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An Illinois animal hospital that sued Indiana-based animal health company Elanco for allegedly illegal advertising practices could not convince the 7th Circuit Court of Appeals that two faxes it received from Elanco violated federal advertising law.
The case of Ambassador Animal Hospital, Ltd. V. Elanco Animal Health Inc. and Eli Lilly & Co., 22-1304, began when Greenfield-based Elanco Animal Health sent Bloomington, Illinois-based Ambassador Animal Hospital two unsolicited faxes inviting Ambassador’s veterinarians and owners to RSVP for two free dinner programs, one titled “Canine and Feline Disease Prevention Hot Topics” and the other called “Rethinking Management of Osteoarthritis.”
The faxes featured Elanco’s logo, and the dinners were advertised as approved for continuing education credits. But the faxes also included a disclaimer encouraging recipients to consult state or federal regulations about accepting industry-provided educational and food items.
Ambassador responded by filing suit in state court against Elanco and its then-parent company, Eli Lilly. The suit alleged violations of the Telephone Consumer Protection Act as well as state law and argued that the faxes were unsolicited advertisements that were used to market Elanco’s animal health goods and services.
Elanco removed the case to the Illinois Northern District Court, where it secured a dismissal with prejudice under Rule 12(b)(6).
Ambassador appealed but the 7th Circuit affirmed.
According to Judge Thomas Kirsch, the case turns on whether the faxes fell within the TCPA’s definition of an “unsolicited advertisement,” which 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.”
“Ambassador argues that Elanco’s faxes did, in fact, contain advertising content. Namely, Ambassador emphasizes that Elanco included its name and logo on the faxes, the seminar topics related to products sold by Elanco, and the invitations targeted recipients and requested RSVPs of particular employees,” Kirsch wrote. “But none of these features transformed Elanco’s invitations to free dinners and continuing education programs into advertisements for a good, service, or property.
“Use of Elanco’s trademarked logo on the invitations did not reasonably encourage readers to buy any of Elanco’s products or services,” Kirsch continued. “Nor did simply mentioning subject matter related to Elanco’s business.
“The TCPA does not go so far as to prohibit sending faces on company letterhead to promote free education on topics that relate to the sender’s business — it prohibits advertising products or services. And even if Elanco targeted veterinarians familiar with its products or directed RSVPs to individuals in the marketing or sales departments, Elanco’s faxes did not contain the promotional quality necessary for an advertisement.”
Kirsch acknowledged there could be situations where a similar fax would be considered an indirect advertisement — for example, if it said, “Join us for a free dinner discussion of how Alenza [Elanco’s product] can help manage canine inflammation.”
“But not only did these faxes lack that promotional aspect,” Kirsch wrote, “nothing in them directly or indirectly alluded to the commercial availability or the quality of Elanco’s products, as the statutory definition requires.”
Pointing to 2006 guidance from the Federal Communications Commission on the implementation of the TCPA, Ambassador also argued the faxes were a pretext for unsolicited advertising. The 2006 order from the FCC said faxes “that promote goods or services even at no cost … are unsolicited advertisements under the TCPA’s definition. … In many instances, ‘free’ seminars serve as a pretext to advertise commercial products and services.”
But the appellate court determined the FCC’s guidance conflicts with the statutory text and thus is not entitled to deference.
“The text of the TCPA creates an objective standard narrowly focused on the content of the faxed document,” the court held. “The FCC’s interpretation, however, asks us not only to assume subjective motivations behind faxes that advertise no goods or services, but to assume that subsequent conduct of senders is relevant to the TCPA analysis.
“Moreover, the TCPA is limited to advertisements that promote ‘commercial’ property, goods, and services. … A bare offer for a free good or service is not an advertisement unless the fax also promotes something that the reader can acquire in exchange for consideration,” the court concluded. “… We therefore decline to manufacture a pretext element unsupported by the TCPA’s text.
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