North Suburban Chiropractic Clinic, Ltd. v. Merck & Co., Inc.

Filing 31

ORDER Signed by the Honorable Amy J. St. Eve on 9/13/2013: The Court denies Defendant's motion to dismiss #19 brought pursuant to Federal Rule ofCivil Procedure 12(b)(6). Rule 26(a)(1) disclosures shall be exchanged by 10/4/13. Written discovery shall be issued by 10/11/13. Status hearing remains set for 10/29/13 at 8:30 a.m. [For further details, see attached Order.] Mailed notice(kef, )

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
NORTH SUBURBAN CHIROPRACTIC )
CLINIC, LTD., individually and on behalf )
of others similarly situated,
)
)
Plaintiffs,
)
)
v.
)
)
MERCK & CO., INC., a Delaware
)
Corporation,
)
)
Defendant.
)

Case No. 13 C 3113
Judge Amy J. St. Eve

ORDER
The Court denies Defendant’s motion to dismiss [19] brought pursuant to Federal Rule of
Civil Procedure 12(b)(6). Rule 26(a)(1) disclosures shall be exchanged by 10/4/13. Written
discovery shall be issued by 10/11/13. Status hearing remains set for 10/29/13 at 8:30 a.m.
STATEMENT
On June 13, 2013, Plaintiff North Suburban Chiropractic Clinic, Ltd. filed the present
First Amended Class Action Complaint against Defendant Merck & Co., Inc. alleging that
Defendant or its agents sent unsolicited mass junk faxes or fax blasts to unwilling recipients in
violation of the Telephone Consumer Protection Act of 1991 (“TCPA”), as amended by the Junk
Fax Protection Act of 2005. See 47 U.S.C. § 227(b)(1)(C). Before the Court is Defendant’s
motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following
reasons, the Court denies Defendant’s motion.

LEGAL STANDARD
“A motion under Rule 12(b)(6) tests whether the complaint states a claim on which relief
may be granted.” Richards v. Mitcheff, 696 F.3d 635, 637 (7th Cir. 2012). Under Rule 8(a)(2), a
complaint must include “a short and plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ. P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must
“give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell
Atlantic v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L.Ed.2d 929 (2007) (citation
omitted). Under the federal notice pleading standards, a plaintiff’s “factual allegations must be

enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Put
differently, a “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937,
1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570). “In evaluating the
sufficiency of the complaint, [courts] view it in the light most favorable to the plaintiff, taking as
true all well-pleaded factual allegations and making all possible inferences from the allegations
in the plaintiff’s favor.” AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). In ruling
on a Rule 12(b)(6) motion, district courts may also consider documents attached to the pleadings
without converting the motion into a motion for summary judgment, as long as the documents
are referred to in the complaint and central to the claims. See Geinosky v. City of Chicago, 675
F.3d 743, 745 n. 1 (7th Cir.2012); Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 556 (7th Cir.
2012); Fed.R.Civ.P. 10(c).
BACKGROUND
Defendant is a corporation that develops, manufactures, and distributes prescription drugs
and other health products and services. (R. 1, Compl. ¶ 8.) Plaintiff is a corporation bringing
this action on behalf of itself and others similarly situated. Reviewing documents attached to
Plaintiff’s First Amended Class Action Complaint and Plaintiff’s allegations, Plaintiff asserts
that on or about January 8, 2013, Plaintiff received an unsolicited fax sent by or on behalf of
Defendant. (Compl. ¶¶ 9, 14.) The fax invited recipients to “a medical education program for
health care professionals only” in the form of a live interactive webcast sponsored by Defendant,
with the speaker presenting on Defendant’s behalf. (Compl., Ex. A.) The fax included a list of
topics related to “health literacy,” which would be the focus of the webcast, none of which on
their face involved products or services commercially available from Defendant. (Id.) The fax
did, however, display Defendant’s corporate name and logo. (Id.)
In order to attend the webcast, recipients were required to register for the event by
visiting a URL listed on the fax, which led to a registration page on Defendant’s website. (Id.)
Registration entailed providing contact information, including an e-mail address. (Compl., Ex.
B.) The registration website stated, and the Plaintiff alleges, that by registering for the webcast,
registrants “agree[d] that the Merck & Co., Inc. family of companies . . . may contact [them] via
e-mail regarding product information, site enhancements, special offers, educational
opportunities, additional resources, programs, and information about Merck.” (Id.; Compl. ¶ 12.)
The registration website further provided a telephone number registrants could call to request
that Merck not contact them in the future. (Compl., Ex. B.) Near the bottom of the registration
website, the page featured a checkable box, asking “May we send information about Merck
products to you via e-mail?” (Id.) Plaintiff further alleges that Defendant’s “fax advertisements
did not display a proper opt out notice” as is required by law. (Compl. ¶ 18.) Plaintiff also
alleges that Defendant “uses the fax advertisements and the seminars as part of its work or
operations to market is goods and services.” (Id. ¶ 13.) Finally, Plaintiff alleges that the fax sent

