UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

PHYSICIANS HEALTHSOURCE, INC., an

Ohio corporation, individually and on behalf of

similarly situated persons,

Plaintiff, Case No. 12-cv-05105

v.

Hon. Joan B. Gottschall

Magistrate Judge Sheila M. Finnegan

A-S MEDICATION SOLUTIONS, LLC,

JAMES BARTA, WALTER HOFF and JOHN

DOES 1-10,

Defendants.

DEFENDANTS’ MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF’S

MOTION FOR CLASS CERTIFICATION

Eric L. Samore

Albert Bower

Yesha Hoeppner

SMITHAMUNDSEN LLC

150 N. Michigan Avenue #3300

Chicago, IL 60601

(312) 894-3251

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TABLE OF CONTENTS

I. INTRODUCTION ...................................................................................................1

II. BACKGROUND .....................................................................................................5

A. Allscripts, LLC.................................................................................................5

1. Products and Services .........................................................................5

2. Salesforce............................................................................................6

3. Fax Communication............................................................................6

4. Allscripts’s Practice Of Obtaining Consent Before Sending

Fax Advertisements .............................................................................8

B. A-S Medication’s Purchase Of Allscripts’s MSG .......................................9

C. A-S Medication Was A Continuation Of Allscripts’s MSG......................10

D. A-S Medication’s Practice Of Sending Fax Advertisements Only

To Its Customers, Allscripts’s Customers And Others Interested In

Receiving Faxes From It............................................................................12

E. Plaintiff’s Consent To Receive Faxes........................................................13

1. To Allscripts......................................................................................13

2. To A-S Medication ...........................................................................13

F. Putative Class Members’ Consent To Receive Faxes From

Allscripts And A-S Medication .................................................................14

G. The Fax At Issue ........................................................................................16

III. ARGUMENT.........................................................................................................18

A. Requirements For Class Certification............................................................18

B. Consent—the Predominant Issue—Must Be Resolved Individually

For Each Putative Class Member...................................................................20

C. The Retroactive Waiver Applies To The Faxes At Issue...............................25

IV. CONCLUSION......................................................................................................29

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TABLE OF AUTHORITIES

CASES

Aderhold v. Car2go N.A., LLC, No. C13-489RAJ, 2014 WL 794802

(W.D. Wash. Feb. 27, 2014) ........................................................................................22

Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689

(1997)...........................................................................................................................19

Baird v. Sabre, Inc., 995 F. Supp. 2d 1100 (N.D. Cal. 2014) aff'd, No. 14-55293,

2016 WL 424778 (9th Cir. Feb. 3, 2016) ................................................................3, 23

Bais Yaakov of Spring Valley v. Graduation Source, LLC, No. 14-CV-3232

(NSR), 2016 WL 1271693 (S.D.N.Y. Mar. 29, 2016)...........................................27, 28

Baisden v. Credit Adjustments, Inc., 813 F.3d 338 (6th Cir. 2016)...................................23

Chavez v. Advantage Group, 959 F. Supp. 2d 1279 (D. Colo. 2013)................................24

Fields v. Mobile Messengers Am., Inc., No. C 12-05160 WHA,

2013 WL 6073426, (N.D. Cal. Nov. 18, 2013) ...........................................................20

G.M. Sign, Inc. v. Brink's Mfg. Co., No. 09 C 5528, 2011 WL 248511

(N.D. Ill. Jan. 25, 2011) .....................................................................................4, 19, 20

General Telephone Co. of Southwest v. Falcon, 457 U.S. 147 (1982)..............................19

Harper v. Sheriff of Cook Co., 581 F.3d 511 (7th Cir.2009).............................................18

Jamison v. First Credit Servs., Inc., 290 F.R.D. 92 (N.D. Ill. 2013).............................4, 20

Kolinek v. Walgreen Co., No. 13 C 4806, 2014 WL 3056813

(N.D. Ill. July 7, 2014).......................................................................................3, 22, 23

New England Carpenters Health Benefits Fund v. First Databank, Inc.,

244 F.R.D. 79 (D.Mass.2007)......................................................................................19

Olney v. Job.com, Inc., 2014 WL 1747674 (E.D. Cal. May 1, 2014)......................3, 22, 23

Oshana v. Coca–Cola Co., 472 F.3d 506 (7th Cir.2006) ..................................................18

Physicians Healthsource, Inc. v. Stryker Sales Corp., 65 F. Supp. 3d 482

(W.D. Mich. 2014).......................................................................................................28

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Simon v. Healthways, Inc., No. CV1408022BROJCX, 2015 WL 10015953,

(C.D. Cal. Dec. 17, 2015) ..................................................................................5, 27, 28

Spring Valley v. Graduation Source, LLC, No. 14-CV-3232 (NSR), 2016 WL

1271693, (S.D.N.Y. Mar. 29, 2016) ..............................................................................5

Schwartz-Earp v. Advanced Call Ctr. Techs., LLC, No. 15-CV-01582-MEJ,

2016 WL 899149 (N.D. Cal. Mar. 9, 2016).................................................................23

Szabo v. Bridgeport Machs., Inc., 249 F.3d 672 (7th Cir.2001)........................................19

Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) ...................................................19

STATUTES, RULES AND REGULATIONS

Fed. R. Civ. P. 23(b)(3)....................................................................................................4, 5

OTHER AUTHORITIES

In re Rules and Regs. Implementing Tel. Consumer Protection Act of 1991,

23 FCC Rcd. 559 (Jan. 4, 2008).........................................................................................23

In re Rules and Regs. Implementing Tel. Consumer Protection Act of 1991,

27 FCC Rcd. 1830 (Feb. 15, 2012)....................................................................................23

In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act

of 1991, Junk Fax Prevention Act of 2005, 21 F.C.C. Rcd. 3787 (2006)..........................26

In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act

of 1991, 30 F.C.C. Rcd. 7961 (2015).................................................................................23

In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act

of 1991, 30 F.C.C. Rcd. 8598 (2015).............................................................................5, 26

In The Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act

of 1991, 29 F.C.C. Rcd. 13998 (2014)...............................................................................26

Matter of Groupme, Inc./skype Commc'ns S.A.R.l Petition for Expedited

Declaratory Ruling Rules & Regulations Implementing the Tel. Consumer Prot.

Act of 1991, 29 F.C.C. Rcd. 3442 (2014)......................................................................4, 24

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

PHYSICIANS HEALTHSOURCE, INC., an

Ohio corporation, individually and on behalf of

similarly situated persons,

Plaintiff, Case No. 12-cv-05105

v.

Hon. Joan B. Gottschall

Magistrate Judge Sheila M. Finnegan

A-S MEDICATION SOLUTIONS, LLC,

JAMES BARTA, WALTER HOFF and JOHN

DOES 1-10,

Defendants.

DEFENDANTS’ MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF’S

MOTION FOR CLASS CERTIFICATION

Defendants, A-S Medication Solutions, LLC (“A-S Medication”), LLC, James Barta, and

Walter Hoff (collectively, “Defendants”), by and through their attorneys, respectfully request

that this Court deny Plaintiff’s Motion for Class Certification (Dkt. ## 147, 147-1). In support of

their opposition, Defendants state as follows:

I. INTRODUCTION

Prior express consent—the predominant issue in this case—can only be resolved through

inquiry into the facts and circumstances of each individual putative class member’s consent to

receive fax advertisements. Where, as here, the relevant facts and circumstances establish that

consent must be resolved individually for each putative class member, class certification is

properly denied.

A-S Medication’s predecessor—Allscripts, LLC (“Allscripts”)—obtained prior express

consent from putative class members to send them fax advertisements. (See Transcript of Brian

Moffett’s 30(b)(6) Corporate Representative Deposition in Physicians Healthsource v. A-S

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Medications Solutions, et. al., (“Moffet A-S Dep.”), attached here to as Exhibit A, pp. 45-46;

125). When Allscripts obtained such consent, it marketed and sold a variety of healthcare-related

products and services, including electronic prescribing solutions, electronic medical records

software, and practice management software. (See Marketing Agreement, dated Mar. 16, 2009,

attached hereto as Exhibit B, pp. 1-2). At the time, Allscripts’s business also included a prepackaged medication solutions business group—the Medication Services Group (the “MSG”)—

that marketed and sold pre-packaged medications and related dispensing software. (See Asset

Purchase Agreement (“APA”), dated Mar. 2, 2009, attached hereto as Exhibit C, p. 6).

When the MSG was part of Allscripts, Allscripts’s centralized marketing and sales staff

marketed and promoted MSG’s products and services. (See Affidavit of John Gregory Cull

(“Cull Aff.”), attached hereto as Exhibit D, ¶ 3). This included occasionally sending faxes

advertising MSG’s products and services to Allscripts’s current and potential customers. (Id. ¶¶

3-4). Prior to sending any faxes, Allscripts obtained consent from its customers and potential

customers to send the fax advertisements. (Moffet A-S Dep., pp. 45-46; 125; Affidavit of Lindsey

Williams (“Williams Aff.”), attached hereto as Exhibit E, ¶¶ 2-3; Affidavit of Jeannine Oliver

(“Oliver Aff.”), attached hereto as Exhibit F, ¶¶ 2-3). The scope of the consent included faxes

advertising products and services sold by Allscripts, including products marketed and sold by

Allscripts’s MSG. (Id.).

A-S Medication is, for all practical purposes, a continuation of Allscripts’s MSG. In

March 2009, A-S Medication purchased all of the assets primarily used in Allscripts’s MSG

business and assumed substantially all of the liabilities of the business. (See APA, p. 5). A-S

Medication assumed MSG’s contractual obligations to prior MSG customers. (See, e.g., St. Louis

County Administration Letter, dated April 9, 2009, attached hereto as Exhibit G). And, MSG’s

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customers were directed to pay outstanding accounts receivable balances owed to MSG to A-S

Medication. (See Accounts Payable Letter, dated May 1999 [sic], attached hereto as Exhibit H).

As one former MSG customer explained, A-S Medication “appeared to me to be a continuation

of the same business.” (Oliver Aff., ¶ 7).

