Sandusky Wellness Ctr., LLC v. Medtox Scientific, Inc.

• Decision Date: 25 April 2017
• Docket Number: Case No. 12-CV-2066 (PJS/HB).
• Citation: 250 F.Supp.3d 354
• Parties: SANDUSKY WELLNESS CENTER, LLC, an Ohio limited liability company, individually and as the representative of a class of similarly-situated persons, Plaintiff, v. MEDTOX SCIENTIFIC, INC., MedTox Laboratories, Inc., and John Does 1–10, Defendants.
• Court: U.S. District Court — District of Minnesota

250 F.Supp.3d 354

SANDUSKY WELLNESS CENTER, LLC, an Ohio limited liability company, individually and as the representative of a class of similarly-situated persons, Plaintiff,

v.MEDTOX SCIENTIFIC, INC., MedTox Laboratories, Inc., and John Does 1–10, Defendants.

Case No. 12-CV-2066 (PJS/HB).

United States District Court, D. Minnesota.

Signed April 25, 2017

Glenn L. Hara, Brian J. Wanca, Ryan M. Kelly, and Wallace C. Solberg, ANDERSON + WANCA; Garrett D. Blanchfield, Jr., and Brant D. Penney, REINHARDT WENDORF & BLANCHFIELD, for plaintiff.

Robert I. Steiner and Geoffrey W. Castello, III, KELLEY DRYE & WARREN LLP; Jeffrey R. Mulder and Lewis A. Remele, Jr., BASSFORD REMELE, P.A., for defendants.

ORDER

Patrick J. Schiltz, United States District Judge

Defendants MedTox Scientific, Inc. and MedTox Laboratories, Inc. (collectively, "MedTox") faxed an unsolicited advertisement to plaintiff Sandusky Wellness Center, LLC ("Sandusky"). In response, Sandusky filed this putative class action under the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227. Sandusky now moves to certify a class of 3,256 persons who received the fax, ECF No. 229, and MedTox moves to dismiss Sandusky's lawsuit for lack of standing, ECF No. 234. For the reasons that follow, the Court grants Sandusky's motion to certify and denies MedTox's motion to dismiss.

I. BACKGROUND

Sandusky is a medical clinic in Ohio. Winnestaffer Dep. 10, 24 [ECF No. 205–2]. Its owner, Gregg Winnestaffer, is a chiropractor, but the clinic offers more than just chiropractic services. Id. at 20–21, 23–24, 35, 39–40. During the time period relevant to this litigation, Dr. Bruce Montgomery, a family practitioner, saw patients at Sandusky one day per week. Montgomery Dep. 7, 16–17, 21–22 [ECF No. 205–6].

MedTox is a toxicology laboratory in Minnesota. Huffer Decl. ¶ 4 [ECF No. 176]. MedTox provides a lead-testing service that it markets to pediatricians and other doctors who work with children. Huffer Dep. 13–16, 44 [ECF No. 205–4]; see also Montgomery Dep. 36 (describing the dangers that lead poses to children). MedTox's lead-testing service requires a doctor to draw only two drops of blood from a patient (instead of a whole ampule). See ECF No. 205–1; Montgomery Dep. 38–40. This makes MedTox's lead-testing service less invasive than many other forms of lead testing.

In February 2012, MedTox faxed a one-page advertisement to 3,256 healthcare providers touting its lead-testing service. Huffer Decl. ¶¶ 7–10, 16–17; see also ECF No. 205–1 (reproducing the fax advertisement). One of these faxes made its way to Sandusky. The fax was intended for Montgomery (the part-time family doctor), see Huffer Decl. ¶¶ 7–10, 13–15, but the fax was not specifically addressed to Montgomery, see ECF No. 205–1, and Montgomery never actually saw the fax, see Montgomery Dep. 38. Instead, a Sandusky employee picked up the fax and brought it to Winnestaffer, who read it and mailed it to his attorney. Winnestaffer Dep. 76–81, 128. This lawsuit followed.

In this lawsuit, Sandusky claims that MedTox's unsolicited fax violated the TCPA because it was sent without "a proper opt-out notice" and without the recipients' "permission or invitation." Am. Compl. ¶¶ 14–17 [ECF No. 174]. Sandusky claims that MedTox's violation of the TCPA harmed it in at least four ways: First, MedTox's fax tied up Sandusky's fax line, preventing Sandusky from receiving other faxes or processing credit-card payments (which "run [ ] through the fax machine"). Winnestaffer Dep. 75–76, 81–83. Second, MedTox's fax wasted Sandusky's paper and ink. Id. at 74, 76, 83–84. Third, MedTox forced Sandusky's employees to waste time processing, reviewing, and disposing of the unwanted fax. Id. at 76–77, 84. And fourth, MedTox's fax "interrupted the Plaintiff's and other class members' privacy interests in being left alone." Am. Compl. ¶ 29; see also id. ¶ 3.

II. PROCEDURAL HISTORY

Three years ago, Sandusky moved to certify a class of "persons who were sent advertisements by fax about products or services offered" by MedTox. ECF No. 162 at 1; see also ECF No. 165 at 8 (proposing a narrower class definition). Senior Judge David S. Doty denied Sandusky's motion for class certification on the grounds that the proposed class was not ascertainable. ECF No. 188 at 7–10. Judge Doty also questioned the commonality of the asserted claims and the adequacy of the proposed class representative and class counsel. Id. at 10 n.4.

