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

Filing 55

ORDER ON DEFENDANTS MOTION TO DISMISS AND MOTION TO STAY denying 46 Motion to Dismiss for Failure to State a Claim; denying as moot 48 Motion to Stay. Signed by Judge Beth Bloom on 1/10/2017. (lan)

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 DEFENDANT’S MOTION TO DISMISS AND MOTION TO STAY
THIS CAUSE is before the Court upon Defendant M3 USA Corporation’s
(“Defendant”) Motion to Dismiss Second Amended Class Action Complaint, ECF No. [46]
(“Motion to Dismiss”).

Defendant also filed a Motion to Stay Discovery, ECF No. [48]

(“Motion to Stay”), pending the Court’s resolution of the Motion to Dismiss. The Court has
reviewed the Motions, Plaintiffs’ Response, ECF No. [52] (“Response”), Defendant’s Reply,
ECF No. [54] (“Reply”), the record in this case, the applicable law, and is otherwise fully
advised in the premises. For the reasons set forth below, the Motion to Dismiss is denied.
Therefore, the Motion to Stay is denied as moot.
I. Background
Plaintiffs

Comprehensive

Healthcare

Systems

of

the

Palm

Beaches,

Inc.

(“Comprehensive”) and Dr. Robert W. Mauthe (“Mauthe”) (together, “Plaintiffs”) filed their
Second Amended Class Action Complaint, ECF No. [44] (“Complaint”), asserting claims for
violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”) and conversion
against Defendant, stemming from the transmission of faxes to Plaintiffs and a class of similarly-

Case No. 16-cv-80967-BLOOM/Valle
situated individuals. See generally Complaint. Plaintiffs allege that Defendant is a Delaware
corporation, of which MDLinx is a division.1 Id. ¶¶ 14-15. Defendant’s clients are companies in
the pharmaceutical industry looking for feedback or ideas from health professionals on how to
improve the industry. Id. ¶ 9. As a result, Defendant sends advertisements by fax to Plaintiffs
and others in which Defendant offers compensation for participation in online surveys and
advertises the commercial availability of Defendant’s online paid survey program, through which
Defendant gathers market research and opinions from health professionals for its clients. Id. ¶¶
20-24. Plaintiffs further allege that they did not invite or consent to being sent advertisements
from Defendant on their fax machines. Id. ¶ 41. Therefore, Plaintiffs contend that Defendant
violated the TCPA by sending unsolicited advertisements without prior express invitation or
permission and without a clear and conspicuously displayed opt-out notice.

Id. Count I.

Plaintiffs also assert a claim for conversion based upon Defendant’s use of their faxes. Id. Count
II. Plaintiffs attach to the Complaint a number of exhibits exemplifying the type and content of
the faxes received by Plaintiffs, ECF Nos. [44-1]-[44-13], and content from Defendant’s website,
ECF No. [44-14]-[44-16]. Defendant seeks to dismiss the Complaint pursuant to Rule 12(b)(6)
of the Rules of Federal Procedure for failure to state a claim.
II. Legal Standard
A pleading in a civil action must contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Although a complaint
“does not need detailed factual allegations,” it must provide “more than labels and conclusions,
and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007); see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (explaining
1

