Sowders v. Scratch Financial, Inc.
ENTRY and ORDER Granting, in Part, and Denying, in Part, 7 Defendant's Motion to Dismiss Plaintiff's Complaint or, Alternatively, to Strike Plaintiff's Class Allegations. Plaintiff shall be GRANTED leave to file an amended complaint consistent with the CONCLUSION Section of this Order.Signed by Judge Thomas M. Rose on 11/14/2023. (jdb)
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
ALICE SOWDERS, DVM d/b/a FAIRBORN
ANIMAL HOSPITAL, individually and as the
representative of a class of similarly-situated
Case No. 3:23-cv-56
Judge Thomas M. Rose
Magistrate Judge Peter B. Silvain, Jr.
SCRATCH FINANCIAL, INC.
ENTRY AND ORDER GRANTING, IN PART, AND DENYING, IN PART,
DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT OR,
ALTERNATIVELY, TO STRIKE PLAINTIFF’S CLASS ALLEGATIONS
(DOC. NO. 7)
Currently before the Court is Defendant’s Motion to Dismiss Plaintiff’s Complaint or,
Alternatively, to Strike Plaintiff’s Class Allegations (the “Motion”). (Doc. No. 7.) Plaintiff Alice
Sowders, DVM d/b/a Fairborn Animal Hospital (“FAH”) filed the instant Complaint (the
“Complaint”) against Defendant Scratch Financial, Inc. (“Scratch”) on behalf of itself and as the
representative of a class of similarly-situated persons (the “Putative Class”). (Doc. No. 1.) FAH
alleges a single cause of action arising under the “junk fax” provisions of the Telephone Consumer
Protection Act, 47 U.S.C. § 227(b)(1)(C) (the “TCPA”). (Id. at PageID 18-24.) In its Motion,
Scratch avers that, (a) FAH lacks standing to confer the Court with subject matter jurisdiction in
this action, and (b) FAH has failed to state a claim upon which relief may be granted. (Doc. No.
7 at PageID 81.) Alternatively, Scratch requests that the Court strike FAH’s class allegations.
(Id.) For the reasons set forth below, the Court GRANTS, IN PART, and DENIES, IN PART,
Scratch’s Motion. FAH shall be GRANTED leave to file an amended complaint within fourteen
(14) days of this Order.
This action arises from an allegedly unsolicited promotional fax that Scratch sent to FAH
in violation of the TCPA. (Doc. No. 1 at PageID 1-2.) FAH is a veterinary clinic operating in
Fairborn, Ohio. (Id. at PageID 4.) Scratch partners with veterinary offices and other medical
providers to offer patients and pet owners financing options for those professional services. (Id.
at PageID 5.)
Scratch acts as an intermediary between providers and prospective patients and pet owners.
(See id.) The Complaint alleges that Scratch offers patients and pet owners financing allowing
them to receive immediate care and pay Scratch in subsequent installments. (Id.) Additionally,
Scratch connects providers with prospective patients and pet owners in exchange for a percentage
of the providers’ fees. (Id.) Scratch ultimately markets itself to providers as a simple financing
solution that will help “grow revenues and reduce accounts receivable.” (Id.)
Scratch’s marketing strategy included sending promotional faxes to providers. (Id. at
PageID 6.) FAH received one such fax from Scratch on February 20, 2019, advertising Scratch’s
services. (Doc. No. 1-1.) However, FAH did not welcome Scratch’s promotional fax. (See Doc.
No. 1 at PageID 10-11.) To be sure, FAH alleges that, as a rule, it does not use its fax machine to
“send or receive advertising material.” (Id. at PageID 11.) Specifically regarding Scratch’s
promotional fax to FAH, FAH states that it had not previously done business with Scratch, nor did
FAH expressly consent to receive marketing materials from Scratch. (Id. at PageID 10-11.)
The advertisement included a conspicuous writing at the bottom of the page stating: “[t]o
‘UNSUBSCRIBE+[fax number]’ to firstname.lastname@example.org.”
(Doc. No. 1-1.)
immediately sent Scratch a return fax requesting that FAH be removed from Scratch’s fax list.
(Doc. No. 7-2.) FAH does not allege that it received any additional promotional faxes from
FAH insinuates that it was the recipient of a “bulk fax broadcast” by Scratch. (Id. at PageID
12.) The Complaint alleges that the header of Scratch’s promotional fax indicates that the fax was
sent to a potentially lengthy computerized list of veterinary offices and healthcare providers. (Id.)
As such, FAH has pled this case as a class action, utilizing the following class definition:
All persons and entities who were sent one or more facsimiles from Scratch
Financial, Inc., on or after February 20, 2019, containing any material advertising
the commercial availability or quality of Scratch’s property, goods, or services, and
not including the opt-out notice required by 47 U.S.C. § 227(b)(2)(D), but who did
not sign-up or register to do business with Scratch.