Because A-S Medication was a continuation of Allscripts’s MSG, the consent obtained

by Allscripts may be broad enough to encompass faxes sent by A-S Medication marketing the

same types of products and services previously offered by the MSG. Affidavits from putative

class members confirm that they considered their consent to be broad enough to include consent

to A-S Medication. (See, e.g., Oliver Aff., ¶ 7; Williams Aff., ¶¶ 2-5). As Ms. Oliver explained,

when [Oliver Family Health] provided its fax number to Allscripts, it agreed to

and consented to receive faxes from Allscripts regarding Allscripts’ products and

services. I considered the consent that I previously provided to Allscripts

extended to A-S Medications as it appeared to me to be a continuation of the same

business.

(Williams Aff., ¶ 7).

The putative class members’ affidavits confirm that, in this case, consent must be

resolved individually for each putative class member based on the purpose of the consent and the

context in which consent was provided. See Kolinek v. Walgreen Co., No. 13 C 4806, 2014 WL

3056813, at *4 (N.D. Ill. July 7, 2014)(“to the extent the FCC’s orders establish a rule, it is that

the scope of a consumer’s consent depends on its context and the purpose for which it is

given.”). Courts have recognized that consent can be broad enough to extend to third-parties.

See, e.g., Olney v. Job.com, Inc., 2014 WL 1747674, at *6 (E.D. Cal. May 1, 2014)(“[a]n

individual may indirectly provide a third-party with express consent to be called under the

TCPA.”); Baird v. Sabre, Inc., 995 F. Supp. 2d 1100, 1107 (N.D. Cal. 2014) aff'd, No. 14-55293,

2016 WL 424778 (9th Cir. Feb. 3, 2016) (plaintiff who voluntarily provided cell phone number

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to airline “consented to be contacted on her cellphone about flight-related matters,” and text

message sent by airline’s third-party vendor offering to provide flight information “fell within

the scope of her ‘prior express consent.’”). This is consistent with the Federal Communication

Commission (“FCC”)’s position that consent may extend to third-parties. See Matter of

Groupme, Inc./skype Commc'ns S.A.R.l Petition for Expedited Declaratory Ruling Rules &

Regulations Implementing the Tel. Consumer Prot. Act of 1991, 29 F.C.C. Rcd. 3442, 3446

(2014)(“consent to be called at a number in conjunction with a transaction extends to a wide

range of calls ‘regarding’ that transaction, even in at least some cases where the calls were made

by a third party.”).

Because consent cannot be resolved through common or class-wide proof, Plaintiff

cannot satisfy the class certification prerequisite that common questions of fact and law

predominate over individual ones. See Fed. R. Civ. P. 23(b)(3). A number of courts have denied

class certification where, as here, consent could only be resolved through consideration of

evidence unique to each putative class member. See, e.g., Jamison v. First Credit Servs., Inc.,

290 F.R.D. 92, 107 (N.D. Ill. 2013)(“Since there is no way to employ generalized proof to prove

consent, or lack thereof, [plaintiff] has failed to meet its burden under Rule 23(b)(3) because

individual issues predominate over common ones.”); G.M. Sign, Inc. v. Brink's Mfg. Co., No. 09

C 5528, 2011 WL 248511, at *8 (N.D. Ill. Jan. 25, 2011)(finding that it would have to engage in

class-member-specific inquiry to resolve issue of consent and established business relationship,

court held the individual questions predominated over common questions of law or fact).

Plaintiff attempts to avoid the issue of consent by arguing that consent is irrelevant

because the faxes at issue did not contain an opt-out notice as required by 47 C.F.R.

64.1200(a)(4)(iv). (See Dkt. # 147-1, p. 9). Plaintiff’s argument should be rejected. As Plaintiff

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acknowledges, the Consumer and Governmental Affairs Bureau of the FCC—the agency

charged with administering the Telephone Communications Protection Act (“TCPA”)—granted

A-S Medication a retroactive waiver of the requirement that opt-out language be included on

faxes sent with prior express consent. (Id. at 9-10). Plaintiff does not challenge the validity of the

waiver, but instead argues that the waiver does not apply in private litigation.(Id. at 10).

Plaintiff’s argument is contrary to: (1) the plain language of the waiver, and (2) cases applying

the waiver in private litigation. See In the Matter of Rules & Regulations Implementing the Tel.

Consumer Prot. Act of 1991 (“Bureau Order”), 30 F.C.C. Rcd. 8598, 8609 (2015)(“we dismiss

arguments that by granting waivers while litigation is pending violates the separation of

powers”); Simon v. Healthways, Inc., No. CV1408022BROJCX, 2015 WL 10015953, at *7

(C.D. Cal. Dec. 17, 2015); Spring Valley v. Graduation Source, LLC, No. 14-CV-3232 (NSR),

2016 WL 1271693, at *5 (S.D.N.Y. Mar. 29, 2016).

Simply put, Plaintiff cannot meet its burden of establishing that “questions of law or fact

common to class members predominate over any questions affecting only individual members,

and that a class action is superior to other available methods for fairly and efficiently

adjudicating the controversy,” because the issue of consent in this case can only be resolved

through individual inquiry for each putative class member. Fed. R. Civ. P. 23(b)(3). Therefore,

Plaintiff’s motion for class certification should be denied.