Defendant asserts that MDLinx, Inc. was merged into M3 Corporation in 2008 and no longer
exists as a separate entity. See ECF No. [15] at 7 n.3.
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Case No. 16-cv-80967-BLOOM/Valle
that Rule 8(a)(2)’s pleading standard “demands more than an unadorned, the-defendantunlawfully-harmed-me accusation”). Nor can a complaint rest on “‘naked assertion[s]’ devoid of
‘further factual enhancement.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557
(alteration in original)). “To survive a motion to dismiss a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id.
(quoting Twombly, 550 U.S. at 570).
When reviewing a motion under Rule 12(b)(6), a court, as a general rule, must accept the
plaintiff’s allegations as true and evaluate all plausible inferences derived from those facts in
favor of the plaintiff. See Miccosukee Tribe of Indians of Fla. v. S. Everglades Restoration
Alliance, 304 F.3d 1076, 1084 (11th Cir. 2002); AXA Equitable Life Ins. Co. v. Infinity Fin. Grp.,
LLC, 608 F. Supp. 2d 1349, 1353 (S.D. Fla. 2009). However, this tenet does not apply to legal
conclusions, and courts “are not bound to accept as true a legal conclusion couched as a factual
allegation.” Twombly, 550 U.S. at 555; see Iqbal, 556 U.S. at 678; Thaeter v. Palm Beach Cty.
Sheriff’s Office, 449 F.3d 1342, 1352 (11th Cir. 2006). Moreover, “courts may infer from the
factual allegations in the complaint ‘obvious alternative explanations,’ which suggest lawful
conduct rather than the unlawful conduct the plaintiff would ask the court to infer.” Am. Dental
Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 556 U.S. at 682). A
court considering a Rule 12(b) motion is generally limited to the facts contained in the complaint
and attached exhibits, including documents referred to in the complaint that are central to the
claim. See Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009); Maxcess, Inc.
v. Lucent Techs., Inc., 433 F.3d 1337, 1340 (11th Cir. 2005) (“[A] document outside the four
corners of the complaint may still be considered if it is central to the plaintiff’s claims and is

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Case No. 16-cv-80967-BLOOM/Valle
undisputed in terms of authenticity.”) (citing Horsley v. Feldt, 304 F.3d 1125, 1135 (11th Cir.
2002)). Through this lens, the Court evaluates the instant Motion to Dismiss.
III. Discussion
The sole basis for dismissal raised by Defendant is that the faxes sent to Plaintiffs are not
advertisements within the definition provided by the TCPA. Defendant argues that the faxes are
merely invitations to participate in “double blind medical surveys,” and that they do not advertise
property, goods, or service for sale, as required by the TCPA. Defendant further argues that
Plaintiffs’ reliance on the hypothetical result of following the survey link provided in the fax and
resulting registration for a survey, and review of Defendant’s Terms of Use, Privacy Policy, and
FAQs, is misplaced as it does not somehow convert the faxes into advertisements, and only leads
to the ultimate conclusion that Defendant is a for-profit company. Defendant further argues that
because Plaintiffs fail to state a claim under federal law, the Court should decline to exercise
supplemental jurisdiction over the state law conversion claim.

The Court considers each

argument in turn.
Relevant in this case is the TCPA’s prohibition on the sending of unsolicited
advertisements to fax machines. 47 U.S.C. § 227(b)(1)(C). The TCPA defines an “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.” 47 U.S.C. § 227(a)(5). The TCPA
tasks the Federal Communications Commission (“FCC”) with developing regulations with which
to implement it provisions.

See 47 U.S.C. § 227(b)(2) (“The Commission shall prescribe

regulations to implement the requirements of this subsection.”). The FCC provides additional
guidance with respect to what qualifies as an unsolicited advertisement under the TCPA and

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Case No. 16-cv-80967-BLOOM/Valle
examples of the types of faxes which would violate the statute. See Rules & Regs. Implementing
the Tel. Consumer Prot. Act of 1991; Junk Fax Prevention Act of 2005, 71 Fed. Reg. 25967-01
(May 3, 2006). Furthermore, “the [FCC] concludes that any surveys that serve as a pretext to an
advertisement are subject to the TCPA’s facsimile advertising rules. The TCPA’s definition of
‘unsolicited advertisement’ applies to any communication that advertises the commercial
availability or quality of property, goods or services, even if the message purports to be
conducting a survey.” Id. Thus, the FCC contemplates that savvy companies may devise a
multilayered approach in attempting to avoid violating the TCPA, and acknowledges that an
otherwise benign fax may violate the TCPA, if it ultimately leads to the promotion of goods or
services. See Drug Reform Coordination Network, Inc. v. Grey House Publ’g, Inc., 106 F. Supp.
3d 9, 13 (D.D.C.2015) (“The regulations thus provide that a fax that does not on its face promote
a product or service may nonetheless violate the TCPA if it is a precursor to a future
solicitation.”).
In pertinent part, the Complaint alleges that through the online survey program,
Defendant gathers information and opinions from health professionals, which it then shares with
its clients, who are companies in the pharmaceutical industry. Compl. ¶¶ 9, 23. The faxes at
issue direct a potential participant to a survey weblink, which in turn directs the potential
participant to the website’s “Privacy Policy,” stating that Defendant may target advertising and
marketing based upon information provided by a potential participant during the registration
process. Id. ¶¶ 25-30. “For example, a user that registers with oncology as his/her specialty, or
frequently uses oncology-related Services, or informs M3 that oncology is a significant
component of his/her practice may be served oncology-related advertisements and invitations to
participate in oncology-related sponsored programs, on both M3 and third party Services.” Id. ¶

