Brodsky v. HumanaDental Insurance Company

Filing 349

MEMORANDUM Opinion and Order Signed by the Honorable John Robert Blakey on 9/29/2016. Mailed notice(gel, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
LAWRENCE S. BRODSKY,
individually and as the
representative of a class of
similarly-situated persons,

Case No. 1:10-cv-03233
Judge John Robert Blakey

Plaintiff,
v.
HUMANADENTAL INSURANCE
COMPANY d/b/a
HUMANA SPECIALITY BENEFITS,
Defendant.
MEMORANDUM OPINION AND ORDER
Plaintiff Lawrence Brodsky (“Plaintiff” or “Brodsky”) filed this putative class
action against Defendant HumanaDental Insurance Company (“Defendant” or
“HDIC”) after receiving two messages on his fax machine. Plaintiff argues that
these faxes represented improper advertisements in violation of the Telephone
Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq.

Currently pending

before the Court are Plaintiff’s Motion For Class Certification [290], Defendant’s
Motion To Dismiss For Lack Of Subject Matter Jurisdiction Under FRCP 12(b)(1)
[323], and Defendant’s Motion For Leave To File Eighth and Ninth Affirmative
Defenses To The Amended Complaint [281].

As explained below, Defendant’s

Motion To Dismiss For Lack Of Subject Matter Jurisdiction Under FRCP 12(b)(1)
[323] is denied, Defendant’s Motion For Leave To File Eighth and Ninth Affirmative

1

Defenses To The Amended Complaint [281] is denied as moot, and Plaintiff’s Motion
For Class Certification [290] is granted in part and denied in part,.
I.

Legal Standard
When analyzing Defendant’s motion to dismiss, the Court must construe the

Amended Complaint [32] in the light most favorable to Plaintiff, accept as true all
well-pleaded facts and draw reasonable inferences in his favor.

See Long v.

Shorebank Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999). To survive Defendant’s
motion, the Plaintiff must competently prove by a preponderance of the evidence
that subject matter jurisdiction exists. NLFC, Inc. v. Devcom Mid–America, Inc., 45
F.3d 231, 237 (7th Cir. 1995).

The Court “may properly look beyond the

jurisdictional allegations of the complaint and view whatever evidence has been
submitted on the issue to determine whether in fact subject matter jurisdiction
exists.” Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 444 (7th Cir. 2009)
(internal quotation omitted).
To obtain class certification, Plaintiff must satisfy the four Rule 23(a)
requirements—numerosity,

commonality,

typicality

and

adequacy

of

representation—and one subsection of Rule 23(b). See Arreola v. Godinez, 546 F.3d
788, 794 (7th Cir. 2008). Here, Plaintiff moves to certify a class under Rule 23(b)(3),
so he must show: (1) that issues common to the class members predominate over
questions affecting only individual members; and (2) that a class action is superior
to other available adjudication methods.

See Messner v. Northshore University

HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012). Plaintiff bears the burden of

2

proving each Rule 23 requirement by a preponderance of the evidence. Id. Failure
to satisfy any requirement precludes class certification. Oshana v. Coca-Cola Co.,
472 F.3d 506, 513 (7th Cir. 2006).
This Court has broad discretion to determine whether to certify a class. In
exercising its discretion, this Court does not presume that all well-pleaded
allegations are true and can look “beneath the surface” of the Amended Complaint
[32] to conduct the inquiries required by Rule 23. Davis v. Hutchins, 321 F.3d 641,
649 (7th Cir. 2003); Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 677 (7th Cir.
2001). Although a determination regarding class certification should not turn upon
the likelihood of success on the merits, this Court must make the factual and legal
inquiries necessary to ensure that the class certification requirements are satisfied,
even if that implicates some overlap with the merits of the case. Messner, 669 F.3d
at 823-24; American Honda Motor Co., Inc. v. Allen, 600 F.3d 813, 815 (7th Cir.
2010).
II.

Background 1
A.

Factual History

Plaintiff Brodsky is a “wholesaler of insurance” who does business as a sole
proprietorship known as the Lawrence S. Brodsky Agency, Inc. (the “LSB Agency”).
Defendant HDIC is a Wisconsin corporation that insures certain dental plans,
including the HumanaDental Prevention Plus plan, the HumanaDental PPO and
Traditional Preferred Plans. “Humana Specialty Benefits,” a group within Humana
Unless otherwise indicated, these facts are taken from Judge Durkin’s earlier ruling on HDIC’s
motion for summary judgment [189].

1

3

Inc., markets “specialty products,” including dental, vision, life insurance and
disability products.
Brodsky and the LSB Agency have “market agreements” with numerous
insurance companies. Brodsky then sells the products of those insurance companies
through various insurance agents/independent contractors.

One of Brodsky’s

market agreements was with “Humana Insurance Company, Humana Health Plan,
Inc., and all of their affiliates.” That agreement is known as a “Group Producing
Agent or Agency Contract.” This Agency Contract stipulated that Brodsky and the
LSB Agency agreed that Humana Insurance Co. and all of its affiliates “may choose
to communicate with [Brodsky and/or the LSB Agency] through the use of . . .
facsimile to the

. . . facsimile numbers of” Brodsky and the LSB Agency.