(Id. at PageID 13.)
FAH filed its Complaint on February 20, 2023, exactly four years after receiving Scratch’s
promotional fax, seeking statutory damages under the TCPA and injunctive relief for itself and the
Putative Class. (Doc. No. 1.) Scratch filed the instant Motion on May 11, 2023. (Doc. No. 7.)
FAH filed its response in opposition to Scratch’s Motion (the “Response”) (Doc. No. 8) on June
1, 2023, and Scratch timely filed its reply (Doc. No. 9). Thus, this matter is ripe for review and
STANDARD OF REVIEW
1. Subject Matter Jurisdiction
Rule 12(b)(1) motions to dismiss based upon subject matter jurisdiction generally fall into
one of two categories: facial attacks or factual attacks. Ohio Nat’l Life Ins. Co. v. United States,
922 F.2d 320, 325 (6th Cir. 1990). A facial attack questions the sufficiency of the pleading. Id.
In reviewing a facial attack, a trial court takes the allegations in the complaint as true. Id. If those
allegations adequately establish jurisdiction, then the court will find that jurisdiction exists. Gentek
Bldg. Prods., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007) (internal citations
omitted). In reviewing a factual attack, no presumptive truthfulness applies. Id.
A factual attack on subject matter jurisdiction has been commonly termed a “speaking
motion.” Id. (citing Ohio Nat’l Life Ins. Co., 922 F.2d at 325). When the facts regarding subject
matter jurisdiction create a factual controversy, the court must weigh the conflicting evidence to
determine whether subject matter jurisdiction exists. Id. “In its review, the district court has wide
discretion to allow affidavits, documents, and even a limited evidentiary hearing to resolve
jurisdictional facts.” Id. Because the issue in a factual attack is the court's jurisdiction, the
reviewing court may go beyond the pleadings and “weigh the evidence and satisfy itself as to the
existence of its power to hear the case.” United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994);
see also Anestis v. United States, 749 F.3d 520, 524 (6th Cir. 2014).
However, a court will engage in this factual inquiry “only when the facts necessary to
sustain jurisdiction do not implicate the merits of the plaintiff’s claim.” Gentek, 491 F.3d at 330
(citing Garcia v. Copenhaver, Bell & Assocs., 104 F.3d 1256, 1261 (11th Cir. 1997)). If a factual
attack on subject matter jurisdiction implicates the merits of the plaintiff’s claim, “the district court
should ‘find that jurisdiction exists and deal with the objection as a direct attack on the merits of
the plaintiff’s claim.’” Id. (internal citations omitted) (emphasis in original). This subjects the
party posing a factual attack on a court’s subject matter jurisdiction to the standards of Fed. R. Civ.
P. 12(b)(6) and/or Fed. R. Civ. P. 56. Id.
The party asserting jurisdiction has the burden of proof. Thomson v. Gaskill, 315 U.S. 442,
446 (1942); Glob. Tech., Inc. v. Yubei (XinXiang) Power Steering Sys. Co., 807 F.3d 806, 810 (6th
Cir. 2015). This burden must be satisfied by a preponderance of the evidence. Wright v. United
States, 82 F.3d 419 (6th Cir. 1996).
2. Failure to State a Claim
“The purpose of a Rule 12(b)(6) motion to dismiss is to allow a defendant to test whether,
as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint
is true.” Bihn v. Fifth Third Mortg. Co., 980 F. Supp. 2d 892, 897 (S.D. Ohio 2013) (citing Mayer
v. Mylod, 988 F. 2d 635, 638 (6th Cir. 1993)). Moreover, the purpose of the motion is to test the
formal sufficiency of the statement of the claim for relief. Id. “[F]or the purposes of a motion to
dismiss, the complaint must be construed in the light most favorable to the plaintiff and its
allegations taken as true.” Id. (citing Scheuer v. Rhodes, 416 U.S. 232 (1974)).
To survive a 12(b)(6) motion to dismiss, a plaintiff must provide more than labels and
conclusions; a formulaic recitation of the elements of a cause of action is not enough. Bell
Atlantic v. Twombly, 550 U.S. 544, 545 (2007). The factual allegations must be enough to raise
a right to relief above the speculative level and must also do something more than merely create
a suspicion of a legally cognizable right. Id. A court is not bound to accept as true a legal
conclusion couched as factual allegation or draw unwarranted factual inferences. Id. at 555; see
also Ashcroft v. Iqbal, 556 U.S. 662 (2009); Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12
(6th Cir. 1987). In sum, only well-pleaded facts are construed liberally in favor of the party
opposing the motion to dismiss. Lillard v. Shelby Cnty. Bd. of Educ., 76 F. 3d 716, 726 (6th Cir.
