Case: 1:20-cv-02886 Document #: 47 Filed: 02/18/21 Page 1 of 11 PageID #:571
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`Case No. 20-cv-2886
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`Judge Mary M. Rowland
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`AMBASSADOR ANIMAL HOPSITAL,
`LTD. individually and as the
`representative of a class of similarly
`situated persons,
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`Plaintiff,
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`v.
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`ELANCO ANIMAL HEALTH,
`INCORPORATED and ELI LILLY
`AND COMPANY,
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`Defendants.
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`MEMORANDUM OPINION AND ORDER
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`Plaintiff Ambassador Animal Hospital brings this putative class action against
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`Defendants Elanco Animal Health, Inc. and Eli Lilly and Company alleging violations
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`of the Telephone Consumer Protection Act (TCPA) and Illinois common law. The
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`defendants move to dismiss the complaint for failing to state a claim. Eli Lilly also
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`moves to strike part of the proposed class, and Ambassador moves to cite
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`supplemental authority related to that motion. For reasons stated herein, the
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`defendants’ Motion to Dismiss [23] is granted without prejudice, and the motions to
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`strike and cite supplemental authority [25, 44] are dismissed as moot.
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`I. Background
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`The following factual allegations are taken from the Complaint (Dkt. 1-1) and are
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`accepted as true for the purposes of the motion to dismiss. See W. Bend Mut. Ins. Co.
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`v. Schumacher, 844 F.3d 670, 675 (7th Cir. 2016).
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`1
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`Case: 1:20-cv-02886 Document #: 47 Filed: 02/18/21 Page 2 of 11 PageID #:572
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`Ambassador brings this suit against Elanco and Eli Lilly alleging violations of the
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`TCPA and Illinois common law arising from fax messages sent by Elanco to
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`Ambassador. Ambassador is a veterinary hospital based in Oak Park. Dkt. 1-1 ¶ 9.
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`Elanco is an animal health products and services company incorporated in Delaware
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`and based in Greenfield, Indiana. Id. at ¶¶ 9, 13. Eli Lilly is a global pharmaceuticals
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`company incorporated in Delaware and headquartered in Indianapolis, Indiana. Id.
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`at ¶¶ 11, 14. Elanco was a division of Eli Lilly until September 2018, when Elanco
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`was made public. Id. at ¶ 13. Eli Lilly sold its last shares in the company in March
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`2019. Id.
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`In April 2018, defendant sent Ambassador two unsolicited faxes. Id. at ¶ 15.
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`Ambassador believes these faxes were part of a larger broadcast to thousands of
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`veterinary institutions. Id. The faxes invited the recipient veterinary professionals to
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`attend presentations hosted by Elanco in Buffalo Grove on the topics of “Rethinking
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`Management of Osteoarthritis” and “Canine and Feline Disease Prevention Hot
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`Topics.” Id. at ¶¶ 17-18; Ex. A, Fax Messages. The faxes prominently feature Elanco’s
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`name and logo and state that the lectures had been approved for continuing education
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`credit. Id. at Ex. A, Fax Messages. Interested individuals were requested to RSVP by
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`phone. Id.
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`Ambassador never gave Elanco permission to send it advertisements by fax, and
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`the faxes did not contain any opt-out notice. Id. at ¶¶ 20-21. Ambassador alleges that
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`the advertised presentations were used by Elanco to market its animal health
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`products and services. Id. at ¶ 17. However, Ambassador does not state that any
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`2
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`Case: 1:20-cv-02886 Document #: 47 Filed: 02/18/21 Page 3 of 11 PageID #:573
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`employee actually attended the programs or attempted to register for them. Receipt
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`of the faxes consumed Ambassador’s paper, toner, and employee time. Id. at ¶ 46.
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`In response, Ambassador filed this suit in the Circuit Court of Cook County on
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`April 10, 2020. On May 13, the defendants removed the case to federal court.
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`II. Standard
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`A motion to dismiss tests the sufficiency of a complaint, not the merits of the case.
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`Gibson v. City of Chi., 910 F.2d 1510, 1520 (7th Cir. 1990). “To survive a motion to
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`dismiss under Rule 12(b)(6), the complaint must provide enough factual information
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`to state a claim to relief that is plausible on its face and raise a right to relief above
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`the speculative level.” Haywood v. Massage Envy Franchising, LLC, 887 F.3d 329,
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`333 (7th Cir. 2018) (quotations and citation omitted). See also Fed. R. Civ. P. 8(a)(2)
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`(requiring a complaint to contain a “short and plain statement of the claim showing
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`that the pleader is entitled to relief.”). A court deciding a Rule 12(b)(6) motion accepts
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`plaintiff’s well-pleaded factual allegations as true and draws all permissible
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`inferences in plaintiff’s favor. Fortres Grand Corp. v. Warner Bros. Entm't Inc., 763
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`F.3d 696, 700 (7th Cir. 2014).
