Sandusky Wellness Center, LLC v. Medtox Scientific, Inc. et al

Filing 214

ORDER denying 195 Motion for Summary Judgment; granting 199 Motion for Summary Judgment (Written Opinion). Signed by Senior Judge David S. Doty on 1/27/2015. (PJM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 12-2066(DSD/HB)
Sandusky Wellness Center LLC,
a Ohio limited liability company,
individually and as the
representative of a class of
similarly-situated persons,
Plaintiff,
ORDER

v.
Medtox Scientific, Inc.,
Medtox Laboratories, Inc. and
John Does 1-10,
Defendants.

Glen L. Hara, Esq. and Anderson & Wanca, 3701 Algonquin
Road, Suite 760, Rolling Meadows, IL 60008; Brant D.
Penney and Reinhardt, Wendorf & Blanchfield, 332
Minnesota Street, Suite E-1250, St. Paul, MN 55101,
counsel for plaintiff.
Robert I. Steiner, Esq. and Kelley, Drye &
101 Park Avenue, New York, NY 10178 and
Mulder, Esq. and Bassford Remele, PA, 33
Street, Suite 3800, Minneapolis, MN 55402
defendants.

Warren LLP,
Jeffrey R.
South Sixth
counsel for

This matter is before the court upon the cross motions for
summary

judgment

by

plaintiff

Sandusky

Wellness

Center,

LLC

(Sandusky) and defendants Medtox Scientific, Inc., and Medtox
Laboratories, Inc. (collectively, Medtox).

Based on a review of

the file, record, and proceedings herein, and for the following
reasons, the court grants Medtox’s motion and denies Sandusky’s
motion.

BACKGROUND
This dispute under the Telephone Consumer Protection Act
(TCPA) arises from an unsolicited facsimile advertisement sent to
Sandusky by Medtox on February 21, 2012.

The background of this

action is fully set out in the court’s previous order dated August
5, 2014, and the court recites only those facts necessary for
disposition of the instant motion.
On February 21, 2012, Medtox sent a facsimile to Sandusky’s
fax number.

See Lang Decl. Ex. 1.

advertises lead testing services.

It is undisputed that the fax
Id.

The fax did not have a

cover sheet and did not identify its intended recipient.

See id.

The record shows, however, that Medtox intended to send the fax to
Dr. Bruce Montgomery, a non-party who worked out of Sandusky’s
office, but was not a Sandusky employee.
22:10.

Montgomery Dep. 21:24-

Dr. Montgomery used Sandusky’s fax number for business

purposes.

Id.

at

43:13-44:12.

Sandusky’s

owner,

Greg

Winnestaffer, reviewed the fax, as was his practice, and forwarded
it to his attorney because he believed that it constituted an
unsolicited advertisement in violation of the TCPA.

Winnestaffer

Dep. 76:12-14, 78:8-80:10, 81:17-21, 127:5-11; 74:16-75:12, 128:11129:2, 130:3-9.
On August 23, 2012, Sandusky filed a putative class action
complaint,

alleging

§ 227(b)(1)(C).

a

violation

of

the

TCPA,

47

U.S.C.

On May 8, 2013, Medtox made a settlement offer,

2

including payment by check, to Sandusky in the amount of $3,500.
See Lang Decl. Ex. 7, ECF No. 205.

The offer included a promise

not to “send another facsimile to plaintiff in the future unless
plaintiff specifically requests that Medtox do so.”

Id.

Medtox’s

offer did not, however, address or include class-wide relief.
id.

See

On May 9, 2013, Medtox filed a motion to dismiss, arguing that

because it offered Sandusky complete relief on its individual
claim, Sandusky no longer had a personal stake in the outcome of
the litigation, thereby rendering the action moot.

The court

denied the motion, concluding that because the offer did not
provide class-wide relief, the offer did not moot the action.
No. 59, at 6.

ECF

Medtox then made an offer of judgment under Fed. R.

Civ. P. 68 to Sandusky, this time including relief for the class as
a whole.

Lang Decl. Ex. 8.

On August 5, 2014, the court denied Sandusky’s motion for
class certification and granted Medtox’s motion to limit the case
to the February 21, 2012, facsimile.1

Both parties now file

motions for summary judgment.

1

The Eighth Circuit denied Sandusky’s petition under Rule
23(f) for permission to immediately appeal the denial of class
certification. See ECF No. 193.
3

DISCUSSION
I.

Standard of Review
“The court shall grant summary judgment if the movant shows

that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”

Fed. R. Civ.

P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
A fact is material only when its resolution affects the outcome of
the case.
(1986).