3. Motion to Strike Class Allegations
Federal class actions must be brought in accordance with Fed. R. Civ. P. 23. Progressive
Health & Rehab Corp. v. Quinn Med., Inc. 323 F.R.D. 242, 244 (S.D. Ohio 2017). To successfully
proceed with a class action, plaintiffs must demonstrate that:
(1) the class is so numerous that joinder of all members is impracticable; (2) there
are questions of law or fact common to the class; (3) the claims or defenses of the
representative parties are typical of the claims or defenses of the class; and (4) the
representative parties will fairly and adequately protect the interests of the class.
Id. (quoting Fed. R. Civ. P. 23(a)). “Plaintiffs must also show that the class action falls into at
least one of the three categories set forth by Rule 23(b).” Id. (citing Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. 338, 345 (2011)).
There are two procedural mechanisms that a court may use to strike class allegations from
a plaintiff’s complaint. See Carmouche v. A1 Diabetes Med. Supply, Inc., 586 F. Supp. 3d 795,
799 (W.D. Tenn. 2022). First, a court may strike class allegations from a complaint pursuant to
Fed. R. Civ. P. 12(f) if the allegations concern a “‘redundant, immaterial, impertinent, or
scandalous matter.’” Id. (quoting Fed. R. Civ. P. 12(f)). Second, a party may request that the court
strike class allegations from the plaintiff’s complaint on the grounds that the prerequisites of Fed.
R. Civ. P. 23(a) and (b) cannot possibly be satisfied. Id. (quoting Schilling v. Kenton Cnty., Ky.,
No 10-143-DLB, 2011 U.S. Dist. LEXIS 8050, at *12, 2011 WL 293759, at *4 (E.D. Ky. Jan 27,
2011)) (“nothing in Rule 23 prevents a defendant from attempting to preemptively deny
certification on the grounds that Rule 23(a) and (b) can never be satisfied”).
Generally, “courts should exercise caution when striking class action allegations based
solely on the pleadings . . ..” Progressive Health, 323 F.R.D. at 244-45 (internal citations and
quotation marks omitted). A court’s determination to strike class allegations “generally involves
considerations that are enmeshed in the factual and legal issues comprising the plaintiff’s cause of
action.” Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982) (internal citations and quotation
marks omitted). To this end, some courts review motions to strike class allegations taking all wellpled allegations as true and construing the allegations in the light most favorable to the plaintiff,
as when reviewing a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). Eldridge v. Cabela’s,
Inc., No. 3:16-cv-536-DJH, 2017 U.S. Dist. LEXIS 160427, at *24, 2017 WL 4364205, at *7
(W.D. Ky. Sept. 28, 2017). Although, the burden of proving that Fed. R. Civ. P. 23 has been
satisfied remains with the plaintiff. Progressive Health, 323 F.R.D. at 245 (internal citations
As an initial matter, the Court notes that it must consider jurisdictional issues before
addressing more substantive challenges. Amacher v. Tennessee, No. 3:21-cv-638, 2022 U.S. Dist.
LEXIS 7567, at *5, 2022 WL 141607, at *2 (M.D. Tenn. Jan. 13, 2022) (citing In re: 2016 Primary
Election, 836 F.3d 584, 587 (6th Cir. 2016)). Further, “a challenge to a plaintiff’s standing under
Article III of the Constitution is a challenge to subject matter jurisdiction.” Id. (quoting Tennessee
Gen. Assembly v. U.S. Dep’t of State, 931 F.3d 499, 507 (6th Cir. 2019)).
Therefore, for purposes of deciding the present Motion, the Court will first address the
challenges to FAH’s standing. The Court will then consider whether FAH has stated a claim upon
which relief may be granted and whether it is appropriate to strike the class allegations of FAH’s
Standing is a doctrine of limitation “rooted in the traditional understanding of a case or
controversy.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). The doctrine defines a court’s
authority to hear a case and the “category of litigants empowered to maintain a lawsuit . . ..” Id.
(citing Valley Forge Christian Coll. v. Americans United for Separation of Church & State, Inc.,
454 U.S. 464, 473 (1982); Warth v. Seldin, 422 U.S. 490, 498-99 (1975)).
It is well settled that to establish standing a party invoking a federal court’s jurisdiction
must satisfy three elements. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). Accordingly,
such a party must show that she “(1) suffered an injury in fact, (2) that is fairly traceable to the
challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial
decision.” Spokeo, 578 U.S. at 338 (citing Lujan, 504 U.S. at 560-61; Friends of the Earth, Inc.
v. Laidlow Env’t. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000)).
i. Facial Challenge
To start, Scratch contends that FAH’s complaint does not plead sufficient facts to establish
standing. (Doc. No. 7 at PageID 93.) In particular, Scratch argues FAH has failed to allege any
concrete and particularized injury that the company itself “actually suffered.” (Id. at PageID 94.)
