Kaye et al v. Merck & Co., Inc. et al
Filing
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ORDER adhering to prior decision permitting only limited discovery pending the outcome of related proceedings before the Federal Communications Commission. The limitation on the scope of discovery and the stay established by the Court's prior Order [ECF No. 114] remain in effect. Please see full text of attached Order. Signed by Judge Robert N. Chatigny on 05/15/2014.(Bialek, T.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
ROGER H. KAYE and
ROGER H. KAYE, MD PC,
on behalf of themselves
and all others similarly
situated,
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Plaintiffs,
V.
MERCK & CO., INC. and
MEDLEARNING, INC.,
Defendants.
CASE No. 3:10-cv-1546(RNC)
RULING AND ORDER
This matter is before the Court on the plaintiffs= motion to lift
the partial stay on discovery.
Both sides have submitted briefs and
a telephone conference has been held.
After considering the parties=
submissions, the Court adheres to its prior decision permitting only
limited discovery pending the outcome of related proceedings before
the Federal Communications Commission.
Plaintiffs Roger H. Kaye and Roger H. Kaye, MD, PC, bring this
putative class action under the Telephone Consumer Protection Act
(ATCPA@), 47 U.S.C. ' 227, alleging that Dr. Kaye received an
unsolicited fax advertisement from the defendants inviting him to
participate in a telesymposium regarding a drug named Saphris.
The
TCPA makes it unlawful to send Aunsolicited@ advertisements to fax
machines and creates a private right of action entitling the
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recipient of such a fax to recover $500 in statutory damages.
Pursuant to the provision in the TCPA proscribing Aunsolicited@ faxes,
the FCC has adopted a rule, 47 C.F.R. 64.1200(a)(4)(iv), which
provides a private right of action for statutory damages for
solicited faxes that do not contain a detailed opt-out notice.
Invoking both the TCPA=s proscription of unsolicited faxes and the
FCC=s rule requiring an opt-out notice on solicited faxes, plaintiffs
seek to represent all persons to whom the defendants sent or caused
to be sent, during a four year period, unsolicited faxes and solicited
faxes with deficient opt-out notices.
Defendants deny that the fax
Dr. Kaye received concerning the Saphris telesymposium was
unsolicited and contend that the FCC=s rule requiring detailed opt-out
notices on solicited faxes is invalid.
Since this action was filed in 2010, the parties and the Court
have had difficulty determining the appropriate scope of
pre-certification discovery.
Plaintiffs have requested discovery
relating to every fax the defendants sent during the applicable
four-year period on the ground that Dr. Kaye is entitled to represent
every person who received an unsolicited fax or a solicited fax with
a deficient opt-out notice during that time.
In support of their
position, plaintiffs maintain that the validity of the FCC=s rule
requiring opt-out notices on solicited faxes cannot be challenged
in this action because of the Hobbs Act, 28 U.S.C. ' 2342, which gives
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the Courts of Appeals exclusive jurisdiction to determine the
validity of FCC orders following appropriate administrative
proceedings.
Defendants, on the other hand, seek to limit discovery
to faxes concerning the Saphris telesymposium.
They contend that
such a limitation is appropriate because the FCC=s rule requiring
opt-out notices on solicited faxes is invalid and the plaintiffs lack
standing to represent persons who did not receive the fax received
by Dr. Kaye.
Because of the wide divergence in the parties=
positions, and the unsettled nature of the FCC=s rule, essentially
no discovery has been done.
Earlier this year, the Court issued an order lifting a stay on
pre-certification discovery to permit limited discovery with regard
to whether faxes sent by the defendants in connection with the Saphris
telesymposium were solicited or unsolicited.
The order stated that
the stay on discovery would remain in effect as to any additional
discovery pending the outcome of related proceedings concerning the
FCC=s rule requiring opt-out notices on solicited faxes,
specifically, proceedings in the U.S. Supreme Court in Nack v.
Walburg, 715 F.3d 680 (8th Cir. 2013), petition for cert. filed (U.S.
Oct. 15, 2013)(No. 13-486), and proceedings before the FCC itself.1
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The Supreme Court has since denied the petition for a writ of
certiorari. See Walburg v. Nack, No. 13-486, 2014 WL 1124926 (U.S.
Mar. 24, 2014).
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In Nack, a fax advertisement was sent to the plaintiff with the
express consent of the plaintiff=s agent but the fax lacked the opt-out
notice mandated by the FCC.
The District Court granted summary
judgment to the defendant finding that the FCC=s rule requiring an
opt-out notice applied to unsolicited faxes only.
The Eighth
Circuit reversed based on a submission by the FCC stating that the
opt-out requirement applies to all faxes.
The Court questioned the
validity of the FCC=s rule as thus interpreted but held that the Hobbs
Act precluded it from entertaining a challenge to the rule because
a petition challenging the rule had not been filed with the FCC.
In
reversing the judgment, the Eighth Circuit indicated that the
District Court had discretion to stay the action pending the filing
of a petition with the FCC.