In

connection with his Agency Contract, Brodsky provided Humana Insurance Co.
with a specific facsimile number ending in 0152.
On May 14, 2008, Brodsky’s fax machine assigned to the 0152 number
received two identical one-page fax messages (“the Subject Faxes”). The bottom of
the Subject Faxes indicated that they were sent by “Humana Specialty Benefits.”
There is no dispute that the Subject Faxes were created by the Marketing
Department of Humana Inc., and received the internal designation GN-Fax 4/08.
The Subject Faxes do not identify the individual or entity to which they were
specifically sent.

At least seven of Brodsky’s insurance agents/independent

contractors had permission to use (and did in fact use) Brodsky’s office space and
fax machine during the time period at issue. The parties have stipulated that faxes

4

identical to the Subject Faxes (similarly designated GN-Fax 4/08) were successfully
transmitted 19,931 times. [285] Ex. 21, ¶ 20.
B.

Procedural Posture

Plaintiff initiated the present litigation in state court against HDIC. [1] Ex.
A at 1. HDIC, in turn, removed the litigation to this Court. Id. HDIC first moved
to dismiss on the basis that its prior offers of full relief to Plaintiff rendered the
litigation moot. [14] at 2-3. That motion was denied. [21] at 1. HDIC then moved
for summary judgment, arguing, inter alia, that HDIC did not “send” the Subject
Faxes, the Subject Faxes were not “sent” to Plaintiff, the Subject Faxes were not
“advertisements,” and Plaintiff had consented to delivery of the Subject Faxes.
[118] at 1-5. Defendant’s motion for summary judgment was denied as to Plaintiff’s
TCPA claim. [189] at 12-23. HDIC moved for reconsideration of that ruling [199],
which was denied. [212] at 3-9. In the course of ruling on both HDIC’s motion for
summary judgment and motion for reconsideration, Judge Durkin ultimately
determined, inter alia, that:
(1) Whether the Subject Faxes were “advertisements” within
the meaning of the TCPA is a disputed factual question, [189] at
16-18;
(2) Whether HDIC was a “sender” of the Subject Faxes within
the meaning of the TCPA is a disputed factual question, [189] at
13-16;
(3) Brodsky has standing to pursue a TCPA claim based on the
Subject Faxes, even if they were intended for independent
contractors with whom he associated, as “it makes no difference
to whom the [Subject Faxes were] sent,” [212] at 9; and

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(4) The opt-out notices on the Subject Faxes were deficient as a
matter of law, thereby precluding Defendant from raising
defenses sounding in “express prior invitation” or “established
business relationship.” [189] at 21-23.
On March 23, 2016, HDIC deposited $25,000 in an escrow account with U.S.
Bank, N.A. [323] ¶¶ 4-6. Under the escrow agreement, upon entry of a final order
from this Court, U.S. Bank, N.A. is directed to pay the escrow funds to the Plaintiff.
Id. In connection with the tender and deposit of funds into the escrow account,
HDIC has also agreed, in written correspondence with Plaintiff, to refrain from
sending any faxes to Plaintiff in the future. Id.
III.

Analysis
Defendant’s Motion To Dismiss For Lack Of Subject Matter Jurisdiction

Under FRCP 12(b)(1) [323] and Defendant’s Motion For Leave To File Eighth and
Ninth Affirmative Defenses To The Amended Complaint [281] contest Plaintiff’s
standing in light of HDIC’s creation of the escrow account. Given the potentially
dispositive nature of this question, the Court addresses these motions first.
A.

Defendant’s Motion to Dismiss

Defendant claims that by placing in escrow an amount equal to or greater
than Plaintiff’s potential individual recovery, it has mooted any putative “claim or
controversy” and thereby deprived Plaintiff of standing.
misconstrues governing precedent, and is therefore rejected.

6

Defendant’s argument

1.

Campbell-Ewald Requires
Litigate Class Claims

A

“Fair Opportunity” To

The Supreme Court of the United States recently had occasion to address
Article III standing under similar circumstances in Campbell-Ewald Co. v. Gomez,
136 S. Ct. 663 (2016). The plaintiff in Campbell-Ewald filed a putative class action
complaint pursuant to the TCPA. Id. at 667. Defendant in that case proposed to
settle plaintiff’s individual claim through a FRCP 68 offer of judgment and parallel
settlement offer. Id. at 667-68. After plaintiff rejected those offers, the defendant
moved to dismiss pursuant to FRCP 12(b)(1) for lack of subject matter jurisdiction.
Id. at 668. More specifically, the defendant argued that no “case or controversy”
existed insofar as plaintiff had been offered complete relief. Id.
The Court rejected defendant’s “pick off” attempt. The Court stated that a
case becomes moot “only when it is impossible for a court to grant any effectual
relief whatever to the prevailing party,” and that “as long as the parties have a
concrete interest, however small, in the outcome of the litigation, the case is not
moot.” Id. at 669 (internal quotation omitted). An unaccepted settlement offer
simply has “no force,” and like other unaccepted contract offers “creates no lasting
right or obligation.”

Id. at 666.

