Fulton v. Enclarity, Inc. et al

Filing 25

ORDER Granting 18 Defendants' Motion to Dismiss. Signed by District Judge Denise Page Hood. (LSau)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
MATTHEW N. FULTON, D.D.S., P.C.,
individually and as the representative of
a class of similarly-situated persons,
Plaintiff,
Case No. 16-13777
HON. DENISE PAGE HOOD

v.

ENCLARITY, INC., LEXISNEXIS
RISK SOLUTIONS INC., LEXISNEXIS
RISK SOLUTIONS GA INC., LEXISNEXIS
RISK SOLUTIONS FL INC., and JOHN
DOES 1-12,
Defendants.
_________________________________________/
ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS [#18]
I.

INTRODUCTION
On October 24, 2016, Plaintiff filed this action, alleging that Defendants

violated the Telephone Consumer Protection Act, 47 U.S.C. § 227, and the
accompanying regulations prescribed by the Federal Communications Commission
(“FCC”), 47 C.F.R. § 64.1200 (collectively, the “TCPA”), when Defendants sent
Plaintiff an unsolicited facsimile (the “Fax”). On December 16, 2016, the identified
Defendants filed a Motion to Dismiss [Dkt. No. 18] pursuant to Federal Rule of Civil
Procedure 12(b)(6). The Motion is fully briefed, and on February 22, 2017, the Court

held a hearing on Defendants’ Motion. For the reasons that follow, the Court grants
Defendants’ Motion.
II.

BACKGROUND
Defendants sent the Fax to Plaintiff, a dental practice in Linden, Michigan. A

copy of the Fax is set forth below.

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Prior to receiving the Fax, Plaintiff did not have a relationship with any of the
Defendants.
Plaintiff filed a two-count Complaint. In Count I, Plaintiff alleges Defendants
violated the TCPA. In Count II, Plaintiff alleges a state law conversion claim.
III.

APPLICABLE LAW & ANALYSIS

A.

Standard of Review
A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the plaintiff’s

complaint. Accepting all factual allegations as true, the court will review the
complaint in the light most favorable to the plaintiff. Eidson v. Tennessee Dep’t of
Children’s Servs., 510 F.3d 631, 634 (6th Cir. 2007). As a general rule, to survive a
motion to dismiss, the complaint must state sufficient “facts to state a claim to relief
that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007). The complaint must demonstrate more than a sheer possibility that the
defendant’s conduct was unlawful. Id. at 556. Claims comprised of “labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not
do.” Id. at 555. Rather, “[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.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009).
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B.

Analysis Regarding TCPA Claim
Defendants argue that Plaintiff’s TCPA does not apply TCPA does not apply

to the Fax because it is not an advertiment.

Whether a fax constitutes an

advertisement under the TCPA is a question of law. Sandusky Wellness Ctr., LLC v.
Medco Health Solutions, Inc., 788 F.3d 218, 221 (6th Cir. 2015) (“So were these faxes
advertisements? It is a question of law our court has never addressed”).
The TCPA forbids the use of “any telephone facsimile machine, computer, or
other device to send an unsolicited advertisement to a telephone facsimile machine.”
47 U.S.C. § 227(b)(1)(C). An “unsolicited advertisement” is defined 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.”1 47 U.S.C. § 227(a)(5); 47 C.F.R. §
64.1200(f)(1). The FCC defines “advertisement” as follows:
We conclude that 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.

