Physicians Healthsource, Inc. v. Boehringer Ingelheim Pharmaceu

Filing

OPINION, vacating and remanding for further proceedings consistent with this opinion. by RKW, DJ, PNL FILED.[1961166] [15-288]

Case 15-288, Document 87-1, 02/03/2017, 1961166, Page1 of 13

15-288-cv
Physicians Healthsource, Inc. v. Boehringer Ingelheim Pharmaceuticals, Inc.,

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UNITED STATES COURT OF APPEALS

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FOR THE SECOND CIRCUIT

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August Term, 2015

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(Argued: September 29, 2015

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Decided: February 3, 2017)

Docket No.

15-288-CV

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Physicians Healthsource, Inc.,
Plaintiff-Appellant,
v.
Boehringer Ingelheim Pharmaceuticals, Inc., Boehringer Ingelheim
Corporation, Medica, Inc.
Defendants-Appellees,
John Does, 1-10,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - B e f o r e:

WINTER, JACOBS, and LEVAL, Circuit Judges.

Appeal from a grant by the United States District Court for

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the District of Connecticut (Stefan R. Underhill, Judge) of a

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Rule 12(b)(6) motion dismissing a complaint asserting violations

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of the Telephone Consumer Protection Act of 1991, as amended by

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the Junk Fax Protection Act of 2005, 47 U.S.C. § 227.

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principal issue is whether an unsolicited fax inviting doctors to

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a free dinner meeting featuring a discussion of an ailment -- to

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which an upcoming product, as yet unapproved by the FDA, was
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The

Case 15-288, Document 87-1, 02/03/2017, 1961166, Page2 of 13

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aimed -- was an “unsolicited advertisement.”

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remand.

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separate opinion.

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We vacate and

Judge Leval joins in the panel’s opinion and concurs by

GLENN L. HARA (Aytan Y. Bellin, Bellin &
Associates LLC, White Plains, NY, on the
brief), Anderson & Wanda, White Plains, NY,
for Plaintiff-Appellant.
THOMAS D. GOLDBERG (Bryan J. Orticelli, Day
Pitney LLP, Stamford, CT, Matthew H. Geelan,
Donahue, Durham & Noonan, P.C., Guilford, CT,
on the brief),Day Pitney LLP, Stamford, CT,
for Defendants-Appellees.
WINTER, Circuit Judge:
Physicians Healthsource appeals from Judge Underhill’s

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dismissal of its class action complaint asserting violations of

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the Telephone Consumer Protection Act of 1991, as amended by the

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Junk Fax Protection Act of 2005, 47 U.S.C. § 227 (the TCPA).

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complaint alleges that appellees (collectively “Boehringer”) sent

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an unsolicited fax invitation for a free dinner meeting to

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discuss ailments relating to appellees’ business.

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appellant, this fax constituted an “unsolicited advertisement”

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prohibited by the TCPA.

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The

According to

Judge Underhill dismissed appellant’s complaint for failure

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to state a claim -- holding that no facts were pled that

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plausibly showed that the fax had a commercial purpose.

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agree that a fax must have a commercial purpose to be an

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“unsolicited advertisement,” we hold that the district court

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improperly dismissed appellant’s complaint.

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While we

Where it is alleged

Case 15-288, Document 87-1, 02/03/2017, 1961166, Page3 of 13

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that a firm sent an unsolicited fax promoting a free event

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discussing a subject related to the firm’s business, the

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complaint is sufficient to state a claim.

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We therefore vacate and remand.

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BACKGROUND
In reviewing a Fed. R. Civ. P. 12(b)(6) dismissal of a

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complaint, we accept all factual allegations as true, drawing all

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reasonable inferences in the plaintiff's favor.

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Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002).

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See Chambers v.

The complaint alleges that, on April 6, 2010, Boehringer, a

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pharmaceutical company, sent an unsolicited fax to appellant,

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inviting one of appellant’s doctors to a free “dinner meeting”

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and discussion entitled, “It's time to Talk:

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Sexual Dysfunction (FSD) and Diagnosing Hypoactive Sexual Desire

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Disorder (HSDD).”