The Court further observed that, given “the

defendant’s continuing denial of liability, adversity between the parties persists.”
Id.
The majority in Campbell-Ewald also explicitly “adopt[ed] Justice Kagan’s
analysis” in Genesis Healthcare Corporation v. Symczyk, 133 S. Ct. 1523 (2013). In
that case Justice Kagan, writing in dissent, explained:
7

Nor does a court have inherent authority to enter an unwanted
judgment for Smith on her individual claim, in service of wiping out
her proposed collective action. To be sure, a court has discretion to
halt a lawsuit when the defendant unconditionally surrenders and only
the plaintiff’s obstinacy or madness prevents her from accepting total
victory. But the court may not take that tack when the supposed
capitulation in fact fails to give the plaintiff all the law authorizes and
she has sought. And a judgment satisfying an individual claim does
not give a plaintiff like Smith, exercising her right to sue on behalf of
other employees, “all that [she] has . . . requested in the complaint (i.e.,
relief for the class).” Deposit Guaranty Nat’l Bank v. Roper, 445 U.S.
326, 341 (1980) (Rehnquist, J., concurring). No more in a collective
class action brought under the FSLA than in any other class action
may a court, prior to certification, eliminate the entire suit by acceding
to a defendant’s proposal to make only the named plaintiff whole. That
course would short-circuit a collective action before it could begin, and
thereby frustrate Congress’s decision to give FLSA plaintiffs “the
opportunity to proceed collectively.” Hoffmann-LaRoche, 493 U.S., at
170, 110 S. Ct. 482; see Roper, 445 U.S., at 339, 100 S. Ct. 1166. It is
our plaintiff Smith’s choice, and not the defendant’s or the court’s,
whether satisfaction of her individual claim, without redress of her
viable classwide allegations, is sufficient to bring the lawsuit to an end.
Symczyk, 133 S. Ct. at 1536 (Kagan, J., dissenting). Ultimately, Campbell-Ewald
stands for the proposition that, notwithstanding a defendant’s individual settlement
attempts, “a would-be class representative with a live claim of her own must be
accorded a fair opportunity to show that [class] certification is warranted.”
Campbell-Ewald Co., 136 S. Ct. at 672.
2.

Campbell-Ewald’s Remaining Hypothetical

The majority in Campbell-Ewald stated, in dicta, that it did not “now decide
whether the result would be different if a defendant deposits the full amount of the
plaintiff’s individual claim in an account payable to the plaintiff, and the court then
enters judgment for the plaintiff in that amount,” as that “question is appropriately
reserved for a case in which it is not hypothetical.” Id. at 672. Unsurprisingly,
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TCPA defendants across the country have endeavored to test the limits of
Campbell-Ewald by making this hypothetical a reality. Federal courts faced with
this situation have reached divergent conclusions.

Compare South Orange

Chiropractic Center, LLC v. Cayan LLC, No. 15-13069, 2016 WL 1441791, at *5 (D.
Mass. Apr. 12, 2016) (holding the named plaintiff’s individual TCPA claims were
moot “because Defendant has offered to deposit a check with the court, to satisfy all
of Plaintiff’s individual claims (and more), and to have the district court enter
judgment in Plaintiff’s favor”) and Price v. Berman’s Automotive, Inc., No. 14-763,
2016 WL 1089417, at *3 (D. Md. Mar. 21, 2016) (issuance of unconditional cashier’s
check with proof of payment and delivery to plaintiff would moot plaintiff’s claim);
and Leyse v. Lifetime Entertainment Services, LLC, ––– F. Supp. 3d ––––, 2016 WL
1253607, at *2 (Mar. 17, 2016) (a “defendant’s deposit of a full settlement with the
court, and consent to entry of judgment against it, will eliminate the live
controversy before a court”) with Chen v. Allstate Ins. Co., 819 F.3d 1136, 1146 (9th
Cir. 2016) (defendant’s attempt to “invoke the hypothetical question reserved in
Campbell-Ewald” is rejected, as plaintiff “has not actually or constructively
received” the money placed in escrow) and Bais Yaakov of Spring Valley v.
Graduation Source, LLC, ––– F. Supp. 3d ––––, 2016 WL 872914, at *1 (S.D.N.Y.
Mar. 7, 2016) (“Although Defendants sought to avail themselves of the hypothetical
proposed in Campbell–Ewald by depositing the full amount of statutory damages
into the Court’s Finance Unit and assenting to the injunctive relief requested by
Plaintiff in its Complaint, Plaintiff’s individual claims remain live.”).

9

This Court finds more persuasive those cases rejecting a defendant’s attempt
to invoke the hypothetical reserved in Campbell-Ewald. See Fauley v. Royal Canin
U.S.A., Inc., 143 F. Supp. 3d 763, 765 (N.D. Ill. 2016) (characterizing the alternative
view as “inconsistent” with Campbell-Ewald).

At bottom, Campbell-Ewald

constitutes an admonishment that “a would-be class representative with a live
claim of her own must be accorded a fair opportunity to show that certification is
warranted.”

Campbell-Ewald Co., 136 S. Ct. at 672.

Accordingly, it is

inappropriate to enter judgment on a named plaintiff’s individual claims, “over the
plaintiff’s objection, before the plaintiff has had a fair opportunity to move for class
certification.” Chen, 819 F.3d at 1147.
The Seventh Circuit has not yet specifically ruled upon the hypothetical
reserved by the Campbell-Ewald majority. However, this Court’s conclusion today
comports with their previous guidance.

