Urgent One Med. Care, PC v. Co-Options Inc.

• Decision Date: 01 June 2022
• Docket Number: 21-CV-4180 (JS)(SIL)
• Parties: URGENT ONE MEDICAL CARE, PC, doing business as DAVID E. SIMAI PEDIATRICS, individually and on behalf of the class defined herein, Plaintiff, v. CO-OPTIONS, INC., doing business as THE SAMPLING STORE, KRAFT HEINZ FOODS COMPANY, and KRAFT FOOD BRANDS LLC, Defendants.
• Court: U.S. District Court — Eastern District of New York

URGENT ONE MEDICAL CARE, PC, doing business as DAVID E. SIMAI PEDIATRICS, individually and on behalf of the class defined herein, Plaintiff,
v.
CO-OPTIONS, INC., doing business as THE SAMPLING STORE, KRAFT HEINZ FOODS COMPANY, and KRAFT FOOD BRANDS LLC, Defendants.

No. 21-CV-4180 (JS)(SIL)

United States District Court, E.D. New York

June 1, 2022

REPORT AND RECOMMENDATION

STEVEN I. LOCKE, UNITED STATES MAGISTRATE JUDGE

Presently before the Court in this Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq., junk-fax advertising action, on referral from the Honorable Joanna Seybert for report and recommendation, are Defendants' CoOptions, Inc. (“Co-Options”), Kraft Heinz Foods Company (“Kraft”), and Kraft Foods Group Brands LLC (“Kraft Foods,” together with Kraft, the “Kraft Defendants,” and collectively with Co-Options, “Defendants”) motions to dismiss Plaintiff Urgent One Medical Care, PC's (“Plaintiff” or “Urgent One”) First Amended Complaint's class action claim (the “Class Claim”) for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) on statutory grounds and failure to state a claim pursuant to Rule 12(b)(6) or, in the alternative, to strike the Class Claim pursuant to Rule 12(f) of the Federal Rules of Civil Procedure. See Co-Options Notice of Motion to Dismiss or Strike (“Co-Options Motion” or “Co-Options Mot.”), Docket Entry (“DE”) [27]; Kraft

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Defendants' Notice of Motion to Dismiss or Strike the Complaint in Part (“Kraft Motion” or “Kraft Mot.,” together with the Co-Options Motion, “Defendants' Motions”), DE [28].

By way of Complaint dated July 26, 2021, later modified by Amended Complaint dated December 8, 2021, Plaintiff commenced this action against Defendants, alleging violations of section 227(b)(1)(C) of the TCPA. See Complaint (“Compl.”), DE [1]; First Amended Complaint (“FAC”), DE [26]. Defendants seek dismissal of the First Amended Complaint's putative class claim on the pleadings. See Defendants' Motions. For the reasons set forth herein, the Court respectfully recommends that Defendants' Motions be denied in their entirety.

I. BACKGROUND

A. The Parties

Plaintiff is a medical practice and New York professional corporation that “maintains telephone facsimile equipment that automatically prints incoming faxes on paper using toner/ink.” FAC ¶¶ 3, 15. Defendant Co-Options is a Connecticut corporation with its principal office in Apex, North Carolina. Id. at ¶ 4. Co-Options contracts with major manufacturers of “food and similar products,” including the Kraft Defendants, to “distribute samples of such products, for the purpose of introducing them to the market and inducing consumers to purchase them.” Id. at ¶¶ 5-6. Defendant Kraft is a Pennsylvania limited liability company with its principal offices located in Pittsburgh, Pennsylvania. Id. at ¶ 7. Defendant Kraft Foods is a Delaware limited liability company with its principal offices also located in Pittsburgh, Pennsylvania. Id. at ¶ 8. The Kraft Defendants are subsidiaries of

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The Kraft Heinz Company and are responsible for the “development and marketing of the company's food and beverage products, including the Creative Roots product [line].” Id. at ¶¶ 18-20.

