Brodsky ex rel. Situated v. Humanadental Ins. Co.
910 F.3d 285
| 7th Cir. | 2018Background
- Two consolidated TCPA suits (Brodsky v. Humana; Alpha Tech v. Essendant) challenge faxed advertisements that plaintiffs say violated the TCPA and the FCC’s 2006 Solicited Fax Rule by lacking compliant opt‑out notices.
- Brodsky had a market agreement with Humana that explicitly allowed fax communications to a shared fax number; Humana’s faxes included a small opt‑out phone number. Plaintiffs allege nearly 20,000 identical transmissions.
- Alpha Tech alleged Essendant sent hundreds of fax templates (totaling ~1.5 million faxes across ~24,000 numbers) with opt‑out language that plaintiffs claimed failed to meet the Solicited Fax Rule’s requirements.
- District courts denied class certification in both cases, relying heavily on the D.C. Circuit’s Bais Yaakov decision (which found the Solicited Fax Rule unlawful as applied) and on FCC grants of retroactive waivers to the defendants.
- The Seventh Circuit reviewed for abuse of discretion and affirmed denial of class certification, emphasizing individualized consent/established‑business‑relationship inquiries, the regulatory waivers, and uncertainty about the reach of Bais Yaakov.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether faxes required compliant opt‑out notice even when solicited | Plaintiffs: Solicited faxes lacked required opt‑out language under FCC rule; classwide relief appropriate | Defendants: Either recipients consented/there was an EBR or FCC waivers and Bais Yaakov undermine the rule’s reach | Court: Denied class certification; individualized consent/EBR issues predominate and waivers/binding D.C. Circuit precedent complicate class treatment |
| Effect of Bais Yaakov and whether it binds Seventh Circuit broadly | Plaintiffs: Bais Yaakov invalidates the Solicited Fax Rule, supporting class claims | Defendants: Bais Yaakov limits or vacates FCC rule application; waivers further protect defendants | Court: Treated Bais Yaakov as binding on the 2014 Anda Order as‑applied; did not need to decide full retroactive invalidation of 2006 Rule but gave Bais Yaakov substantial weight |
| Impact of FCC retroactive waivers on availability of statutory claims/class treatment | Plaintiffs: Waivers don’t bar private damages claims or class treatment | Defendants: Waivers relieve compliance obligations and reduce common legal questions across class | Court: Waivers undermine common‑issue predominance and provide additional reason to deny class certification |
| Whether Rule 23(b)(3) predominance/superiority met for large proposed classes | Plaintiffs: Common issues of notice and damages make class appropriate | Defendants: Individualized consent/contract/usage facts and differing opt‑out language require individualized inquiries | Court: Predominance/superiority not satisfied; district courts did not abuse discretion in decertifying/denying certification |
Key Cases Cited
- Bais Yaakov of Spring Valley v. FCC, 852 F.3d 1078 (D.C. Cir. 2017) (vacated FCC Anda Order and held Solicited Fax Rule unlawful as applied)
- Holtzman v. Turza, 728 F.3d 682 (7th Cir. 2013) (addressed need for compliant opt‑out notice for unsolicited faxes)
- Puffer v. Allstate Ins. Co., 675 F.3d 709 (7th Cir. 2012) (appellate review of district court class‑certification decisions is deferential)
- Blow v. Bijora, Inc., 855 F.3d 793 (7th Cir. 2017) (consent issues may preclude classwide resolution)
- Sandusky Wellness Ctr., LLC v. ASD Specialty Healthcare, Inc., 863 F.3d 460 (6th Cir. 2017) (treated Bais Yaakov as invalidating the 2006 rule more broadly)
- True Health Chiropractic, Inc. v. McKesson Corp., 896 F.3d 923 (9th Cir. 2018) (adopted broad reading of Bais Yaakov)
- Parko v. Shell Oil Co., 739 F.3d 1083 (7th Cir. 2014) (court may affirm denial of class certification where individual issues predominate)
- Howland v. First Am. Title Ins. Co., 672 F.3d 525 (7th Cir. 2012) (transaction‑specific inquiries defeat class treatment)
- Cal. Ass'n of the Physically Handicapped, Inc. v. FCC, 833 F.2d 1333 (9th Cir. 1987) (Hobbs Act time limits for challenging FCC orders are jurisdictional)