II. BACKGROUND

A. Allscripts, LLC

1. Products and Services

Allscripts, LLC (“Allscripts”) is a company that “offer[s] an open, integrated portfolio of

healthcare information technology solutions for hospitals, physician practices, and extended

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care organizations.” (See Allscripts’s “About Us,” available at

http://www.allscripts.com/company/about-us (last visited Apr. 18, 2016). Allscripts has provided

a variety of healthcare-related products and services since its incorporation in 1986. (See id.).

One such healthcare solution was Allscripts’s “pre-packaged medication fulfillment solutions

business” (the “MSG”). (APA, p. 5). The MSG provided “both medications and software for

dispensing and inventory control.” (Id. at 5).

2. Salesforce

Since 2006, Allscripts has used a customer relationship management database called

Salesforce. (Transcript of Brian Moffett’s 30(b)(6) Corporate Representative Deposition in

Physicians Healthsource v. Allscripts Healthcare Solutions, Inc. and Allscripts Healthcare, LLC,

(“Moffett Allscripts Dep.”), attached here to as Exhibit I, pp. 9-10; Moffet A-S Dep., p. 10).

Allscripts uses Salesforce to keep track of data pertaining to its customers and prospective

customers, such as their contact information, order history, account number, etc. (Moffet A-S

Dep., pp. 9-10).

3. Fax Communication

One of the ways in which Allscripts communicated with its customers and prospective

customers was via fax; in fact, until the more recent advent of email, faxing was the most

common method of communication:

Q: And prior to February of 2010, how common was fax communication

between Allscripts and its customers and prospects?

A: Prospects? I’ll say for customers, it was very – it was very common.

Again, a lot of these clients [customers] did not have e-mail addresses at

that time....

Prospects, if the prospects wanted information, we would always ask for

permission, and we would send it to them if they wanted it faxed. Again,

e-mail was – you know, for a lot of these doctors, they were not

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technologically savvy. That’s why they were trying to move to us to help

them with that, and early on, fax was a big communicator.

(Moffet A-S Dep., pp. 42-43)(attorney objections omitted).

If Salesforce included a fax number for a particular entity, it was only because that entity

voluntarily provided its fax number to Allscripts, along with permission to fax it something.

(Moffet Allscripts Dep., p. 78; Moffet A-S Dep., pp. 41-42)(attorney objection omitted). The fax

numbers would often be provided to Allscripts at the inception of contact between Allscripts and

a customer or prospective customer:

Q: Just so I understand this. Clients [customers] and prospects had the

opportunity to volunteer their fax numbers to Allscripts at the start of the

relationship?

A: Yes.

(Moffet A-S Dep., p. 42; see also id. at 40-41).

Allscripts sent information about its various products and services—including the

MSG—to its customers and prospective customers via fax. (Cull Aff., ¶¶ 3-4). If a customer was

already using a particular Allscripts product or service, Allscripts would fax it information about

other Allscripts products and services; and, Allscripts would also fax information about its

products and services to entities that had not previously purchased or used any Allscripts

products or services. (Moffet A-S Dep., pp. 123-125). The goal was to market a whole suite of

Allscripts products and services—and product and service upgrades—to customers and

prospects. (Moffet Allscripts Dep., pp. 121, 123). These fax advertisements were always sent

with the recipient’s permission, and often at the recipient’s request:

Q: Did Allscripts’ clients [customers] and prospects frequently request

information regarding Allscripts’ products and services via fax?

A: Yes.

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Q: And I’ll just ask this one more time. Allscripts, am I correct, had a policy

and practice of obtaining consent before sending faxes of promotion or

informational nature to clients and prospects?

A: Yes.

(Moffet A-S Dep., pp. 45-46; 125)(attorney objection omitted).

4. Allscripts’s Practice Of Obtaining Consent Before Sending Fax

Advertisements

Brian Moffett has been an Allscripts employee for 21 years and is familiar with

Allscripts’s business practices and how Allscripts keeps track of information pertaining to its

customers and prospective customers in Salesforce. (Moffet A-S Dep., pp. 6, 9-10). He testified

that Allscripts had a custom and practice of faxing advertisements only with the consent of the

recipient:

Q: You had said that Allscripts always got permission to send advertisement

by fax, is that correct?

A: That is correct.

(Moffet Allscripts Dep., p. 51; see also id. at 39-40, 43, 65-66, 125; Moffet A-S Dep., pp. 45-46).

Moffett explained that Allscripts’s employees were trained to always ask permission before

sending fax advertisements, and that part of asking for permission to send a fax would be to

verify the fax number that Allscripts had for that entity in its Salesforce database:

Q: Did Allscripts train its employees to request permission prior to sending

faxes promoting Allscripts’ goods and services?

A: We always had that. We always ask permission.

Q: Okay. And –

A: Part of that was to validate the fax number [that the entity had previously

provided to Allscripts].

