, it is unlawful to send an unsolicited advertisement by fax.
NIA
,
An example of a possible TCPA violation by the sending of a fax to an entity other than a possible direct purchaser of the sender's product or services is a fax sent to a doctor encouraging the doctor to prescribe a particular drug to the doctor's patients who, rather than the doctor, are the likely purchasers of the sender's product.
Mauthe advances his third-party based liability argument on a theory that, although he was not a purchaser of defendants' products or services, defendants violated the TCPA because they had a profit motive in sending him the fax so that the fax should be regarded as an advertisement. Mauthe asserts that defendants sought the information in the fax to enhance the accuracy of their database and thus increase their profits. We agree with the stated factual basis for his claim because defendants were using the faxes to improve the accuracy of their database. However, the TCPA only prohibits unsolicited
advertisements
, not any and all faxes even if sent for a commercial purpose. It seems beyond doubt that a fax does not become an advertisement merely because the sender intended it to enhance the quality of its products or services and thus its profits. After all, a commercial entity takes almost all of its actions with a profit motivation. But as we opined in
NIA
, "[a]dvertising is the action of drawing the public's attention to something to promote its sale. 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."
NIA
,
We are satisfied that to establish third-party based liability under the TCPA a plaintiff must show that the fax: (1) sought to promote or enhance the quality or quantity of a product or services being sold commercially; (2) was reasonably calculated to increase the profits of the sender; and (3) directly or indirectly encouraged the recipient to influence the purchasing decisions of a third party. As we explained in
NIA
, "the fax must convey the impression ... that a seller is trying to make a sale[.]"
NIA
,
We give an example that supports our conclusion and demonstrates why we must be concerned with possible overreaching of the application of the TCPA that we derive from the analogous field of telemarketing, a practice that the TCPA regulates. In dealing with telemarketing the TCPA prohibits
any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes [or is] exempted by rule or order by the Commission under paragraph (2)(B).
Commercial entities conducting research sometimes do so by sending faxes. Under Mauthe's theory, these firms would violate TCPA's prohibition on the sending of an unsolicited fax advertisement because they would send their faxes for the purposes of improving their operations and thus their profits. But such faxes would not promote the sale of any products or services, or seek to influence the purchasing decisions of a potential buyer. We will not adopt a construction that broadly would limit commercial activities to the extent Mauthe invites.
See
NIA
,
Turning to the facts of this case, Mauthe's claim does not survive our standard for third-party based liability or any other theory of liability under the TCPA. Though defendants intended their faxes to *135 obtain information enhancing the quality of their services, and thus reasonably calculated their faxes to increase their profits by keeping their database updated, the faxes did not attempt to influence the purchasing decisions of any potential buyer, whether a recipient of a fax or a third party. Moreover, the fax sent to Mauthe did not encourage him to influence the purchasing decisions or those of a third party. Though we appreciate the annoyance and/or harassment Mauthe felt receiving unsolicited faxes, we are constrained in reaching our decision by what the TCPA actually prohibits-it does not prohibit all unsolicited faxes, just advertisements. We will not distort the meaning of "advertisement" to accommodate Mauthe's case. Therefore, we will uphold the District Court's conclusion that defendants' fax was not an "advertisement" under the TCPA.
The District Court also held that the fax was not a pretext to more commercial solicitation.
Optum
,
Inasmuch as we hold that the District Court did not err in granting summary judgment in favor of defendants on Mauthe's TCPA claim, the only federal claim in the case, we also hold that the Court did not err in declining to exercise supplemental jurisdiction over Mauthe's state law claim. In this regard a court does not err if it declines to exercise supplemental jurisdiction over state claims after it dismisses a federal claim on which its jurisdiction is based in the absence of extraordinary circumstances.
Bright v. Westmoreland Cty.
,
V. CONCLUSION
For the foregoing reasons we will affirm the order of July 27, 2018.
The District Court had jurisdiction under
We used the term "third-party based liability" even though the parties do not do so in their briefs. They do, however, refer to third parties in their briefs.
We note that there is a petition for expedited declaratory ruling on whether market research surveys are fax advertisements as defined by the TCPA pending before the FCC.
See
Lyngaas v. J. Reckner Assocs., Inc.
, No. 2:17-cv-12867,
In fact, under Mauthe's theory an employer with a letterhead listing its address, telephone number and products and services would violate the TCPA if it sent a fax on its letterhead to inquire about the qualifications of a job applicant from the applicant's former employer because employee selection is certainly related to making a profit.
Reference
- Full Case Name
- ROBERT W. MAUTHE, M.D., P.C., Individually and on Behalf of All Others Similarly Situated v. OPTUM INC., OptumInsight, Inc., Robert W. Mauthe, M.D., P.C., Appellant
- Cited By
- 45 cases
- Status
- Published