Loop Spine & Sports Ctr. v. Am. Coll. of Med. Quality

1

Loop Spine & Sports Center, Ltd., Plaintiff, v. American College of Medical Quality, et al., Defendants.

No. 22 CV 4198

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

October 22, 2024

MEMORANDUM OPINION AND ORDER

Georgia N. Alexakis, United States District Judge.

Loop Spine & Sports Center, Ltd. (“Loop Spine”) an Illinois chiropractic and sports injury company, received an unsolicited fax on August 8, 2022, advertising an upcoming conference hosted by the American College of Medical Quality Inc. (“ACMQ”). Loop Spine now sues ACMQ-along with Affinity Strategies, LLC (“Affinity”) and former ACMQ executive director Daniel J. McLaughlin, who they believe helped facilitate the fax-under the Telephone Consumer Protection Act (“the Act”) for the alleged junk fax. Loop Spine also sues all three defendants for the common-law torts of conversion and trespass to chattels for their unauthorized use of Loop Spine's fax machine, ink, and paper. Loop Spine further seeks to represent a class of other individual or entities who they believe received unauthorized faxes advertising the ACMQ conference.

ACMQ Affinity, and McLaughlin all move to dismiss Loop Spine's second amended complaint. [189, 190, 193]. All three motions are denied.

I. Legal Standards

“To survive a motion to dismiss, a plaintiff need allege ‘only enough facts to state a claim to relief that is plausible on its face.'” Barwin v. Vill. of Oak Park, 54 F.4th 443, 453 (7th Cir. 2022) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A court reviewing a Rule 12(b)(6) motion to dismiss accepts as true all well-pled facts alleged in the complaint (as the Court does in the “Background” section below) and determines whether “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 453 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “[L]egal assertions or recital of the elements of a cause of action supported by mere conclusory statements,” however, do not receive the presumption of truth. Vesely v. Armslist LLC, 762 F.3d 661, 664-65 (7th Cir. 2014) (citation and quotations omitted).

II. Background

ACMQ is a professional organization focusing on healthcare quality. [177] ¶ 11. On August 8, 2022, Loop Spine received a one-page fax advertising ACMQ's “Care After Covid” conference. Id. ¶ 113; [177-1] at 2.^[1] Loop Spine did not authorize this fax and had no prior relationship with ACMQ. [177] ¶ 119. Loop Spine also believes that at least 40 other residents of Illinois received similar faxes in a “mass broadcast.” Id. ¶¶ 120, 122.

Loop Spine alleges that the faxes were engineered by Affinity, a company that describes itself as “provid[ing] professional associations in the health care industry customized services to improve operations, member engagement, and marketing.” Id. ¶ 12; see also id. ¶ 21. An Affinity client, ACMQ received such services from Affinity. Id. ¶¶ 12-16. Per a written agreement between ACMQ and Affinity, this included managing ACMQ's day-to-day business and assisting ACMQ with increasing its membership and promoting its annual conference. Id. ¶¶ 22-24, 68-69. To help increase conference attendance, Affinity provided marketing services which included “optimiz[ing] existing marketing channels and platforms for [] ACMQ including mass email marketing” to ACMQ members. Id. ¶ 61. While ACMQ had a board, it had no employees, and communications with ACMQ were managed through Affinity. Id. ¶¶ 27-33.

When ACMQ's executive director-who was also an Affinity employee- departed in early 2022, Affinity recommended McLaughlin as a replacement. Id. ¶¶ 34, 42-45. After only “hasty” vetting for the position, McLaughlin began work as ACMQ's executive director, though during the relevant period he was paid by Affinity through McLaughlin's sole-proprietor limited liability corporation. Id. ¶¶ 45-46, 4849, 52, 58, 67. McLaughlin's duties included implementing the marketing services and strategic plan for ACMQ developed by Affinity, scheduling and running meetings, organizing and promoting the 2022 ACMQ conference, and communicating with Affinity employees. Id. ¶¶ 59-60. Affinity instructed McLaughlin to work with Affinity employees on marketing and mass emails, and McLaughlin reported to both Affinity and ACMQ. Id. ¶¶ 64-65.

This working relationship between ACMQ, Affinity, and McLaughlin included promoting ACMQ's conferences. Id. ¶¶ 68-69, 76. For the 2022 “Care After Covid” conference, Affinity helped arrange logistics and sponsored the conference as well. Id. ¶¶ 79-80. ACMQ and McLaughlin decided to use fax broadcasting to advertise the conference, and McLaughlin purchased a list of fax recipients for the broadcast from a former colleague. Id. ¶¶ 89-92.