In Chapman v. First Index, Inc., the

plaintiff brought a putative TCPA class action, and before a class had been certified,
the defendant offered the plaintiff judgment for $3,002 (the full statutory damages),
an injunction, and an award of costs. 796 F.3d 783 (7th Cir. 2015). The defendant’s
offer lapsed unaccepted, and the defendant then moved to dismiss the action as
moot. Id. at 786. The district court granted the motion but the Seventh Circuit
reversed, largely based on Justice Kagan’s dissent in Symczyk. Id. at 786-87. The
Court went on to reject the circular logic endemic to defendant’s arguments
regarding plaintiff’s request for equitable relief:
If an offer to satisfy all of the plaintiff’s demands really moots a case,
then it self-destructs. Rule 68 is captioned “Offer of Judgment.” But a
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district court cannot enter judgment in a moot case. All it can do is
dismiss for lack of a case or controversy. So if the $3,002 offer made
this case moot, then even if Chapman had accepted it the district court
could not have ordered First Index to pay. It could have done nothing
but dismiss the suit. Likewise with First Index’s offer to have the
district court enter an injunction. As soon as the offer was made, the
case would have gone up in smoke, and the court would have lost the
power to enter the decree. Yet no one thinks (or should think) that a
defendant’s offer to have the court enter a consent decree renders the
litigation moot and thus prevents the injunction’s entry.
Id. at 786–87 (emphasis added). This rationale applies with similar force in this
case.

Plaintiff here is seeking an injunction prohibiting UDIC from sending

additional inappropriate faxes. Am. Compl. [32] at 9. If this case had really been
rendered moot by virtue of UDIC’s tender of payment and concomitant offer to stop
sending Plaintiff faxes, then this Court “would have lost the power to enter the
[requested] decree.”

Chapman, 796 F.3d

at 787.

Plaintiff would therefore be

denied part of the remedy he sought from the outset. That is not the law.
Defendant’s motion to dismiss is inconsistent with the text, logic and purpose
of Campbell-Ewald. That decision stands for the general proposition that plaintiffs,
not defendants, are the masters of their complaints. Defendant’s argument would
allow a potential exception (identified in dicta) to swallow Campbell-Ewald’s
fundamental rule, and it is accordingly rejected. Defendant’s Motion To Dismiss
For Lack Of Subject Matter Jurisdiction Under FRCP 12(b)(1) [323] is denied.
B.

Defendant’s Motion to Add Affirmative Defenses

Defendant’s Motion For Leave To File Eighth and Ninth Affirmative
Defenses To The Amended Complaint requests permission to file affirmative
defenses sounding in estoppel and waiver. [281] at 2-5. These defenses, however,
11

do not represent new substantive arguments; instead, Defendant’s new affirmative
defenses “essentially recast the Fifth Affirmative Defense (mootness) [which was
timely pled], in terms of ‘estoppel’ and ‘waiver,’ respectively.” [300] at 3; see also
Def.’s Answer And Affirmative Defenses To Pl.’s Am. Class Action Compl. [34] at 10
(“This Court lacks subject matter jurisdiction over this litigation because all of
Plaintiff’s claims are moot.”).
As a preliminary matter, the Court notes that Defendant has failed to
meaningfully apply the requirements of FRCP 16(b)(4) (good cause required to
amend operative Scheduling Order) or FRCP 15(a)(2) (factors implicated by a
request for leave to amend pleadings).

This failing is ultimately immaterial,

however, given the Court’s determination supra that Defendant’s settlement offer
and placement of select funds in escrow did not moot, waive or otherwise estop
Plaintiff from bringing his claims. The Court’s rejection of Defendant’s argument
stands regardless of the stylistic gloss Defendant chooses to apply. Accordingly,
Defendant’s Motion For Leave To File Eighth and Ninth Affirmative Defenses To
The Amended Complaint [281] is denied as moot.
C.

Plaintiff’s Motion for Class Certification

Having determined that Plaintiff’s TCPA claim can proceed, the Court turns
to the question of class certification. Plaintiff seeks to certify the following class:
All persons or entities who were successfully sent one or more faxes during
the period from May 2007 through September 2008 that: (1) named “Humana
Specialty Benefits” or “HumanaDental” on the bottom of the fax; (2) referred
to, referenced, or discussed “HumanaDental” dental plans; (3) contained one
of the following designations: FL-Fax 4/08, GN-Fax 4/08, NC-Fax 4/08, WVFax 4/08, AK-Fax 9/07, GN-Fax 9/07, KS-Fax 9/07, NC-Fax 9/07, TX-Fax
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9/07, VA-Fax 9/07, CO/NM-Fax 10/07, GA-Fax 10/07, OK-Fax 10/07,
IL/MS/LA/MN-Fax 12/07, KY-Fax 12/07, WV-Fax 12/07, MD-Fax 2/08, CAFax 2/08, NV-Fax 7/08; and (4) contained an “opt out” notice stating, “If you
don’t want us to contact you by fax, please call 1-800-U-CAN-ASK,” or “If you
don’t want us to contact you by fax, please call 1-888-4-ASSIST.”
[290] at 2. To certify the proposed class Plaintiff must satisfy, by a preponderance
of the evidence, the enumerated elements of Rule 23(a) and one subsection of Rule
23(b). As explained below, Plaintiff’s TCPA claim is amenable to class treatment,
but the proposed class is too broad.
1.

Rule 23(a) Requirements

The four Rule 23(a) requirements are numerosity, commonality, typicality
and adequacy of representation. Arreola v. Godinez, 546 F.3d 788, 794 (7th Cir.
2008).
a)

Numerosity

The numerosity requirement of Rule 23(a)(1) is satisfied when the proposed
class is so numerous that joinder of all members of the class is impracticable, such
that “a class of forty is generally sufficient.” McCabe v. Crawford & Co., 210 F.R.D.
631, 643 (N.D. Ill. 2002).

Here, HDIC has stipulated that 25,232 faxes were

transmitted error-free to the proposed class.

[290] Ex. 21, ¶¶ 19-22.

