Physicians Healthsource, Inc. v. Cephalon, Inc., CIVIL ACTION NO. 12-3753

• Decision Date: 29 October 2018
• Docket Number: CIVIL ACTION NO. 12-3753
• Citation: 340 F.Supp.3d 445
• Parties: PHYSICIANS HEALTHSOURCE, INC., Individually and as the Representative of a Class of Similarly-Situated Persons, v. CEPHALON, INC., et al., Defendants, and SciMedica Group, LLC, et al., Defendants/Third Party Plaintiffs, v. Blitz Research, Inc., Third Party Defendant
• Court: U.S. District Court — Eastern District of Pennsylvania

340 F.Supp.3d 445

PHYSICIANS HEALTHSOURCE, INC., Individually and as the Representative of a Class of Similarly-Situated Persons,

v.CEPHALON, INC., et al., Defendants,andSciMedica Group, LLC, et al., Defendants/Third Party Plaintiffs,

v.Blitz Research, Inc., Third Party Defendant

CIVIL ACTION NO. 12-3753

United States District Court, E.D. Pennsylvania.

Signed October 29, 2018

Ann M. Caldwell, Caldwell Law Office LLC, Philadelphia, PA, Brian J. Wanca, Ryan M. Kelly, Anderson & Wanca, Rolling Meadows, IL, for Physicians Healthsource, Inc.

Joseph E. Wolfson, Stevens & Lee, Philadelphia, PA, Nicholas H. Pennington, Stevens & Lee PC, King of Prussia, PA, for Defendants.

Mark S. Halpern, Mark S. Halpern & Associates, P.C., Sheryl S. Levy, Halpern & Levy, P.C., Drexel Hill, PA, Jeffrey S. Downs, Mullica Hill, NJ, for Defendants/Third Party Plaintiffs.

George Bochetto, Jeffrey W. Ogren, Bochetto & Lentz P.C., Philadelphia, PA, Samuel B. Potter, Broadwell Phillips & Potter PLLC, Wrightsville Beach, NC, for Third Party Defendant.

MEMORANDUM

Padova, District Judge

Plaintiff, Physicians Healthsource, Inc. ("PHS"), has brought this putative class action pursuant to the Telephone Consumer Protection Act of 1991 (the "TCPA"), as amended by the Junk Fax Prevention Act of 2005, 47 U.S.C. § 227 (the "JFPA"), asserting that it was damaged by its receipt of two unsolicited advertisements sent to it by facsimile transmission ("fax") on behalf of Cephalon, Inc. in 2009. Before the Court are the Motion for Summary Judgment filed by Defendants Cephalon, Inc., Cephalon Clinical Partners, L.P., and Cephalon Development Corporation (collectively "Cephalon"), and the Motion for Summary Judgment filed by Defendants SciMedica Group, LLC and SciMedica Group Marketing Research and Consulting, LLC (collectively "SciMedica"). For the reasons that follow, we grant both Motions.

I. BACKGROUND

This lawsuit concerns two advertisements that SciMedica faxed, on behalf of Cephalon, to an employee of PHS, Dr. Jose Martinez, in 2009. At that time, PHS employed Dr. Martinez as a primary care physician practicing in the area of pain management. (Martinez Dep. at 13, 15-16.) The first advertisement was faxed by SciMedica to Dr. Martinez on January 16, 2009 and invited Dr. Martinez to a dinner program regarding Amrix, a form of long-acting cyclobenzaprine that is prescribed for musculoskeletal pain. (Cephalon Ex. A; Martinez Dep. at 28.) On August 27, 2009, SciMedica, on behalf of Cephalon, faxed the second advertisement to Dr. Martinez, inviting him to a luncheon program in Las Vegas, Nevada that would include discussions on assessing breakthrough pain ("BTP") and the use of opioids for treating BTP. (Cephalon Ex. B.) Neither of these faxes included an opt-out notice setting forth the manner in which the recipient could ask the sender not to fax any advertisements in the future. (See Cephalon Exs. A, B.)

The Complaint asserts one claim against Defendants for violating the JFPA by sending unsolicited advertisements that fail to contain an opt-out notice, as that statute requires.¹ (Compl. ¶¶ 30-39; 47 U.S.C. § 227(b)(1)(C).) PHS seeks to recover its actual monetary losses from these violations or statutory damages of $500.00 for each violation, whichever is greater.² (See Compl. at 13.) Cephalon argues, in its Motion for Summary Judgment, that it is entitled to the entry of judgment in its favor on Plaintiff's single claim brought pursuant to the JFPA because it had express permission to fax to Plaintiff the two advertisements at issue in this case, so those advertisements were not subject to the JFPA's requirement that unsolicited advertisements contain opt-out notices. SciMedica has adopted the arguments set forth by Cephalon.

II. LEGAL STANDARD

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). An issue is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual dispute is "material" if it "might affect the outcome of the suit under the governing law." Id.

