Advanced Dermatology v. Fieldwork, Inc.

550 F.Supp.3d 555

ADVANCED DERMATOLOGY, on behalf of itself and all those similarly situated,

v.FIELDWORK, INC., and Dixie Plumbing Specialities, Inc., a Georgia corporation, individually and as the representative of a class of similarly-situated persons,

v.Fieldwork Chicago-Schaumburg, Inc., Fieldwork Chicago, Inc., and Fieldwork Chicago Downtown, Inc., Illinois corporations, and Fieldwork, Inc., a Delaware Corporation.

Nos. 19 C 08012

19 C 05821

United States District Court, N.D. Illinois, Eastern Division.

Signed July 21, 2021

David J. Philipps, Philipps & Philipps, Ltd., Palos Hills, IL, Michael L. Berler, Michael L. Fine, Ronald Ira Frederick, Frederick & Berler, Cleveland, OH, for Advanced Dermatology.

Avanti Bakane, Chirag Haresh Patel, Christina Rose Spiezia, Gordon Rees Scully Mansukhani LLP, Chicago, IL, Gregory D. Brunton, Joseph Kendall Merical, Gordon & Rees, Columbus, OH, for Fieldwork, Inc.

MEMORANDUM OPINION AND ORDER

John J. Tharp, Jr., United States District Judge In 2019, plaintiffs Dixie Plumbing Specialties, Inc. and Advanced Dermatology each received an unwanted fax from defendant Fieldwork, Inc., a market research firm, apprising them of a paid opportunity to participate in an industry-specific research study. Dixie Plumbing Specialties and Advanced Dermatology now bring separate putative class actions under the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005, 47 U.S.C. § 227. The Fieldwork entities have filed motions to dismiss in each case; alternatively, Fieldwork moves to stay the proceedings pursuant to the primary jurisdiction doctrine and to strike the plaintiffs’ class allegations.

Dixie Plumbing Services has plausibly pleaded that the fax it received from Fieldwork was a pretext for further advertising, so this Court cannot conclude that the fax Dixie Plumbing received was not an "unsolicited advertisement" under the TCPA as a matter of law, and Fieldwork's motion to dismiss Dixie's complaint is denied. Advanced Dermatology, however, expressly disclaimed the pretext theory and argued solely that the fax it received was, on its face, an unsolicited advertisement. This argument fails as a matter of law. So, though the faxes Fieldwork sent Advanced Dermatology and Dixie Plumbing are substantially the same, Fieldwork's motion to dismiss Advanced Dermatology's complaint is granted, given the plaintiff's waiver of the pretext argument.

Fieldwork's other motions to strike Dixie Plumbing's class allegations and to stay or dismiss the proceedings are also denied. Because Fieldwork has not established that Dixie Plumbing is categorically unable to satisfy Rule 23 ’s criteria for class certification, even if given the opportunity to engage in class certification discovery, Fieldwork's motion to dismiss for failure to strike Dixie's class allegations is denied. And because the primary jurisdiction doctrine does not negate this Court's subject matter jurisdiction over Dixie's TCPA claims, and because there is unlikely to be a timely resolution to the pending FCC petition regarding the TCPA's definition of "unsolicited advertisement," Fieldwork's motion to stay or dismiss pursuant to the primary jurisdiction doctrine is denied as well.

BACKGROUND

On May 22, 2019, plaintiff Dixie Plumbing Specialties, Inc. received a fax from Fieldwork, a national market research firm, inviting Dixie to participate in a research study with residential plumbers and share its opinion about brands and products it uses in its line of work. Dixie Compl. ¶¶ 14, 15, ECF No. 1 (19 C 05281). The fax indicated that Dixie would be compensated $200 if it qualified and participated in the five-day online study and provided a phone number to call if interested.¹ Id. at ¶ 17; Ex. A. On July 23, 2019, plaintiff Advanced Dermatology received a nearly identical fax;² the invitation it received offered $425 if Advanced Dermatology completed a twenty-minute "homework assignment" and a ninety-minute online discussion with other dermatologist practice owners regarding the dermatology industry. Advanced Dermatology Compl. ¶ 8; Ex. 1.

Both plaintiffs now bring putative class actions alleging that Fieldwork has violated 47 U.S.C. § 227(b)(1)(C).³ That statute prohibits the use of "any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement" unless the fax recipient has an established business relationship with the sender, the recipient has voluntarily made its fax number available through different methods, and the advertisement has an adequate opt-out notice. Advanced Dermatology and Dixie seek injunctive relief and an award of statutory damages on behalf of themselves and similarly situated fax recipients. Fieldwork, however, has moved to dismiss, alleging that the faxes at issue do not constitute "unsolicited advertisements" as a matter of law; alternatively, it moves to strike the plaintiffs’ class allegations and to dismiss or stay each case pursuant to the primary jurisdiction doctrine.

