PHILADELPHIA – A three-judge panel from the U.S. Court of Appeals for the Third Circuit reinstated a doctor’s Telephone Consumer Protection Act lawsuit against a health insurance company and a medical services firm on Wednesday.
Plaintiff Robert W. Mauthe, M.D., P.C. challenged the U.S. District Court for the Eastern District of Pennsylvania’s order of Jan. 28, 2019, dismissing his case for failure to state a claim, filed under the TCPA against defendants Hartford Financial Services Group, Inc., a health insurance provider, and Spreemo Inc., a medical diagnostic services vendor, for their allegedly illegal transmission of an unsolicited fax to Mauthe.
On March 28, 2019, two months after the District Court dismissed the case, the Third Circuit issued a precedential opinion construing the TCPA in another, similar action involving the plaintiff, Mauthe v. Optum, Inc.
As a result, Mauthe then appealed his case to the Third Circuit.
Judge Morton I. Greenberg authored the Court’s opinion in this matter, writing on behalf of himself and fellow judges Kent A. Jordan and L. Felipe Restrepo.
“The relevant document that we consider in this case, as was also true in Optum, is the fax itself – a single page that defendants sent to plaintiff by fax. The fax recited “that Spreemo is the ‘Primary Diagnostic Vendor’ for Hartford.’ We need not go beyond considering the fax in deciding this case so we do not set forth the facts of the case at length,” Greenberg said.
According to the TCPA, it is “unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States…to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.”
The TCPA further 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.”
The federal appellate court said it ruled in Optum that the offending fax need not be sent to a direct purchaser – and that in order to establish third-party based liability under the TCPA, it held that a plaintiff: Must show that the fax sought to promote or enhance the quality or quantity of a product or services being sold commercially; was reasonably calculated to increase the profits of the sender; and directly or indirectly encouraged the recipient to influence the purchasing decisions of a third party.
Ultimately, the Third Circuit said the trial court wrongfully dismissed the case.
“With the above principles in mind, we conclude that the District Court erred in dismissing the case. Because the Court did not have the benefit of our decision in Optum when it decided this case, it could not have known about the theory of third-party based liability that we explained in Optum. All three elements for third-party based liability are met in this case, at least as alleged and judged at the pleading stage,” Greenberg said.
“As was the case in Optum, and likely the vast majority of third-party based liability cases, it should be reasonably obvious that the fax met the first two elements – it was sent to promote the availability of services, and was done with a profit motive. The deciding factor, therefore, is whether the fax was sent to encourage Mauthe to influence the purchasing decisions of a third party. Construing the pleading in the light most favorable to the plaintiff, it has sufficiently pled a third-party based liability claim.”
Additionally, Greenberg said the Court saw “very little distinction between this case and the doctor-patient example it articulated in Optum” and a result, would reverse the order of dismissal and remand the case to the District Court for further proceedings.
“The District Court found that the fax was sent merely for informational purposes, but at the pleading stage it is plausible that the fax was sent to encourage a doctor to send patients to Spreemo whenever diagnostic testing is prescribed. Nothing in the fax informed or suggested to the recipient that it must direct patients covered by Hartford to Spreemo for diagnostic testing, so the choice remained with the doctor as to whom to send patients for testing, and the fax can be considered as an attempt to influence that choice, with the patients being the ultimate purchasers of the diagnostic services,” Greenberg stated.
“At the pleading stage, Mauthe merely needs to plead the plausible. Accordingly, we will reverse the District Court’s Jan. 28, 2019 order dismissing the case, and will remand the matter for further proceedings. In rendering this decision, we express no opinion as to the viability of Mauthe’s class action claims.”
U.S. Court of Appeals for the Third Circuit case 19-1470
U.S. District Court for the Eastern District of Pennsylvania case 5:18-cv-01902
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com