Case Information
*1 Before R OVNER B RENNAN S T . E VE Circuit Judges . B RENNAN Circuit Judge
. A medical supply company sent faxes thousands medical providers solicit prescrip tions sell medical equipment providers’ patients. One provider received numerous led class action challenging faxing practices Telephone Con sumer Protection Act (“TCPA”), U.S.C. § et seq ‐
As the worked way through the court, the supply company failed appear and had entered against but damages. Later the supplier’s chief executive o ffi cer granted summary judg ment. Concerned with an inconsistency, the va cated the supply company and entered both executive and company. medical provider appeals decision.
We a rm executive. But because standard applied vacating company, inconsistent judgments between individual corporate defendants do pre sent a problem, we reverse remand further proceed ings claim company.
I. Factual Procedural Background Plaintiff Arwa Chiropractic, P.C. Illinois medical pro vider. On six occasions Arwa received nearly identical faxes containing prescription request form a nebulizer (which turns liquid medicine into mist) defendant Med ‐ Care Diabetic & Medical Supplies, Inc. used third party, WestFax, send faxes bulk. provided WestFax with blank templates prescription request forms, along spreadsheets contact information fill forms. WestFax then sent Care’s faxes thou sands medical providers. Those received part broadcast 46,051 each differed only by patient doctor information. Care’s chief executive officer, Dr. Steven Silverman, explained “Med business model mail order medi cal equipment company involved reaching out physicians ‐ to request prescriptions after first being contacted by patients needing medical products.” Silverman asserted he had personal control over the faxing operations of Med ‐ Care. He claimed “day to day operations of business del egated to others” while he “focused more big picture busi ness development and overall health of business.” Silverman did not send any faxes behalf Med ‐ Care. He did oversee, supervise, or participate sending faxes, and he did design draft any prescription request forms. He execute Med ‐ Care’s contract with WestFax, he involved with uploading order requests to WestFax. Others signed contract WestFax, oversaw Med ‐ operations, uploaded to WestFax.
Arwa sued Med ‐ Care behalf puta tive class fax recipients, claiming defendants’ faxing prac tices violated TCPA. Arwa moved to certify class, which court granted. Defense counsel then moved to withdraw tt orney Med Care but continued to represent Silverman. Counsel informed court Med Care had commenced proceeding Florida court signing assets bene t creditors, see generally F LA . S TAT . ch. state proceeding similar bankruptcy.
The granted counsel’s motion withdraw representing Care ordered it have ney appear if wished continue defend case. When none did, Arwa moved Federal Civil Procedure 55(a), granted. Later Arwa moved Care. See F ED R. C IV . P. 55(b). granted entered liability, but deferred question damages.
Moving the next defendant, Arwa sought partial sum ‐ mary judgment Dr. Silverman its TCPA claim, and Silverman moved summary all claims. After reviewing parties’ brie ng and the law, the court concluded that Med Care’s faxes were not advertisements, and it denied Arwa’s motion summary judgment. Arwa argued Silverman directly participated or authorized faxes should be liable, but only evidence Arwa cited support this theory was that Silverman “knew” or “was aware” that Med procedures included sending faxed prescription requests physicians. So court granted motion summary because even if faxes were advertisements, he could be person ally liable unless he was “sender” TCPA had “direct personal participation personally authorized” faxes.
Arwa then renewed its Care submi ed damages calculation. Sil verman, who despite receiving summary his fa vor had remained active case. He opposed re quest argued Care logically inconsistent ruling that faxes were advertisements.
At April hearing, after Arwa Silverman supplemented their arguments, considered question inconsistent judgments. Arwa had sought hold liable based same con duct: sending unsolicited fax advertisements. concluded that defendants sued jointly should sub jected inconsistent judgments. Given had found advertisements, reasoned ‐ entitled to a default judgment on liability against Med Care. So denied renewed default judgment, vacated judgment Med ‐ Care, entered judgment both Silverman and Med Care. appeals those rulings, arguing Med Care’s prescrip
tion request forms are advertisements TCPA, genuine issue material fact exists as to personal liability, summary judgment Silverman does pre clude Med Care. disa grees with each these arguments. He believes was correct to vacate previous as to to enter Care. participated in this appeal.
