Comprehensive Health Care Systems Of The Palm Beaches, Inc. v. M3 USA Corporation et al

Filing 112

ORDER granting 99 Motion to Stay. All proceedings in the above-styled action are STAYED pending ruling from theFCC on the Petition. The above-styled action is administratively CLOSED without prejudice to theparties to file status reports every 90 days, with the first report due January 4,2018. The Clerk shall CLOSE this case for administrative purposes only. Any pending motions are DENIED AS MOOT, any scheduled hearings areCANCELLED, and all pending deadlines are TERMINATED. Closing Case. on 10/6/17. (tas) NOTICE: If there are sealed documents in this case, they may be unsealed after 1 year or as directed by Court Order, unless they have been designated to be permanently sealed. See Local Rule 5.4 and Administrative Order 2014-69.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 16-cv-80967-BLOOM/Valle

COMPREHENSIVE HEALTH CARE SYSTEMS
OF THE PALM BEACHES, INC., and
DR. ROBERT W. MAUTHE, M.D., P.C.,
Plaintiffs,
v.
M3 USA CORPORATION, and MDLINX, INC.,
Defendants.
___________________________________________/

ORDER ON MOTION TO STAY
THIS CAUSE is before the Court upon a Motion to Stay filed by Defendant M3 USA
Corporation (“M3,” together with MDLinx, Inc., “Defendants”). ECF No. [99] (“Motion”). The
Court has carefully reviewed the Motion, all opposing and supporting materials, the record in
this case and the applicable law, and is otherwise fully advised. For the reasons set forth below,
the Motion is GRANTED.
I.

Background
M3 is a market research company which sends targeted invitations via facsimile to

healthcare professionals participate in research surveys.

ECF No. [55] at 2.

Plaintiffs

Comprehensive Healthcare Systems of the Palm Beaches, Inc. (“Comprehensive”) and Dr.
Robert W. Mauthe (“Mauthe”) (together, “Plaintiffs”) each received at least one such facsimile
(or “fax”) from M3. Id. Plaintiffs assert that these faxes are “advertisements” transmitted in
violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), because they
were sent without Plaintiffs’ consent and without the proper opt-out language required by the

Case No. 16-cv-80967-BLOOM/Valle
TCPA. ECF No. [44] at 2–3, 19–25.1 While the parties have advanced several arguments about
the legal and factual sufficiency of the claims, both note that “the questions of whether the faxes
at issue are in fact advertisements is a core issue that is potentially dispositive of this case.” ECF
No. [103] at 1; see also ECF Nos. [102] at 9, [99] at 1.
On March 20, 2017, M3 filed a Petition for Expedited Declaratory Ruling with the
Federal Communications Commission (“FCC”) seeking confirmation “that research survey
invitations are not TCPA ‘advertisements.’ ” ECF No. [99–1] at i (“Petition”); see also ECF No.
[99] at 1, 5. Specifically, the Petition requests that the FCC declare the following:
1. There is no presumption under the TCPA that faxes sent by for-profit businesses are
pretext for advertisements;
2. Informational faxes are not pretexts for advertisements under the TCPA unless the
transmission promotes specific, commercially-available property, goods or services to
the recipient of the fax;
3. Market research surveys do not constitute property, goods or services vis-à-vis the
persons taking the surveys under the TCPA; and
4. Invitations to participate in market research surveys are not advertisements under the
TCPA unless commercially-available property, goods or services are promoted in the
fax itself or during the survey itself.
ECF No. [99–1] at i-ii. On March 28, 2017, the FCC issued a Public Notice and opened a
notice-and-comment rulemaking proceeding to address the Petition. ECF No. [99] at 8; ECF No.
[99–2] at 1. According to Defendants, the FCC received comments and the record on the matter
is now closed. ECF No. [99] at 8. Defendants now move for a stay of this case pending
resolution of the Petition.

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Plaintiffs also assert a common law claim of conversion. ECF No. [44] at 24–28.
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Case No. 16-cv-80967-BLOOM/Valle
I.

Legal Standard

A district court acts within its own general discretion to control its own docket when
determining whether a stay is warranted. American Mfrs. Mut. Ins. Co. v. Edward D. Stone, Jr.
& Assoc., 743 F.2d 1519, 1525 (11th Cir.1984). A court may grant a stay to “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).
To apply these principles to the appropriateness of a stay when the interaction between
regulatory schemes promulgated by administrative agencies and their application by the judiciary
is at issue, courts have devised a four-pronged test. This “primary jurisdiction doctrine,” as it is
known, “has evolved as a means of reconciling the functions of administrative agencies with the
judicial function of the courts.” Bondhus v. Henry Schein, Inc., No. 14–22982–CIV, 2015 WL
1968841, at *2–3 (S.D. Fla. Apr. 30, 2015) (quoting Mississippi Power & Light Co. v. United
Gas Pipe Line Co., 532 F.2d 412, 416 (5th Cir.1976)) (internal quotation marks omitted). Under
the doctrine, a court “may dismiss or stay an action pending a resolution of some portion of the
actions by an administrative agency . . . 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

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Case No. 16-cv-80967-BLOOM/Valle
administration.” Bondhus, 2015 WL 1968841, at *3 (citing United States v. General Dynamics
Corp., 828 F.2d 1356, 1362 (9th Cir.1987). The Court thus analyzes each of these factors in
turn.
II.