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`A plaintiff need not plead “detailed factual allegations”, but “still must provide
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`more than mere labels and conclusions or a formulaic recitation of the elements of a
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`cause of action for her complaint to be considered adequate under Federal Rule of
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`Civil Procedure 8.” Bell v. City of Chi., 835 F.3d 736, 738 (7th Cir. 2016) (citation and
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`internal quotation marks omitted). When ruling on motions to dismiss, courts may
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`also consider documents attached to the pleadings without converting the motion to
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`3
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`Case: 1:20-cv-02886 Document #: 47 Filed: 02/18/21 Page 4 of 11 PageID #:574
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`dismiss into a motion for summary judgment, so long as the documents are referred
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`to in the complaint and central to the plaintiff's claims. See Adams v. City of
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`Indianapolis, 742 F.3d 720, 729 (7th Cir. 2014); Fed. R. Civ. P. 10(c).
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`Dismissal for failure to state a claim is proper “when the allegations in a
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`complaint, however true, could not raise a claim of entitlement to relief.” Bell Atl.
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`Corp. v. Twombly, 550 U.S. 544, 558, 127 S. Ct. 1955, 1966 (2007). Deciding the
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`plausibility of the claim is “‘a context-specific task that requires the reviewing court
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`to draw on its judicial experience and common sense.’” McCauley v. City of Chi., 671
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`F.3d 611, 616 (7th Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct.
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`1937, 1950 (2009)).
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`III. Analysis
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`In its complaint, Ambassador raised two counts against the defendants: (1)
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`violations of the TCPA, and (2) conversion in violation of Illinois law. We consider the
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`counts in turn.
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`A. Ambassador Has Not Shown That the Faxes Were an Unsolicited
`Advertisement
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`1. Applying the TCPA
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`The TCPA generally prohibits the use of “any telephone facsimile machine,
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`computer, or other device to send, to a telephone facsimile machine, an unsolicited
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`advertisement.” 47 U.S.C. § 227(b)(1)(C). An “unsolicited advertisement” is in turn
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`defined as “any material advertising the commercial availability or quality of any
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`property, goods, or services which is transmitted to any person without that person’s
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`prior express invitation.” Id. at § 227(a)(5).
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`4
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`Case: 1:20-cv-02886 Document #: 47 Filed: 02/18/21 Page 5 of 11 PageID #:575
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`The meaning of “commercial availability and quality” is contestable, especially if
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`the fax advertises items offered for free. “Congress has not spoken directly on the
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`issue of whether an advertisement for free services [is an] unsolicited advertisements
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`under the TCPA.” GM Sign, Inc. v. MFG.com, Inc., No. 08 C 7106, 2009 WL 1137751,
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`at *2 (N.D. Ill. Apr. 24, 2009). In such situations, the fax is not an “overt
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`advertisement.” Orrington v. Scion Dental, Inc., No. 17-CV-00884, 2017 WL 2880900,
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`at *5 (N.D. Ill. July 6, 2017).
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`For guidance in these situations, courts in this district have looked to the FCC’s
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`construction of the statute. Orrington, 2017 WL 2880900, at *3. Because, “[i]n many
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`instances, ‘free’ seminars serve as a pretext to advertise commercial products or
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`services” faxes “that promote goods or services even at no cost, such as free magazine
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`subscriptions, catalogs, or
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`free consultations or seminars, are unsolicited
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`advertisements under the TCPA's definition.” In re Rules and Regs. Implementing the
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`Tel. Consumer Protection Act of 1991 and the Junk Fax Prevention Act of 2005, 21
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`F.C.C.R. 3787, 3814 (Apr. 6, 2006).1 In applying this principle, courts have required
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`plaintiffs to show that the free offering described in the fax was a pretext for some
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`other commercial motive. Orrington, 2017 WL 2880900, at *3;2 see Physicians
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`1 The defendants argue that the Court is not bound by the FCC’s interpretation of the TCPA. We do
`not reach this issue today, however, because the outcome is same in either case.
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` 2
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` The plaintiff in Orrington failed to show a commercial motive in his initial complaint. Ambassador
`asserts that his amended complaint survived a motion to dismiss. That is true but does not help
`Ambassador here because Orrington’s amended complaint detailed how the free seminar advertised
`was integral to the defendant’s business model. Orrington v. Scion Dental, Inc., No. 17-CV-00884, 2017
`WL 5569741 (N.D. Ill. Nov. 20, 2017).
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`5
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`Case: 1:20-cv-02886 Document #: 47 Filed: 02/18/21 Page 6 of 11 PageID #:576
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`Healthsource, Inc. v. Alma Lasers, Inc., No. 12 C 4978, 2012 WL 4120506, at *2 (N.D.