II. Discussion
Two standards review apply parties’ arguments appeal. rst, Silverman, is familiar de novo review grant summary judgment, appropriate when there genuine dispute any material fact moving party entitled ma er law. F ED . R. C IV P. 56(c). We view record draw all reasonable inferences light most favorable nonmoving party. See, e.g. Driveline Sys., LLC Arctic Cat, Inc. 2019). We may rm summary any ground supported record, provided parties *6 6 19 1916 adequately addressed the issue the the non moving party had opportunity contest it. Id. second abuse discretion on the or vaca tion Care, the denial renewed by Arwa. See Relational, LLC v. Hodges , 627 F.3d 668, 671 (7th Cir. 2010); Pre tz el & Stou ff er v. Imperial Adjusters 28 42, 44–45 (7th Cir. 1994).
A. Liability
We fi rst consider whether the erred grant ing summary Silverman claims. Per sonal under TCPA analyzed by examining whether individual “sender” TCPA, or person had direct, personal participation or personally authorized conduct found have violated statute. Physicians Healthsource, Inc. v. A S Medication Sols. LLC F. Supp. 3d 973, (N.D. Ill. 2018), ’d 2020) (citing Texas v. Am. Blastfax, Inc. F. Supp. 2d 892, (W.D. Tex. 2001)). “In addition person who physically sends fax, federal regulations bring within de nition ‘sender’ person or entity whose behalf facsimile unsolicited advertisement sent whose goods or services are advertised promoted unsolicited adver tisement.” Heather McCombs, DPM, LLC Cayan LLC WL *5 (N.D. Ill. Mar. (citing C.F.R. § 64.1200(f)(10)).
Silverman did fit within definition sender he send any faxes, faxes were sent behalf personally, if advertisements, they advertised prod ucts, Silverman’s. 19 ‐ 1916 7
Even though was “sender,” some courts have found corporate officer “personally liable under TCPA if he had direct, personal participation in or personally authorized conduct found have violated statute, merely tangentially involved.” Physicians Healthsource, Inc. 324 F. Supp. 3d at 983 (noting regulatory definition “sender”); see City Select Auto Sales Inc. v. David Randall Assoc., Inc. F.3d (3d Cir. 2018) (as suming personal participation liability is available under TCPA, direct, personal participation corporate officer is re quired).
Our has decided whether personal participation liability available under TCPA. The Physicians Healthsource noted that “direct, personal partic ipation” standard “has been adopted across country, cluding by other judges district,” rejected requirement that officer liability requires only knowledge wrongful conduct willful violation. F. Supp. 3d at 983. This affirmed, F.3d (7th Cir. 2020), includ ing, that case’s facts, personal liability chief ex ecutive officer.
The personal participation standard been criticized resting challenged assumption that traditional forms common law personal liability remain available fed eral statutes by default. City Select 160–61 (citing Boim Holy Land Found. Relief & Dev. (en banc)). But we need decide personal participation present here. only claim o ers support he “knew” “was aware” procedures included sending faxes. Mere knowledge insu cient. See Physicians Healthsource F. Supp. 3d at (citing Am. Blastfax F. Supp. 2d 898). Even assuming personal par ‐ ticipation is standard, direct participation or au ‐ thorization would required, that absent here. So we conclude that court err granting sum ‐ mary judgment favor.
B. Default Default Judgment as to Liability Care Before considering vacation default judg ment proper, as background we examine entry default under Rule 55(a) subsequent en try default as Care Rule 55(b). “When a party whom a af rmative relief sought failed plead otherwise de fend, that failure shown by davit otherwise, clerk must enter party’s default.” F ED . R. C IV . P. 55(a). 55(b)(2) provides court may enter de fault.