On July 29, 2022, McLaughlin used an Affinity email address to communicate his plan to “dramatically extend” the reach of the conference advertising with “the ability to mass fax or email,” and he sent that communication to the ACMQ board of trustees and executive committee, as well as Affinity's chief executive officer and chief operating officer. Id. ¶ 102. A week later-just before the August 8 fax at issue- McLaughlin sent another email to ACMQ and Affinity leadership concerning “the plan to mass broadcast faxes intending to reach approximately 16,000 doctors in Chicago and surrounding areas to advertise the 2022 annual conference.” Id. ¶ 103. Neither Affinity nor ACMQ objected to McLaughlin's plan or otherwise discouraged the August 8 fax; in fact, ACMQ's president complimented the “blast fax marketing strategy.” Id. ¶¶ 104-105.

Loop Spine filed a complaint against ACMQ just two days later, on August 10, 2022, [1], eventually adding Affinity and McLaughlin as defendants in an amended complaint. [63]. Affinity's motion to dismiss that amended complaint, [87], was granted at a January 10, 2024 hearing, but Loop Spine was given leave to file the instant complaint to attempt to cure the deficiencies identified by the court previously assigned to this matter. [99]; [186].

III. Analysis

A. ACMQ's Motion To Dismiss

ACMQ's motion to dismiss focuses on Loop Spine's claims of conversion (Count II) and trespass to chattels (Count III). [189] at 2-4.^[2] ACMQ treats the analysis for both claims as identical, so the Court addresses them together. ACMQ concedes that the court previously assigned to this matter denied its earlier motion to dismiss these counts-and did so by rejecting the same grounds that ACMQ advances now. Id. at 1; [46] at 7-9. But according to ACMQ, the previous court “expressed a willingness to revisit this issue on the matter of a de minimis defense.” [189] at 1.

In pressing for reconsideration of its earlier motion, ACMQ argues that “[c]ourts in this district regularly reject conversion claims for unsolicited faxes pursuant to the de minimis doctrine,” id. at 2-3 (inexactly quoting Chicago Car Care, Inc. v. A.R.R. Enterprises, Inc., 19-C-07687, 2021 WL 1172262, *3 (N.D. Ill. March 29, 2021)), and that “the losses pleaded by [Loop Spine] here are too vague to be determinable or definite,” id. at 4. ACMQ suggests that the denial of its previous motion, which relied on Hessel v. O'Hearn, 977 F.2d 299, 302-03 (7th Cir. 1992), misapprehended Hessel, as “the pleaded facts in this case amount to harm much less definite than that contemplated . . . in Hessel.” [189] at 4.

The Court sees no reason to depart from the previous decision on this issue. Chicago Care did apply the de minimis doctrine to dismiss claims of conversion and trespass to chattels related to a one-page fax, but district courts' decisions do not bind each other, and, indeed, the denial of ACMQ's previous motion to dismiss cited Chicago Car Care in considering that “[c]ourts in this district have split on the question” of whether the de minimis doctrine would apply here. [46] at 8; see, e.g., Glen Ellyn Pharmacy, Inc. v. Meda Pharms., Inc., No. 09 CV 4100, 2011 WL 196925, at *2 (N.D. Ill. Jan. 13, 2011). That another district court might have ruled differently-put another way, the mere fact that a split exists within the district- does not compel a different result.

Furthermore, the distinction ACMQ relies on in Hessel, which concluded that the theft of a single can of soda was not de minimis, is between losses that were merely small and those that were “not only small but also indefinite, so that substantial resources would have to be devoted to determining whether there was a loss at all” because “[t]he costs of such litigation overwhelm the benefits.” [189] at 34; Hessel, 977 F.2d at 303. The amount of ink used in a one-page fax may be miniscule but it's not indefinite, and the Court sees no legally relevant distinction between a single can of soda and a single sheet of paper.

ACMQ's motion to dismiss Counts II and III is denied.

B. McLaughlin's Motion to Dismiss

McLaughlin also moves to dismiss Counts II and III. [193] at 1. Because McLaughlin adopted ACMQ's arguments, and made none of his own, his motion is dismissed for the same reasons.

C. Affinity's Motion to Dismiss

1. Telephone Consumer Protection Act

The Act prohibits “unsolicited advertisements” unless “the sender” of the advertisement meets certain requirements.^[3] 47 U.S.C. § 227(b)(1)(C). A “sender,” for the purpose of the Act, is “the person [who] had direct, personal participation in or personally authorized” the fax, or “the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement.” Arwa Chiropractic, P.C. v. Med-Care Diabetic & Med. Supplies, Inc., 961 F.3d 942, 947 (7th Cir. 2020); 47 C.F.R. § 64.1200(f)(10...