On the remand, the District Court granted
the defendant=s motion for such a stay.
See Nack v. Walburg, No.
4:10CV478 AGF, 2013 WL 4860104 (E.D. Mo. Sept. 12, 2013).
This Court=s order maintaining a partial stay of discovery
pending the outcome of proceedings before the FCC with regard to the
opt-out notice requirement is in accord with decisions of other
District Courts following the Eighth Circuit=s decision in Nack.
See
Physicians Healthsource, Inc. v. Purdue Pharma L.P., 3:12-CV-1208
(SRU), 2014 WL 518992, at *3 (D. Conn. Feb. 3 2014)("[A]lthough I
am inclined to agree with the defendants that the FCC lacks authority
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to regulate solicited faxes . . . and am not entirely persuaded by
the Eighth Circuit's conclusion that the Hobbs Act bars me from
reaching this conclusion, given the complete lack of Second Circuit
precedent on this issue, a stay seems the wiser course of action.");
Raitport v. Harbour Capital Corp., 09-CV-156-SM, 2013 WL 4883765,
at *1 (D.N.H. Sept. 12, 2013) ("Given the substantial effect that
the outcome of the pending administrative proceedings will have on
disposition of the pending issues in this case, particularly with
respect to certification of the proposed class, this litigation shall
be stayed pending a final decision in those matters.").
Staying discovery in these circumstances is consistent with the
primary jurisdiction doctrine, which applies Awhenever 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."
Fulton Cogeneration Associates v.
Niagara Mohawk Power Corp., 84 F.3d 91, 97 (2d Cir. 1996).
In
addition, such a stay is an appropriate exercise of the Court=s
inherent discretion to manage discovery to conserve judicial and
litigant resources and avoid prejudice.
AA district court has broad
latitude to determine the scope of discovery and to manage the
discovery process."
EM Ltd. v. Republic of Argentina, 695 F.3d 201,
207 (2d Cir. 2012) cert. granted, 134 S. Ct. 895, 187 L. Ed. 2d 701
(U.S. 2014).
"The decision whether to issue a stay is firmly within
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a district court's discretion," and in balancing the relevant factors
"the basic goal is to avoid prejudice."
United Rentals, Inc. v.
Chamberlain, 3:12-CV-1466 CSH, 2013 WL 6230094, at *3 (D. Conn. Dec.
2, 2013).
Plaintiffs contend that the primary jurisdiction doctrine does
not apply because the FCC has already spoken clearly in support of
its rule requiring opt-out notices on solicited faxes.
Defendants
respond that the FCC is currently considering comments on the rule
in the wake of the Eighth Circuit=s decision in Nack.
Given the
plaintiffs= arguments concerning the Hobbs Act and the current status
of the proceeding before the FCC, I agree with the defendants that
the primary jurisdiction doctrine applies.2
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The primary jurisdiction doctrine requires consideration of
four factors: "(1) whether the question at issue is within the
conventional experience of judges or whether it involves technical
or policy considerations within the agency's particular field of
expertise; (2) whether the question at issue is particularly within
the agency's discretion; (3) whether there exists a substantial
danger of inconsistent rulings; and (4) whether a prior application
to the agency has been made." National Communications Ass'n v. AT&T,
46 F.3d 220, 223 (2d Cir. 1994). With regard to the first two
factors, the plaintiffs argue that the Hobbs Act prevents the Court
from adjudicating the defendants= challenge to the validity of the
FCC=s rule requiring opt-out notices on solicited faxes. Like Judge
Underhill, I am not convinced that the Hobbs Act prevents me from
addressing the defendants= challenge to the FCC rule, see Physicians
Healthsource, Inc., 2014 WL 518992, at *3, but given the plaintiffs=
insistence that the Hobbs Act applies and the lack of Second Circuit
precedent, a stay seems reasonable and proper. With regard to the
other two factors, it is undisputed that both are satisfied.
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Moreover, even accepting the plaintiffs' argument that the
primary jurisdiction doctrine does not compel a stay, the Court has
inherent discretion to maintain a partial stay of discovery in the
circumstances presented here.
Under the present order, the
plaintiffs can obtain discovery to determine whether the defendants'
consent protocol was followed in connection with the Saphris
telesymposium.
If discovery reveals that the consent protocol was
followed, the defendants will be able to argue that the burdens of
discovery relating to other faxes would be unwarranted.
If
discovery reveals that the protocol was not followed, plaintiffs will
have a stronger basis for their claim that broader discovery should
be permitted.
For now, the broader discovery that plaintiffs seek
would impose an undue burden on the defendants.
The Court concludes
that the order currently in place Alimit[s] discovery in a prudential
and proportionate way.@
See EM Ltd., 695 F.3d at 207.
Accordingly, plaintiffs= motion to lift the stay is denied. The
limitation on the scope of discovery and the stay established by the
Court's prior Order [ECF No. 114] remain in effect.
So ordered.
______________/s/_________________
Robert N. Chatigny
United States District Judge
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