Sandusky Wellness Center, LLC v. ASD Specialty Healthcare, Inc.
863 F.3d 460
| 6th Cir. | 2017Background
- In 2010 Besse (a pharmaceutical distributor) sent a one-page Prolia advertising fax to a purchased list of 53,502 physician fax numbers; 40,343 transmissions (75%) were successful according to WestFax invoices, but the broadcaster’s detailed fax logs no longer existed when suit was filed.
- Sandusky Wellness Center (a chiropractic clinic) received the fax in 2010 and sued in 2013 under the TCPA, alleging the fax was an unsolicited advertisement lacking a compliant opt-out notice.
- Sandusky moved to certify a class of all 40,343 successful fax recipients; the district court denied certification on grounds that individualized issues of (1) identity (who actually received the fax) and (2) consent (which recipients had previously consented/solicited the fax) defeated Rule 23(b)(3) predominance and made ascertainment unworkable.
- Besse produced voluminous customer documents (≈450,000 pages) showing many recipients had previously provided fax numbers to Besse — evidence the district court found could establish consent for many individuals.
- The D.C. Circuit later struck down the FCC’s Solicited Fax Rule (Bais Yaakov), undermining the Rule-based theory that solicited faxes required an opt-out notice; the Sixth Circuit panel relied on that decision (and on Besse’s consent evidence) to affirm the denial of class certification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether individualized consent issues defeat Rule 23(b)(3) predominance | Sandusky: consent can be resolved classwide (Solicited Fax Rule covers solicited faxes; many recipients lacked consent). | Besse: produced concrete consent evidence for many recipients; identifying which recipients consented requires individualized review. | Held: Individualized consent inquiries predominate and defeat Rule 23(b)(3). |
| Whether lack of fax logs makes class membership unascertainable | Sandusky: affidavits or other means could identify recipients; class action still appropriate. | Besse: logs are gone; affidavits are unreliable for a 7-year-old single-page fax; cannot feasibly ascertain which 40,343 actually received the fax. | Held: Difficulty identifying actual recipients is a valid, dispositive barrier to class certification (ascertainability/management). |
| Effect of FCC actions (Solicited Fax Rule and retroactive waivers) on liability | Sandusky: Solicited Fax Rule makes solicited recipients actionable if opt-out missing; district court should not rely on later FCC waiver orders to deny class. | Besse: retroactive waiver (and later D.C. Circuit invalidation of the Rule) mean solicited recipients are not liable; consent-based defenses apply. | Held: Bais Yaakov invalidated the Solicited Fax Rule; whether by waiver or invalidation, recipients who solicited the fax lack claims — supporting individualized consent inquiry. |
| Whether class treatment is superior/manageable given identity and consent problems | Sandusky: overall deterrence and TCPA policy favor class treatment; subclasses or affidavits could manage issues. | Besse: managing millions of mini-inquiries (cross-checking forms, affidavits) is impracticable; superiority not shown. | Held: Class treatment is not superior or manageable here; district court did not abuse discretion in denying certification. |
Key Cases Cited
- Bais Yaakov of Spring Valley v. FCC, 852 F.3d 1078 (D.C. Cir. 2017) (invalidated the FCC’s Solicited Fax Rule requiring opt-out notices on solicited faxes)
- Bridging Communities, Inc. v. Top Flite Fin., Inc., 843 F.3d 1119 (6th Cir. 2016) (predominance requires that classwide proof suffice for issues controlling the outcome)
- Am. Copper & Brass, Inc. v. Lake City Indus. Prods., Inc., 757 F.3d 540 (6th Cir. 2014) (fax logs showing numbers that received faxes satisfy ascertainability)
- Medtox Scientific, Inc. v. Steward, 821 F.3d 992 (8th Cir. 2016) (fax-recipient identification predominates where objective fax logs exist)
- Ira Holtzman, C.P.A. v. Turza, 728 F.3d 682 (7th Cir. 2013) (fax logs can obviate recipient-by-recipient adjudication)
- Gene & Gene, LLC v. BioPay, LLC, 541 F.3d 318 (5th Cir. 2008) (class certification inquiry should consider how trial would be conducted; individualized consent can defeat predominance)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (U.S. 2011) (plaintiff bears burden to affirmatively demonstrate Rule 23 requirements)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (U.S. 1997) (predominance inquiry focuses on substantive issues that will control the case)
- Young v. Nationwide Mut. Ins. Co., 693 F.3d 532 (6th Cir. 2012) (standard of review and district court discretion on class certification)
- Rikos v. Procter & Gamble Co., 799 F.3d 497 (6th Cir. 2015) (appellate review of district court class-certification decisions is for abuse of discretion)