St. Louis Heart Center, Inc. v. Athenahealth, Inc. et al
MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Defendant's motion to stay is GRANTED. (Doc. No. 41 .) This case is STAYED until such time as the United States Court of Appeals for the District of Columbia Circuit issues a decision in Bais Ya akov of Spring Valley v. FCC ("Bais Yaakov"), No. 14-1234. IT IS FURTHER ORDERED that, during the stay, (1) the parties shall preserve all potentially relevant evidence, and (2) the parties shall promptly notify the Court and opposing cou nsel upon learning that any witness with discoverable information will be unavailable for any reason, so that the witness's deposition may be taken to preserve his or her testimony. IT IS FURTHER ORDERED that within seven (7) days following t he United States Court of Appeals for the District of Columbia Circuit's ruling in Bais Yaakov, Defendant shall file an appropriate motion as to lifting of the stay. The Court shall set a case management conference upon lifting of the stay. IT IS FURTHER ORDERED that this case shall be deemed closed for statistical. purposes only, subject to reopening upon lifting of the stay herein imposed or other appropriate Order. Signed by District Judge Audrey G. Fleissig on May 27, 2016. (BRP)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
ST. LOUIS HEART CENTER, INC.,
ATHENAHEALTH, INC., et al.,
MEMORANDUM AND ORDER
This matter is before the Court on the motion (Doc. No. 41) of Defendant
Athenahealth, Inc. (“Defendant”) to stay this putative class action. After careful
consideration, the Court will grant Defendant’s motion.
Plaintiff claims in this putative class action that Defendant violated a regulation,
47 C.F.R. § 64.1200(a)(4), promulgated by the Federal Communication Commission
(“FCC”) under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, by
faxing Plaintiff advertisements that did not have an opt-out notice. Plaintiff’s proposed
class definition includes recipients of both unsolicited faxes and faxes sent with consent
that did not display the opt-out notice required by this FCC regulation. Defendant asks
the Court to stay this action pending resolution of a consolidated appeal before the United
States Court of Appeals for the District of Columbia Circuit, captioned Bais Yaakov of
Spring Valley v. FCC (“Bais Yaakov”), No. 14-1234, which challenges the validity of the
FCC regulation at issue as applied to faxes sent with consent.1 Defendant asserts that the
outcome of Bais Yaakov will greatly impact this case because there is substantial
evidence that the faxes in question were sent with consent. In support of this assertion,
Defendant has offered the sworn declaration of its director of event marketing, Maria
Chow, attesting that the faxes in question were dinner seminar invitations that were sent
by third-party contractor Voice Teleservices, subject to Defendant’s protocol. Chow
states that Defendant’s protocol required a Voice Teleservices representative to contact
potential attendees by phone and to send an invitation by fax only where the person
indicated on the call a preference to receive the document by fax and provided a fax
number. Chow attaches to her declaration the script that Defendant provided to Voice
Teleservices to use for calls to potential attendees. The script reflects that the Voice
Teleservices representative must ask whether the potential attendee would like more
information about the seminar, and if so, whether he or she preferred to receive that
information by email or fax. The script includes a space for the representative to record
the potential attendee’s response and, if provided, his or her fax number.
Defendant previously moved to stay this case on two alternative grounds: one
pending the United States Supreme Court’s decision in Campbell-Ewald Co. v. Gomez,
No. 14-857, regarding whether a putative class action may be mooted by an offer of
complete relief to the named plaintiff, and the other pending resolution of Defendant’s
petition before the FCC seeking a waiver with respect to the regulation discussed above.
The Court granted the stay on the first ground only, without prejudice to Defendant’s
refiling on the second ground upon lifting of the stay following a decision in CampbellEwald. Following the Supreme Court’s ruling in Campbell-Ewald on January 20, 2016,
the Court lifted the stay. Defendant’s waiver petition was denied by the FCC without
appeal, but Defendant subsequently retained new counsel and filed the current motion to
stay based on the consolidated appeal challenging the validity of the FCC regulation in
Defendant argues that a stay is in accordance with the suggestion by the Eighth
Circuit Court of Appeals in Nack v. Walburg, 715 F.3d 680 (8th Cir. 2013), wherein the
Eighth Circuit held that the Administrative Orders Review Act (“Hobbs Act”), 28 U.S.C.
§ 2342 et seq., precluded it from hearing challenges to the FCC regulation at issue other
than on appeals arising from agency proceedings, and instructed that on remand, the
district court “may entertain any requests to stay proceedings for pursuit of administrative
determination of the issues raised.” Nack, 715 F.3d at 687. As Defendant correctly
notes, following Nack, courts in this District have consistently stayed similar TCPA cases
pending the resolution of FCC proceedings now consolidated on appeal in Bais Yaakov.