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J. App'x at 24.

Recognizing Female

The “invitation” stated that

Boehringer Ingelheim Pharmaceuticals, Inc.
cordially invites you to join us for a dinner
meeting entitled, It’s Time to Talk:
Recognizing Female Sexual Dysfunction and
Diagnosing Hypoactive Sexual Desire Disorder.
Based on recent data from a large US study
(PRESIDE), 43% of US women aged > 18 years
have experienced a sexual problem in their
lives and 9.5% of the same group of women
have experienced decreased sexual desire with
distress. This program has been developed to
discuss Female Sexual Dysfunction (FSD),
including Hypoactive Sexual Desire Disorder
(HSDD) including pathophysiology models,
epidemiology, and diagnosis. We hope you
will join us for this informative and
stimulating program.

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Id.

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speaker at the dinner meeting would be David Portman, MD.

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The fax provided registration details and revealed that the

On March 30, 2014, appellant filed a class action lawsuit on

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behalf of more than forty individuals against Boehringer,

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alleging that the fax violated the TCPA as an “unsolicited

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advertisement” without a proper opt-out notice.

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According to the complaint, the fax was an “unsolicited

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advertisement” because it “promote[d] the services and goods of

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[Boehringer].”

Id.

Id. at 11.

Appellant sought an award of statutory

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damages in the minimum amount of $500 for each violation of the

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TCPA, and to have such damages trebled.

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injunctive relief to enjoin Boehringer from sending similar faxes

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in the future.

Appellant also requested

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Boehringer moved to dismiss, arguing that appellant failed

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to state a claim under the TCPA because the unsolicited fax was

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not an advertisement.

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the district court to take judicial notice of public records of

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the Food and Drug Administration (FDA) -- a request that was

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unopposed and that the court granted.

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at the time it faxed appellant, Boehringer had submitted for

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approval by the FDA to market a drug named Flibanserin.

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was intended to treat HSDD.

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approved by the FDA, Boehringer was forbidden to promote it.

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See 21 C.F.R. § 312.7(a)(prohibiting, inter alia, pharmaceutical

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companies from “promoting” drugs not yet approved by the FDA).

In its motion to dismiss, Boehringer asked

These records showed that,

The drug

Because Flibanserin had yet to be

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The district court dismissed the complaint for failure to

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state a claim under Fed. R. Civ. P. 12(b)(6).

Physicians

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Healthsource, Inc. v. Boehringer Ingelheim Pharmaceuticals, Inc.,

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No. 3:14-CV-405 (SRU), 2015 WL 144728, at *6 (D. Conn. Jan. 12,

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2015).

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(FCC) regulations as “requir[ing] plaintiffs to show that [an

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unsolicited] fax has a commercial pretext” for it to violate the

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TCPA.

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[f]ax indicates that the dinner was a pretext for pitching a

The court interpreted Federal Communications Commission

Id. at *3.

The court determined that “[n]othing in the

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Boehringer product or service.”

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that, “[e]ven drawing the inference that Boehringer sponsored the

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dinner in order to inform potential future prescribers of

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Flibanserin about the existence and nature of HSDD, the

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hypothetical future economic benefit that the Boehringer

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defendants might receive someday does not transform the [f]ax

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into an advertisement.”

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Id. at *5.

The court noted

Id.
DISCUSSION

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As noted, we review de novo a district court's dismissal of

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a complaint pursuant to Rule 12(b)(6).

See Chambers, 282 F.3d at

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152.

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sufficient factual matter, accepted as true, to “state a claim to

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relief that is plausible on its face.”

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Twombly, 550 U.S. 544, 570 (2007).

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stated,

To survive a motion to dismiss, a complaint must contain

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Bell Atl. Corp. v.

As the Supreme Court has

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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted)

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(quoting Twombly, 550 U.S. at 557).

