Eric B. Fromer Chiropractic, Inc. v. Si-Bone, Inc.

ERIC B. FROMER CHIROPRACTIC, INC., Plaintiff, v. SI-BONE, INC., Defendant.

Case No. 19-CV-00633-LHK

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

August 5, 2019

ORDER DENYING DEFENDANT'S MOTION TO DISMISS

Re: Dkt. No. 18

Plaintiff Eric B. Fromer Chiropractic, Inc. ("Plaintiff") brings this putative class action against Defendant Si-Bone, Inc. ("Defendant") for alleged violations of the Telephone Consumer Protection Act ("TCPA"). Before the Court is Defendant's motion to dismiss Plaintiff's complaint. Having considered the parties' submissions, the relevant case law, and the record in this case, the Court hereby DENIES Defendant's motion to dismiss Plaintiff's complaint.

I. BACKGROUND

A. Factual Background

Plaintiff is a California corporation providing chiropractic services. ECF No. 1 ("Compl."), ¶ 9. Defendant is a Delaware corporation located in Santa Clara, California. Id. ¶ 10. Defendant sells iFuse implants, which are "small titanium rods" used to remedy lower back pain stemming from the sacroiliac ("SI") joint. Id. ¶ 13.

On November 27, 2018, Defendant sent Plaintiff a fax (the "Fax"). Id. ¶ 11; see Ex. A. Defendant's logo is prominently displayed at the top of the Fax. Ex. A. The Fax invites the recipient to an education program on the SI joint: "You are cordially invited to an educational program to discuss the sacroiliac joint as a cause of action of low back pain. Dinner will be provided for all registered attendees." Id. The Fax indicates that the November 28, 2018 dinner will include a presentation by a medical doctor. Id. The Fax also states that Defendant is sponsoring the presentation and that the presentation will address SI joint treatment options: "During this presentation, co-sponsored by SI-BONE, Inc., we will review the SI joint as a potential cause of LBP [lower back pain], the diagnosis of SI joint pain and treatment options for patients with SI joint problems." Id. Finally, the Fax is signed by Michael Flowers, "Territory Manager - SI-Bone Inc.," and includes Flowers' email address and a telephone number. Id.

Plaintiff alleges that the Fax "was a pretext to recommend a 'treatment option,' namely, a minimally invasive sacroiliac surgery treatment option that uses Si-Bone's 'iFuse' titanium implants across the sacroiliac joint." Id. ¶ 13. Plaintiff did not give Defendant "prior express invitation or permission" to send the Fax and the Fax did not include an opt-out notice. Id. ¶¶ 15, 18. Plaintiff alleges that Defendant sent the Fax to at least forty other recipients, id. ¶ 16, and that Defendant is "continuing to send unsolicited advertisements via facsimile transmission." Id. ¶ 30.

B. Procedural History

On February 5, 2019, Plaintiff filed its complaint against Defendant. ECF No. 1 ("Compl."). Plaintiff's complaint brings a single claim for unlawful solicitation under the TCPA, 42 U.S.C. § 227(b)(1)(C). Id. ¶ 25. Plaintiff wishes to represent the following putative class:

All persons who (1) on or after four years prior to the filing of this action, (2) were sent telephone facsimile messages of material advertising the commercial availability or quality of any property, goods, or services by or on behalf of Defendant, (3) from whom Defendant did not obtain "prior express invitation or permission" to send fax advertisements, and (4) where the fax advertisements did not include an opt-out notice compliant with 47 C.F.R. § 64.1200(a)(4)(iii).

Id. ¶ 19.

On March 28, 2019, Defendant filed a motion to dismiss Plaintiff's complaint. ECF No. 18 ("Mot."). Defendant also filed a request for judicial notice. ECF No. 20. The Court denies as moot Defendant's request for judicial notice, as none of the documents for which Defendant seeks judicial notice affect the outcome of this motion.

On May 9, 2019, Plaintiff filed its opposition to the instant motion to dismiss, ECF No. 26 ("Opp."), and on May 30, 2019, Defendant filed its reply. ECF No. 31 ("Reply").

II. LEGAL STANDARD

A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)

Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include "a short and plain statement of the claim showing that the pleader is entitled to relief." A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The United States Supreme Court has held that Rule 8(a) requires a plaintiff to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

The Court, however, need not accept as true allegations contradicted by judicially noticeable facts, see Schwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and it "may look beyond the plaintiff's complaint to matters of public record" without converting the Rule 12(b)(6) motion into a motion for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995). Nor must the Court "assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (percuriam) (internal quotation marks omitted). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).

B. Leave to Amend

If the Court determines that a complaint should be dismissed, it must then decide whether to grant leave to amend. Rule 15(a) of the Federal Rules of Civil Procedure states that leave to amend "shall be freely given when justice so requires," bearing in mind "the underlying purpose of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation marks omitted). When dismissing a complaint for failure to state a claim, "a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Id. at 1130. Thus, leave to amend generally shall be denied only if allowing amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008).

III. DISCUSSION

Defendant raises two arguments in support of its motion to dismiss. First, Defendant contends that Plaintiff lacks Article III standing. Second, Defendant contends that the Fax was not an advertisement under the TCPA, and thus was not unlawful. In the alternative, Defendant asks the Court to stay the case pending the United States Supreme Court's decision in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., which was pending when Defendant filed its motion. However, the United States Supreme Court issued its decision in that case on June 20, 2019, PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., 139 S. Ct. 2051 (2019), and Defendant's stay request is moot. Thus, the Court addresses Defendant's remaining two arguments for dismissal in turn.

A. Plaintiff Has Plausibly Alleged Facts to Support Article III Standing

"[S]tanding is an essential and unchanging part of the case-or-controversy requirement ofArticle III." Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). Article III standing requires that (1) the plaintiffs suffered an injury in fact, i.e., "an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical"; (2) the injury is " 'fairly traceable' to the challenged conduct"; and (3) the injury is "likely" to be "redressed by a favorable decision." Id. at 560-61. "[A]t the motion to dismiss stage, the plaintiff must clearly ... allege facts demonstrating each element." Spokeo v. Robins, 136 S. Ct. 1540, 1547 (2016) (citation and internal quotation marks omitted) (ellipses in original). Defendant contends that Plaintiff has failed to allege a particularized injury traceable to Defendant's action in sending the Fax. Defendant's argument is unavailing.

Plaintiff brings its claim under the TCPA, which prohibits any person from using "any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement." 47 U.S.C. § 227(b)(1)(C). The TCPA defines "unsolicited advertisement" as "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. § 227(a)(5). Plaintiff alleges that Defendant violated the TCPA because Defendant sent the Fax without Plaintiff's consent, and the Fax was "part of an overall campaign for Defendants' goods and services, including iFuse implants." Compl. ¶¶ 14-15.

Ninth Circuit precedent compels the conclusion that Plaintiff's allegation of a TCPA violation is sufficient to establish standing. Recently, the Ninth Circuit held that "a violation of the TCPA is a concrete, de facto injury" under Article III and the United States Supreme Court's Spokeo decision. Van Patten v. Vertical Fitness Grp., ...