Physicians Healthsource, Inc. v. Allscripts Health Solutions, Inc.

• Decision Date: 02 June 2017
• Docket Number: No. 12 C 3233.,12 C 3233.
• Citation: 254 F.Supp.3d 1007
• Parties: PHYSICIANS HEALTHSOURCE, INC., an Ohio corporation, individually and as the representative of a class of similarly-situated persons, Plaintiffs, v. ALLSCRIPTS HEALTH SOLUTIONS, INC. and Allscripts Healthcare LLC, Defendants.
• Court: U.S. District Court — Northern District of Illinois

254 F.Supp.3d 1007

PHYSICIANS HEALTHSOURCE, INC., an Ohio corporation, individually and as the representative of a class of similarly-situated persons, Plaintiffs,

v.ALLSCRIPTS HEALTH SOLUTIONS, INC. and Allscripts Healthcare LLC, Defendants.

No. 12 C 3233.

United States District Court, N.D. Illinois, Eastern Division.

Signed June 2, 2017

Brian J. Wanca, Glenn L. Hara, Ryan M. Kelly, Ross Michael Good, Wallace Cyril Solberg, Anderson & Wanca, Rolling Meadows, IL, Phillip A. Bock, James Michael Smith, Tod Allen Lewis, Christopher Phillip Taylor Tourek, John P. Orellana, Julia Lynn Titolo, Bock Law Firm, LLC dba Bock, Hatch, Lewis & Oppenheim, LLC, Chicago, IL, Kerry Ann Bute, Matthew Elton Stubbs, Montgomery, Rennie & Johnson, LPA, Cincinnati, OH, Max G. Margulis, Margulis Law Group, Chesterfield, MO, for Plaintiffs.

Livia McCammon Kiser, Andrew Jacob Chinsky, Lawrence P. Fogel, Sidley Austin LLP, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

Jeffrey Cole, UNITED STATES MAGISTRATE JUDGE

INTRODUCTION

"Plaintiff is a professional class-action plaintiff who regularly works with [Law Firm of] Anderson & Wanca to file TCPA cases." Physicians Healthsource, Inc. v. Doctor Diabetic Supply, LLC , 2014 WL 7366255, at *7 (S.D. Fla. 2014).¹ The plaintiff has moved for certification of this "junk fax" case as a class action under Fed.R.Civ.P. 23(a) and 23(b)(3). Denial of class certification and of a finding that the plaintiff and/or its counsel is not appropriate is reviewed for an abuse of discretion. Gomez v. St. Vincent Health, Inc. , 649 F.3d 583, 591 (7th Cir. 2011). Thus, review is deferential, but not abject. CE Design, Ltd. , 637 F.3d at 723.

The defendants have objected to certification and have filed a cross-motion for summary judgment, submitting that the plaintiff gave its express permission to send it faxes advertising defendants' goods and services. The materials filed in connection with the motion for class certification total 1105 pages. At first blush, this seems not to bode well for what ought to be an uncomplicated showing of requisite class action elements like commonality, typicality, and predominance. The materials filed in connection with defendants' summary judgment motion add up to about the same: 1166 pages. Likewise, it is somewhat counterintuitive (although by no means conclusive) that there is no genuine issue of fact in those lengthy materials, especially when the question presented seems so basic: did the plaintiff give the statutorily required permission to the defendants to fax it advertisements.

To complicate things even more (due in large measure to the presentation of the defendants), the two motions are inextricably intertwined, making review of the parties' arguments and evidence difficult. Time-honored warnings, such as the impermissibility of asking a judge to play archaeologist with the record, Spitz v. Proven Winners N. Am., LLC , 759 F.3d 724, 731 (7th Cir. 2014), or hunt for truffles buried in briefs, Friend v. Valley View Cmty. Unit Sch. Dist. 365U , 789 F.3d 707, 711 (7th Cir. 2015), come to mind. The Seventh Circuit's advice in Dal Pozzo v. Basic Mach. Co. , 463 F.3d 609, 613 (7th Cir. 2006) that counsel for both sides should endeavor to make it easier for the court to rule in their client's favor—does not.

We turn to the motion for class certification.

I.BACKGROUND

The plaintiff filed this suit five years ago under the Telephone Consumer Protection Act ("TCPA"), 47 USC § 227, which prohibits any person from sending unsolicited fax advertisements, unless the sender has an established business relationship with the recipient, the sender obtained the fax number through voluntary communication or a directory, and the fax includes an opt-out notice meeting certain statutory requirements. 47 USC § 227(b)(1)(C). The statute 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." 47 U.S.C. § 227(a)(5). Federal regulations define "established business relationship" as:

a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a business or residential subscriber with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the business or residential subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party.

