TCPA Family Feud – Survey Says: Second Circuit Rejects Third Circuit and Holds that a Faxed Invitation to Participate in a Market Research Survey in Exchange for Money Does Not Constitute an “Advertisement” Under the TCPA

Author: Thomas Blatchley

The Second Circuit recently affirmed a District Court dismissal, holding as a matter of first impression that an unsolicited faxed invitation to participate in a market research survey in exchange for money does not constitute an “unsolicited advertisement” under the Telephone Consumer Protection Act. See Bruce Katz, M.D., P.C. v. Focus Forward, LLC, 22 F.4th 368 (2d Cir. 2022). Looking to the statutory text, legislative history and FCC implementation, the Second Circuit rejected a recent Third Circuit decision and found that invitations to participate in a survey, without more, are not advertisements under the TCPA.

Plaintiff’s Complaint alleged that that on or about September 12, 2019, and October 25, 2019, Defendant sent Plaintiff two unsolicited faxes seeking participants in market research surveys, in violation of the TCPA, as amended by the Junk Fax Prevention Act. Both faxes explained that Defendant was “currently conducting a market research study and “offer[ed] an honorarium of $150 for [the recipient’s] participation in a . . . telephonic interview.” Plaintiff filed a putative class action alleging violations of the TCPA, seeking both injunctive relief and statutory damages. Defendant filed a Rule 12(b)(6) motion to dismiss, arguing that an unsolicited faxed invitation to participate in a market research survey does not constitute an “unsolicited advertisement under the TCPA. The District Court agreed and granted the motion to dismiss.

The TCPA, as amended by the JFPA, prohibits the use of “any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.” An “unsolicited advertisement” is defined by the statute 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.” Additionally, in 2006 the FCC promulgated a rule that construes the TCPA specifically proscribing any faxed surveys “that serve as a pretext to an advertisement,” which the Second Circuit previously considered in Physician’s Healthsource, Inc. v. Boehringer Ingelheim Pharmaceuticals, Inc., 847 F.3d 92, 96 (2d Cir. 2017) (held that an unsolicited fax promoting a free event could serve as a pretext for an advertisement, but only where the event had a “commercial nexus to a firm’s business, i.e., its property, products or services.”).

This appeal, as a matter of first impression, centered on the interpretation of what constitutes an “unsolicited advertisement” under the TCPA. Specifically, whether a fax inviting the recipient to take a survey in exchange for money constitutes an “advertisement” under the TCPA.

The Second Circuit began its analysis by recognizing that a split panel of the Third Circuit recently held in Fischbein v. Olson Research Group, 959 F.3d 559 (3d Cir. 2020) that such faxes are advertisements, reasoning that “an offer of payment in exchange for participation in a market survey is a commercial transaction, so a fax highlighting the availability of that transaction is an advertisement under the TCPA.” Not surprisingly, the plaintiff urged the Second Circuit to adopt Fischbein’s reasoning and conclusion. The defendant (and the District Court) relied on multiple district court decisions holding the opposite. Those decisions essentially concluded that mere invitations to participate in a survey, without more to render them a pretext for advertising, should not themselves be viewed as prohibited advertisements under the TCPA.

The Second Circuit agreed with the District Court that the subject faxes were not facially “advertisements” under the TCPA. Looking to the plain language of the TCPA, specifically the meaning of “unsolicited advertisement” (see definition above), the Court found that faxes seeking a recipient’s participation in a survey plainly do not advertise the commercial availability or qualify of any property, goods or services, and therefore cannot be “advertisements” under the TCPA. Notably, the Second Circuit disagreed with the majority opinion in Fischbein on whether the faxes could be construed as advertising the availability of a service. The Second Circuit, rejecting the Third Circuit interpretation, found that the TCPA neither prohibits communications advertising the availability of an opportunity nor does it prohibit communications advertising communications advertising the availability of transactions that are commercial in character. The TCPA simply prohibits communications advertising the “availability . . . of any property, goods or services.” Finally, the Second Circuit found that the legislative history of the TCPA and the FCC’s implementation of that law supported the defendant’s position that the faxes are not advertisements.

In summary, the Second Circuit held that a faxed invitation to participate in a market research survey in exchange for money does not constitute an “advertisement” under the TCPA. The decision is a significant victory for TCPA fax defendants, at least in the Second Circuit, and sets the stage for a continued Circuit split.