When counsel withdrew, court instructed an orney must appear company if it wished defend lawsuit. When after two months none appeared, granted Arwa’s request entry de fault. After two more months still failed appear, so granted liability.
When enters liability, must accept true all factual allegations complaint, ex cept those regarding amount damages. F ED R. C IV . P. 8(b)(6); see, e.g. Quincy Bioscience, LLC Ellishbooks (affirming judgment). That occurred here. Arwa’s requests for default and default judgment contained all information necessary for dis trict court to issue its rulings. Care did appear after November and failed to explain its absence. Indeed, Care has appeared on appeal defense to contrary has been offered us hold otherwise. These rul ings by district court within discretion, which it properly exercised.
C. Vacation Default Judgment Liability has challenged court’s decision vacate default judgment deny Arwa’s request default damages. “The may set aside good cause, it may set aside Rule 60(b).” F ED R. C IV . P. 55(c). Relief fi nal available because mistake, inadvertence, excusable neglect, newly discovered evidence, fraud, void been satis fi ed, any other reason that justi fi es relief. F ED R. C IV . P. 60(b)(1)–(6); see Chrysler Credit Corp. Macino (a rming grant judgment). The Rule 60(b) standard “applied more stringently” than Rule 55(c) standard. Chrysler 368.
Upon initial review, court’s grant “default judgment,” but damages, suggests 60(b) should apply. order used term “judgment,” counsel referred ruling manner.
But enter nal until over one year later, after had ruled parties’ motions *10 10 19 1916 summary judgment and vacated default judg ment as liability. [2] The more stringent Rule 60(b) standard applied unless fi nal judgment entered. F ED . R. C IV P. 60(b) (noting ground relief “ fi nal” judgments); see also Kapco Mfg. v. C&O Enters. , 773 F.2d 151, 153 (7th Cir. 1985) (quoting Rule 60(b) “applies only fi nal judg ment, order, proceeding” (internal quotation marks omit ted)); Dassault Systemes, SA v. Childress , 663 F.3d 832, 840 (6th Cir. 2011) (noting “the well established rule Rule 60(b) applies only nal, appealable judgments”). So “default judgment” er characterized an en try default, Rule 55(c) standard applies. See, e.g. , O.J. Distrib. v. Hornell Brewing Co. , 340 F.3d 345, 353 (6th Cir. 2003) (noting stricter Rule 60(b) standard applies once default has ripened into judgment, mean ing entered determined damages); Chrysler Credit Corp. , 710 F.2d at 367 (noting dif ferent standards between 55(c) Rule 60(b)).
The scope our review here limited. Sta ff ord v. Mesnik F.3d 1445, 1450 (7th Cir. 1995). We may consider only court’s decision an abuse discretion, “we cannot reach merits underlying judgment.” Sta ord F.3d (quoting Lee v. Village River Forest 976, (7th Cir. 1991)); see Wehrs Wells (reviewing de nial vacate only abuse 19 1916 11 of discretion); Merrill Lynch Mortg. Corp. v. Narayan , 908 F.2d 246, 250 (7th Cir. 1990) (reviewing default, entry of default judgment, motions to vacate those rulings under an abuse discretion standard).
“To succeed vacation default order under Rule 55(c), defendant must show ‘(1) good cause [its] de ‐ fault; (2) quick action to correct it; (3) meritorious de fense to plainti ’s complaint.’” O’Brien v. R.J. O’Brien & Assoc., Inc. , 998 F.2d 1394, 1401 (7th Cir. 1993) (quoting United States v. DiMucci F.2d 1488, 1495 (7th Cir. 1989)). “The same requirements, although more strictly applied, must be met to set aside default under Rule 60(b).” Id.