(Moffet A-S Dep., p. 45; Moffet Allscripts Dep., p. 78).

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Allscripts sent fax advertisements based off of information contained in its Salesforce database.

Moffett explained that if an entity’s fax number was present in Salesforce, it was because that

entity had provided its fax number to Allscripts, along with permission to receive a fax

advertisement:

Q: Does the fact that Allscripts have a fax number for a particular entity mean

that they have permission to send them advertisements by fax?

A: The client would have given us that fax number. That wouldn’t have come

from any place. The client would have given us permission.

(Moffet Allscripts Dep., p. 78)(attorney objection omitted).

B. A-S Medication’s Purchase Of Allscripts’s MSG

In March 2009, A-S Medication purchased Allscripts’s MSG, which “include[d] the

offering of a formulary of pre-packaged medications and related dispensing software licensed to

customers using FirstFillTM and TouchScriptTM, as currently conducted.” (APA, p. 6).

Specifically, A-S Medication purchased “all property and assets primarily used in or primarily

held for use in” the MSG, which property and assets included, among other things:

The machinery, equipment, furniture, tools, computer hardware and network

infrastructure that are primarily used in or primarily held for use in the [MSG]

Business....

The inventories held for use primarily in the operation and conduct of the [MSG]

Business, including raw materials, packaging materials, goods in process, finished

goods, labels and supplies....

The personnel, benefits and payroll records of the Transferred employees....

[A]ll advertising and promotional materials, manuals and data, sales and purchase

correspondence, lists of present and former suppliers, all customer information

and data including lists of present and former customers....

Any and all software, whether in source code, object code or human readable

form (including any intellectual property rights related thereto and associated

documentation), that is primarily used in or primarily held for use in the [MSG]

Business, including FirstFillTM and TouchScriptTM....”

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All of the trade names, trademarks, service marks and other marks of [Allscripts]

(including brand names, product names, logos, and slogans) and application

therefor, other than, for the avoidance of doubt, any of the foregoing using or

derived from “Allscripts,” that are primarily used in or primarily held for use in

the [MSG] Business....

(Id. at 13-15).

A-S Medication also assumed “all liabilities and obligations...primarily relating to or arising out

of the [MSG] Business or the Assets....” (Id. at 17).

C. A-S Medication Was A Continuation Of Allscripts’s MSG

After A-S Medication’s purchase of Allscripts’s MSG and its acquisition of all the assets

and liabilities related thereto, A-S functioned—and was presented to the healthcare field—as a

continuation of that MSG. (See Cull Aff., ¶ 5). As Walter Hoff, A-S’s Chief Executive Officer

and part owner explained:

[W]e were a continuation of Allscripts’s [MSG] business. We had a joint

marketing arrangement with Allscripts. We were generally known on the street as

Allscripts, even after the business because we were a continuation. We purchased

the assets from Allscripts, the equipment, the contract. We assumed the

employees. We’re actually still in the same building as Allscripts, and we had a

continuing relationship with our customers between us and Allscripts, so we were

simply a continuation of the Allscripts business. Same business, different owners.

(Transcript of A-S 30(b)(6) Representative Deposition (“A-S 30(b)(6) Dep.”), attached hereto as

Exhibit J, pp. 17-18).

Pursuant to the Marketing Agreement between A-S Medication and Allscripts, executed in

conjunction with the sale of the MSG, A-S Medication was granted a five-year license to use

certain “Allscripts Trademarks” for the “marketing and sale of [A-S Medication] products in

furtherance of the joint marketing relationship” and for “advertising and promotional material for

the products that are covered by the marketing arrangement.” (See Marketing Agreement, pp. 25-

26, 38). A-S Medication’s advertisements after its purchase of the MSG often described A-S

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Medication as “Formerly Allscripts Medication Services Group” and included an approved

Allscripts logo. (See Exemplar Advertisements, attached hereto as Group Exhibit K). In fact, the

fax at issue in this case describes A-S as “formerly Allscripts Medication Services Group.” (See

Dkt. # 38-1, p. 2).

Furthermore, pursuant to the Marketing Agreement and for a period of five years,

Allscripts would “use commercially reasonable efforts to cause any users of the

‘meds.allscript.com’ website to be automatically forwarded to a web address provided to

Allscripts by [A-S Medication].” (Marketing Agreement, p. 35). A-S Medication representatives

were also permitted to “actively participate in Allscripts’s presentations and booths at all

industry trade shows and events related to the [MSG] Business,” and Allscripts would allow A-S

Medication to “provide [MSG] material to be incorporated into Allscripts’ web-x/web casts for

customers and prospective customers planned in the normal course of Allscripts’ marketing.” (Id.

at 33-34). Moreover, A-S Medication had, for a limited period of time and pursuant to the

Marketing Agreement, remote access to Allscripts’s Salesforce database. (Moffet A-S Dep., p.

36; Marketing Agreement, p. 35). Allscripts also would “”ensure that [A-S Medication] receives

current monthly lists of Allscripts’ clients with name, product names and sales history.”