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A claim has facial plausibility when the
plaintiff pleads factual content that allows
the court to draw the reasonable inference
that the defendant is liable for the
misconduct alleged. The plausibility
standard is not akin to a “probability
requirement,” but it asks for more than a
sheer possibility that a defendant has acted
unlawfully. Where a complaint pleads facts
that are “merely consistent with” a
defendant’s liability, it “stops short of the
line between possibility and plausibility of
‘entitlement to relief.’”

Under the TCPA, it is unlawful for “any person within the

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United States” to send a fax that is an “unsolicited

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advertisement” -- unless, inter alia, the fax has an opt-out

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notice meeting certain requirements.

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The Act creates a private right of action, providing for

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statutory damages in the amount of $500 for each violation as

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well as injunctive relief against future violations.

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§ 227(b)(3).

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47 U.S.C. § 227(b)(1)(C).

47 U.S.C.

The parties do not dispute that Boehringer’s fax lacked any

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opt-out notice, and the question is, therefore, whether it was an

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“unsolicited advertisement.”

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advertisement” as “any material advertising the commercial

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availability or quality of any property, goods, or services which

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is transmitted to any person without that person’s prior express

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invitation or permission, in writing or otherwise.”

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§ 227(a)(5).

The Act defines “unsolicited

47 U.S.C.

Exercising its delegated rulemaking authority over
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the TCPA pursuant to 47 U.S.C. § 227(b)(2), the FCC has

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promulgated a rule elaborating on the Act’s definition of

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“unsolicited advertisement.”

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the Tel. Consumer Prot. Act of 1991; Junk Fax Prevention Act of

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2005, 71 Fed. Reg. 25967, 25973 (May 3, 2006) (the “2006 Rule”).

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The 2006 Rule states, in relevant part, that

Rules and Regulations Implementing

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facsimile messages that promote goods or
services even at no cost, such as free
magazine subscriptions, catalogs, or free
consultations or seminars, are unsolicited
advertisements under the TCPA’s definition.
In many instances, “free” seminars serve as a
pretext to advertise commercial products and
services. Similarly, “free” publications are
often part of an overall marketing campaign
to sell property, goods, or services. For
instance, while the publication itself may be
offered at no cost to the facsimile
recipient, the products promoted within the
publication are often commercially available.
Based on this, it is reasonable to presume
that such messages describe the “quality of
any property, goods, or services.”
Therefore, facsimile communications regarding
such free goods and services, if not purely
“transactional,” would require the sender to
obtain the recipient’s permission beforehand,
in the absence of an [established business
relationship].
Id.

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defines offending advertisements as those promoting “the

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commercial availability or quality of [the firm’s] property,

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goods, or services.”

The Rule itself comports with the statutory language, which

47 U.S.C. § 227(a)(5).

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The district court interpreted the Rule as “requir[ing]

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plaintiffs to show that the fax has a commercial pretext -- i.e.,

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‘that the defendant advertised, or planned to advertise, its
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products or services at the seminar.’”

Physicians Healthsource,

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2015 WL 144728, at *3 (quoting Bais Yaakov of Spring Valley v.

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Richmond, the Am. Int'l Univ. in London, Inc., No. 13-CV-4564

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(CS), 2014 WL 4626230, at *3 (S.D.N.Y. Sept. 16, 2014)).

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not disagree.

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that a firm sent an unsolicited fax promoting a free seminar

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discussing a subject that relates to the firm’s products or

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services, there is a plausible conclusion that the fax had the

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commercial purpose of promoting those products or services.

We do

But, at the pleading stage, where it is alleged

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Businesses are always eager to promote their wares and usually do

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not fund presentations for no business purpose.

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can rebut such an inference by showing that it did not or would

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not advertise its products or services at the seminar, but only

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after discovery.

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Rule.

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interpreting a statute, we must begin by examining the language

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of the provision at issue.”

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(2d Cir. 2002).

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presume that such messages [advertising free seminars] describe

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the ‘quality of any property, goods, or services,’” potentially

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violating the TCPA.

