Physicians Healthsource, Inc. v. A-S Medication Solutions LLC
324 F. Supp. 3d 973
E.D. Ill.2018Background
- A-S Medication Solutions LLC (A-S Solutions) purchased part of Allscripts’ business and sent a marketing fax in Feb. 2010 to 15,666 numbers from Allscripts’ Salesforce list; 11,422 transmissions succeeded, including to plaintiff Physicians Healthsource, Inc. (PHI).
- The fax promoted A-S Solutions’ services (including “PedigreeRx”) and invoked a “Quality Service Guarantee.”
- A-S Solutions never sought or documented prior express permission from recipients; CEO Walter Hoff directed the fax content and authorized sending.
- PHI sued under the TCPA, alleging the fax was an unsolicited advertisement; Judge Gottschall certified a class of recipients; PHI moved for summary judgment on liability.
- A-S Solutions defended principally by asserting prior express permission (via Allscripts) and Hoff contested individual liability; the court considered FCC guidance but determined burden rules itself.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the fax is an "advertisement" under TCPA | Fax advertises commercial services/quality; thus an advertisement | N/A | Fax is an advertisement. |
| Whether defendants were "senders" under TCPA | A-S Solutions and Hoff are responsible for and promoted services in the fax | N/A | A-S Solutions and Hoff are the senders. |
| Whether fax was sent | PHI: transmissions succeeded to class members including PHI | Defendants do not dispute transmission count | Fax was sent; 11,422 successful transmissions. |
| Whether defendants had prior express permission | PHI: no evidence Allscripts obtained the required prior express permission; A-S cannot rely on undocumented Allscripts permissions | A-S: Allscripts had customers’ permission (Salesforce entries, deposits, declarations) and that permission transfers | A-S did not prove prior express permission by preponderance; no triable issue for defendants. |
| Hoff's personal liability | PHI: Hoff personally authorized and participated in sending, so personally liable | Hoff: individual liability requires knowledge/willfulness (argued via some cases) | Hoff is personally liable due to direct participation/authorization; no separate knowledge requirement. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (summary judgment and nonmoving-party burden)
- Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368 (federal jurisdiction over TCPA claims)
- CE Design, Ltd. v. Prism Bus. Media, Inc., 606 F.3d 443 (deference and Hobbs Act/FCC orders)
- Woodby v. INS, 385 U.S. 276 (judicial role in assigning burdens of persuasion)
- Steadman v. SEC, 450 U.S. 91 (courts prescribe proof standards when Congress is silent)
- Addington v. Texas, 441 U.S. 418 (standard for civil vs. other proceedings)
- Ira Holtzman, CPA & Assocs. Ltd. v. Turza, 728 F.3d 682 (limits on deferring to freestanding FCC declarations)
- Texas v. American Blastfax, Inc., 164 F. Supp. 2d 892 (personal liability for officers who authorize TCPA violations)
- Physicians Healthsource, Inc. v. Stryker Sales Corp., 65 F. Supp. 3d 482 (definition and proof of "express invitation or permission")
- Physicians Healthsource, Inc. v. Allscripts Health Sols., Inc., 254 F. Supp. 3d 1007 (related TCPA decision regarding similar evidentiary issues)