(Marketing Agreement, p. 32). And, Allscripts would "actively participate and reasonably

cooperate with [A-S Medication] in the development, integration, promotion and marketing of

new non-manual products to existing and new clients of Allscripts” and would “[a]ctively

promote and market current physician dispensing offering of [A-S Medication] as a compliment

to Allscripts’ current physician and clinical solutions programs and its new physician and clinical

solutions programs.” (Id.).

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D. A-S Medication’s Practice Of Sending Fax Advertisements Only To

Its Customers, Allscripts’s Customers And Others Interested In

Receiving Faxes From It

A-S Medication maintained a database called Alpha that contained information about its

past and current customers; Alpha did not contain information about prospective customers or

leads. (Transcript of Lauren McElroy Deposition (“McElroy Dep.”), attached hereto as Exhibit

L, pp. 30, 118, 191). Whenever a customer filled out an A-S Medication new account application

form, the customer was asked whether it wanted to provide A-S Medication with its fax number.

The customer was also asked whether it wanted A-S Medication to communicate with it via

fax—or mail or email—regarding, among other things, A-S Medication’s products and services.

Customers’ fax numbers and communication preferences were stored in A-S Medication’s Alpha

system. Hoff testified:

A: Then the client would be requested to fill out what’s called a new

application form where they had the option to put in their fax number or

not put in their fax number, and they would sign the form; and when the

client was actually set up, Chris at that time was doing setups, he would

interview the client according to the various screens on Alpha. One of

those screens required how did they want to communicate product

information and other things along those lines so did they want to use fax

or email or, you know, other forms.

Q: Okay. And how did you obtain fax numbers from your customers and

new accounts?

A: So in that – two places. In that new account application form, the

customer would fill it in or – and/or during the setup process Chris would

be asking the question and they would be filling it in. The client or the

prospect always had the chance of understanding whether or not they

wanted to communicate by fax or not, they had the chance to explain it; or

if they didn’t want to give an email, they didn’t have to give an email

address either.

(Transcript of Walter Hoff Deposition (“Hoff Dep.”), attached hereto as Exhibit M, pp. 67-69).

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A-S Medication had a custom and practice of sending fax advertisements to only its

customers—culled from the Alpha system based on their communication preference to receive

faxes—Allscripts’s leads that were provided pursuant to the Marketing Agreement between A-S

Medication and Allscripts, Allscripts’s customers, and/or to entities that had provided permission

to receive fax advertisements. (McElroy Dep., pp. 10-11). A-S Medication’s former Vice

President of Marketing, Lauren McElroy, testified:

A: To your knowledge, was it A-S’s custom and practice to only send faxes

to its customers or people who were interested in receiving faxes, correct?

A: Correct, to my knowledge.

Q: That had indicated that they were interested in receiving faxes?

A: Yep.

(Id. at 122; see also Hoff Dep., p. 17).

E. Plaintiff’s Consent To Receive Faxes

1. To Allscripts

Plaintiff is a former customer of Allscripts. (Transcript of Gearline Monhollen

Deposition, attached hereto as Exhibit N, pp. 66-67). Allscripts and Plaintiff communicated on

multiple occasions, including via fax. (Id. at 67-69). Plaintiff had provided Allscripts with

permission to send it information via fax. (Id. at 68-69, 71-72). Plaintiff has also asked

Allscripts to send it information about various products. (Id. at 87-90).

2. To A-S Medication

A-S Medication acquired Plaintiff’s fax number from Allscripts’s Salesforce database of

customers. (See, e.g., A-S 30(b)(6) Dep., pp. 15-16). To the extent that Plaintiff provided express

permission to Allscripts to fax it information about various Allscripts’s products, that consent

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extended to A-S Medication, which acquired Allscripts’s MSG and was a continuation thereof.

(See supra II.B-C, E.1). As Hoff explained:

Q: As you sit here today, what evidence do you have that the plaintiff

provided express invitation or permission to A-S to be sent fax

advertisements?

A: They gave their permission to Allscripts and we were a continuation of

Allscripts business.

***

Q: [D]id Allscripts ever tell the customer or ask for permission to the

customer for A-S to be able to send fax advertisements to them?

A: They didn’t do it on a product-by-product basis, so we [Medication

Business] would be one of the many products that they represent – had in

their portfolio and represented on their website as available for sale. They

wouldn’t get permission for this product or that product. They get

permission for the overall customer relationship.

(A-S 30(b)(6) Dep., pp. 17, 21-22).