See, e.g., Nack v. Walburg, No. 4:10CV00478 AGF, 2013 WL 4860104, at *1-2 (E.D.
Mo. Sept. 12, 2013); St. Louis Heart Ctr., Inc. v. Gilead Palo Alto, Inc., No. 4:13–CV–
958–JAR, 2013 WL 5436651, at *1-2 (E.D. Mo. Sept. 27, 2013); St. Louis Heart Ctr.,
Inc. v. The Forest Pharm., Inc., No. 4:12CV02224 JCH, 2013 WL 3988671, at *1 (E.D.
Mo. July 17, 2013).
In opposition to the motion to stay, Plaintiff argues that Defendant has not met its
burden of establishing that the faxes in question were sent with consent; that a stay would
be contrary to Federal Rule of Civil Procedure 23(c)(1)(A) requiring a decision on class
certification at an “early practicable time”; that a stay should not be granted because
Defendant is not a party to Bais Yaakov; and that there is at least a “fair possibility” of
prejudice to Plaintiff with regard to the loss of evidence.
In support of its first argument, Plaintiff asserts that “at least two courts” have
denied similar motions to stay where the defendant failed to establish consent. But
neither of these cases persuades the Court to deny a stay here. In the first case, the
defendant had “not proffered any evidence” in support of its assertion that the faxes in
question were sent with consent. Around the World Travel, Inc. v. Unique Vacations,
Inc., No. 14-CV-12589, 2014 WL 6606953, at *4 (E.D. Mich. Nov. 19, 2014) (emphasis
added). In the second case, the plaintiff’s proposed class definition encompassed only
unsolicited faxes. True Health Chiropractic Inc. v. McKesson Corp., No. 13-CV-02219JST, 2014 WL 6707594, at *2 (N.D. Cal. Nov. 25, 2014). By contrast, in this case,
Plaintiff’s proposed class definition undisputedly encompasses faxes sent with consent,
and Defendant has provided evidence of consent. Defendant need not prove consent at
this stage. But Defendant has offered enough evidence of consent to persuade the Court
that a ruling in Bais Yaakov is likely to impact this case.
Plaintiff’s other arguments against a stay are also without merit. The Court agrees
with Defendant that Rule 23(c)(1)(A)’s “at an early practicable time” language actually
relaxes the timetable for class certification from the previous standard of “as soon as
practicable,” in recognition of the “many valid reasons that may justify deferring the
initial certification decision.” Fed. R. Civ. P. 23(c)(1)(A) advisory committee’s note to
2003 amendment. Indeed, a ruling in Bais Yaakov on the validity of the FCC regulation
as applied to faxes sent with consent is likely to impact the class certification decision in
this case significantly, particularly with regard to whether common issues exist and
predominate. And Defendant need not be a party to Bais Yaakov for the case to have an
impact. The procedural path taken by the parties in Bais Yaakov will result in a “uniform,
nationwide interpretation” of the TCPA, Nack, 715 F.3d at 686—an interpretation that
will be highly relevant to this case. Finally, the Court does not believe that Plaintiff will
be unduly prejudiced by a stay, particularly because the Court will continue to require the
parties to preserve all potentially relevant evidence during the stay and to promptly notify
the Court and opposing counsel upon learning that any witness with discoverable
information will be unavailable for any reason, so that the witness’s deposition may be
taken and his or her testimony preserved.
For the reasons set forth above,
IT IS HEREBY ORDERED that Defendant’s motion to stay is GRANTED.
(Doc. No. 41.) This case is STAYED until such time as the United States Court of
Appeals for the District of Columbia Circuit issues a decision in Bais Yaakov of Spring
Valley v. FCC (“Bais Yaakov”), No. 14-1234.
IT IS FURTHER ORDERED that, during the stay, (1) the parties shall preserve
all potentially relevant evidence, and (2) the parties shall promptly notify the Court and
opposing counsel upon learning that any witness with discoverable information will be
unavailable for any reason, so that the witness’s deposition may be taken to preserve his
or her testimony.
IT IS FURTHER ORDERED that within seven (7) days following the United
States Court of Appeals for the District of Columbia Circuit’s ruling in Bais Yaakov,
Defendant shall file an appropriate motion as to lifting of the stay. The Court shall set a
case management conference upon lifting of the stay.
IT IS FURTHER ORDERED that this case shall be deemed closed for statistical
purposes only, subject to reopening upon lifting of the stay herein imposed or other
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 27th day of May, 2016.
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