B. Co-Options's Transmission of the Faxes

Prior to July 2020, the Kraft Defendants engaged Co-Options “to distribute over 300,000 child-sized bottles of Creative Roots products to parents and caretakers of children via pediatricians and other practitioners.” Id. at ¶ 21. On July 20, 2020, and July 27, 2020, Plaintiff received a pair of unsolicited faxes advertising Creative Roots products (the “Faxes”) on its facsimile machine, sent by Co-Options on behalf of the Kraft Defendants. Id. at ¶¶ 13-14, 17; see also FAC Exhibits A (July 20, 2020 Fax) & B (July 27, 2020 Fax). Urgent One had no prior relationship with Defendants, nor had it authorized or requested the Faxes. Id. at ¶ 26.

The Faxes advertised products that were commercially available and sought to have Plaintiff “distribute and recommend those products, as part of an overall marketing plan to sell the Creative Roots products.” Id. at ¶ 23. Specifically, the Faxes, which were allegedly intended to “induce the recipients to obtain and offer free samples of the new Creative Roots products for the purpose of inducing consumers to purchase them[,]” explicitly stated that the program's purpose was “to get the word out on its new Creative Roots and provide parents and their kids with a chance to try them.” Id. at ¶ 22. The Faxes, which were allegedly sent “as part of a mass broadcasting of faxes” to at least 40 other recipients within and outside of New York,

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“d[id] not contain information on how to opt out of further faxes.” Id. at ¶¶ 24, 27, 29.

C. Procedural History

Based on the above, Dr. David Simai, Urgent One's owner, commenced this action against Defendants on July 26, 2021, alleging that Defendants violated his rights under the TCPA when they sent the Faxes to Plaintiff's facsimile machine unsolicited. See generally Compl. The Complaint, styled as a class action, sought to assert claims on behalf of all persons who, on or after a date four years prior to the filing of the Complaint, “were sent faxes by or on behalf of Defendant Co-Options Inc.... promoting commercially available goods or services ...where Defendants [did] not have evidence of consent or an established business relationship prior to the sending of the faxes,” as well as a subclass “consisting of class members sent a fax on behalf of the Kraft Defendants.” Id. at ¶ 39. The Complaint further alleges that, in addition to the Faxes sent to Urgent One, Defendants “have transmitted similar unsolicited fax advertisements to at least 40 other persons in New York and others elsewhere.” Id. at ¶ 29. Through the Complaint, Dr. Simai sought: (1) actual and statutory damages; (2) an “injunction against the further transmission of unsolicited fax advertising”; and (3) costs. See id. at 7-8.^[1]

On October 25, 2021, after Defendants filed pre-motion letters seeking to file motions to dismiss or, in the alternative, motions to strike the class definition, see DEs [9], [11], Judge Seybert directed Defendants to file their motions by November

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24, 2021, which they did. See October 25, 2021 Electronic Order; DEs [24], [25]. Plaintiff timely amended its Complaint on December 8, 2021, and substituted Urgent One as Plaintiff in place of Dr. Simai - all other allegations remained the same. See generally FAC. In light of the FAC's filing, Judge Seybert denied Defendants' November 24, 2021 motions without prejudice, and directed them to file renewed motions to dismiss on or before January 7, 2022. See December 9, 2021 Electronic Orders. Defendants filed their motions to dismiss the FAC or, in the alternative, to strike the class allegations, on December 21 and December 29, 2021, respectively, see Co-Options Mot.; Kraft Mot., which Plaintiff opposed on January 21, 2022. See Plaintiff's Omnibus Response to Defendants' Motions to Dismiss (“Plaintiff's Opposition” or “Pl. Opp.”), DE [33]. On April 7, 2022, Judge Seybert referred Defendants' Motions to this Court for report and recommendation. See April 7, 2022 Electronic Order. For the reasons set forth below, the Court respectfully recommends that Defendants' Motions be denied in their entirety.

II. LEGAL STANDARDS

A. Motion to Dismiss for Lack of Article III Standing

Initially, Defendants move to dismiss the FAC pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of standing. To maintain Article III standing, a plaintiff must establish: “(i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief.” Doe v. McSweeney, No. 21-cv-2191, 2022 WL 1451383, at *1 (2d Cir. May 9...