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`Ill. Sept. 18, 2012).
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`When evaluating whether an unsolicited fax advertising some free product or
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`service violates the TCPA, the dispositive question is whether the free offering was a
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`pretext for the fax’s true, commercial purpose. The presence of a company’s name or
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`logo on a fax is not, by itself, sufficient to infer a commercial purpose. See Phillips
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`Randolph Enterprises, LLC v. Adler-Weiner Research Chicago, Inc., 526 F. Supp. 2d
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`851 (N.D. Ill. 2007) (holding that the plaintiff had not shown a fax had a commercial
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`purpose despite it prominently featuring the sender’s name and logo). Instead, a
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`commercial purpose is found when the fax-sender “promoted its products and
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`services” using the free offering. Physicians Healthsource, Inc., 2012 WL 4120506, at
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`*2.
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`2. The Faxes are not advertisements on their face
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`In the instant case, Elanco sent two faxes to Ambassador notifying it of free
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`seminars that had been approved for continuing education credit for veterinarians.
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`The text of the faxes includes Elanco’s name and logo but does not mention any of the
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`company’s products or services. As a result, the faxes do not advertise Elanco’s
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`products.
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`Ambassador, however, argues that the faxes are overt advertisements, despite
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`making no reference to Elanco’s commercial products. In support of this view, it relies
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`on the Seventh Circuit case Ira Holtzman, C.P.A. v. Turza. 728 F.3d 682 (7th Cir.
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`2013). In Holtzman, Turza, a lawyer, sent hundreds of CPAs occasional “newsletters”
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`Case: 1:20-cv-02886 Document #: 47 Filed: 02/18/21 Page 7 of 11 PageID #:577
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`via fax. Id. at 683. These faxes “devote[d] about 75% of the space to mundane advice
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`and the remainder to Turza's name, address, logo, and specialties.” Id. at 686. Turza
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`admitted that this was “marketing,” but argued that the portion describing his
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`business was “merely incidental” to the newsletter’s business advice. Id. at 687. The
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`court found that the newsletters were advertisements, stating that the fact that “75%
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`of the page is not an ad does not detract from the fact that the fax contains an
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`advertisement.” Id.
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`The present case is different from Holtzman because Elanco’s fax does not list
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`Elanco’s product offerings nor contain contact information beyond a phone number to
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`RSVP for the event. In contrast, the fax in Holtzman clearly states the “commercial
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`availability” of Turza’s services in estate planning and other fields. Id.
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`Ambassador argues that such availability can be inferred by the recipient
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`veterinarians because of their familiarity with Elanco’s business. But reading the fax,
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`one would not know whether Elanco made any drugs related to osteoarthritis or feline
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`disease prevention. Ambassador cites no authority for the proposition that a reader’s
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`possible knowledge can transform an otherwise benign fax into an advertisement.
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`And it is in clear tension with this district’s precedent that the presence of a name
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`and logo does not transform a fax into an advertisement. See Phillips Randolph
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`Enterprises, LLC v. Adler-Weiner Research Chicago, Inc., 526 F. Supp. 2d 851 (N.D.
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`Ill. 2007). Whether or not Elanco’s faxes violated the TCPA thus turns on whether its
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`free seminars served as a pretext for a commercial interest.
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`3. Ambassador has not pled that the seminars are pretextual
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`The faxes present no reason to believe that the continuing education seminars
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`promoted Elanco’s products and services. The Complaint states that “[o]n information
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`and belief, Elanco . . . used [the presentations] to market its animal health goods and
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`services.” Dkt. 1-1 ¶ 18. But Ambassador admits that it does not “know the content .
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`. . of Defendants’ free seminars because . . . Plaintiff did not sign up and attend.” Pl.
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`Resp., Dkt. 36 at 3. As a result, Ambassador’s allegations about the nature of the
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`seminars are “mere labels and conclusions” insufficient to survive a motion to
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`dismiss. Bell v. City of Chi., 835 F.3d 736, 738 (7th Cir. 2016).
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`Ambassador counters by citing several cases where a free seminar was found to
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`be a pretext for some commercial purpose. In most of the cases cited, however, the
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`plaintiff was either required to opt-in to the defendant’s future marketing to attend
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`the seminar, see Am.'s Health & Res. Ctr., Ltd. v. Promologics, Inc., No. 16-CV-9281,
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`2017 WL 5001284, at *1 (N.D. Ill. Nov. 2, 2017); N. Suburban Chiropractic Clinic,
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`Ltd. v. Merck & Co., No. 13-CV-3113, 2013 WL 5170754, at *2 (N.D. Ill. Sept. 13,
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`2013); or the seminar itself contained specific references to the defendant’s products,
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`see Physicians Healthsource, Inc. v. Stryker Sales Corp., 65 F. Supp. 3d 482, 487 (W.D.