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It is undisputed that Plaintiff did not solicit, nor did Plaintiff consent to
Defendants sending Plaintiff, the Fax.
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In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of
1991 Junk Fax Prevention Act of 2005, 21 F.C.C.R. 3787, 3814 (April 6, 2016). The
Sandusky court stated,
Advertising is “[t]he action of drawing the public’s attention to
something to promote its sale,” Black’s Law Dictionary 65 (10th ed.
2014), or “the action of calling something (as a commodity for sale, a
service offered or desired) to the attention of the public,” Webster’s
Third New International Dictionary 31 (1986). So material that
advertises something promotes it to the public as for sale. For another
thing, we know what’s advertised–here, the “availability or quality of
any property, goods, or services”–must be commercial in nature.
Commercial means “of, in, or relating to commerce”; “from the point of
view of profit: having profit as the primary aim.” Webster’s Third at 456.
It’s something that relates to “buying and selling.” Black’s Law
Dictionary 270 (6th ed. 1990). 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.
Sandusky, 788 F.3d at 221-22 (emphasis in original).
Defendants argue that the plain language of the Fax establishes that it is not an
advertisement because it does not “advertis[e] the commercial availability or quality
of any property, goods, or services.” 47 U.S.C. § 227(a)(5). Defendants assert that the
Fax seeks only to verify or validate contact information related to Plaintiff, namely the
location, practice, and contract information of Plaintiff (and health care providers who
receive like faxes). Defendants maintain that the Fax does not offer any property,
goods, or services to Plaintiff, and that Defendants did not and will not sell anything
to Plaintiff.
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Plaintiff argues that the Fax is an advertisement because “Defendants could
include [Plaintiff’s contact information] in their proprietary database to sell to their
subscribers, and so Defendants and their subscribers could advertise and sell their
goods to Plaintiff.” [Dkt. No. 23, PgID 162] Plaintiff suggests the Fax “was sent to
Plaintiff with the goal of ultimately making profit – i.e., the fax was a pretext to obtain
consent from Plaintiff so Defendants could later market additional goods and services
to Plaintiff, and direct and increase traffic to Defendants’ website.” Id. Plaintiff
contends that “the [F]ax was an indirect commercial solicitation or a pretext for a
commercial solicitation sent as an overall marketing campaign for the purpose of
making a profit.” Id. Plaintiff cites a case from the Middle District of Florida to
support its position. See Comprehensive Health Care Systems of the Palm Beaches,
Inc. v. M3 USA Corp., No. 16-cv-80967, 2017 WL 108029, at *3 (S.D. Fla. Jan. 11,
2017). Based on the facts of that case (which are distinguishable from this case, as
noted below), the court stated that the “ultimate question of whether Defendant’s
survey fax is merely a pretext for advertising its good or services is a question of fact
not suitable for a disposition as a matter of law upon a motion to dismiss.” Id.
Plaintiff also states that “[t]he commercial and for-profit reason for the
transmission of the [F]ax is revealed on the Lexis Page.” [Dkt. No. 23, PgID 161].
Plaintiff argues that the “Lexis Page” contains advertising, whether it be through the
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“Terms & Conditions,” the “Privacy Policy,” or the revelation that contact information
will be shared with many other entities on the “Lexis Page.” [Dkt. No. 23, PgID 163]