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U.S.C. § 227(a)(3)).

The defendant

This interpretation comports with the 2006

“In interpreting an administrative regulation, as in

Resnik v. Swartz, 303 F.3d 147, 151

The 2006 Rule states that “it is reasonable to

2006 Rule, 71 Fed. Reg. at 25973 (quoting 47

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Of course, as other courts have ruled,1 not every

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unsolicited fax promoting a free seminar satisfies the Rule.

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There must be a commercial nexus to a firm’s business, i.e., its

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property, products, or services; that, in our view, is satisfied

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at the pleading stage where facts are alleged that the subject of

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the free seminar relates to that business.

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at faxes promoting free seminars per se,2 but states only that,

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“[i]n many instances, ‘free’ seminars serve as a pretext to

The Rule does not aim

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See Physicians Healthsource, Inc. v. Stryker Sales Corp.,
65 F. Supp. 3d 482, 489 (W.D. Mich. 2015); Bais Yaakov of Spring
Valley v. Richmond, the Am. Int’l Univ. in London, Inc., No. 13CV-4564 (CS), 2014 WL 4626230, at *3 (S.D.N.Y. Sept. 16, 2014)
(“While the [2006 Rule] could be read to categorize all faxes
promoting free seminars as unsolicited advertisements, many
courts require plaintiffs to show that the defendant advertised,
or planned to advertise, its products or services at the
seminar.”); Addison Automatics, Inc. v. RTC Group, Inc., No. 12 C
9869, 2013 WL 3771423, at *2 (N.D. Ill. July 16, 2013) (“[F]axes
promoting free seminars may be unsolicited advertisements because
free seminars are often a pretext to market products or
services.”) (internal quotation marks omitted); St. Louis Heart
Center, Inc. v. Forest Pharms., Inc., No. 4:12-CV-02224, 2013 WL
1076540, at *4 (E.D. Mo. Mar. 13, 2013); Phillips Long Dang,
D.C., P.C. v. XLHealth Corp., No. 1:09-CV-1076-RWS, 2011 WL
553826, at *4 (N.D. Ga. Feb. 7, 2011) (“[T]he Court does not read
the FCC Promulgation as creating a per se ban on free seminar
communications.”).
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Appellant relies on another provision of the 2006 Rule -that “applications and materials regarding educational
opportunities and conferences sent to persons who are not yet
participating or enrolled in such programs are unsolicited
advertisements,” 2006 Rule, 71 Fed. Reg. at 25973 -- to support
its argument that faxes promoting free seminars are per se
violations of the TCPA. We are unconvinced. The cited provision
targets pretextual materials that promote, for example,
enrollment at particular educational institutions; it does not
purport to create a per se rule of the sort appellant advances.
See 2006 Rule, 71 Fed. Reg. at 25974.
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advertise commercial products and services.”

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Reg. at 25973 (“[M]essages that promote goods and services even

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at no cost, such as . . . free . . . seminars, are unsolicited

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advertisements under the TCPA’s definition.”).

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but relevant context, the Rule states that ”a trade

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organization’s newsletter sent via facsimile would not constitute

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an unsolicited advertisement, so long as the newsletter's primary

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purpose is informational, rather than to promote commercial

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products.”

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2006 Rule, 71 Fed.

In a different

Id.

Requiring plaintiffs to plead specific facts alleging that

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specific products or services would be, or were, promoted at the

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free seminar would impede the purposes of the TCPA.

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Dell Fin. Servs., LLC, 727 F.3d 265, 271 (3d Cir. 2013) (“Because

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the TCPA is a remedial statute, it should be construed to benefit

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consumers.”); Physicians Healthsource, Inc. v. Alma Lasers, Inc.,

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No. 12 C 4978, 2012 WL 4120506, at *2 (N.D. Ill. Sept. 18, 2012)

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(“Congress enacted the TCPA to prevent the shifting of

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advertising costs to recipients of unsolicited fax

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advertisements.”) (citing H.R. Rep. No. 102-317, at 10 (1991); S.