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

A dispute is genuine if the evidence is such that it could

cause a reasonable jury to return a verdict for either party.

See

id. at 252.
On a motion for summary judgment, the court views all evidence
and inferences in a light most favorable to the nonmoving party.
See id. at 255.

The nonmoving party, however, may not rest upon

mere denials or allegations in the pleadings but must set forth
specific facts sufficient to raise a genuine issue for trial.
Celotex, 477 U.S. at 324.

See

A party asserting that a genuine dispute

exists — or cannot exist — about a material fact must cite
“particular parts of materials in the record.”
56(c)(1)(A).

Fed. R. Civ. P.

If a plaintiff cannot support each essential element

of a claim, the court must grant summary judgment because a
complete

failure

of

proof

regarding

an

necessarily renders all other facts immaterial.
at 322-23.

4

essential

element

Celotex, 477 U.S.

II.

Settlement Offer
Medtox argues that the case should be dismissed as moot

because, now that the court has denied class certification, the
settlement offer provides complete relief to Sandusky.

The court

agrees.
“[F]ederal courts do not sit simply to bestow vindication in
a vacuum.”

Zimmerman v. Bell, 800 F.2d 386, 390 (4th Cir. 1986).

“Article III of the Constitution only allows federal courts to
adjudicate actual, ongoing cases or controversies.”

Potter v.

Norwest Mortg., Inc., 329 F.3d 608, 611 (8th Cir. 2003).
The

case

interested

or

controversy

parties

requirement

vigorously

advocating

ensures

that

opposing

present issues “in a concrete factual setting.”

“self-

positions”

Id. (quoting

United States Parole Comm’n v. Geraghty, 445 U.S. 388, 403 (1980)).
“When an

action

no

longer

satisfies

the

case

or

controversy

requirement, the action is moot and a federal court must dismiss
the action.”
“Judgment

Id.
should

be

entered

against

a

putative

class

representative on a defendant’s offer of payment only where class
certification has been properly denied and the offer satisfies the
representative’s entire demand for injuries and costs of the suit.”
Alpern v. UtiliCorp United, Inc., 84 F.3d 1525, 1539 (8th Cir.
1996) (citations omitted); see also Harris v. Messerli & Kramer,
P.A., No. 06-CV-4961, 2008 WL 508923, at *2 (D. Minn. Jan. 2, 2008)

5

(“[A]s a general matter, a Rule 68 offer that provides complete
relief to the plaintiff renders the plaintiff’s claims moot, even
if the plaintiff refuses the offer.”); Zimmerman, 800 F.2d at 390
(“Since class certification has been denied, and defendant had
offered [plaintiff] the full amount of damages ... to which she
claimed individually to be entitled, there was no longer any case
or controversy.”).

Sandusky does not contest this principle, but

argues that Medtox’s offer was insufficient to render its stake in
the litigation moot.

The court disagrees.

First, the offer provides complete monetary relief to Medtox.
The $3,500 offer exceeds Sandusky’s possible statutory recovery of
$500

and

the

taxable

§ 227(b)(3)(B).

costs

it

has

incurred.2

47

U.S.C.

Sandusky concedes that it is not entitled to

recover attorney’s fees under the TCPA.
Second, the offer provides the equitable relief sought by
Sandusky, namely the promise to refrain from sending such faxes to
Sandusky in the future.
insufficient

because

injunctive relief.

it

Sandusky argues that the promise is
is

not

in

the form

court-ordered

Sandusky is concerned that it would have no

legal recourse should Medtox breach its promise.
unfounded.

of

This concern is

If Medtox sends an unsolicited fax advertisement to

2

Sandusky conceded at the hearing that it is not entitled to
treble damages under 47 U.S.C. § 227(b)(3).
Sandusky also
represented that it has incurred taxable costs in the amount of
$2,311.99. For purposes of its motion, Medtox does not dispute
that amount.
6

Sandusky in the future, Sandusky may sue under the TPCA and may
well be entitled to treble damages under such circumstances.

The

court nevertheless will include Medtox’s promise to refrain from
future solicitations in this order to ensure that Sandusky has
meaningful legal recourse in the context of this case.
The offer provides complete relief to Sandusky.

As a result,

dismissal of Sandusky’s claim is warranted as moot and the court
need not, and indeed is without jurisdiction to, address the merits
of Sandusky’s motion.

CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED:
1.

Plaintiff’s motion for summary judgment [ECF No. 195] is

denied; and
2.

Defendants’ motion for summary judgment [ECF No. 199] is

granted.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated:

January 27, 2015
s/David S. Doty
David S. Doty, Judge
United States District Court

7