Physicians Healthsource, Inc. v. A-S Medication Solutions LLC et al

Filing 455

ORDER DENYING DEFENDANTS' MOTION FOR STAY, signed by the Honorable Matthew F. Kennelly on 8/2/2020: The Court denies defendants' motion for a stay pending appeal 448 for the reasons stated in this order. (mk)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

PHYSICIANS HEALTHSOURCE, INC., )
)
Plaintiff,
)
)
vs.
)
)
A-S MEDICATION SOLUTIONS
)
LLC, et al.,
)
)
Defendants.
)

Case No. 12 C 5105

ORDER DENYING DEFENDANTS' MOTION TO STAY
The $5.7 million judgment in this class action was affirmed on appeal, see
Physicians Healthsource, Inc. v. A-S Medication Solutions LLC, 950 F.3d 959 (7th Cir.
2020), and the case then came back before this Court to distribute the judgment
amount. Defendants argued that no one should get a distribution without first
completing a claim form; that there should be no second distribution to class members
of unclaimed funds; and that defendants should get back any unclaimed funds rather
than having them distributed to a cy pres designee.
The defendants' first argument was concluded by the judgment and the appeal.
The Court had previously overruled a similar argument, and the court of appeals did not
disturb this on appeal. Thus the first argument was not even properly before the Court
(and was not sufficiently supported in any event). The Court therefore rejected it.
The Court agreed with the defendants' first argument. It concluded that a second
distribution might result in class members getting more than the statutory maximum
recovery of $500 and concluded this would be inappropriate.

On the third argument, the Court declined to order a cy pres distribution of
unclaimed funds but overruled defendants' request that they should get back any part of
the judgment amount. (In contrast to most other situations in which a reversion
sometimes may be appropriate, this case was resolved by a judgment against the
defendants, not by a settlement.) Instead, the Court determined that any unclaimed
funds would escheat to the government.
The Court adopted the following schedule: distribution of notice of the judgment
within 14 days; 35 days after that for class members to update their addresses or turn
down payment; 30 days after that for the judgment administrator to distribute checks;
and 42 days after that for plaintiff and the judgment administrator to file a report
regarding unclaimed funds. Under this schedule, there would be no occasion for even
considering the mechanism of escheat for a period of about four months.
Defendants have now appealed, and they have requested a stay. As plaintiffs
point out, the Court's order was not a judgment—that happened a few years ago—and
thus defendants are not entitled to any sort of an automatic stay under Rule 62(b) or
otherwise.
On the merits of defendants' request, the Court notes that this case is already
over eight years old, and the defendants' illegal facsimile transmissions program
predates that. People change or terminate phone numbers, and for fax numbers this is
even more likely given the creeping obsolescence of facsimile transmission. Thus
every month that passes likely adds to the amount of funds that will remain unclaimed
and thus to the number of victims of defendants' unlawful program who will go
uncompensated. A reasonable person looking at the history of the case—particularly

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the more recent part of its history—could conclude that this, hand-in-glove with
defendants' insistence on a reversion, is a hoped-for result of further delays and thus of
a stay. The longer defendants can drag this out, the more funds are likely to be
available for their hoped-for reversion.
Even without this, there is no appropriate basis to delay the distribution of the
judgment to the class members. The only objection asserted by defendants after the
appeal—that there should be a claim form—is not properly before this Court, or any
court. The Court rejected defendants' argument for a claim form before defendants
appealed. Physicians Healthsource, Inc. v. A-S Med. Sols., LLC, No. 12 C 5102, 2018
WL 6179094, at *2 (N.D. Ill. Nov. 27, 2018). In affirming the judgment, the court of
appeals did not disturb this ruling. Thus defendants' renewed insistence on a claim
form amounts to a request to amend or vacate the judgment, which defendants never
properly sought (and still have not). This point is no basis for a stay. The claimants
who can be found should get the compensation that they were adjudged to be entitled
to, and they should get it now.
As for the rest of it, the only other issue currently in dispute between the parties
is what happens to unclaimed funds. No stay is needed for that, at least not at this time.
By definition, there will be no unclaimed funds until the judgment is distributed and the
administrator determines how much is left after a reasonable time for negotiating the
checks. If defendants' problem concerns escheat of the unclaimed funds, there will be
plenty of time four months from now to ask the Court for a stay of that aspect of the
distribution.
For these reasons, the Court denies defendants' motion for a stay pending

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appeal [448].
Date: August 2, 2020
________________________________
MATTHEW F. KENNELLY
United States District Judge

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