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`Mich. 2014), as amended (Jan. 12, 2015). In Promologics, the plaintiff also pled with
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`specificity that the defendants sold registrant data and directly marketed their
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`products to seminar attendees. 2017 WL 5001284, at *2.
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`The plaintiffs in these cases were able to allege a commercial purpose for the faxes
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`with particularity, something Ambassador does not do. Along with failing to
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`adequately plead that the seminars themselves marketed Elanco products,
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`Ambassador does not allege that registration for the seminars required consent to
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`receive future marketing or to have one’s information sold. Indeed, the fax suggests
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`the opposite, as registration could only take place via telephone, not a corporate
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`webpage that might have contained advertisements or consent forms. Orrington v.
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`Scion Dental, Inc., No. 17-CV-00884, 2017 WL 2880900, at *4 (N.D. Ill. July 6, 2017)
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`(noting that registration on a corporate website implies a commercial purpose). In
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`only one cited in-circuit case, Physicians Healthsource, Inc. v. Alma Lasers, Inc, was
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`the bare allegation that a free seminar was used “to market [the defendant]'s goods
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`or services” sufficient to state a claim. No. 12 C 4978, 2012 WL 4120506, at *2 (N.D.
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`Ill. Sept. 18, 2012). The court does not find this lone example persuasive.
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`Ambassador also argues that the Court should adopt the standard articulated by
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`the Second Circuit in the dicta of Physicians Healthsource, Inc. v. Boehringer
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`Ingelheim Pharmaceuticals, Inc., which would assume a commercial purpose at the
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`pleading stage whenever “it is alleged that a firm sent an unsolicited fax promoting
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`a free seminar discussing a subject that relates to the firm’s products or services.”
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`847 F.3d 92, 95 (2d Cir. 2017). The Seventh Circuit has yet to adopt this expansive
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`standard in fax cases. And while the Court shares the Second Circuit’s concern about
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`fax recipient plaintiffs not knowing whether the seminar was used for purposes of
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`advertising, the Court finds it less compelling here where, unlike in Boehringer, the
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`free seminar was certified for continuing education credit and thus has educational
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`value.
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`Failing to show that the seminars promoted Elanco’s products, Ambassador
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`argues that they served a commercial purpose by generating goodwill for the company
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`by providing free dinners and continuing education credit to potential customers.
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`Ambassador may well be correct that this was Elanco’s intention. But “‘[t]he fact that
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`the sender might gain an ancillary, remote, and hypothetical economic benefit later
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`on does not convert a noncommercial, informational communication into a
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`commercial solicitation.’” Orrington v. Scion Dental, Inc., No. 17-CV-0884, 2019 WL
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`4934696, at *5 (N.D. Ill. Oct. 7, 2019) (quoting Sandusky Wellness Center, LLC v.
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`Medco Health Solutions, Inc., 788 F.3d 218, 225 (6th Cir. 2015)) (finding that the
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`goodwill generated from advertising a helpful free service did not constitute a
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`commercial purpose). The possible goodwill generated by offering a continuing
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`education seminar is not, on its own, enough to imbue a fax with commercial purpose.
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`As a result, Ambassador has not adequately alleged that the faxes were “unsolicited
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`advertisements” as defined by the TCPA. Ambassador has failed to plead a non-
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`speculative violation of the TCPA, and so the count is dismissed without prejudice.
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` B. The Court Declines to Exercise Jurisdiction Over the Illinois Law
`Conversion Claim
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`In this case, Ambassador brought a federal law claim, the alleged violation of the
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`TCPA, over which the Court has original jurisdiction, and an Illinois law claim,
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`conversion, over which the Court has supplemental jurisdiction. The Court may
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`decline to exercise supplemental jurisdiction when it “has dismissed all claims over
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`which it has original jurisdiction.” 28 U.S.C. § 1367(c)(3). In light of this case’s
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`contested state law issues and the fact that the plaintiff originally brought the action
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`Case: 1:20-cv-02886 Document #: 47 Filed: 02/18/21 Page 11 of 11 PageID #:581
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`in state court, the Court declines to exercise its supplemental jurisdiction. The
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`conversion claim is dismissed without prejudice.
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`IV. Conclusion
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`For the stated reasons, the defendants’ Motion to Dismiss [23] is granted without
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`prejudice. Because the Complaint has been dismissed, the motions related to the
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`scope of the class are moot. Eli Lilly’s Motion to Strike [25] and Ambassador’s Motion
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`to Cite Supplemental Authority [44] are denied as moot.
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` E
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` N T E R:
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`MARY M. ROWLAND
`United States District Judge
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`Dated: February 18, 2021
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