Bondhus v. Henry Schein, Inc.

MARVIN BONDHUS, MD, individually and on behalf of all others similarly situated, Plaintiff, v. HENRY SCHEIN, INC., a Delaware Corporation, Defendant.

Case No.: 14-22982-Civ-COOKE/TORRES

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

April 30, 2015

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT HENRY SCHEIN, INC.'S MOTION TO STAY PROCEEDINGS PENDING FCC RULING

Plaintiff, Marvin Bondhus, MD, individually and on behalf of all others similarly situated, brought this action against Defendant, Henry Schein, Inc., for allegedly violating the Telephone Consumer Protection Act, as amended by the Junk Facsimile Prevention Act of 2005, 47 U.S.C. § 227 ("TCPA"), by sending faxes that failed to contain an adequate opt-out notice. Before me now is Defendant's Motion to Stay Proceedings Pending FCC Ruling ("Motion" or "Motion to Stay") and memorandum of law (ECF Nos. 21 and 22), Plaintiff's response (ECF No. 26), and Defendant's reply (ECF No. 27). The Motion has been fully briefed and is ripe for adjudication. I have reviewed the Motion, the parties' arguments, the record, the relevant legal authorities, and am otherwise fully advised in the premises. For the reasons provided herein, Defendant's Motion is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

Defendant is a provider of health care products and services to office-based dental, animal health, and medical practitioners. (Compl. ¶ 7). Defendant transmits faxes that advertise its products and services to the fax machines of potentialcustomers. (Id. at ¶ 8). Plaintiff alleges that Defendant violated the TCPA when it sent noncompliant fax advertisements to Plaintiff's, and other similarly situated persons' or entities', fax machines. (Id. at ¶ 2). Specifically, Plaintiff alleges that the faxes "failed to contain a clear and conspicuous opt-out notice stating that the recipient may make a request to the sender not to send any future faxes and that failure to comply with the request within 30 days is unlawful...." (Id. at ¶ 10).¹

A. The Federal Communications Commission Order

On October 30, 2014, the Federal Communications Commission ("FCC") provided a retroactive waiver of TCPA liability to two-dozen petitioners. (See ECF No. 22-1; CG Docket Nos. 02-278 and 05-338, FCC 14-164 (rel. Oct. 30, 2014)). The petitioners argued that the FCC had offered confusing and conflicting statements regarding the applicability of a rule it promulgated which required opt-out notices on fax advertisements sent to recipients that had given prior express invitation or permission to the sender to receive the faxes. (Id. at p. 6). Some of these petitioners also sought a declaratory ruling that a fax advertisement that substantially complied with section 64.1200(a)(4)(iv)² of the FCC's rules did not violate any regulation promulgated under the TCPA, even if the opt-out notice did not strictly conform to the specific requirements of that rule. (Id. at p. 6-7).

The FCC found that its rules required an opt-out notice on all fax ads, even those fax ads sent to recipients that had provided prior express invitation or permission to receive the faxes. (Id. at p. 9). However, the FCC also found that a footnote contained in its Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Junk Fax Prevention Act of 2005, 21 FCC Rcd. 3787 (2006) (the "Junk Fax Order"), "caused confusion regarding the applicability of[the opt-out] requirement to faxes sent to those recipients who provided prior express permission or created a false sense of confidence that the requirement did not apply," a situation providing good cause for individual retroactive waivers of section 64.1200(a)(4)(iv). (Id.). The FCC provided similarly-situated parties with an opportunity to seek similar waivers if requests were made within six months, or by April 30, 2015. (Id. at p. 2). The FCC will adjudicate such waiver requests on a case-by-case basis. (Id. at p. 16, n.102). Finally, the FCC rejected the argument made by certain of the petitioners that substantial compliance with section 64.1200(a)(4)(iv) is sufficient. (Id. at p. 16-17).

B. Defendant's Petition for Retroactive Waiver

On December 17, 2014, Defendant filed its Petition for Waiver with the FCC. (ECF No. 27-1). In its Petition, Defendant argued that it "was confused by the footnote contained in the Junk Fax Order stating that the opt-out notice requirement only applied to communications that constituted unsolicited advertisements." (Id. at p. 4).

Defendant argues that this action should be stayed pursuant to the primary jurisdiction doctrine, or this Court's discretionary authority, pending the FCC's adjudication of its Petition for Waiver because the FCC is uniquely situated to provide a retroactive waiver, which would, in turn, affect the scope of the putative class, the scope of discovery, and may render this proceeding inadequate for class treatment.