In response, FAH posits that alleging its receipt of a single unsolicited fax advertisement from
Scratch sufficiently demonstrates an injury in fact to survive Scratch’s facial challenge here. (Doc.
No. 8 at PageID 119-21.)
The Supreme Court has defined an injury in fact as an injury that is both “concrete and
particularized,” and “actual or imminent.” Lujan, 504 U.S. at 560 (internal citations and quotation
marks omitted). “For an injury to be particularized, it must affect the plaintiff in a personal and
individual way.” Spokeo, 578 U.S. at 339 (internal citations and quotation marks omitted); Valley
Forge, 454 U.S. at 472 (“... Art. III requires the party who invokes the court’s authority to show
that [s]he personally has suffered some actual or threatened injury . . .” (emphasis added)) (internal
citations and quotation marks omitted). In the simplest terms, an alleged injury “must actually
exist” to be considered concrete. Spokeo, 578 U.S. at 340.
The most easily identifiable concrete harms will involve “physical or monetary injury to
TransUnion LLC v. Ramirez, 594 U.S. ---, 141 S.Ct. 2190, 2204 (2021).
Nevertheless, intangible harms may likewise be considered concrete under the right circumstances.
Id. (citing Spokeo, 578 U.S. at 340-41). The Supreme Court has held that intangible harms are
likely concrete where they bear a “close relationship to harms traditionally recognized as providing
a basis for lawsuits in American courts.” Id. Specifically included in these types of intangible
harms are traditional injuries such as “reputational harms, disclosure of private information, and
intrusion upon seclusion.” Id. (internal citations omitted).
By way of its constitutional lawmaking authority, Congress may create new causes of
action where none previously existed. Spokeo, 578 U.S. at 341 (quoting Lujan, 504 U.S. at 578)
(“Thus we said in Lujan that Congress may ‘elevat[e] to the status of legally cognizable injuries
concrete, de facto injuries that were previously inadequate at law’”). “Courts must afford due
respect to Congress’s decision” to enact a statute establishing a private cause of action.
TransUnion, 141 S.Ct. at 2204. However, an injury will not be made concrete simply because
Congress says so. Id. at 2205; Hagy v. Demers & Adams, 882 F.3d 616, 622 (6th Cir. 2018) (“We
know of no circuit court decision since Spokeo that endorses an anything-hurts-so-long-asCongress-says-it-hurts theory of Article III injury”). For instance, a plaintiff cannot establish
standing where she alleges “a bare procedural violation.” Spokeo, 578 U.S. at 341 (citing Summers
v. Earth Island Inst., 555 U.S. 488, 496 (2009)). To illustrate this point in TransUnion, the
Supreme Court offered the following hypothetical:
Suppose first that a Maine citizen’s land is polluted by a nearby factory. She sues
the company, alleging that it violated a federal environmental law and damaged her
property. Suppose also that a second plaintiff in Hawaii files a federal lawsuit
alleging that the same company in Maine violated that same environmental law by
polluting land in Maine. The violation did not personally harm the plaintiff in
TransUnion, 141 S.Ct. at 2205.
The TCPA is one such statute that establishes a cognizable right of action where one did
not exist before. Imhoff Inv., LLC v. Alfoccino, Inc., 792 F.3d 627, 733 (6th Cir. 2015). In essence,
“the TCPA promotes an ‘interest in seclusion,’” the intrusion upon which bears a close relationship
to harms traditionally recognized in American courts. Id. (quoting Owners Ins. Co. v. Eur. Auto
Works, Inc., 695 F.3d 814, 820 (8th Cir. 2012); TransUnion, 141 S.Ct. at 2204 (citing Gadelhak
v. AT&T Servs., Inc., 950 F.3d 458, 462 (7th Cir. 2020)) (intrusion upon seclusion). Further, with
respect to unsolicited promotional faxes, the TCPA seeks to provide a remedy for the harms –
tangible and intangible – associated with such unsolicited faxes. Am. Copper & Brass, Inc. v. Lake
City Indus. Prods., Inc., 757 F.3d 540, 544 (6th Cir. 2014) (citing Ira Holtzman, C.P.A. v. Turza,
728 F.3d 682, 684 (8th Cir. 2013)) (“unsolicited fax advertisements impose costs on all recipients,
irrespective of ownership and the cost of paper and ink, because such advertisements waste the
recipients’ time and impede the free flow of commerce”). As such, when a plaintiff alleges that
she has received an unsolicited promotional fax, she has alleged a particularized and concrete
injury under the TCPA. Imhoff, 792 F.3d at 631 (finding a concrete and particularized injury where
named plaintiff only received two unsolicited promotional faxes).