F. Putative Class Members’ Consent To Receive Faxes From Allscripts

And A-S Medication

Many putative class members are A-S Medication customers who were also Allscripts

customers. (See, e.g., Declaration of Victoria Smith (“Smith Dec.”), attached hereto as Exhibit

O, ¶¶ 2-3; Affidavit of Cathy Bolt Jones (“Jones Aff.”), attached hereto as Exhibit P, ¶¶ 2, 4;

Williams Aff., ¶¶ 2-5; Oliver Aff., ¶¶ 2, 5; Declaration of Debra Lucas, (“Lucas Dec.”), attached

hereto as Exhibit Q, ¶ 3). After A-S Medication purchased Allscripts’s MSG, Allscripts’s

customers just started ordering medication from A-S Medication, because they considered A-S

Medication to be a continuation of Allscripts’s MSG. (See, e.g., Oliver Aff., ¶¶ 4-7; Williams

Aff., ¶¶ 3-5; Jones Aff., ¶¶ 2-5). For example, Victoria Smith, a medical technician for one of the

putative class members, explained:

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Prior to purchasing medication from A-S [Medication], Riverview purchased

medication from Allscripts, LLC....After A-S [Medication] purchased

Allscripts’s pre-packaged medication fulfillment solutions business (the

“Medication Business”), Riverview began purchasing medication from A-S

[Medication]....I was aware that Allscripts sold its Medication Business to A-S

[Medication], and considered A-S [Medication] to be a continuation of

Allscripts’s Medication Business because it was the same business, just with a

different owner.

(Smith Dec., ¶¶ 1, 3-5).

Many putative class members gave Allscripts permission to send them information about

Allscripts’s various products via fax. (See, e.g., Jones Aff., ¶ 3; Oliver Aff., ¶ 3; Jones Aff., ¶ 3;

Smith Dec., ¶¶ 6-8; Lucas Dec., ¶ 5). And, they considered the consent they gave Allscripts to

receive fax advertisements to also extend as consent given to A-S Medication to receive fax

advertisements, as they considered A-S Medication simply to be a continuation of Allscripts’s

MSG. For example, Cathy Jones, an administrator for one of the putative class members,

explained:

I consented to receive Allscripts’ product information via fax at the beginning of

our business relationship....I considered the consent previously provided to

Allscripts [to send fax advertisements] extended to A-S Medications. I again

consented to receive information about A-S Medications products and services via

fax....

(Jones Aff., ¶¶ 3, 5).

Similarly, Jeannine Oliver, the office manager for another putative class member, attested:

I consented to receive Allscripts’ product information via fax at the beginning of

our business relationship....When OFH [putative class member] provided its fax

number to Allscripts, it agreed to and consented to receive faxes from Allscripts

regarding Allscripts’ products and services. I considered the consent that I

previously provided to Allscripts extended to A-S Medications as it appeared to

me to be a continuation of the same business.

(Oliver Aff., ¶¶ 3, 7). And, Lindsey Williams, a director for another putative class member,

stated: “Stern [putative class member] agreed to and consented to receive faxes from Allscripts

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regarding Allscripts’ products and services. I considered the consent that I previously provided to

Allscripts extended to A-S Medications.” (Williams Aff., ¶ 5). And, Smith explained:

I do not specifically recall Riverview [putative class member] ever receiving fax

advertisements from Allscripts or A-S. However, if Riverview did receive any fax

advertisements from Allscripts or A-S, I would have given Allscripts and A-S

permission to send Riverview those fax advertisements.

(Smith Dec., ¶ 7). Similarly, Debra Lucas, the purchasing manager for a putative class member,

stated:

While I do not specifically recall giving Allscripts or A-S permission to send

DAK fax advertisements, given my custom, practice and experience in dealing

with Allscripts and A-S, I can attest that I would have given Allscripts and A-S

permission to send DAK faxes advertising their products and/or services.

(Lucas Dec., ¶ 5).

Putative class members also specifically gave A-S Medication permission to send them

fax advertisements because they wanted to stay apprised of A-S Medication’s products. (See,

e.g., Oliver Aff., ¶¶ 6-7; Williams Aff., ¶¶ 4-5; Jones Aff., ¶¶ 5-6; Smith Dec., ¶¶ 7-8). And,

putative class members did not ever ask Allscripts or A-S Medication to stop sending them fax

advertisements. (See, e.g., Oliver Aff., ¶ 8; Williams Aff., ¶ 6; Jones Aff., ¶ 7; Smith Dec., ¶ 9;

Lucas Dec., ¶ 7).

G. The Fax At Issue

The document attached as Exhibit A to the First Amended Complaint—which is the sole

basis for all of Plaintiff’s claims—advertises a new A-S Medication product, PedigreeRx, that AS Medication started marketing in early 2010. (See Dkt: # 38-1; Hoff Dep., p. 41). PedigreeRx

was a web-based software that was a newer version of an existing MSG product—

TouchScriptTM—that A-S Medication acquired from Allscripts:

Q: What is TouchScripts?

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A: I guess I should rephrase that. I don’t know exactly what it is, but I know

it’s a program that Allscripts started, and I know we’re trying to upgrade

TouchScripts for subscribers to – or prescribers to PedigreeRx.

***

Q: So PedigreeRx was an A-S product?

A: Correct.

Q: Okay. And if I understand your testimony just a moment ago, A-S was

trying to convert former TouchScripts customers to use PedigreeRx?

A: Correct.

Q: And why – why did A-S want to convert them from TouchScripts to

PedigreeRx?

***

A: I think it was just a better – a newer system.

(McElroy Dep., pp. 145-146; see also APA, p. 6).

The fax advertisement was intended to inform A-S Medication’s and Allscripts’s customers and

prospective customers about PedigreeRx and get them to upgrade to or purchase this new

product. (McElroy Dep., pp. 145-146; see also Dkt. # 38-1; Hoff Dep., pp. 65-66).