"[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where the nonmoving party bears the burden of proof on a particular issue at trial, the movant's initial Celotex burden can be met simply by "pointing out to the district court" that "there is an absence of evidence to support the nonmoving party's case." Id. at 325, 106 S.Ct. 2548. After the moving party has met its initial burden, the adverse party's response "must support the assertion [that a fact is genuinely disputed] by: (A) citing to particular parts of materials in the record ...; or (B) showing that the materials [that the moving party has] cited do not establish the absence ... of a genuine dispute." Fed. R. Civ. P. 56(c)(1). Summary judgment is appropriate if the nonmoving party fails to respond with a factual showing "sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. 2548. " 47 U.S.C. § 227(b)(1)(C). However, where it is the moving party that has the burden of proof at trial "it must show that, on all the essential elements of its case on which it bears the burden of proof, no reasonable jury could find for the non-moving party." A. Natterman & Cie GmbH v. Bayer Corp., 428 F.Supp.2d 253, 257 (E.D. Pa. 2006) (citing In re Bressman, 327 F.3d 229, 237-38 (3d Cir. 2003) ); see also In re Bressman, 327 F.3d at 237 (stating that when the party that has the burden of proof with respect to a particular issue at trial moves for summary judgment as to that issue, that party has "the burden of supporting [its] motion[ ] with credible evidence ... that would entitle [it] to a directed verdict if not controverted at trial." (third alteration in original) (internal quotation and citations omitted) ). In ruling on a summary judgment motion, we consider "the facts and draw all reasonable inferences in the light most favorable to ... the party who oppose[s] summary judgment." Lamont v. New Jersey, 637 F.3d 177, 179 n.1 (3d Cir. 2011) (citing Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) ).

III. DISCUSSION

A. The JFPA

The JFPA bans the faxing of unsolicited advertisements. See 47 U.S.C. § 227(b)(1)(C). An advertisement is unsolicited if it "advertis[es] the commercial availability or quality of any property, goods, or services [and] is transmitted to any person without that person's prior express invitation or permission, in writing or otherwise." 47 U.S.C. § 227(a)(5). The JFPA "supplies a private right of action to fax recipients for them to sue fax senders that send unsolicited fax advertisements in violation of FCC regulations." Bais Yaakov of Spring Valley v. Fed. Commc'ns Comm'n, 852 F.3d 1078, 1080 (D.C. Cir. 2017), cert. denied ––– U.S. ––––, 138 S.Ct. 1043, 200 L.Ed.2d 300 (2018) (citing 47 U.S.C. § 227(b)(3) ). "The Act allows plaintiffs to obtain from fax senders at least $500 for each violation." Id. (citing 47 U.S.C. § 277(b)(3) ).

There is one exception to the JFPA's ban on unsolicited faxes. The exception applies only if the following three elements are present: (1) the sender has "an established business relationship with the recipient;" (2) the recipient voluntarily provided the number of its telephone facsimile machine to the sender in the context of their established business relationship or voluntarily made its facsimile telephone number available for public distribution through "a directory, advertisement, or site on the internet[;]" and (3) the unsolicited advertisement contains an opt-out notice that meets certain requirements. Id. § 227(b)(1)(C)(i-iii).

Cephalon and SciMedica contend that they are entitled to summary judgment with respect to PHS's JFPA claim because PHS gave prior express permission to Cephalon to fax the January 16, 2009 and August 27, 2009 advertisements, so that those faxes were not unsolicited. PHS maintains, however, that, even if Cephalon and SciMedica can prove that the faxes were not unsolicited, the JFPA requires senders to include opt-out notices pursuant to § 227(b)(1)(C) on solicited faxes as well as unsolicited faxes. PHS relies on the Solicited Fax Rule, which was issued by the FCC in 2006 and "require[d] a sender of a fax advertisement to include an opt-out notice on the advertisement, even when the advertisement [was] sent to a recipient from whom the sender ‘obtained permission.’ " Bais Yaakov, 852 F.3d at 1080 (citing 71 Fed. Reg. at 25,972 ). Thus, the Solicited Fax Rule "mandate[d] that senders of solicited faxes comply with a statutory requirement that applie[d] only to senders of unsolicited faxes." Id.

Defendants, however, rely on Bais Yaakov, in which the United States Court of Appeals for the D.C. Circuit concluded that the FCC did not have the "authority to require opt-out notices on solicited faxes."³

Bais Yaakov, 852 F.3d at 1083. The Bais Yaakov court held "that the FCC's 2006 Solicited Fax Rule is unlawful to the extent that it requires opt-out notices on solicited faxes" and vacated an order issued by the FCC that interpreted and applied the Solicited Fax Rule. Id. Thus, Defendants argue that, because the Solicited Fax Rule is unlawful, it does not apply to the faxes sent to PHS on January 16 and August 27, 2009, and they were not required to include opt-out notices in those faxes because those faxes were not unsolicited.

PHS argues that we should...