Physicians Healthsource, Inc. v. Allscripts Health Solutions, Inc.
254 F. Supp. 3d 1007
N.D. Ill.2017Background
- Plaintiff (a repeat TCPA "junk fax" plaintiff) sued defendants under the TCPA alleging receipt of ~32–36 unsolicited advertising faxes between 2008–2011 that lacked compliant opt-out notices.
- Defendants moved for summary judgment asserting the plaintiff gave express permission; they also obtained an FCC retroactive waiver regarding opt-out notices that the parties dispute applies to private litigation.
- Plaintiff sought certification of two classes (Class A: recipients of 24 specified broadcasts; Class B: recipients of 3 broadcasts for which transmission logs exist); plaintiffs rely on Westfax invoices and broadcaster reports for class identification.
- The court found numerosity, commonality, and typicality satisfied, but identified significant problems with adequacy of representation due to plaintiff’s false or recklessly indifferent discovery responses and witness testimony (verified interrogatories that were incorrect and unexplained).
- Court also questioned adequacy of proposed class counsel (multiple firms with heavy docketing history and past disciplinary scrutiny) and potential conflicts regarding payment of arbitration damages from class recovery.
- Because adequacy of the named plaintiff (and related concerns about counsel) is fatal under Rule 23, the court denied class certification; plaintiff may proceed individually.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 23(a) requirements are met | Plaintiff: numerosity, commonality, typicality, adequacy satisfied; class-wide issues (advertisement status, sender, opt-out noncompliance, willfulness) predominate | Defendants: individualized issues of express permission/consent and ascertainability; inadequate representative and counsel | Numerosity, commonality, typicality met; adequacy failed — certification denied |
| Adequacy of the named plaintiff | Plaintiff: experienced repeat plaintiff, participated in discovery and depositions | Defendants: plaintiff gave false discovery answers, lacked candor, was a figurehead for counsel | Court: plaintiff’s false/indifferent discovery responses and testimony render it an inadequate representative |
| Adequacy of proposed class counsel | Plaintiff: counsel experienced in TCPA litigation and devoted resources | Defendants: counsel’s past conduct and case-management failings raise concerns | Court: counsel’s experience insufficient to overcome adequacy concerns given record; combined with plaintiff problems, counsel adequacy cannot be assumed |
| Predominance and manageability (consent, opt-out waiver, identification) | Plaintiff: common questions (including opt-out and FCC waiver) can be resolved classwide; manageability solvable (notice by publication, cy pres) | Defendants: individualized consent/permission issues and lack of recipient lists defeat predominance/manageability | Court: common issues (e.g., opt-out noncompliance) favor predominance, but adequacy failure is dispositive — court did not certify the class |
Key Cases Cited
- Gomez v. St. Vincent Health, Inc., 649 F.3d 583 (7th Cir. 2011) (review of class-cert denial/approval is for abuse of discretion)
- CE Design, Ltd. v. King Architectural Metals, Inc., 637 F.3d 721 (7th Cir. 2011) (rigorous adequacy/credibility inquiry for class representatives)
- Ira Holtzman, C.P.A. v. Turza, 728 F.3d 682 (7th Cir. 2013) (even solicited faxes must include compliant opt-out notice under TCPA)
- Creative Montessori Learning Ctrs. v. Ashford Gear LLC, 662 F.3d 913 (7th Cir. 2011) (ethical violations by counsel can affect class certification; vigorous scrutiny required)
- Mullins v. Direct Digital, LLC, 795 F.3d 654 (7th Cir. 2015) (ascertainability and manageability standards for class certification)
- Reliable Money Order, Inc. v. McKnight Sales Co., 704 F.3d 489 (7th Cir. 2013) (serious counsel misconduct can jeopardize class certification even without direct prejudice to class)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (Rule 23 requires a rigorous analysis; commonality demands class-wide questions)
- Bridgeview Health Care Ctr., Ltd. v. Clark, 816 F.3d 935 (7th Cir. 2016) (economic impact of junk faxes is often minimal; statutory damages and attorney fees drive TCPA enforcement)
- Bais Yaakov of Spring Valley v. F.C.C., 852 F.3d 1078 (D.C. Cir. 2017) (vacating FCC solicited-fax rule—but Seventh Circuit precedent controls within the circuit)