Of that

number, 19,931 were transmissions of GN-Fax 4/08—identical to the Subject Faxes
here. Id. at ¶ 20. Therefore, Rule 23(a)(1)’s numerosity requirement is satisfied.
b)

Commonality

To meet the commonality requirement, Plaintiff must show that there are
“questions of law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). Even a

13

single common question of law or fact will do. Wal-Mart Stores, Inc. v. Dukes, 131
S. Ct. 2541, 2556 (2011). While the Rule speaks of “questions,” what matters for
class certification is the capacity of a classwide proceeding to generate “common
answers apt to drive the resolution of the litigation.” Wal-Mart Stores, 131 S. Ct. at
2551 (emphasis in original and internal quotations omitted); accord Chicago
Teachers Union, Local No. 1 v. Bd. of Educ. of City of Chicago, 797 F.3d 426, 436-38
(7th Cir. 2015). The “critical point” is “the need for conduct common to members of
the class.”

Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 756 (7th Cir. 2014)

(emphasis in original and internal quotations omitted).

Where the defendant’s

allegedly injurious conduct differs from plaintiff to plaintiff, no common answers are
likely to be found. Id.
Here, a class action likely will generate common answers to at least three
questions of fact and law, which are common to the proposed class and which will
drive the resolution of this case:
(1) Whether the Subject Faxes were “advertisements” within
the meaning of the TCPA;
(2) Whether HDIC was a “sender” of the Subject Faxes within
the meaning of the TCPA; and
(3) Whether HDIC’s putative violations of the TCPA were
performed “willfully or knowlingly,” such that the enhanced
relief under the TCPA is implicated.
Defendant only grapples with the first common question.

HDIC first

acknowledges that the Court previously determined that whether the Subject Faxes
amounted to “advertisements” was a disputed factual question. However, HDIC

14

suggests that the context in which each individual message was received will
necessarily impact this factual determination, such that the first question is not
susceptible to a common answer.

Not necessarily so.

As the Court originally

explained, “a jury could find that the faxes” contain “a sales pitch,” given “the
precise information included in the fax.” [189] at 17. This finding is not context
dependent; rather, this determination requires a single application of the law to
common facts, i.e., the content of the messages in question.
Defendant’s additional arguments regarding other ostensibly individual
questions implicated by Plaintiff’s proposed class are more properly considered as
part of the Court’s “superiority” analysis. In the end, Plaintiff has identified a
number of common questions, and those same questions are amenable to common
answers which will drive the resolution of this case.

That is all Rule 23(a)(2)

requires.
c)

Typicality 2

To satisfy the typicality requirement, Plaintiff must establish a congruence
between his claim and those of the unnamed class members sufficient to allow him
to litigate on behalf of the group. Fed. R. Civ. P. 23(a)(3). Generally, a claim is
typical if it “arises from the same event or practice or course of conduct that gives
rise to the claims of the other class members,” and it is based upon the same legal
theory. Oshana, 472 F.3d at 514 (internal quotations omitted). Although there may
be factual distinctions between the claims of the named representatives and those of
Given our substantive rejection of Defendant’s mootness argument supra, we similarly reject
Defendant’s argument that Plaintiff is atypical of the proposed class insofar as he is subject to a
unique mootness defense not applicable to the class.
2

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other class members, the former’s claims must share the “same essential
characteristics as the claims of the class at large.” Muro v. Target Corp., 580 F.3d
485, 492 (7th Cir. 2009) (internal quotations omitted).
Plaintiff summarily concludes that because “HDIC acted consistently toward
the entire class and all claims, including Plaintiff’s, are based on the same legal
theory,” the “typicality requirement is satisfied.”

[290] at 30.

Defendant

alternatively argues that “plaintiff’s claim is not typical of the potential claims of
the recipients of faxes other than the one he has identified as having been received
by his fax machine.” [319] at 14. Defendant’s position best reconciles governing
precedent to the facts of this case.
Plaintiff’s proposed class captures 18 other faxes which he never received.
[290] at 2. This is not a marginal variation in the same course of conduct. There
are simply no connections in this record between Plaintiff and these 18 other
messages.

Claims related to these 18 other messages do not share the “same

essential characteristics” with Plaintiff’s claims, as the subject messages have
different content, were sent at different times, and were sent to different parties.
Muro, 580 F.3d at 492. Indeed, most of these other faxes were not even the subject
of discovery in this (long-running) litigation.
Plaintiff’s proposed class is a bridge too far. His claims are typical of those
held by other recipients of the Subject Faxes. However, Plaintiff’s claims are not
typical of the claims held by recipients of the other 18 messages that he never
received.

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d)

Adequacy

To satisfy the adequacy requirement, Plaintiff must show that he will fairly
and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a)(4).

In

assessing adequacy, this Court must determine whether Plaintiff has: (1)
antagonistic or conflicting claims with other members of the class; (2) a sufficient
interest in the outcome of the case to ensure vigorous advocacy; and (3) counsel who
is competent, qualified, experienced and able to vigorously conduct the litigation.
See Streeter v. Sheriff of Cook County, 256 F.R.D. 609, 613 (N.D. Ill. 2009).
Defendant’s only argument on this point is that Plaintiff is not an adequate
representative insofar as he is subject to a unique mootness defense.

See C.E.

Design Ltd. v. King Architectural Metals, Inc., 637 F.3d 721 (7th Cir. 2011) (“The
presence of even an arguable defense peculiar to the named plaintiff or a small
subset of the plaintiff class may . . . bring into question the adequacy of the named
plaintiff’s representation.”). Here again, given the foregoing substantive rejection of
Defendant’s mootness defense, this point is unavailing.
The Court further finds based upon its own independent review that Plaintiff
has satisfied his burden on this score.

