Brodsky v. Humanadental Ins. Co.
| Decision Date | 29 September 2016 |
| Docket Number | Case No. 1:10-cv-03233 |
| Parties | LAWRENCE S. BRODSKY, individually and as the representative of a class of similarly-situated persons, Plaintiff, v. HUMANADENTAL INSURANCE COMPANY d/b/a HUMANA SPECIALITY BENEFITS, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
Plaintiff Lawrence Brodsky ("Plaintiff" or "Brodsky") filed this putative class action against Defendant HumanaDental Insurance Company ("Defendant" or "HDIC") after receiving two messages on his fax machine. Plaintiff argues that these faxes represented improper advertisements in violation of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 et seq. Currently pending before the Court are Plaintiff's Motion For Class Certification [290], Defendant's Motion To Dismiss For Lack Of Subject Matter Jurisdiction Under FRCP 12(b)(1) [323], and Defendant's Motion For Leave To File Eighth and Ninth Affirmative Defenses To The Amended Complaint [281]. As explained below, Defendant's Motion To Dismiss For Lack Of Subject Matter Jurisdiction Under FRCP 12(b)(1) [323] is denied, Defendant's Motion For Leave To File Eighth and Ninth Affirmative Defenses To The Amended Complaint [281] is denied as moot, and Plaintiff's Motion For Class Certification [290] is granted in part and denied in part,.
When analyzing Defendant's motion to dismiss, the Court must construe the Amended Complaint [32] in the light most favorable to Plaintiff, accept as true all well-pleaded facts and draw reasonable inferences in his favor. See Long v. Shorebank Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999). To survive Defendant's motion, the Plaintiff must competently prove by a preponderance of the evidence that subject matter jurisdiction exists. NLFC, Inc. v. Devcom Mid-America, Inc., 45 F.3d 231, 237 (7th Cir. 1995). The Court "may properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists." Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 444 (7th Cir. 2009) (internal quotation omitted).
To obtain class certification, Plaintiff must satisfy the four Rule 23(a) requirements—numerosity, commonality, typicality and adequacy of representation—and one subsection of Rule 23(b). See Arreola v. Godinez, 546 F.3d 788, 794 (7th Cir. 2008). Here, Plaintiff moves to certify a class under Rule 23(b)(3), so he must show: (1) that issues common to the class members predominate over questions affecting only individual members; and (2) that a class action is superior to other available adjudication methods. See Messner v. Northshore University HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012). Plaintiff bears the burden ofproving each Rule 23 requirement by a preponderance of the evidence. Id. Failure to satisfy any requirement precludes class certification. Oshana v. Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006).
This Court has broad discretion to determine whether to certify a class. In exercising its discretion, this Court does not presume that all well-pleaded allegations are true and can look "beneath the surface" of the Amended Complaint [32] to conduct the inquiries required by Rule 23. Davis v. Hutchins, 321 F.3d 641, 649 (7th Cir. 2003); Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 677 (7th Cir. 2001). Although a determination regarding class certification should not turn upon the likelihood of success on the merits, this Court must make the factual and legal inquiries necessary to ensure that the class certification requirements are satisfied, even if that implicates some overlap with the merits of the case. Messner, 669 F.3d at 823-24; American Honda Motor Co., Inc. v. Allen, 600 F.3d 813, 815 (7th Cir. 2010).
Plaintiff Brodsky is a "wholesaler of insurance" who does business as a sole proprietorship known as the Lawrence S. Brodsky Agency, Inc. (the "LSB Agency"). Defendant HDIC is a Wisconsin corporation that insures certain dental plans, including the HumanaDental Prevention Plus plan, the HumanaDental PPO and Traditional Preferred Plans. "Humana Specialty Benefits," a group within HumanaInc., markets "specialty products," including dental, vision, life insurance and disability products.
