FOLLOW US

The U.S. Supreme Court on Monday declined to hear an appeal by healthcare technology company Pulse8 LLC in a proposed class action accusing it of violating the Telephone Consumer Protection Act (TCPA) by sending faxes promoting a free webinar.

Pulse8 sought to overturn a Fourth Circuit decision that revived the lawsuit, arguing that the fax did not constitute an "unsolicited advertisement" under the TCPA because the webinar was free and lacked direct commercial content. The Fourth Circuit, however, found the fax had a commercial element under the "pretext theory," which deems a fax an advertisement if it serves as a gateway to future paid goods or services.

Divided Fourth Circuit Decision

The Fourth Circuit's decision centered on a 2020 fax sent by Pulse8 to Family Health Physical Medicine LLC, a chiropractic office in Ohio. The fax advertised a free webinar on health condition coding and documentation, provided registration details, and included an offer to win a $25 Amazon gift card for completing a survey.

A Maryland federal court dismissed the case initially, ruling that the fax was not an advertisement because it did not directly promote a paid product or service. However, a divided Fourth Circuit panel reversed this decision, holding that the webinar's commercial context — potentially leading to future business opportunities for Pulse8 — made it sufficiently promotional under the TCPA.

Judge G. Steven Agee dissented, criticizing the majority’s reliance on the pretext theory and arguing that the decision broadened the TCPA’s definition of unsolicited advertisements beyond its legislative intent.

Circuit Split and Pulse8’s Petition

Pulse8's appeal argued that the Fourth Circuit’s ruling conflicted with decisions from the Third and Seventh Circuits, which apply a stricter, objective standard to assess whether a fax constitutes an advertisement. According to Pulse8, the pretext theory improperly expands TCPA liability.

"The Fourth Circuit lost its way in reversing," Pulse8 said in its petition, adding that the decision created uncertainty for businesses relying on clearer standards in other circuits.

Plaintiff’s Response

Family Health countered that no significant circuit split exists and characterized the case as "garden-variety TCPA litigation." The Fourth Circuit, it argued, correctly determined that the fax had a commercial purpose, even if indirectly.

Broader Implications

The Supreme Court’s refusal to take up the case leaves unresolved the circuit split regarding the application of the TCPA to faxes promoting free goods or services. Businesses operating in jurisdictions favoring the pretext theory may face heightened liability risks for communications that could indirectly serve a commercial purpose.

Related TCPA Ruling

The Fourth Circuit's decision relied heavily on its ruling in Carlton & Harris Chiropractic Inc. v. PDR Network LLC, a similar case involving a fax promoting a free prescription drug e-book. That case also revived a putative class action, broadening the scope of TCPA enforcement in the Fourth Circuit.