47 C.F.R. § 64.1200(f)(6).

Opt-out notices are also required for faxes sent with the recipient's permission. Ira Holtzman, C.P.A. v. Turza , 728 F.3d 682, 683 (7th Cir. 2013). The provision covering opt-out notices requires that the notice be "clear and conspicuous and on the first page" of the advertisement, state that the recipient can make a request that the sender not send any further unsolicited advertisements, and include a cost-free phone or fax number to which the recipient can communicate its request. 47 U.S.C. § 277(b)(2)(D). For one reason or another, the faxes at issue here do not comply with the opt-out notice requirements. [Dkt. # 204–1, at 18–19].

The potential monkey wrench is that in August of 2015, three years after the suit was filed, the defendants sought and obtained from the F.C.C. a retroactive waiver of the requirement that even faxes sent with permission have an opt-out notice. The parties are at odds over whether that waiver applies to civil litigation (or simply FCC enforcement proceedings) and whether it trumps Seventh Circuit precedent in which our Court of Appeals has said "[e]ven when the Act permits fax ads—as it does to persons who have consented to receive them, or to those who have established business relations with the sender—the fax must tell the recipient how to stop receiving future messages." Turza , 728 F.3d at 683.

Recently, the Court of Appeals for the D.C. Circuit vacated the FCC's 2006 Solicited Fax Rule and held that "the ... Rule is ... unlawful to the extent that it requires opt-out notices on solicited faxes." Bais Yaakov of Spring Valley v. F.C.C. , 852 F.3d 1078, 1079 (D.C. Cir. 2017). The Seventh Circuit's holding in Turza , however, did not even mention the FCC rule, but relied exclusively on the statute, itself, when it said that opt-out notices are required on solicited faxes. See 728 F.3d at 683 ("Even when the Act permits fax ads—as it does to persons who have consented to receive them, or to those who have established business relations with the sender—the fax must tell the recipient how to stop receiving future messages. 47 U.S.C. § 227(b)(1)(C)(iii), (2)(D)"). Given the institutional hierarchy of the federal courts, we are bound to follow Turza , not Bais Yaakov . See Hays v. United States , 397 F.3d 564, 567 (7th Cir. 2005) ; United States v. Glaser , 14 F.3d 1213, 1216 (7th Cir. 1994). See also United States v. Castro–Portillo , 211 Fed.Appx. 715, 722 (10th Cir. 2007) ; Bell v. Hill , 190 F.3d 1089, 1093 (9th Cir. 1999).

II.FACTS OF THE CASE

On its surface, the suit is about plaintiff's claim that defendants violated the Act by sending it anywhere from 32 to 36 faxes [Dkt. # 204–1, at 2–3]; plaintiff's claims vary throughout the case and even in its motion for certification. The faxes were sent between July 2008 and December 2011, on an average of about once a month. [Dkt. # 204, Page 2/3]. But when the surface is scratched, this case is perhaps something of a continuation of a discovery dispute from a case that has been settled, Geismann v. Allscripts–Misy's Healthcare Solutions, Inc. , 09 CV 5114, liberally seasoned with some leftover animosity between the parties and especially between their counsel.

That much is clear from the opening paragraph of the Complaint, which alleges that, in the previous case, the defendants withheld the 32 faxes at issue now, thereby, it is alleged, perpetrating a "fraud ... upon the [plaintiffs] and [Magistrate] Judge Young B. Kim who presided over the case." [Dkt. # 78, ¶ 1]. If the defendants have it right, the plaintiff could have filed a motion to vacate the final approval order in that case under Fed.R.Civ.P. 60(b)(3). Or, it could have asked for other relief against the defendants and their counsel. But the plaintiff's lawyers chose instead to file another junk fax case. That is a strategic decision—by which it is bound. Crowe ex rel. Crowe v. Zeigler Coal Co. , 646 F.3d 435, 444 (7th Cir. 2011) ; Abbott Laboratories v. Takeda Pharmaceutical Co. Ltd. , 476 F.3d 421 (7th Cir. 2007). In any event, it is not productive to attempt to recreate now what happened in discovery in another case years earlier. Nor is it necessary.²

The Complaint, which appears to be based on earlier Complaints in other cases,³ is premised on a view of junk faxes that in a certain respect harkens back to a less sophisticated era—although one which has not fallen totally into desuetude. It alleges that:

[u]nsolicited faxes damage their recipients. A junk fax recipient loses the use of his fax machine, paper, and ink toner. An unsolicited fax wastes the recipient's valuable time that would have been spent on something else. A junk fax interrupts the recipient's privacy. Unsolicited faxes prevent fax machines from receiving authorized faxes, prevent their use for authorized outgoing faxes, cause undue wear and tear on the recipients' fax machines, and require additional labor to attempt to discern the source and purpose of the unsolicited message. A junk fax consumes a portion of the limited capacity of the telecommunications infrastructure serving the victims of junk faxing.

[Dkt. # 78, ¶ 3].

This preamble to the Complaint recalls the original statement of legislative intent from a quarter century ago. See S. REP. 102–177, 20 (Oct. 8, 1991). But, much has changed since 1991. Even on a traditional fax machine, the cost to...