Brodsky and the LSB Agency have "market agreements" with numerous insurance companies. Brodsky then sells the products of those insurance companies through various insurance agents/independent contractors. One of Brodsky's market agreements was with "Humana Insurance Company, Humana Health Plan, Inc., and all of their affiliates." That agreement is known as a "Group Producing Agent or Agency Contract." This Agency Contract stipulated that Brodsky and the LSB Agency agreed that Humana Insurance Co. and all of its affiliates "may choose to communicate with [Brodsky and/or the LSB Agency] through the use of . . . facsimile to the . . . facsimile numbers of" Brodsky and the LSB Agency. In connection with his Agency Contract, Brodsky provided Humana Insurance Co. with a specific facsimile number ending in 0152.
On May 14, 2008, Brodsky's fax machine assigned to the 0152 number received two identical one-page fax messages ("the Subject Faxes"). The bottom of the Subject Faxes indicated that they were sent by "Humana Specialty Benefits." There is no dispute that the Subject Faxes were created by the Marketing Department of Humana Inc., and received the internal designation GN-Fax 4/08. The Subject Faxes do not identify the individual or entity to which they were specifically sent. At least seven of Brodsky's insurance agents/independent contractors had permission to use (and did in fact use) Brodsky's office space and fax machine during the time period at issue. The parties have stipulated that faxesidentical to the Subject Faxes (similarly designated GN-Fax 4/08) were successfully transmitted 19,931 times. [285] Ex. 21, ¶ 20.
Plaintiff initiated the present litigation in state court against HDIC. [1] Ex. A at 1. HDIC, in turn, removed the litigation to this Court. Id. HDIC first moved to dismiss on the basis that its prior offers of full relief to Plaintiff rendered the litigation moot. [14] at 2-3. That motion was denied. [21] at 1. HDIC then moved for summary judgment, arguing, inter alia, that HDIC did not "send" the Subject Faxes, the Subject Faxes were not "sent" to Plaintiff, the Subject Faxes were not "advertisements," and Plaintiff had consented to delivery of the Subject Faxes. [118] at 1-5. Defendant's motion for summary judgment was denied as to Plaintiff's TCPA claim. [189] at 12-23. HDIC moved for reconsideration of that ruling [199], which was denied. [212] at 3-9. In the course of ruling on both HDIC's motion for summary judgment and motion for reconsideration, Judge Durkin ultimately determined, inter alia, that:
On March 23, 2016, HDIC deposited $25,000 in an escrow account with U.S. Bank, N.A. [323] ¶¶ 4-6. Under the escrow agreement, upon entry of a final order from this Court, U.S. Bank, N.A. is directed to pay the escrow funds to the Plaintiff. Id. In connection with the tender and deposit of funds into the escrow account, HDIC has also agreed, in written correspondence with Plaintiff, to refrain from sending any faxes to Plaintiff in the future. Id.
Defendant's Motion To Dismiss For Lack Of Subject Matter Jurisdiction Under FRCP 12(b)(1) [323] and Defendant's Motion For Leave To File Eighth and Ninth Affirmative Defenses To The Amended Complaint [281] contest Plaintiff's standing in light of HDIC's creation of the escrow account. Given the potentially dispositive nature of this question, the Court addresses these motions first.
Defendant claims that by placing in escrow an amount equal to or greater than Plaintiff's potential individual recovery, it has mooted any putative "claim or controversy" and thereby deprived Plaintiff of standing. Defendant's argument misconstrues governing precedent, and is therefore rejected.
The Supreme Court of the United States recently had occasion to address Article III standing under similar circumstances in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016). The plaintiff in Campbell-Ewald filed a putative class action complaint pursuant to the TCPA. Id. at 667. Defendant in that case proposed to settle plaintiff's individual claim through a FRCP 68 offer of judgment and parallel settlement offer. Id. at 667-68. After plaintiff rejected those offers, the defendant moved to dismiss pursuant to FRCP 12(b)(1) for lack of subject matter jurisdiction. Id. at 668. More specifically, the defendant argued that no "case or controversy" existed insofar as plaintiff had been offered complete relief. Id.
The Court rejected defendant's "pick off" attempt. The Court stated that a case becomes moot "only when it is impossible for a court to grant any effectual relief whatever to the prevailing party," and that "as long as the parties have a concrete interest, however small, in the outcome of the litigation, ...
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