In the current action, FAH has adequately alleged an injury in fact to establish standing.
As stated above, Scratch argues that FAH’s Complaint fails to allege an injury that it “actually
suffered.” (Doc. No. 7 at PageID 94.) However, FAH’s Complaint specifically alleges that FAH
itself received an unsolicited fax advertisement from Scratch which resulted in real costs and
infringed upon FAH’s privacy interests. (Doc. No. 1 at PageID 23.) In short, FAH has alleged a
personal (i.e., particularized) injury. What’s more, FAH has adequately alleged a concrete injury
in this case. The Court finds that the Complaint clearly frames FAH’s injury as an intrusion upon
its seclusion. Per the Supreme Court, such an intrusion is a concrete intangible harm bearing a
close relationship to traditional harms recognized in American courts. Therefore, FAH has
sufficiently alleged an injury in fact and Scratch’s facial challenge is denied.
ii. Factual Challenge
The Court turns next to Scratch’s factual challenge to subject matter jurisdiction. Scratch
submits that FAH lacks standing to bring this action because, as a matter of fact, FAH has suffered
no injury at all under the TCPA. (Doc. No. 7 at PageID 88.) To support this factual challenge,
Scratch has provided the declaration of its Vice President of Sales, Neil Stanga, to demonstrate
that FAH provided consent to receive Scratch’s promotional fax. (Doc. No. 7-1.) Additionally,
Scratch asserts that, regardless of FAH’s consent, Scratch and FAH had an existing business
relationship (“EBR”) within the meaning of the TCPA. (Doc. No. 7 at PageID 90-93.) FAH
counters, arguing that Scratch’s factual challenge here is improper. (Doc. No. 8 at PageID 115.)
It contends that Scratch’s factual challenge attacks the merits of FAH’s claim and, therefore, must
be construed under Rule 12(b)(6). (Id.)
Courts have generally been instructed to “assume jurisdiction when statutory standing and
merits questions converge.” Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 443-44 (6th Cir. 2006)
(citing Bell v. Hood, 327 U.S. 678, 681-82 (1946)). As a rule, “[t]he question of subject matter
jurisdiction and the merits will normally be considered intertwined where the [same] statute
provides both the basis of federal court subject matter jurisdiction and the cause of action.” Id.
(quoting Eubanks v. McCotter, 802 F.2d 790, 793 (5th Cir. 1986)) (internal citations and quotation
marks omitted). When standing and the merits of a plaintiff’s claim are so intertwined, courts are
encouraged to “find that jurisdiction exists and deal with the objection as a direct attack on the
merits.” Gentek, 491 F.3d at 330 (internal citations and quotation marks omitted). At the pleading
stage, this requires courts to consider a party’s factual challenge under Rule 12(b)(6). Id.
Here, the Court finds that Scratch’s factual challenge relies on purported facts which are
intertwined with the merits of FAH’s claim under the TCPA. Consider Scratch’s assertion that
consent to receive the promotional fax at issue deprives FAH of standing. (Doc. No. 7 at PageID
88-90.) Under the junk fax provisions of the TCPA, promotional faxes must be unsolicited to
violate the statute. 47 U.S.C. § 227(b)(1)(C). As a matter of common sense, an act cannot be
unsolicited if it was consented to. For the Court to consider whether FAH provided consent in this
case, the Court must necessarily rule on the merits of FAH’s claim. The same is true with respect
to Scratch’s contention that Scratch and FAH had an EBR under the TCPA. EBRs constitute a
statutory exception to the general rule of the TCPA’s junk fax provisions. 47 U.S.C. §
227(b)(1)(C)(i). An individual has no claim under the TCPA if she had an EBR with the sender
of a fax and the sender otherwise complies with the statute. The Court cannot consider whether
the Parties here had an EBR without addressing the merits of FAH’s claim. Therefore, the Court
must consider Scratch’s factual challenge here pursuant to the standards of Rule 12(b)(6)
To this end, the Court is unpersuaded by Scratch’s argument. Scratch would have the Court
determine that FAH consented to receiving Scratch’s promotional facts and, if not, that the Parties
had an EBR as set forth in the TCPA. (Doc. No. 7 at PageID 88-93.) Yet, this is directly
contradictory to the allegations of the Complaint. (Doc. No. 1 at PageID 10-11.) Accepting the
well-pled allegations of the Complaint as true, the Court thus disregards Scratch’s contradictory
allegations at the pleading stage of these proceedings. Scratch submits no arguments based on the
face of the Complaint to support a finding of consent or an EBR here. Accordingly, Scratch’s
factual challenge to standing is denied.
iii. Injunctive Relief
To close the page on standing, the Court must determine whether FAH possesses standing
to seek injunctive relief under the TCPA. Scratch avers that FAH has failed to allege it is likely
to be harmed again by Scratch’s fax advertisements in the future. (Doc. No. 7 at PageID 94-95.)