On appeal, the United States Court of Appeals for the Eighth Circuit reversed the denial of class certification. Sandusky Wellness Ctr., LLC v. MedTox Sci., Inc. , 821 F.3d 992, 998 (8th Cir. 2016). The Eighth Circuit held that the proposed class was ascertainable. Id. at 995–98. It also held that the proposed class met the commonality and predominance requirements for class certification. Id. at 998. It then remanded the case for further proceedings. Id.

On remand, the case was reassigned to the undersigned, ECF Nos. 223, 225, and Sandusky renewed its motion for class certification, ECF No. 229. MedTox responded by moving to dismiss the case for lack of standing. ECF No. 234.

III. STANDING

A. Standard of Review

The requirement of standing is rooted in the fact that Article III of the United States Constitution limits the power of federal courts to "cases" or "controversies." U.S. Const. art. III, § 2. No "case" or "controversy" exists unless (1) the plaintiff has suffered a "concrete and particularized" injury; (2) the plaintiff's injury "is fairly traceable" to the defendant's actions; and (3) the plaintiff's injury is "likely to be redressed by a favorable decision." Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 1547–48, 194 L.Ed.2d 635 (2016).

A defendant's motion to dismiss a claim for lack of standing can be treated as either a "facial attack" or a "factual attack" on jurisdiction. Carlsen v. GameStop, Inc. , 833 F.3d 903, 908 (8th Cir. 2016) (citation omitted). When addressing a facial attack, a court must restrict itself to the face of the pleadings and accept all of the plaintiff's allegations as true. Id. When addressing a factual attack, a court may consider matters outside of the pleadings and weigh the evidence. Id. Here, the Court will construe MedTox's motion to dismiss as a factual attack on jurisdiction, and the Court will consider deposition testimony and other evidence in the record.

B. Analysis

MedTox argues that Sandusky lacks standing under the Supreme Court's recent decision in Spokeo . But Spokeo simply held that a "bare procedural violation" of a statutory right—"divorced from any concrete harm"—is not sufficient to establish Article III standing. Spokeo , 136 S.Ct. at 1549. Here, however, Sandusky alleges that MedTox's violation of the TCPA created several types of concrete harm. Specifically, Sandusky alleges that MedTox's illegal act disrupted Sandusky's business by tying up its fax line, wasted Sandusky's paper and ink, and wasted the time of Sandusky's employees.¹

Not surprisingly, the "vast majority" of post- Spokeo TCPA cases "have concluded that the invasion of privacy, annoyance and wasted time associated with robocalls is sufficient to demonstrate concrete injury."

Abante Rooter & Plumbing, Inc. v. Pivotal Payments, Inc. , No. 16-CV-05486-JCS, 2017 WL 733123, at *6 (N.D. Cal. Feb. 24, 2017) (collecting cases). Indeed, most courts find that the receipt of even one unwanted call "is [generally] enough to clear Article III's low bar for a concrete injury." Ung v. Universal Acceptance Corp. , 198 F.Supp.3d 1036, 1039 (D. Minn. 2016). Similarly, unwanted faxes harm the plaintiff by "occup[ying] his fax line and machine, us[ing] his toner and paper, and wast[ing] his time." Brodsky v. HumanaDental Ins. , No. 1:10-CV-03233, 2016 WL 5476233, at *11 (N.D. Ill. Sept. 29, 2016) ; see also Fauley v. Drug Depot, Inc. , 204 F.Supp.3d 1008, 1011 (N.D. Ill. 2016) (same).

The handful of TCPA cases that MedTox cites to the contrary can easily be distinguished. For example, in Stoops v. Wells Fargo Bank, N.A. , 197 F.Supp.3d 782 (W.D. Pa. 2016), the plaintiff "purchased at least thirty-five cell phones ... for the [sole] purpose of filing lawsuits under the [TCPA]." Id. at 788. The plaintiff admitted that she did not use these cell phones for any purpose except to fish for telemarketing calls. The court concluded that the plaintiff did not suffer a concrete injury when she got exactly what she sought—telemarketing calls. See id. at 795–803. Here, by contrast, Sandusky did not purchase a fax machine for the sole purpose of drumming up TCPA litigation. Instead, Sandusky used its fax machine for many business purposes, such as to process credit-card payments and to send and receive prescriptions and other "pertinent information." Winnestaffer Dep. 75–76, 114–15.

Two of the cases on which MedTox relies were pleading cases, not standing cases. In Sartin v. EKF Diagnostics, Inc. , No. CV 16-1816, 2016 WL 3598297 (E.D. La. July 5, 2016), "the complaint's only reference to any kind of injury" was a single sentence stating that the "defendants' failure to comply with the TCPA's requirements ‘caus[ed] Plaintiff and Plaintiff Class to sustain statutory damages, in addition to actual damages, including but not limited to those contemplated by Congress and the [Federal Communications Commission].’ " Id. at *3. Understandably, the court concluded that this vague and conclusory allegation was insufficient "to withstand dismissal at the pleading stage." Id. The court explicitly declined to decide whether a properly pled "allegation[ ] of lost time and opportunity cost would be sufficient to establish standing to assert a TCPA claim." Id. at *4. Similarly, in Kostmayer Construction, LLC v. Port Pipe & Tube, Inc. , No. 2:16-CV-01012, 2016 WL 6143075 (W.D. La. Oct. 19, 2016), the same attorneys who had inadequately pleaded standing in Sartin made the "same single reference to damages" in their complaint. Again, the court dismissed ...