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Rep. No. 102–78, at 2, 5 (1991), reprinted in 1991 U.S.C.C.A.N.

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1968, 1972 (“[U]nsolicited calls placed to fax machines, and

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cellular or paging telephone numbers often impose a cost on the

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called party (fax messages require the called party to pay for

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the paper used . . .)”)).

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attended the free seminar -- in many cases it will be difficult

See Gager v.

And -- unless plaintiffs actually

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for plaintiffs to know whether it was in fact used to advertise a

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defendant’s products or services.

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3, 604 F.3d 110, 120 (2d Cir. 2010) (“The Twombly plausibility

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standard, which applies to all civil actions . . . does not

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prevent a plaintiff from pleading facts alleged upon information

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and belief where the facts are peculiarly within the possession

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and control of the defendant.”) (internal quotation marks

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omitted).

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See Arista Records, LLC v. Doe

Two fanciful examples illustrate the distinction.

If a

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complaint alleged that the Handy Widget Company funded a

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professorship at a local law school in the name of its deceased

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founder and faxed invitations on its letterhead to an inaugural

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lecture entitled “The Relevance of Greek Philosophers to

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Deconstructionism,” the complaint would not state a claim under

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the TCPA because the Handy Widget Company is not in the business

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of philosophical musings.

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Company faxed invitations to a free seminar on increasing

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widgets’ usefulness and productivity, a claim under the TCPA

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would be validly alleged.

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could rebut at the summary judgment stage with evidence showing

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that it did not feature its products or services at the seminar.

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In contrast, if the Handy Widget

Of course, the Handy Widget Company

Boehringer’s fax advertised a “dinner meeting” to discuss

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two medical conditions -- Female Sexual Dysfunction (FSD) and

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Hypoactive Sexual Desire Disorder (HSDD) -- and their

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“pathophysiology models, epidemiology, and diagnosis.”
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J. App’x

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at 24.

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the business of treating diseases and medical conditions, such as

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FSD and HSDD.

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the dinner meeting was “sponsored by Boehringer Ingelheim

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Pharmaceuticals, Inc.”

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doctor, whom Boehringer would presumably hope to persuade to

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prescribe its drugs to patients.

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that Boehringer’s fax advertised a free seminar relating to its

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business.

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As a pharmaceutical company, Boehringer was generally in

Moreover, the fax makes clear to the invitee that

Id.

The fax invitation was sent to a

Therefore, facts were alleged

In addition, Boehringer’s seeking approval from the FDA for

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the marketing of Flibanserin is relevant, although not

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dispositive.

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remedy for the ailments to be discussed at the event.

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sure, Boehringer was prohibited from, inter alia, “promoting” an

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unapproved drug, 21 C.F.R. § 312.7(a), but that prohibition is

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not necessarily inconsistent with the free dinner’s mentioning

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the possible future availability of the drug.

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statute or Rule limits their scope to the advertisement of

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products or services then available.

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Although not approved, the drug is intended as a
To be

Nothing in the

In defense, Boehringer can present, inter alia, testimony of

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the dinner meeting participants as well as provide the meeting’s

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agenda, transcript, presentation slides, speaker list, or any

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internal emails or correspondences discussing the meeting.

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Physicians Healthsource, Inc. v. Stryker Sales Corp., 65 F. Supp.

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3d 482, 492 (W.D. Mich. 2015) (holding that “the TCPA’s text does
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See

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not require a court to put on evidentiary blinders in deciding

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whether a particular fax amounts to an advertisement” and

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allowing parties to present evidence beyond the four corners of

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the fax -- such as presentation slides -- to determine if a fax

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promoting a free seminar was pretextual).

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that Boehringer used the seminar to advertise other drugs or

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services in its inventory –- which would certainly support

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finding a violation of the TCPA.

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It is also possible

CONCLUSION
For the foregoing reasons, we vacate and remand for further
proceedings consistent with this opinion.

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