The Court finds that the Fax is not actionable under 47 U.S.C. 227(b)(1)(C), as
a matter of law. The content of the Fax, on its face, does not constitute an
advertisement. Sandusky, 788 F.3d at 222 (emphasis added) (“So to be an ad, the fax
must promote goods or services to be bought or sold.”) Nothing mentioned in the Fax
is “available to be bought or sold.” N.B. Indus., Inc. v. Wells Fargo & Co., 465 F.
App’x 640, 642 (9th Cir. 2012). The Fax does not offer–or even mention–any
product, good, or service to Plaintiff, nor does it not offer or solicit any product, good,
or service for sale. See, e.g., Golan v. Veritas Entm’t, LLC, 788 F.3d 814, 819-20 (8th
Cir. 2015) (“the content of the [communications] controlled whether they were
‘advertisements,’” and “[b]ecause the messages did not mention property, goods, or
services, we agree that they were not advertisements”). For that reason, the Fax
“lack[s] the commercial components inherent in ads.” Sandusky, 788 F.3d at 223;
Vinny’s Landscaping, Inc. v. United Auto Credit Corp., 2016 WL 4801276, at *8
(E.D. Mich. Sept. 14, 2016) (“there is no dispute that a fax must advertise something”
to fall within the TCPA).
Plaintiff’s key arguments are inconsistent with the law in the Sixth Circuit.
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First, pursuant to Sandusky, “[t]he possibility that future economic benefits will flow
from a non-commercial fax, ancillary to the content of the fax, is legally irrelevant to
determining whether the fax is an ad.” Sandusky, 788 F.3d at 225 (rejecting the
argument that “[n]o matter what faxes look like on their face, a jury might conclude
that, taken together, they have a positive effect on [defendant’s] business.”). Even if
Defendants were to profit from verifying Plaintiff’s contact information and selling
it to third parties, there is no allegation or argument that Defendants are advertising
– or will advertise – any goods or services to Plaintiff.
Second, even if the “Lexis Page” contains the advertising language the Plaintiff
alleges, the “Lexis Page” is not a part of the Fax, nor is any of the information
Plaintiff notes on the face of the Fax. The “Lexis Page” is a webpage that one can
access upon entering the domain name (“www.enclarity.com/providerfaqs.php”) set
forth at the bottom of the Fax. The Sandusky court expressly rejected the plaintiff’s
argument that it “should look outside of the four corners of the faxes to see that
they’re ads.” Sandusky, 788 F.3d at 224.2 See also Smith v. Blue Shield of CA, No. 16-

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As the Court is bound by Sandusky, Plaintiff’s citation to a case from the
Southern District of Florida does not aid its position. See Eden Day Spa, Inc. v.
Morris D. Loskove d/b/a Loskove Insurance Agency, No. 14-81340-civ, 2015 WL
1649967 at *3 (S.D. Fla. April 14, 2015) (analysis to determine if fax is part of an
overall marketing campaign will require inquiry beyond four corners of the
complaint). The Eden Day Spa court also found that the fax at issue could be an
advertisement “[o]n the face of the complaint,” which is not the situation here.
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100108, 2017 U.S. Dist. LEXIS 5620, at *29 (C.D. Cal. Jan. 13, 2017) (the “mere fact
that parts of Blue Shield’s website contain the capabilility of allowing consumers to
engage in commerce does not transform any message including [the web address of]
its homepage into telemarketing or advertising”).
Finally, numerous cases cited by Plaintiff do not support its position because,
unlike this case, the cited cases recognize that some product, good, or service has been
offered to the recipient. See, e.g., Vinny’s Landscaping, Inc., 2016 WL 4801276, at
**1-3 (motion to dismiss denied as to fax titled “Introducing Our New Bankruptcy
Program” as the “primary purpose [of the fax] could plausibly be construed as
promoting the commercial availability of Defendants’ new bankruptcy program”);
Herrick v. QLess, Inc., No. 15-cv-14092, 2016 WL 6902544, at *3 (E.D. Mich. Oct.
26, 2016) (motion to dismiss denied as to text message advertising free app);
Physicians Healthsource, Inc. v. Stryker Sales Corp., 65 F. Supp. 3d 482, 493 (W.D.
Mich. Jan. 12, 2015) (motion for summary judgment denied as to fax offering free
steak dinner at a seminar because it constituted a “pretext to advertise”); Bais Yaakov
of Spring Valley v. Alloy, Inc., 936 F.Supp.2d 272, 282-83 (S.D. N.Y. 2013) (motion
to dismiss denied as to fax offering free equipment and services); North Suburban
Chiro. v. Merck & Co., No. 13-C-3113, 2013 WL 5170754, at **3-4 (N.D. Ill. Sept.
13, 2013) (motion to dismiss denied as to fax inviting recipients to medical education
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program); G.M. Sign, Inc. v. MFG.com, Inc., No. 08 C 7106, 2009 WL 1137751, at
**2-3 (N.D. Ill. Apr. 24, 2009) (motion to dismiss denied as to fax promoting free
services).
This case is unlike Comprehensive Health Care Systems of the Palm Beaches,
a case Plaintiff cited as persuasive authority at the hearing. In that case, there are two
significant “facts” cited by the court that distinguish that case from this one: (a) “The
faxes at issue direct a potential participant to [defendant’s] survey weblink,” and (b)
“Defendant offers compensation for participation in online surveys and advertises the
commercial availability of Defendant’s online paid survey program, through which
Defendant gathers market research and opinions from health professionals for its
clients.” Comprehensive Health Care Systems of the Palm Beaches, 2017 WL 108029,
at *3 (emphasis added). Based on those “facts,” which differ from this case, that court
concluded that there was a question whether the defendant’s survey fax was mere
“pretext for advertising its [i.e., the defendant’s] goods or services.” As noted above,
nothing on the Fax (or even on Defendants’ website) advertises for sale any good,
products, or services of Defendants. In addition, as the Court is bound by Sandusky,
Plaintiff’s citation to this case from the Southern District of Florida does not aid its
position, particularly as the Florida court relied on documentation outside of the four
corners of the fax. Id.
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The facts of the instant case also differ significantly from Drug Reform
Coordination Network, Inc. v. Grey House Publishing, Inc., 106 F.Supp.3d 9 (D.D.C.
2015), another case Plaintiff noted at the hearing. In Grey House Publishing, the court
noted that “the Fax offered a free listing [for plaintiff’s business]” and defendant
would “follow up . . . with subsequent email, fax, telephone communications, and
other methods that solicit the purchase of Defendant’s directories.” Id. at 11-15
(emphasis added). In this case, Defendants did not offer anything for free and, more
importantly, did not seek to sell any products, goods, or services to Plaintiff at any
time.
The Court finds that no amendment could cure the deficiencies in the
Complaint. Any amendment would be futile because an amendment would not
change the content of the Fax, and the content of the Fax is insufficient to constitute
an advertisement, as a matter of law. As any amendment would be futile, the Court
dismisses Count I of Plaintiff’s Complaint, with prejudice.
The Court notes that it understands Plaintiff’s position – and agrees that it
appears – that: (1) Defendants send recipients the Fax for the purpose of gathering
contact information; (2) Defendants provide that contact information to third-parties
(presumably at a profit); and (3) the third-parties then utilize the information collected
by Defendants to attempt to sell products, goods, and services to recipients of the Fax.
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Based on Sandusky and the language of the TCPA, however, the Court must conclude
that Defendant does not violate the TCPA when sending the Fax to recipients because
Congress did not include language in the TCPA to prohibit such conduct.
C.

