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

United States Court of Appeals, Second Circuit

February 3, 2017

Physicians Healthsource, Inc., Plaintiff-Appellant,
v.
Boehringer Ingelheim Pharmaceuticals, Inc., Boehringer Ingelheim Corporation, Medica, Inc. Defendants-Appellees, John Does, 1-10, Defendants.

          Argued: September 29, 2015

         Appeal from a grant by the United States District Court for the District of Connecticut (Stefan R. Underhill, Judge) of a Rule 12(b)(6) motion dismissing a complaint asserting violations of the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Protection Act of 2005, 47 U.S.C. § 227. The principal issue is whether an unsolicited fax inviting doctors to a free dinner meeting featuring a discussion of an ailment -- to which an upcoming product, as yet unapproved by the FDA, was aimed -- was an "unsolicited advertisement." We vacate and remand. Judge Leval joins in the panel's opinion and concurs by separate opinion.

          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.

          Before: WINTER, JACOBS, and LEVAL, Circuit Judges.

          WINTER, Circuit Judge

         Physicians Healthsource appeals from Judge Underhill's dismissal of its class action complaint asserting violations of the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Protection Act of 2005, 47 U.S.C. § 227 (the TCPA). The complaint alleges that appellees (collectively "Boehringer") sent an unsolicited fax invitation for a free dinner meeting to discuss ailments relating to appellees' business. According to appellant, this fax constituted an "unsolicited advertisement" prohibited by the TCPA.

         Judge Underhill dismissed appellant's complaint for failure to state a claim -- holding that no facts were pled that plausibly showed that the fax had a commercial purpose. While we agree that a fax must have a commercial purpose to be an "unsolicited advertisement, " we hold that the district court improperly dismissed appellant's complaint. Where it is alleged that a firm sent an unsolicited fax promoting a free event discussing a subject related to the firm's business, the complaint is sufficient to state a claim.

         We therefore vacate and remand.

         BACKGROUND

         In reviewing a Fed.R.Civ.P. 12(b)(6) dismissal of a complaint, we accept all factual allegations as true, drawing all reasonable inferences in the plaintiff's favor. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002).

         The complaint alleges that, on April 6, 2010, Boehringer, a pharmaceutical company, sent an unsolicited fax to appellant, inviting one of appellant's doctors to a free "dinner meeting" and discussion entitled, "It's time to Talk: Recognizing Female Sexual Dysfunction (FSD) and Diagnosing Hypoactive Sexual Desire Disorder (HSDD)." J. App'x at 24. 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 U.S. study (PRESIDE), 43% of U.S. 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.

Id. The fax provided registration details and revealed that the speaker at the dinner meeting would be David Portman, MD.

         On March 30, 2014, appellant filed a class action lawsuit on behalf of more than forty individuals against Boehringer, alleging that the fax violated the TCPA as an "unsolicited advertisement" without a proper opt-out notice. Id. at 11. According to the complaint, the fax was an "unsolicited advertisement" because it "promote[d] the services and goods of [Boehringer]." Id. Appellant sought an award of statutory damages in the minimum amount of $500 for each violation of the TCPA, and to have such damages trebled. Appellant also requested injunctive relief to enjoin Boehringer from sending similar faxes in the future.

         Boehringer moved to dismiss, arguing that appellant failed to state a claim under the TCPA because the unsolicited fax was not an advertisement. In its motion to dismiss, Boehringer asked the district court to take judicial notice of public records of the Food and Drug Administration (FDA) -- a request that was unopposed and that the court granted. These records showed that, at the time it faxed appellant, Boehringer had submitted for approval by the FDA to market a drug named Flibanserin. The drug was intended to treat HSDD. Because Flibanserin had yet to be approved by the FDA, Boehringer was forbidden to promote it. See 21 C.F.R. § 312.7(a)(prohibiting, inter alia, pharmaceutical companies from "promoting" drugs not yet approved by the FDA).

         The district court dismissed the complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6). Physicians Healthsource, Inc. v. Boehringer Ingelheim Pharmaceuticals, Inc., No. 3:14-CV-405 (SRU), 2015 WL 144728, at *6 (D. Conn. Jan. 12, 2015). The court interpreted Federal Communications Commission (FCC) regulations as "requir[ing] plaintiffs to show that [an unsolicited] fax has a commercial pretext" for it to violate the TCPA. Id. at *3. The court determined that "[n]othing in the [f]ax indicates that the dinner was a pretext for pitching a Boehringer product or service." Id. at *5. The court noted that, "[e]ven drawing the inference that Boehringer sponsored the dinner in order to inform potential future prescribers of Flibanserin about the existence and nature of HSDD, the hypothetical future economic benefit that the Boehringer defendants might receive someday does not transform the [f]ax into an advertisement." Id.

         DISCUSSION

         As noted, we review de novo a district court's dismissal of a complaint pursuant to Rule 12(b)(6). See Chambers, 282 F.3d at 152. To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). As the Supreme Court has stated,

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.'"

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted) (quoting Twombly, 550 U.S. at 557).

         Under the TCPA, it is unlawful for "any person within the United States" to send a fax that is an "unsolicited advertisement" -- unless, inter alia, the fax has an opt-out notice meeting certain requirements. 47 U.S.C. § 227(b)(1)(C). The Act creates a private right of action, providing for statutory damages in the amount of $500 for each violation as well as injunctive relief against future violations. 47 U.S.C. § 227(b)(3).

         The parties do not dispute that Boehringer's fax lacked any opt-out notice, and the question is, therefore, whether it was an "unsolicited advertisement." 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." 47 U.S.C. § 227(a)(5). Exercising its delegated rulemaking authority over the TCPA pursuant to 47 U.S.C. § 227(b)(2), the FCC has promulgated a rule elaborating on the Act's definition of "unsolicited advertisement." Rules and Regulations Implementing the Tel. Consumer Prot. Act ...


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