None factors above have been shown. Indeed, Care has appeared or put forth defense since class certi cation stage. never moved to set aside default judgment; sua sponte. Cf. Van Cannon v. United States F.3d 656, (7th Cir. (noting Rule 60’s revised text “[o]n just terms” may foreclose ability vacate de fault sua sponte but leaving question other day). Relief default will granted only where actions leading willful, careless, negligent, referred “excusable neglect.” Johnson Gudmundsson 1994). Although we consider under more lenient standard, defendant must still show good cause either stand ard. O’Brien (a rming denial motions vacate when defendant failed demonstrate good cause). Here, there evidence excus able neglect default. failed appear after November appeared 19 1916 appeal, o ff ers no explanation for its default. See id. ( fi nd ‐ ing no good cause for default where defendant had been served over months before of default, failed to ap pear, o ff ered explanation for its default). The good cause requirement has not been met, even under more le nient Rule standard, when failed to appear o er any explanation for its default.
We conclude district court abused its discretion vacating its as Arwa Care. It did analyze circumstances under cause standard Rule 55(c). A court abuses its dis cretion when it fails consider motion proper legal standard. See, e.g. Smego v. Payne 387, (7th Cir. 2017) (noting “[a]buse discretion means serious error judgment, such as … use incorrect legal standard”); Jones Ill. Cent. R. Co. (re viewing denial Rule 60(b) motion abuse discretion committing “a clear error judgment, such as applying incorrect legal standard”). district violated this re quirement when it issued its April rulings without considering applicable 55(c) standard.
It follows abused discretion by reaching Arwa’s motion damages. When presented motion, sought nal Care, including damages amount. Be did apply appropriate stand ard, damages receive proper consideration subject resolution remand.
D. The Inconsistency Analysis On appeal the parties take opposite positions on the dis trict court’s conclusion that Care’s prescription request forms are advertisements purposes the TCPA. argues the faxes are advertisements, and Silverman asserts they are not. This question is the primary topic the brie fi ng on appeal, federal courts have reached di ff erent conclu sions on this question based on the facts before them. We need reach this issue, though. Whether the were advertisements the TCPA, the question before us district abused discretion in fi nding in consistent summary Silverman Care.
When district decided parties’ cross motions summary judgment, granted summary ruled that prescription request forms advertisements purposes TCPA. To court, created an inconsistency that required reconciliation. This issue briefed addressed April hearing.
At hearing, reasoned “that when claim based joint vicarious conduct, ma er how plainti ff characterizes suit defendants, con cern re fl ected [ Frow De La Vega U.S. (1872)] about inconsistent judgments present must be considered.” But reliance Frow misplaced. In plainti ff alleged several defendants conspired de fraud him out title land Texas. U.S. at 552–53. One alleged co conspirators defaulted, resulting “ nal decree absolute him, adjudging title land [plainti ’s].” Id. 553. remaining *14 14 19 1916 defendants prevailed at trial, resulting dismissal of the plainti ff ’s complaint. Id. Frow appealed, focusing di rectly inconsistent judgments. Id. at 552–53. Court held “ nal decree merits cannot be made separately one of several defendants upon joint charge all, where case is still pending to others.” Id. at 554. So Frow stands proposition when several defend ants are sued jointly one them defaults, judg ment should not be entered until ma er been resolved all defendants. See In re Uranium Antitrust Litig. F.2d 1256–57 (7th Cir. 1980).
This limited broad rule Frow In re Uranium Antitrust Litigation distinguished between defendants sued jointly, defendants sued jointly severally. F.2d at 1257; see Douglas Metro Rental Servs., Inc. (noting In re Uranium Antitrust Litigation limited Frow to cases where all defendants claimed to be jointly, not severally, liable). Defendants sued jointly should subjected inconsistent judgments. Nevertheless, “when di ff erent results di ff erent par ties are logically inconsistent contradictory, ra tionale Frow rule is lacking.” In re Uranium Antitrust Litig. 1257–58. One example when di ff erent re sults di erent parties logically inconsistent when defendants are sued jointly severally. Id. A second exam ple when facts theories do require ‐ uniformity of liability as di ff erent defendants. See Douglas F.2d at ( nding di ff erent judgments against corpora tion its agent were not logically inconsistent). In those ex amples, discretion decide whether enter fewer than all defendants under 54(b).