Plaintiff has demonstrated a sufficient

interest in resolution of these claims by participating in discovery, he has no claims
which are antagonistic to those of the class as a whole, and he has selected
experienced and capable class counsel.

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2.

Rule 23(b)(3) Requirements

Here, Plaintiff moves to certify a class under Rule 23(b)(3), so he must show:
(1) that issues common to the class members predominate over questions affecting
only individual members; and (2) that a class action is superior to other available
adjudication methods.

See Messner v. Northshore University HealthSystem, 669

F.3d 802, 811 (7th Cir. 2012).
a)

Predominance

There “is no mathematical or mechanical test for evaluating predominance.”
Messner, 669 F.3d at 814. Ultimately, the predominance requirement tests whether
the

proposed

class

is

“sufficiently

cohesive

to

warrant

adjudication

by

representation.” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623 (1997). The
predominance requirement, although similar to questions of commonality and
typicality, is more demanding than either of those Rule 23(a)(2) requirements. Id.
at 623-24.

The requirement “is satisfied when common questions represent a

significant aspect of a case and can be resolved for all members of a class in a single
adjudication.”

Stampley v. Altom Transport, Inc., No. 14-cv-3747, 2015 WL

5675095, at *6 (N.D. Ill. Sept. 24, 2015) (internal quotation omitted). Or, “to put it
another way, common questions can predominate if a common nucleus of operative
facts and issues underlie the claims brought by the proposed class.” Id. (internal
quotation omitted).

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Defendant identifies eight questions which purportedly require individual
answers, such that common questions do not predominate. The first four of these
are:
(1) For every fax transmission, an investigation must be made
into whether the party to whom it was sent is the fax machine’s
owner. If not, the owner must be identified because, under the
law currently governing this case, owners of fax machines have
standing.
(2) For every fax transmission, an investigation must be made
into whether persons other than the owner retrieved and read
the fax and were annoyed, distracted and inconvenienced
because, under the law currently governing this case, such
persons may have a TCPA claim.
(3) [F]or every person who retrieved and read the fax, and was
“annoyed, distracted and inconvenienced,” a determination must
be made as to whether that person was in the “protected zone of
interest” and whether the “annoyance, distraction and
inconvenience” reached an actionable level.
(4) For each owner and retriever/reader, a determination must
be made as to whether that person was acting in his or her
individual capacity, or on behalf of a corporate or other entity. A
determination then must be made as to whether the person,
individually, or the corporation is the proper party to assert the
claim.
[319] at 21-22.

These points are more accurately characterized as concerns

regarding the “ascertainability” of the class.

As a

procedural matter,

ascertainability is an element of the “superiority” inquiry, at least in this circuit.
See Mullins v. Direct Digital, LLC, 795 F.3d 654, 664 (7th Cir. 2015). Moreover, as
discussed infra pursuant to Court’s superiority analysis, a plaintiff does not need to
establish a reliable and administratively feasible way to identify all those who fall
within the purported class at the class certification stage. Id. These concerns may
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be valid, but they should be addressed through case management techniques, not
summary denial of class certification. Id.
(5) If two or more persons have a claim for the same fax, this
Court has ruled that the $500 recovery must be allocated among
them. Thus, for every fax transmission for which two or more
persons have a claim, a determination must be made as to how
to allocate that sum.
[319] at 22. This concern similarly puts the cart before the horse. It has “long been
recognized that the need for individual damages determinations at [some later
stage of] the litigation does not itself justify the denial of certification.” Mullins,
795 F.3d at 664 (citing Schleicher v. Wendt, 618 F.3d 679, 685 (7th Cir. 2010) (“The
possibility that individual hearings will be required for some plaintiffs to establish
damages does not preclude certification.”)). So long as HDIC is eventually “given
the opportunity to challenge each class member’s claim to recovery during the
damages phase, the defendant’s due process rights are protected.” Id. (internal
citation omitted).
(6) If HDIC’s pending petition with the FCC is granted and
HDIC is extended a waiver from the requirement of specific optout language on faxes sent with the permission of the
recipient . . . for every fax transmitted, a determination will
need to be made as to whether the recipient claims to have
revoked the permission he extended in his agency contract with
Humana companies (as plaintiff apparently contends he did
in this case).
(7) If the United States Court of Appeals for the District of
Columbia Circuit rules in Bais Yaakov of Spring Valley v. FCC
that opt-out language is not required on faxes sent with the
permission of the recipient, then again whether or not the
recipient consented to the fax will become pertinent. Then, for
every fax transmitted, a determination will need to be made
as to whether the recipient claims to have revoked the
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permission he extended in his agency contract with Humana
companies.
[319] at 23. Neither of these potential complications has come to pass, and such
hypothetical concerns can be addressed through the case management process if
and when they actually manifest.
(8) If the United States Supreme Court rules in Spokeo, Inc. v.
Robins that an injury in fact must be sustained for an individual
to have a statutory claim under the Fair Credit Reporting Act,
then, HDIC submits, that principle will apply to claims brought
under the TCPA. Thus, for every fax transmitted, a
determination will need to be made as to whether the owner
sustained an injury in fact, or whether he did not sustain such
an injury because he allowed others to use his machine. This
Court also will need to determine whether retriever/readers
were sufficiently annoyed, distracted, and inconvenienced to the
extent they sustained an “injury in fact” sufficient to give them
standing to pursue a TCPA claim.
[319] at 24. Defendant’s concern here is misplaced, as Spokeo, Inc. v. Robins, 136 S.
Ct. 1540 (2016), simply does not impact the Court’s predominance analysis. To
understand why necessitates a brief overview of that decision.
The plaintiff in Spokeo alleged that defendant had violated the Fair Credit
Reporting Act (“FCRA”), 15 U.S.C. § 1681, by publishing information about him
which was incorrect. Id. at 1544. Defendant claimed that because plaintiff had not
suffered an “injury-in-fact,” he lacked standing. Id. The Supreme Court initiated
its analysis by reaffirming the principle that Article III’s “injury-in-fact” standard
requires a plaintiff to plead an injury which is both “particularized” and “concrete.”
Id. The Court affirmed the Ninth Circuit’s conclusion that plaintiff had alleged a
“particularized” injury by virtue of his allegation that defendant had reported