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30; see also ECF No. [44-16]. Moreover, Defendant’s “Terms of Use” specify that by using the
company’s sites and providing “User Materials,” the user grants Defendant and others the right
“to use User Materials in connection with all aspects of the operation and promotions of
Company.” Id. ¶ 28; see also ECF No. [44-15]. In the face of these allegations, the ultimate
question of whether Defendant’s survey fax is merely a pretext for advertising its goods or
services is a question of fact not suitable for disposition as a matter of law upon a motion to
dismiss. See Eden Day Spa, Inc. v. Loskove, No. 14-81340-CIV, 2015 WL 1649967, at *3 (S.D.
Fla. Apr. 14, 2015) (denying motion to dismiss, where fax could be construed as an
advertisement as part of an overall marketing campaign); see also Neurocare Inst. of Cent. Fla.,
P.A. v. Healthtap, Inc., 8 F. Supp. 3d 1362, 1367 (M.D. Fla. 2014) (denying motion to dismiss,
where complaint alleged that a fax promotes services or opportunities available through a
company’s website). The cases cited by Defendant in the Motion to Dismiss do not persuade the
Court otherwise with respect to Count I.
As a result, Defendant’s principal argument for dismissal of the conversion claim in
Count II fails. However, Defendant argues in the alternative that if the Court declines to dismiss
the TCPA claim, Count II should also be dismissed because the receipt of a fax is not sufficient
to give rise to a claim for conversion. Defendant relies in part upon Neurocare, in which the
court dismissed a similar conversion claim because the alleged interference—i.e. conversion of
fax, toner, paper, and employee time—was not sufficiently “serious, major, or important.” 8 F.
Supp. 3d at 1368. Since then, however, the Eleventh Circuit has held otherwise, determining that
the dismissal of a conversion claim was incorrect where the complaint alleged the receipt of a
single one-page fax. Palm Beach Golf Ctr.-Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d
1245, 1258-59 (11th Cir. 2015).

“Under Florida law, a conversion consists of an act in

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derogation of the plaintiff’s possessory rights, and any wrongful exercise or assumption of
authority over another’s goods, depriving him of the possession, permanently or for an indefinite
time, is a conversion.” Id. at 1258 (internal citation and quotations omitted). There is no
requirement that the property have a particular monetary value to be converted. Id. at 1259. In
fact, the opposite is true. “Although the value of the property converted may be significant in
determining the amount of damages to be awarded, it appears wholly irrelevant in assessing the
legitimacy of the initial cause of action.” Id. (citing Warshall v. Price, 629 So. 2d 903, 904 n.3
(4th DCA 1993)). Therefore, Defendant’s alternative argument for dismissal of Count II also
fails.
IV. Conclusion
Accordingly, it is ORDERED AND ADJUDGED that Defendant’s Motion to Dismiss,
ECF No. [46], is DENIED. As a result, the Court need not separately consider the Motion to
Stay, ECF No. [48], which is DENIED AS MOOT. Defendant shall file an answer to the
Second Amended Complaint, ECF No. [44], no later than January 20, 2017.
DONE AND ORDERED in Miami, Florida, this 10th day of January, 2017.

_________________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
cc:

counsel of record

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