by Defendant constituted “an unsolicited advertisement to a telephone facsimile machine, in
violation of the TCPA.” (Id. ¶ 28.)
ANALYSIS
Under the TCPA, it is unlawful “to use any telephone facsimile machine, computer, or
other device to send, to a telephone facsimile machine, an unsolicited advertisement . . . .” 47
U.S.C. § 227(b)(1)(C). Plaintiff alleges that Defendant’s fax violated this section of the TCPA
by sending unsolicited fax advertisements. Defendant contends that the fax at issue was not an
unsolicited advertisement, and therefore, did not violate the TCPA. Because Defendant has not
raised any of the enumerated exceptions to the TCPA, 47 U.S.C. § 227(b)(1)(C)(i)-(iii), the
Court turns to whether the Defendant’s fax falls within the TCPA’s definition of an unsolicited
advertisement.
The TCPA defines an “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.” 47
U.S.C. § 227(a)(5). “Congress has not spoken directly on the issue of whether an advertisement
for free services can be unsolicited advertisements under the TCPA.” GM Sign, Inc. v.
MFG.com, Inc., No. 08 C 7106, 2009 WL 1137751, at *2 (N.D. Ill. Apr. 24, 2009). Thus, courts
within this district have accepted the Federal Communications Commission’s construction of the
statute, which provides that faxes “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.” Id. (quoting In re Rules and Reg. Implementing
the Tel. Consumer Prot. Act of 1991 and the Junk Fax Prevention Act of 2005, 21 F.C.C.R. 3787,
3814 (Apr. 6, 2006)).
Courts within this district have also recognized that “[f]axes promoting a free seminar
may constitute an ‘unsolicited advertisement’ since free seminars are often a pretext to market
products or services.” Physicians Healthsource, Inc. v. Alma Lasers, Inc., No. 12 C 4978, 2012
WL 4120506, at *2 (N.D. Ill. Sept. 18, 2012). More specifically, certain courts have concluded
that faxes promoting free seminars are unsolicited advertisements in violation of the TCPA
where “the complaint alleges that the seminar is a part of [the defendant’s] work or operations to
market [its] goods or services.” Id. Where a fax is deemed commercial, “[t]he fact that the fax
was sent only to . . . qualified individuals does not change its commercial nature.” Sadowski v.
OCO Biomedical, Inc., No. 08 C 3225, 2008 WL 5082992, at *2 (N.D. Ill. Nov. 25, 2008). On
the other hand, where the fax at issue advertises a free seminar for which participants must be
pre-screened and the complaint fails to allege that the seminar was a pretext to an advertisement,
courts have found the fax does not violate the TCPA. See, e.g., Phillips Randolph Enters., LLC.
v. Adler-Weiner Research Chicago, Inc., 526 F. Supp. 2d 851, 852-53 (N.D. Ill. 2007).
In support of its motion to dismiss, Defendant cites Phillips Randolph. In that case, the
district court granted a defendant’s motion to dismiss plaintiff’s TCPA claim where the fax at
issue promoted an invitation to participate in “a research discussion on the topic of a new