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incorrect information about him specifically.

Id. at 1548 (“For an injury to be

particularized, it must affect the plaintiff in a personal and individual way.”)
(internal quotation omitted).
The Court found, however, that the Ninth Circuit had not adequately
addressed the question of whether plaintiff’s injury was “concrete.” Id. at 1548.
The Supreme Court further explained that to be “concrete” an injury must be “real”
and not “abstract.” Id. While “tangible injuries are perhaps easier to recognize . . .
intangible injuries can nevertheless be concrete.”

Id. at 1549.

In determining

whether an intangible injury is concrete, the Court identified two factors: (1)
whether in “historical practice” the “alleged intangible harm has a close
relationship to a harm that has traditionally been regarded as providing a basis for
a lawsuit” and (2) the “judgment” of Congress, since “Congress is well positioned to
identify intangible harms that meet minimum Article III requirements.”
1549.

Id. at

In the FRCA context specifically, the Court held that “Congress plainly

sought to curb the dissemination of false information by adopting procedures
designed to decrease that risk.” Id. at 1550.
Spokeo’s particular guidance on Article III standing has limited impact on
this case. Here, Plaintiff and each member of the as-modified class received the
same fax and was ostensibly injured thereby. Their allegations flow from their
individual receipt of the fax, and they have accordingly alleged a sufficiently
“particularized” injury.

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Plaintiff’s injuries (and those of the putative class) are also “concrete.” As a
preliminary matter, the alleged injuries are tangible.

Plaintiff alleges that the

Subject Faxes occupied his fax line and machine, used his toner and paper, and
wasted his time.

Am. Compl. [32] ¶30.

The Seventh Circuit has previously

recognized that injuries of this sort confer standing.

See Chapman v. Wagener

Equities, Inc., 747 F.3d 489, 491 (7th Cir. 2014); Ira Holtzman, C.P.A. v. Turza, 728
F.3d 682, 684 (7th Cir. 2013).
The same result obtains when Plaintiff’s ostensible injuries are analyzed
under the “intangible” rubric. A claim under the TCPA for unwanted fax messages
has a basis in “historical practice” insofar as it is roughly analogous to a claim at
common law for conversion. See Palm Beach Golf Ctr.-Boca, Inc. v. John G. Sarris,
D.D.S., P.A., 781 F.3d 1245, 1260 (11th Cir. 2015) (plaintiff’s factual allegations
regarding unwanted faxes sufficient to make out claim for both TCPA violation and
common law conversion).

The consideration regarding Congressional judgment

similarly suggests that Plaintiff’s injuries are concrete. After all, Congress enacted
the TCPA’s restrictions on unwanted faxes “to protect citizens from the loss of the
use of their fax machines during the transmission of fax data.” Id.
In short, the concerns identified by Defendant are largely abstract,
immaterial, or better addressed by prudent case management. On the other hand,
class treatment will provide common answers to questions that are universally
faced by putative class members. See supra at 14. Accordingly, these common
questions predominate over any individual issues.

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b)

Superiority

The superiority requirement under Rule 23(b)(3) requires Plaintiff to show
that a class action is superior to other available methods for fairly and efficiently
adjudicating the controversy. Fed. R. Civ. P. 23(b)(3). A class action is superior
when, as here, “the judicial economy from consolidation of separate claims
outweighs any concern with possible inaccuracies from their being lumped together
in a single proceeding for decision by a single judge or jury.” Mejdrech v. Met-Coil
Systems Corp., 319 F.3d 910, 911 (7th Cir. 2003).
Defendant’s primary argument regarding superiority is that identification
and administration of the class would be difficult. As mentioned supra, Defendant’s
concerns regarding ascertainability are misplaced. Under binding Seventh Circuit
precedent, the Court is compelled to address these administrative concerns through
case management techniques. See Mullins, 795 F.3d at 664. As a practical matter,
this particular administrative concern is also mitigated by the fact that discovery
has yielded a list of all the fax numbers which received messages designated GNFax 4/08, like the Subject Faxes here. [285] Ex. 21, ¶ 20. This spreadsheet should
substantially reduce the administrative burden on the parties, and if that burden
nevertheless proves too cumbersome in practice, the Court is free to fashion
remedial procedures in the future.
The administrative burden here also pales in comparison to the potential
benefits. Indeed, class treatment is routinely recognized as the superior method of
adjudicating mass TCPA violations, for the obvious reason that many TCPA