II. LEGAL STANDARDS

A. Motion to Stay Generally

In determining whether to grant a motion to stay, the district court acts within its own general discretion incident to its power to control its own docket. Clinton v. Jones, 520 U.S. 681, 706 (1997); American Mfrs. Mut. Ins. Co. v. Edward D. Stone, Jr. & Assoc., 743 F. 2d 1519, 1525 (11th Cir. 1984); Allmon v. United States, No. 3:05CV527/RV/MD, 2006 WL 1401921, at *1 (N.D. Fla. Apr. 10, 2006) (citing CTI-Container Leasing Corp. v. Uiterwyk Corp., 685 F.2d 1284 (11th Cir. 1982)). In certain matters, a stay may "promote judicial economy, reduce confusion and prejudice, and prevent possible inconsistent resolutions." Axa Equitable Life Ins. Co. v.Infinity Fin. Group, LLC, 608 F. Supp. 2d 1330, 1346 (S.D. Fla. 2009). In exercise of their discretion, district courts are cautioned that a stay should not be granted "where the length of the stay would be immoderate or indefinite." Allmon, 2006 WL 1401921, at *1 (citing Landis v. North Am. Co., 299 U.S. 248, 255 (1936)).

B. Primary Jurisdiction Doctrine

The primary jurisdiction doctrine "has evolved as a means of reconciling the functions of administrative agencies with the judicial function of the courts." Mississippi Power & Light Co. v. United Gas Pipe Line Co., 532 F.2d 412, 416 (5th Cir. 1976).³ The doctrine applies "whenever enforcement of [a] claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body...." United States v. Western Pacific Railroad Co., 352 U.S. 59, 63 (1956). The Eleventh Circuit has explained the doctrine as follows:

Primary jurisdiction is a judicially created doctrine whereby a court of competent jurisdiction may dismiss or stay an action pending a resolution of some portion of the actions by an administrative agency. Even though the court is authorized to adjudicate the claim before it, the primary jurisdiction doctrine comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending referral of such issues to the administrative body for its views.

Smith v. GTE Corp., 236 F.3d 1292, 1298 n.3 (11th Cir. 2001).

"There are four factors uniformly present in cases where the doctrine properly is invoked: (1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory scheme that (4) requires expertise or uniformity in administration." United States v. General Dynamics Corp., 828 F.2d 1356, 1362 (9th Cir. 1987).

III. ANALYSIS

A. Each of the Four Factors Associated With Primary Jurisdiction Are Met in this Case

(1) The need to resolve an issue

Defendant has sought a waiver from the FCC due to its alleged confusion as to the requirement of including opt-out language in faxes sent to recipients that consented to receiving the faxes. The FCC has already found that its Junk Fax Order "caused confusion regarding the applicability of [the opt-out] requirement to faxes sent to those recipients who provided prior express permission," a situation providing good cause for individual retroactive waivers of section 64.1200(a)(4)(iv). (ECF No. 22-1 at p. 9). Whether or not a waiver is granted will affect the scope of this case. The purported class in this case does not exclude recipients that consented to receiving the faxes. If the FCC grants Defendant's petition, the issue of prior consent will require discovery and affect the scope of the class.

(2) Placed by Congress within the jurisdiction of an administrative body having regulatory authority

The implementation and interpretation of the TCPA has been placed squarely within the jurisdiction of the FCC. See 47 U.S.C. § 227(b)(2) ("The Commission shall prescribe regulations to implement the requirements of this subsection."). In response, the FCC has issued rules clarifying and interpreting the TCPA. See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Junk Fax Prevention Act of 2005, 21 FCC Rcd. 3787 (2006) (the "Junk Fax Order").

(3) Pursuant to a statute that subjects an industry or activity to a comprehensive regulatory scheme

The TCPA and the Junk Fax Prevention Act, 47 U.S.C. § 227, are comprehensive regulatory schemes governing the use of automated telephone and facsimile equipment that both parties agree applies to Defendant's ability to send faxes to Plaintiff and others similarly situated.

(4) Requiring expertise and uniformity in administration

The FCC has expertise in the telecommunications area due to the fact that the TCPA and other statutes have been entrusted to its care for interpretation andimplementation. See, e.g., 47 U.S.C. § 227; 47 U.S.C. § 201 (Communications Act of 1934); 47 U.S.C. § 160 (Telecommunications Act of 1996). Moreover, the FCC...