FAH offers no response to this argument. Instead, FAH appears to rest on its request for injunctive
relief in the Complaint. (Doc. No. 1 at PageID 25.)
A plaintiff will only have standing to request injunctive relief where she can demonstrate
“continuing, present adverse effects” traceable to the conduct of a defendant. Steel Co. v. Citizens
for a Better Env’t., 523 U.S. 83, 109 (1998) (quoting O’shea v. Littleton, 414 U.S. 488, 495-96
(1974)) (“Past exposure to illegal conduct does not in itself show a present case or controversy
regarding injunctive relief . . . if unaccompanied by any continuing, present adverse effects”)
(internal quotation marks omitted). At present, FAH has only alleged that it received a single
unsolicited fax advertisement from Scratch in 2019. (Doc. No. 1 at PageID 1-2.) FAH makes no
mention of a continuing harm to itself or the Putative Class. FAH does summarily state that
“Plaintiff receives unsolicited advertisements on its fax machine.” (Id. at PageID 11.) However,
FAH provides no additional allegations that would allow the Court to infer any ongoing harm in
violation of the TCPA by Scratch. Hence, FAH lacks standing to seek injunctive relief in this
2. Failure to State a Claim
Moving on, the Court now addresses whether FAH has properly stated a claim upon which
relief may be granted. Scratch argues that FAH has not pled sufficient facts to establish that it
received Scratch’s fax advertisement through the proper medium. (Doc. No. 7 at PageID 95.)
Specifically, Scratch contends that FAH’s TCPA claim fails because FAH did not receive
Scratch’s unsolicited fax “on a traditional standalone fax machine over a regular telephone line.”
FAH responds with two arguments. First, FAH argues that Scratch’s Motion calls on the
Court to impermissibly draw factual inferences in Scratch’s favor. (Doc. No. 8 at PageID 121.)
Second, FAH disagrees with Scratch’s interpretation of the TCPA to require that unsolicited
promotional faxes be received on a traditional standalone fax machine. (Id. at PageID 122.)
To resolve this issue, courts may rely on the plain language of the TCPA. American
Copper, 757 F.3d at 544 (citing 47 U.S.C. § 227(b)(1)(C)). The TCPA prohibits the “use [of] any
telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine,
an unsolicited advertisement.” 47 U.S.C. § 227(b)(1)(C).
The key requirement of the statute is that the signal sending any unsolicited fax must be
received over a telephone line. Lyngaas v. Ag, 992 F.3d 412, 426 (6th Cir. 2021). Such faxes
include faxes received on a standalone fax machine as well as electronic faxes received via efax
line or a computer so long as they are transmitted in “end-to-end communication.”1 Id. at 427
(internal citations and quotations marks omitted). However, emails and messages received on an
online fax server will not fall within the ambit of the TCPA. Id. To illustrate the difference, faxes
that are routed to a recipient’s computer or efax folder utilize a telephone line and impose burdens
on recipients that the TCPA seeks to remedy. Id. By contrast, messages sent via email or delivered
to an online fax server originate over the internet rather than a telephone line. Id.
With this understanding, Scratch’s argument here is unavailing. In the Complaint, FAH
clearly alleges that it received Scratch’s promotional fax on its “fax machine.” (See Doc. No. 1 at
PageID 11.) FAH makes no mention of a fax server or email. Although it would not be fatal,
FAH also does not muddy the waters here by suggesting that it received Scratch’s fax via electronic
fax. Instead, a glance at the fax, attached to the Complaint, that FAH received indicates that
Scratch’s promotional fax was transmitted through a telephone line to a telephone number
The Court notes that the Federal Communications Commission may promulgate developments in this area of the
law. See e.g., In the Matter of Amerifactors Fin. Grp., LLC, 34 F.C.C.R. 11950, 11953 (F.C.C. Dec. 9, 2019).
However, the FCC continues to reconsider its decision in Amerifactors on an application for review. Therefore, the
Court will not integrate Amerifactors into this analysis.
presumably belonging to FAH. (Doc. No. 1-1.) Thus, drawing all inferences in the light most
favorable to FAH, the Court finds that FAH has adequately stated a claim under the TCPA.