Analysis

A. The Need to Resolve an Issue
M3 has filed a Petition with the FCC to clarify a central—and possibly dispositive—issue
in this case: whether faxes which invite the recipient to participate in market research surveys are
pretextual advertisements under the TCPA. A declaration in favor of Defendants on the Petition
will likely alter the scope of this case and impact pending motions before the Court. See
Bondhus, 2015 WL 1968841, at *3. While Plaintiffs argue that it is possible the FCC will refuse
to issue declaratory ruling on the Petition or that a declaratory ruling will not be dispositive (ECF
No. [102] at 6), the Court will inevitably benefit from the FCC’s guidance in this case. Thus, the
Court finds that the first factor is met.
B. Placed by Congress within the Jurisdiction of an Administrative Body Having
Regulatory Authority
The TCPA vests the FCC with the authority to “prescribe regulations to implement the
requirements of [the statute].” 47 U.S.C. § 227(b)(2). This includes issuing rules clarifying and
interpreting the TCPA, as well as addressing petitions like that filed by M3. See e.g., Report and
Order and Third Order on Recommendation, In re Rules and Regulations Implementing the
Telephone Consumer Protection Act of 1991 and the Junk Fax Prevention Act of 2005, 21 FCC
Rcd. 3787 (April 5, 2006) (the “2006 TCPA Order). The FCC has already responded to the
Petition by opening a notice-and-comment rulemaking proceeding and receiving public
comment. This, coupled with the directive from Congress regarding the scope of the FCC’s
jurisdiction, is sufficient to meet the second factor.
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Case No. 16-cv-80967-BLOOM/Valle
C. Pursuant to a Statute that Subjects an Industry or Activity to a Comprehensive
Regulatory Scheme
The TCPA requires the FCC to engage in rulemaking and “prescribe regulations to
implement methods and procedures for protecting the privacy rights” identified in the statute. 47
U.S.C. § 227(c). Thus, as this District has observed, “[t]he 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.” See Bondhus, 2015 WL 1968841, at *3. Given the
statutory framework, the Court finds that the third factor is met.
D. Requiring Expertise and Uniformity in Administration
The FCC is charged with expertise in telecommunications regulation and has the
authority to interpret and implement the TCPA and other telecommunications statutes. See, e.g.,
47 U.S.C. § 227. Where, as here, the “resolution of Plaintiff’s cause of action would require
interpreting and considering technical terms and industry policies[], [s]uch an endeavor is clearly
within the FCC’s precise field of expertise and discretion and outside of the conventional
experience of the Court.” Stewart v. T-Mobile USA, Inc., No. 4:14-CV-02086-PMD, 2014 WL
12614418, at *4 (D.S.C. Oct. 8, 2014) (citing Nader v. Allegheny Airlines, Inc., 426 U.S. 290,
305 (1976)). In its motion, M3 cites to cases both within this Circuit and nationally which have
differed in their interpretation of the TCPA vis-à-vis alleged advertisements transmitted via fax,
often with different results. See ECF No. [99] at 5–7. In fact, in interpreting the 2006 TCPA
Order in a putative class action involving unsolicited faxes to doctors’ offices, Judge Leval of the
Second Circuit observed in a concurring opinion “that other courts might interpret the
Commission’s 2006 Rule differently.” Physicians Healthsource, Inc. v. Boehringer Ingelheim
Pharm., Inc., 847 F.3d 92, 103 (2d Cir. 2017). Given the FCC’s request for comment on the

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Case No. 16-cv-80967-BLOOM/Valle
Petition and the need for uniformity in administration of the TCPA as it relates to research
surveys, the Court finds that the fourth factor is met.
III.

Conclusion

A stay is warranted. The Petition’s potential effect on this case and the dearth of
definitive interpretation of the TCPA provisions applicable here counsel against continued
litigation in this case until the threshold issue set forth in the Petition can be addressed by the
FCC. That issue is whether research surveys constitute “advertisements” under TCPA. While
Plaintiffs argue that a stay would prejudice them because it is unclear if and when the FCC will
issue a precedential ruling on the Petition (see ECF No. [102] at 2–3), the Court finds that the
benefit of the FCC’s guidance, the interests of judicial economy and the prevention of
inconsistent resolutions outweigh the potential prejudice of a stay. The
Accordingly, it is ORDERED AND ADJUDGED as follows:
1. Defendant M3’s Motion, ECF No. [99], is GRANTED.
2. All proceedings in the above-styled action are STAYED pending ruling from the
FCC on the Petition.
3. The above-styled action is administratively CLOSED without prejudice to the
parties to file status reports every 90 days, with the first report due January 4,
2018.
4. The Clerk shall CLOSE this case for administrative purposes only.
5. Any pending motions are DENIED AS MOOT, any scheduled hearings are
CANCELLED, and all pending deadlines are TERMINATED.

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Case No. 16-cv-80967-BLOOM/Valle
DONE AND ORDERED in Chambers at Miami, Florida this 6th day of October, 2017.

_________________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
cc:

counsel of record

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