DISCUSSION

Fieldwork moved to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(6), moved to strike the plaintiffs’ class allegations under Rule 12(f) and Rule 23, and moved to dismiss or stay pursuant to the primary jurisdiction doctrine under the Court's inherent equitable power. See Def.’s Mot. Dismiss or Strike Class Allegations, ECF No. 16, Def.’s Mot. Dismiss or Stay, ECF No. 17 (19 C 05821); Def.’s Mot. Dismiss or Strike Class Allegations, ECF No. 9, Def.’s Mot. Dismiss or Stay, ECF No. 11 (19 C 08012). Those arguments are taken in turn.

A. Motion to Dismiss for Failure to State a Claim.

First, Fieldwork has moved to dismiss both complaints for failure to state a claim under the TCPA—it argues that the faxes it sent to Dixie and Advanced Dermatology are not, as a matter of law, "unsolicited advertisements" prohibited by the statute. See Def.’s Mot. Dismiss (Advanced Dermatology), at 4-7; Def.’s Mot. Dismiss (Dixie), at 4-8. A Rule 12(b)(6) motion tests the sufficiency of a plaintiff's claim; it requires the court to assess whether a litigant has "state[d] a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; Bhalerao v. Ill. Dep't of Fin. & Prof'l Regulations , No. 11 C 7558, 2012 WL 5560887, at *2 (N.D. Ill. Nov. 15, 2012) ("A motion to dismiss pursuant to 12(b)(6) tests the sufficiency of the complaint, not the merits of the case."). At this early stage of the proceedings, the Court must accept as true well-pleaded facts and draw reasonable inferences in favor of the plaintiffs. See Ezekiel v. Michel , 66 F.3d 894, 897 (7th Cir. 1995).

In enacting the TCPA, "Congress’ primary purpose ... was to prevent the shifting of advertising costs to recipients of unsolicited fax advertisements." Phillips Randolph Enters., LLC v. Adler-Weiner Research Chicago, Inc. , 526 F. Supp. 2d 851, 852 (N.D. Ill. 2007). As a result, the TCPA prohibits the use of "telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement" to recipients within the United States. 47 U.S.C. § 227(b)(1)(C). And the statute defines an "unsolicited advertisement" broadly, to include "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission, in writing or otherwise." Id. at § 227(a)(5). Because "the TCPA is a remedial statute," courts "must liberally construe [it] in favor of consumer protection." Physicians Healthsource, Inc. v. A-S Medication Sols., LLC , 950 F.3d 959, 967 (7th Cir. 2020).

The sole issue is whether Fieldwork's faxes meet the statutory definition of an "unsolicited advertisement." In Fieldwork's view, the faxes sent to Advanced Dermatology and Dixie Plumbing are not advertisements as a matter of law—by their plain language, Fieldwork argues, the faxes sought only to invite certain qualified dermatology practice owners and residential plumbers to participate in a research study pertaining to their respective industries. See Def.’s Mot. Dismiss (Dixie), at 1-2; Def.’s Mot. Dismiss (Advanced Dermatology), at 5-7. Fieldwork acknowledges that it benefits financially from the use of the information obtained through fax recipients’ participation in its market surveys but maintains that the mere "potential to gain some benefit from sending information, without the presence of additional commercial statement in the message, is insufficient to transform a message to an advertisement." Def.’s Mot. Dismiss (Advanced Dermatology), at 7 (citing Physicians Healthsource, Inc. v. Janssen Pharms., Inc. , 2013 WL 486207, at *4, 2013 U.S. Dist. LEXIS 15952, at *13 (D.N.J. Feb. 6, 2013) ) (internal quotations omitted).

Dixie counters with two different theories, one of which Advanced Dermatology also advances. Both plaintiffs contend that the faxes received satisfy the TCPA definition of an unsolicited advertisement because a fax "intending to draw the attention of the public to the desire of a defendant to enlist services to advance a commercial purpose is an ‘advertisement’ under the TCPA." Pl.’s Resp. Opp'n (Advanced Dermatology), at 4; Pl.’s Resp. Opp'n (Dixie), at 6-7 (arguing that a fax is an advertisement under the TCPA if it "invite[s] the recipient to ‘do business with’ the sender"). The plaintiffs also argue that the faxes received advertise that Fieldwork is willing and able to "buy[ ] the time (i.e. participation) of participants"—"a direct commercial engagement that allows Fieldwork to advance its for-profit business." Pl.’s Resp. Opp'n (Advanced Dermatology), at 2 (emphasis in original).

Second, Dixie advances a pretext argument, explaining that it "expects to show that the Fax is a ‘pretext’ to further advertising" because Fieldwork sells the data collected to its clients; refers...