3. Class Allegations
Finally, the Court turns its attention to Scratch’s alternative motion to strike the class
allegations contained in the Complaint. As a practical matter, the Court finds that Scratch has
made no assertion that FAH’s class allegations contain any redundant, immaterial, impertinent, or
Therefore, the Court will base its determination here on whether the
requirements of Rule 23 can be satisfied under the class allegations as pled.
In the Complaint, FAH alleges in part that common questions of law or fact predominate
over any individual questions amongst the Putative Class. (Doc. No. 1 at PageID 14.) Scratch
argues that this cannot be. (See Doc. No. 7 at PageID 97.) In short, Scratch submits that questions
regarding consent and potential EBRs are individualized inquiries that will necessarily
predominate over questions common to the Putative Class. (Id. at PageID 97-100.) FAH argues
that Scratch’s motion to strike here relies on speculation rather than the face of the Complaint.
(Doc. No. 8 at PageID 125.)
Class allegations rooted in Rule 23(b)(3) must establish, in pertinent part, that “questions
of law or fact common to the class members predominate over any questions affecting only
Fed. R. Civ. P. 23(b)(3).
Common questions must be “subject to
generalized proof” such that they are applicable to the entire class. Sandusky Wellness Ctr., LLC
v. ASD Specialty Healthcare, Inc., 863 F.3d 460, 468 (6th Cir. 2017) (quoting Bridging Cmtys.,
Inc. v. Top Flite Fin., 843 F.3d 1119, 1124 (6th Cir. 2016)) (internal quotation marks omitted).
“‘If the same evidence will suffice for each [class] member to make prima facie showing,’” then
there is a common question. Id. (quoting Sandusky Wellness Ctr., LLC v. Medtox Sci., Inc., 821
F.3d 992, 998 (8th Cir. 2016)).
To determine whether common questions predominate, courts search for “substantive
issues that will control the outcome” of the case at bar. Id. (quoting Gene & Gene, LLC v. BioPay,
LLC, 541 F.3d 318, 326 (5th Cir. 2008)) (internal quotation marks omitted).
predominance does not require that every element of a claim be subject to class wide proof.
Bridging Cmtys., 843 F.3d at 1124 (quoting Amgen, Inc. v. Conn. Ret. Plans & Tr. Funds, 568
U.S. 455, 467-68 (2013)). Further, that a potential defense may “affect different class members
differently” does not defeat allegations of predominance. Id. at 1125 (quoting Young v. Nationwide
Ins. Co., 693 F.3d 532, 544 (6th Cir. 2012) (internal quotation marks omitted). Courts have refused
to entertain such speculative defenses “[e]ven where defendants point to some evidence that a
defense will indeed apply to some class members.” Id. (citing Young, 693 F.3d at 544; Beattie v.
CenturyTel, Inc., 511 F.3d 554, 564 (6th Cir. 2007); In re HCA Holdings, Inc., No. 14-0511, 2015
U.S. App. LEXIS 3015, at *5, 2015 WL 10575861, at *2 (6th Cir. 2015)).
Here, the Court finds that the Complaint sufficiently alleges predominance with respect to
the TCPA claim at issue. FAH clearly sets forth a conclusive list of common questions that
allegedly predominate in this class action. (Doc. No. 1 at PageID 15-16.) The fact that Scratch
identifies possible defenses that could affect individual members of the Putative Class differently
is immaterial, particularly at this stage of the litigation. Moreover, if Scratch can later point to
individualized defenses in this case, the Court can then utilize “procedural mechanisms” to prune
the class. Bridging Cmtys., 843 F.3d at 1126. Although, the Court will not entertain the merits of
Scratch’s potential individualized defenses at the pleadings stage. See e.g., Sandusky, 863 F.3d at
465 (allowing discovery before addressing issues of individualized defenses). Accordingly, the
Court will not strike FAH’s class allegations on this ground.2
Scratch next argues that FAH’s proposed class definition is impermissibly overbroad and
therefore facially uncertifiable. (Doc. No. 7 at PageID 100.) Substantively, Scratch contends that
the proposed class definition will inevitably include individuals who did not receive fax
advertisements on a traditional fax machine over a phone line. (Id.) Scratch also argues that the
proposed class definition is overbroad because it will include members who consented to receive
promotional faxes from Scratch. (Id. at PageID 100-101.)
Conversely, FAH again disagrees with Scratch’s interpretation of the TCPA’s junk fax
provisions to require that unsolicited fax advertisements must be received on a traditional fax
machine. (Doc. No. 8 at PageID 127.) FAH further argues that to include consent in the proposed
class definition would run contrary to relevant case law on the subject. (Id.) Specifically, FAH
states that including consent in the proposed class definition here would transform the Putative
Class into an impermissible “fail safe” class. (Id.)