HEALTHCARE PROGRAM sponsored by The Chicagoland Chamber of Commerce” and
instructed interested recipients to “call to see if you qualify.” In granting the motion, the Phillips
Randolph court placed emphasis on the fact that the defendant had not alleged “that the fax was a
pretext to an advertisement” and that fax recipients had to be “pre-screened” before participating
in the program. Id. at 853. In the instant case, however, unlike Phillips Randolph, Plaintiff
alleges that the fax was a pretext to an advertisement and that the Defendant utilized the webcast
to advertise its products or services. (Compl. ¶ 13) (“Merck uses the fax advertisements and the
seminars as part of its work or operations to market its goods and services.”) Also, unlike
Phillips Randolph, Defendant’s fax does not require that interested recipients be qualified and
pre-screened. Here, the only restriction on eligible participants is the statement that the webcast
is “for health care professionals only.” (Compl., Ex. A.) The fact that Defendant’s fax was
directed only to health care professionals does not affect its commercial nature one way or
another. See Sadowski, 2008 WL 5082992, at *2.
The present case is factually akin to the district court decision in Physicians
Healthsource, Inc. v. Alma Lasers, Inc. In that case, the defendant sent faxes “to promote a free
seminar on medical aesthetics.” 2012 WL 4120506, at *1. The plaintiff in Alma contended that
the faxes violated the TCPA because the defendant “intended to market its products and services
at the seminar.” Id. On its face, the fax listed general safety and treatment techniques as the
topics to be discussed at the seminar, as well as the opportunity for participants to observe
patient treatments and participate in a lab and a workshop. See id. (listing “laser physics, safety,
treatment parameters, techniques, and the latest in laser technology” as seminar topics). The fax
recipients were directed to “register by contacting Alma via its website, phone number, or fax
number” and provided “phone and fax numbers for those wishing to be removed from Alma’s
fax distribution list.” Id. The defendant argued that the fax was outside the TCPA because the
fax did not “promote products or services for commercial purposes” and therefore filed a motion
to dismiss. Id. at *2.
The Alma court denied the defendant’s motion to dismiss, finding that
[w]hile the fax does not indicate an intent to market products or
services, the complaint alleges that the seminar is a part of Alma’s
‘work or operations to market [Alma]’s goods or services.’
Accepting PHI’s well-pleaded allegations as true and drawing all
inferences in PHI’s favor, it is plausible that Alma promoted its
products and services by holding a free seminar. That is enough to
state a claim under the TCPA.”
Id. at *2. The court in Alma distinguished other cases cited by the plaintiff on the basis that the
plaintiff alleged “that Alma used free seminars like the one advertised here to market its goods.”
Id.

This Court agrees with the decision in Alma. As in Alma — unlike Phillips Randolph —
while the free seminar topics listed on the fax do not mention explicitly any of Defendant’s
commercially available products or services or express an intent by Defendant to market its
products or services, Plaintiff alleges that Defendant “uses the fax advertisements and the
seminars as part of its work or operations to market its goods and services.” (Compl. ¶ 13.)
Additionally, as in Alma, here, the recipients are directed to Defendant’s corporate website to
register for the seminar. The fax in this case entails a step even further than Alma because
registration for Defendant’s seminar requires the recipient to “agree that the Merck & Co., Inc.
family of companies . . . may contact [them] via e-mail regarding product information, site
enhancements, special offers, educational opportunities, additional resources, programs, and
information about Merck.” (Compl., Ex. B.) Therefore, accepting Plaintiff’s well-pleaded
allegations as true and drawing all inferences in Plaintiff’s favor, it is plausible to conclude that
Defendant’s fax may have been a pretext to market its goods and services, which is sufficient to
state a claim under the TCPA. See Iqbal, 556 U.S. at 678 (complaint plausible on its face when
plaintiff alleges “factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”). Thus, the Court denies Defendant’s motion to
dismiss.

Date: September 13, 2013

____________________________
AMY J. ST EVE
United States District Court Judge