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plaintiffs are unlikely to pursue their claims on an individual basis. See Physicians
Healthsource, Inc. v. Doctor Diabetic Supply, LLC, No. 12-22330, 2014 WL 7366255,
at *9 (S.D. Fla. Dec. 24, 2014) (“Congress expressly created the TCPA as a ‘bounty’
statute to increase the incentives for private plaintiffs to enforce the law.”); see also
Mullins, 795 F.3d at 664 (in many cases in which the class composition is difficult to
ascertain “there is realistically no other alternative to class treatment”); 7A Charles
Alan Wright et al., Federal Prac. & Proc. § 1780 (3d ed. 2005) (“If judicial
management of a class action, no matter what its dimensions may be, will reap the
rewards of efficiency and economy for the entire system . . . then the individual
judge should undertake the task. Ironically, those Rule 23(b)(3) actions requiring
the most management may yield the greatest pay-off in terms of effective dispute
resolution.”).
Plaintiff’s case is the quintessential dispute that will, as a practical matter,
proceed only if it receives class treatment.

Resolving these claims via class

treatment is superior to not addressing the claims at all because of potential
administrative difficulties.

See Mullins, 795 F.3d at 663 (reiterating that our

superiority inquiry is “comparative”).

The Court accordingly finds that the

superiority requirement has been satisfied.
3.

The Composition Of The Class

Having concluded that Plaintiff’s TCPA claim is amenable to class treatment,
the Court must resolve two additional questions that impact the final parameters of
the class.

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a)

The New Agency Contracts

Defendant argues that if a class is certified, it must necessarily be defined to
exclude those agents and agencies that received amended agency contracts in the
summer of 2015. [319] Ex. A. These contracts became effective on either August 1,
2015, or 30 days after the date the agent was provided notice of the new agency
contracts, whichever was later.

Id.

The contracts contained, inter alia, an

arbitration clause, a class action waiver, and consent to receive “advertisements,” as
that term is used in the TCPA. Id. These amended agency agreements were issued
long after this case was filed, but Defendant nevertheless failed to inform the
recipients that they were potential plaintiffs in a pending action. Id. Defendant’s
attempt to subvert the integrity of the class certification process is not well taken.
The Supreme Court has long recognized that because “of the potential for
abuse, a district court has both the duty and the broad authority to exercise control
over a class action and enter appropriate orders governing the conduct of counsel
and parties.” Gulf Oil Co. v. Bernard, 452 U.S. 89, 100 (1981). As Plaintiff correctly
notes, courts have repeatedly used this authority to bar or invalidate class action
waivers and arbitration clauses procured from potential class members who were
not provided adequate notice of the pending action. See, e.g., Piekarsi v. Amedisys
Illinois, LLC, 4 F. Supp. 3d 952, 956 (N.D. Ill. 2013) (court invalidated an
arbitration agreement sent to putative class members and required defendant to
send out a corrective notice); In re Currency Conversion Fee Antitrust Litigation,
361 F. Supp. 2d 237, 254 (S.D.N.Y. 2005) (communication of an arbitration

26

agreement to putative class members held misleading where defendant omitted the
“critical information,” including that there was ongoing litigation and that “by
failing to reject the arbitration clause, they were forfeiting their rights as potential
plaintiffs”).
At bottom, the agencies and agents that executed these agreements did not
(and could not) have understood that they might be forfeiting their ability to
participate in this case, because HDIC did not inform them of the pending collective
action. HDIC’s oversight is particularly troubling given the long pendency of this
case and the tenacity with which it has been litigated.

The Court rejects

Defendant’s attempt to use such agreements to bar potential plaintiffs from the
class, at least for the purposes of this preliminary certification decision.

This

conclusion, like all findings at the preliminary certification stage, is subject to
appropriate revision as needed.
b)

Only Those Who Were Also Sent The Subject
Faxes

As explained supra, Plaintiff only received the Subject Faxes, which were
designated GN-Fax 4/08. Plaintiff nevertheless seeks to certify a class containing
recipients of 18 other messages he did not receive. This is untenable. Plaintiff’s
claims are not “typical” of claims held by recipients of messages he never saw. This
litigation is also not the superior method of adjudicating claims concerning
messages never received by Plaintiff. Accordingly, the class certified today will be
defined via reference to the GN-Fax 4/08 only.

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IV.

Conclusion
Defendant’s Motion To Dismiss For Lack Of Subject Matter Jurisdiction

Under FRCP 12(b)(1) [323] is denied. Defendant’s Motion For Leave To File Eighth
and Ninth Affirmative Defenses [281] is denied as moot. Plaintiff’s Motion For
Class Certification [290] is granted in part and denied in part.
This Court certifies the following class:
All persons or entities who were successfully sent one or more faxes
during the period from May 2007 through September 2008 that: (1)
named “Humana Specialty Benefits” or “HumanaDental” on the
bottom of the fax; (2) referred to, referenced, or discussed
“HumanaDental” dental plans; (3) contained the following designationGN-Fax 4/08; and (4) contained an “opt out” notice stating, “If you don’t
want us to contact you by fax, please call 1-800-U-CAN-ASK,” or “If
you don’t want us to contact you by fax, please call 1-888-4-ASSIST.”
The Court designates Plaintiff Lawrence S. Brodsky as the class
representative.

The Court appoints Brian J. Wanca of Anderson + Wanca and

Phillip A. Bock of Bock & Hatch, LLC as class counsel.
Dated: September 29, 2016

Entered:

____________________________
John Robert Blakey
United States District Judge

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