Dismissal of State Law Conversion Claim
It is undisputed that Plaintiff’s conversion claim in Count II is rooted entirely

in state law. Because no federal law claim remains before the Court, and because this
case is in its preliminary stages, the Court concludes that the litigation of Plaintiff’s
state law claim would most appropriately be conducted in state court. For those
reasons, the Court declines to retain jurisdiction over Count II of Plaintiff’s
Complaint. 28 U.S.C. § 1367(c)(3) (“The district courts may decline to exercise
supplemental jurisdiction over a claim . . . if . . . the district court has dismissed all
claims over which it has original jurisdiction”); Carnegie-Mellon v. Cohill, 484 U.S.
343 (1988). The Court dismisses Count II of Plaintiff’s Complaint, without prejudice.
IV.

CONCLUSION
For the reasons stated above,
IT IS ORDERED that: (1) Defendants’ Motion to Dismiss [Dkt. No. 18] is

GRANTED; (2) Count I of Plaintiff’s Complaint is DISMISSED WITH
PREJUDICE, (3) Count II of Plaintiff’s Complaint is DISMISSED WITHOUT

PREJUDICE, and (4) Plaintiff’s cause of action is DISMISSED. Judgment will be
entered accordingly.
IT IS SO ORDERED.

S/Denise Page Hood
Denise Page Hood
Chief Judge, United States District Court
Dated: March 1, 2017
I hereby certify that a copy of the foregoing document was served upon counsel of
record on March 1, 2017, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager

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