The Court agrees with FAH on this issue. Scratch’s overbreadth arguments are largely
recycled from its previous arguments made throughout the Motion, which the Court has already
found to be lacking. The Court finds it unnecessary to reiterate its analyses here. Nonetheless, the
Court does acknowledge that the issue of overbreadth may be raised again in this case after some
factual development. At such time, the Court would reserve the authority to exclude members of
The Court will strike FAH’s allegedly common question pertaining to injunctive relief (Doc. No. 1 at PageID 16),
as the Court has already found that FAH lacks standing to seek injunctive relief in this matter.
In a footnote, Scratch suggests that the Putative Class definition is overbroad because it does not specify that it is
limited to persons or entities in the United States. (Doc. No. 7 at PageID 101, fn. 11.) Without any additional
argument, the Court finds this contention to be without merit and disregards the putative argument for purposes of this
Entry and Order.
the Putative Class as needed. Bridging Cmtys., 843 F.3d at 1126 (“[the Court] can place class
members with potentially barred claims in a separate subclass or exclude them from the class
altogether”) (internal citations and quotation marks omitted).
iii. “Fail-Safe” Class
Nevertheless, the Court does find that FAH’s proposed class definition creates an
impermissible fail-safe class. The Parties themselves to not substantively argue that the proposed
class definition in the Complaint does or does not constitute a fail-safe class.
offhandedly states that the proposed class definition is not an impermissible fail-safe class because
the class is not defined solely by members who have a viable claim under the TCPA. (Doc. No. 8
at PageID 127.)
Briefly, fail-safe classes are classes that only include members who are entitled to relief.
Progressive Health, 323 F.R.D. at 245 (quoting Randleman v. Fid. Nat. Title Ins. Co., 646 F.3d
347, 352 (6th Cir. 2011)). This is to say, membership in the class is predicated on having a
successful claim. Id. Such fail-safe classes are impermissible because it is impossible to ascertain
who its members are until judgment is rendered. Sauter v. CVS Pharmacy, Inc., No. 2:13-cv-846,
2014 U.S. Dist. LEXIS 63122, at *23, 2014 WL 1814076, at *9 (S.D. Ohio May 7, 2014).
In the context of the TCPA’s junk fax provisions, the Southern District of Ohio has
identified proposed class definitions that will constitute impermissible fail-safe classes. See
Swetlic Chiropractic Rehab Ctr. v. Foot Levelers, Inc., 235 F. Supp. 3d 882, 891 (S.D. Ohio 2017).
In Swetlic, the court found that a proposed class definition including persons who received an
unsolicited fax “which did not display a proper opt-out notice” was an impermissible fail-safe
class. Id. Yet, at the early stages of litigation, courts have permitted plaintiffs to amend their
proposed class definition to remedy this issue. Id. (citing Sauter, 2014 U.S. Dist. LEXIS 63122,
at *23, 2014 WL 1814076, at *9) (internal citations omitted).
In the instant Complaint, FAH has submitted a class definition that renders the Putative
Class an impermissible fail-safe class. FAH’s proposed class definition expressly includes parties
who received an unsolicited fax “not including the opt-out notice required by 47 U.S.C. §
227(b)(2)(D).” (Doc. No. 1 at PageID 13.) The Court acknowledges that the opt-out notice
requirements of the TCPA would not be wholly dispositive of the Putative Class’s claims. But the
issue of whether Scratch included a statutorily compliant opt-out notice on its promotional faxes
is deeply enmeshed in the merits of FAH’s class allegations. Therefore, the Court will strike
FAH’s proposed class definition as an impermissible fail-safe class. Though, at this early stage of
the proceedings, the Court will afford FAH the opportunity to file an Amended Complaint
consistent with this analysis.
Based on the foregoing, the Court GRANTS, IN PART, and DENIES, IN PART,
Defendant’s Motion to Dismiss Plaintiff’s Complaint or, Alternatively, to Strike Plaintiff’s Class
Allegations (Doc. No. 7) and finds the following:
1. FAH has sufficiently pled an injury in fact to satisfy standing in this action with
respect to its claims for statutory damages.
2. FAH has stated a claim upon which relief may be granted.
3. FAH does not have standing to seek injunctive relief under the junk fax provisions
of the TCPA.
4. The Court hereby STRIKES FAH’s proposed class definition as an impermissible
5. FAH shall be GRANTED leave to file an amended complaint within fourteen (14)
days of this Order.
DONE and ORDERED in Dayton, Ohio, this Tuesday, November 14, 2023.
s/Thomas M. Rose
THOMAS M. ROSE
UNITED STATES DISTRICT JUDGE
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