Physicians Healthsource, Inc. v. A-S Medication Solutions LLC

324 F. Supp. 3d 973
CourtDistrict Court, E.D. Illinois
DecidedAugust 21, 2018
DocketCase No. 12 C 5105
StatusPublished
Cited by13 cases

This text of 324 F. Supp. 3d 973 (Physicians Healthsource, Inc. v. A-S Medication Solutions LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Physicians Healthsource, Inc. v. A-S Medication Solutions LLC, 324 F. Supp. 3d 973 (illinoised 2018).

Opinion

MATTHEW F. KENNELLY, District Judge:

Changes in technology have relegated the fax machine to a marginal role virtually everywhere but the courtroom. There, the fax machine reclaims some of its old luster, given its role in lawsuits against defendants alleged to have burdened fax machines and their owners with unwanted ads. Under the Telephone Consumer Protection Act (TCPA), it is unlawful to fax an "unsolicited advertisement." 47 U.S.C. § 227(b)(1)(C). The statute defines an unsolicited advertisement as material advertising the commercial availability or quality of property, goods or services transmitted to any person "without that person's prior express invitation or permission, in writing or otherwise." Id. § 227(a)(5).

The plaintiff in this case, Physicians Healthsource, Inc. (PHI), contends that A-S Medication Solutions LLC (A-S Solutions) violated the TCPA by faxing an advertisement to the members of the class PHI represents without their prior express permission. PHI also contends that Walter Hoff, the CEO of A-S Solutions, is personally liable. Judge Joan Gottschall, to whom this case was previously assigned, certified a class of similarly situated plaintiffs. PHI has moved for summary judgment on liability.

Background

A-S Solutions acquired a portion of another business, Allscripts, via a sale of assets. After A-S Solutions acquired this segment of Allscripts, it sent a fax to the 15,666 numbers Allscripts had compiled for its customers. A-S Solutions contends that Allscripts only had the fax numbers of customers who permitted such faxes. So, to fully explain this suit, the Court begins by reviewing Allscripts' practices, even though it is not a party to this case.

Allscripts was in the business of medication dispensing. In providing this service, it frequently sent faxes to its customers. Brian Moffett, the Rule 30(b)(6) witness for Allscripts, testified that the company tracked its customers through a customer relationship management software known as Salesforce. In Salesforce, a customer like PHI could manage its own account, which enabled it to add or delete its fax number. The customer could also check a box that indicated the customer did not want to receive communications. PHI did not check the box.

Moffett also testified that Allscripts had a policy of obtaining a customer's permission before sending faxes. (In repeating the parties' use of the term "permission" here, the Court does not reach any legal conclusions.) He described a hypothetical situation in which Allscripts would obtain customer permission to send a fax:

So I'm working with a client, and I need to show them how to do something. I would type it out on a piece of paper, and I would say, hey, can I fax this to you. They would say yes. We gained permission. Boom. I'd send it over to them.

D.E. 270, Pl.'s Ex. 3 at 26-27 (Moffett Dep.). Likewise, Moffett testified, if a prospective *976customer wanted additional information, Allscripts would "always ask for permission" before sending a fax. Id. at 43.

On March 2, 2009, A-S Solutions agreed to purchase the medication-dispensing portion of Allscripts' business. Allscripts continued to operate the remainder of its business after the sale. Lauren McElroy, the A-S Solutions Vice President of Marketing, drafted a fax to send to the former Allscripts customers, targeted to a list of recipients generated from Allscripts' Salesforce database. McElroy testified that Walter Hoff, the CEO of A-S Solutions, directed her on what to write in the fax that produced this litigation.

On February 10, 2010, McElroy e-mailed another A-S Solutions employee, Marcello Barth: "[Hoff] says Good to Go! Start sending them out and let me know when the list is complete." Pl.'s LR 56.1 Resp. to Defs.' Stat. of Add'l Facts ¶ 33. Barth, using a computer program, sent the fax to 15,666 fax numbers from Salesforce. The fax was successfully delivered to 11,422 numbers. A fax was successfully transmitted to PHI's number on February 18, 2010. The fax advertised PedigreeRx, a new service A-S Solutions offered, provided A-S Solutions' contact information, and referenced "The A-S Medication Solution Quality Service Guarantee." D.E. 270, Pl.'s Ex. 1 (Fax). A-S Solutions itself never sought or obtained permission from any of the recipients before sending the fax. As Hoff later testified, he believed "[A-S Solutions] didn't need to. We were part of Allscripts' joint marketing arrangement." Defs.' LR 56.1 Resp. to Pl.'s Stat. of Facts ¶ 47.

PHI filed suit in state court, and A-S Solutions removed the case to federal court.1 The suit was originally assigned to Judge Joan Gottschall. A-S Solutions moved to dismiss PHI's complaint twice, arguing first that PHI failed to allege an injury and then that PHI's personal stake in the litigation had been rendered moot by a full settlement offer. Judge Gottschall denied both motions. Judge Gottschall then granted PHI's motion to certify the following class:

All persons or entities who were successfully sent the Fax providing "A-S Medication Solutions, LLC, Quality Service Guaranteed," and "Ask about our new PedigreeRx Solution!," between February 10, 2010 and February 28, 2010.

D.E. 202 at 11 (Sept. 27, 2016 Mem. Op. & Order). PHI moved to strike affidavit evidence that it contends was disclosed after the close of discovery; Judge Gottschall denied this motion. On October 16, 2017, the case was reassigned to the undersigned judge pursuant to 28 U.S.C. § 294(b).

Discussion

As indicated earlier, it is unlawful to send an unsolicited advertisement via fax. An advertisement is "unsolicited" if it is "transmitted to [a] person without that person's prior express invitation or permission, in writing or otherwise." 42 U.S.C. § 227(a)(5), (b)(1)(C). PHI has moved for summary judgment on the defendants' liability, which it separates into four issues: (1) whether the fax is an advertisement, as defined by the TCPA; (2) whether A-S Solutions and Hoff are senders of the fax; (3) whether the fax was actually sent; and (4) whether A-S Solutions obtained prior express permission to send the fax.2

*977PHI has also moved for summary judgment on the personal liability of Hoff, the CEO of A-S Solutions. To obtain summary judgment, PHI must establish that there is no "genuine, triable issue of material fact." Celotex Corp. v. Catrett

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
324 F. Supp. 3d 973, Counsel Stack Legal Research, https://law.counselstack.com/opinion/physicians-healthsource-inc-v-a-s-medication-solutions-llc-illinoised-2018.