This is not a case joint liability requiring uniformity of among all defendants. Plainti ff s have alleged joint several liability, not merely joint liability. So an one defendant but not another not precluded. See In re Uranium Antitrust Litig. at 1262. This also not a vicarious liability. Arwa not seek hold Med ‐ Care vicariously liable for Silverman’s violation TCPA, or vice versa. Rather, Arwa argued Med ‐ Care Silverman both directly independently liable for TCPA violations.
Although elements TCPA liability Med ‐ Care Silverman may overlap, theories each defendant do require uniformity judgments. Med Care may be liable a “sender” under C.F.R. § 64.1200(f)(10) entity whose behalf facsimile unsolicited advertise ment was sent whose goods services are advertised. turns he “sender” under TCPA, but must show di erent proof be liable than Med Care. And Silverman may show he liable because he “sender” TCPA, but may still hold Care liable “sender.” So Care would neces sarily inconsistent Silverman. “by defaulting, admi ed guilt.” Douglas 255. “cannot now take advantage in favor of” Silverman when “exoneration one defendant charges [a TCPA violation] does not compel fi nding that [TCPA violation] occurred.” Id. Because judgments these two defendants would not neces sarily inconsistent, concerns described in Frow are not present here. also mistakenly believed that Arwa
sought “essentially” hold Silverman vicariously liable as o cer Med Care, which would require uniformity in judg ments. No record evidence suggests Arwa wanted hold Silverman liable based on vicarious liability. alleged joint several liability, critically di erent vi carious when considering issues Supreme Court described Frow
We do not fault this slip, this case procedurally complex. Nevertheless, we cannot uphold favor when good cause factors were not analyzed, joint several liabil ity was con fl ated vicarious liability. We cannot fi nd any evidence when has not appeared this past class certi cation stage has put defense faxes are advertisements. And ruling that advertisements necessary holding that Silverman lia ble.
It gives us pause while Silverman put this defense Care, there are serious questions his standing do so. Silverman argues judg ment implicates him because he weighed 19 ‐ 1916 17 Arwa’s motion for default judgment as damages Med Care, has said will pursue him personally in the assignment for benefit of creditors in Florida.
But “[s]tanding defend on appeal in the place an orig inal defendant, less than standing sue, demands that the litigant possess direct stake in the outcome.” Arizonans Official English v Arizona U.S. 43, 64 (1997) (quoting Diamond v. Charles U.S. 54, (1986)) (internal quotation marks omitted). stake been resolved can conditioned relief opponent seeks from him another forum. Even more so, specifically opposed Arwa’s request declaratory judgment Med Care. That differs materially requesting court enter judgment favor Care, what dis trict did here.
“Even if entry default judgment resulted judgment inconsistent judgment merits [Silverman], issue properly before us,” as we do review merits underlying are advertisements. Angelo Iafrate Constr., LLC v. Potashnick Constr., Inc. 715, (8th Cir. (citing Pfanenstiel Architects, Inc. Chouteau Petrol. Co. 1992)). Because va cated denied renewed without analyz ing factors 55(c), so based misplaced concern inconsistent judgments, we conclude abused discretion its April ruling vacating entering Care.
III. Conclusion provided su cient evidence establish Dr. personal liability TCPA, so we A FFIRM district court’s grant summary him.
But failed apply correct factors analyzing Care, inconsistent with sum mary Silverman. So we R EVERSE vacation denial renewed de fault judgment, R EMAND this further proceedings consistent opinion.
[1] last appearance litigation November when counsel (who represents Silverman) allowed draw.
[2] entered March then vacated entered April 2019.
[3] To deal problem, nearly century later Federal Civil Procedure 54(b) amended permit multiple party litigation avoid hardship resulting delay waiting until completion entire case. See F ED R. C IV . P. 54(b) advisory committee’s note amendment.
[4] recognizes weakness. Appellee’s Br. p. n.10.