Exhibit A was faxed to a list of A-S Medication and Allscripts customers and prospective

customers that was generated from Allscripts’s Salesforce database. (See, e.g., A-S 30(b)(6)

Dep., p. 26). A digital forensic analysis shows that fax numbers from the A-S Medication fax log

for the February 2010 fax transmission at issue in this matter matched fax numbers and other

corresponding data in Allscripts’s Salesforce database. (Transcript of Yaniv Schiff Deposition,

attached hereto as Exhibit R, pp. 34-38; Hoff Dep., p. 37). The entities on that fax list had

provided Allscripts permission to send them faxes about Allscripts’s various products, which

included Allscripts’s MSG. (Hoff Dep., pp. 17, 21-22; see supra II.A.2-4; II.B-C).

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A-S Medication, as a continuation of Allscripts’s MSG, had permission to send a fax

advertisement to this list pulled from Allscripts’s Salesforce database. As Hoff explained:

Q: For all the different type – for all of the different ways that Allscripts

could obtain consent, to your knowledge, did Allscripts ever seek consent

for A-S to fax advertisements?

A: As I said, we were a continuation of the business. They continued to

represent us in the market. They were selling our products. We were

jointly in the same trade booths together and all that, so it was viewed as

on continuing company.

...

Q: Would it be accurate to say that A-S never directly contacted the target list

that generated off the Salesforce database as provided by Allscripts to seek

prior express invitation or permission to send fax advertisements?

A: We didn’t need to. We were part of Allscripts’ joint marketing

arrangement.

Q: Okay. So you’re saying you obtained the consent from Allscripts?

A: Through our relationship with Allscripts.

(A-S 30(b)(6) Dep., pp. 20, 22).

III. ARGUMENT

A. Requirements For Class Certification

Plaintiff’s request for class certification is governed by Fed. R. Civ. P. 23. Under Rule

23, Plaintiff bears the burden of demonstrating that class certification is appropriate. “To be

entitled to class certification, a plaintiff must satisfy each requirement of Rule 23(a)—

numerosity, commonality, typicality, and adequacy of representation—and one subsection of

Rule 23(b).” Id. (citing Harper v. Sheriff of Cook Co., 581 F.3d 511, 513 (7th Cir.2009); Oshana

v. Coca–Cola Co., 472 F.3d 506, 513 (7th Cir.2006)).

“A party seeking class certification must affirmatively demonstrate his compliance with

the Rule—that is, he must be prepared to prove that there are in fact sufficiently numerous

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parties, common questions of law or fact, etc.” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541,

2551 (2011). In analyzing Plaintiff’s request for class certification, this Court must “make

whatever factual and legal inquiries are necessary under Rule 23.” Szabo v. Bridgeport Machs.,

Inc., 249 F.3d 672, 676 (7th Cir.2001). This will “frequently . . . entail some overlap with the

merits of Plaintiff’s underlying claim” as “the class determination generally involves

considerations that are enmeshed in the factual and legal issues comprising the plaintiff’s cause

of action.” Wal-Mart Stores, Inc., 131 S. Ct. at 2551-52 (quoting General Telephone Co. of

Southwest v. Falcon, 457 U.S. 147, 160 (1982)).

Here, Plaintiff seeks certification pursuant to Rule 23(b)(3). For a class to be certified

pursuant to Rule 23(b)(3), the “class must meet two requirements beyond the Rule 23(a)

prerequisites: common questions of law or fact must ‘predominate over any questions affecting

only individual members,’ and class resolution must be ‘superior to other available methods for

fairly and efficiently adjudicating the controversy.’” Brink's Mfg. Co., 2011 WL 248511, at *7

(quoting Fed. R. Civ. P. 23(b)(3)). “The Supreme Court has made clear . . . that ‘the

predominance criterion is far more demanding’ than ‘Rule 23(a)'s commonality requirement.’”

Id. (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 624, 117 S.Ct. 2231, 138 L.Ed.2d

689 (1997)).

“[T]he question whether common questions predominate is necessarily a case-specific

one.” Id. at * 8. To resolve the issue, “‘a district court must engage in a case-specific analysis

that goes outside of the pleadings in order to formulate some prediction as to how specific issues

will play out in order to determine whether common or individual issues predominate in a given

case.’” Id. (quoting New England Carpenters Health Benefits Fund v. First Databank, Inc., 244

F.R.D. 79, 84 (D.Mass.2007)(emphasis added).

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B. Consent—the Predominant Issue—Must Be Resolved Individually

For Each Putative Class Member

In TCPA cases, when evidence demonstrates that consent cannot be resolved through

generalized or class-wide evidence, but instead must be resolved through inquiry into facts and

circumstances unique to each individual putative class member, a plaintiff “fail[s] to meet his

burden under Rule 23(b)(3) because individual issues predominate over common ones.”

Jamison, 290 F.R.D. 92, 107 (N.D. Ill. 2013); see also Brink's Mfg. Co., 2011 WL 248511 at *8;

Fields v. Mobile Messengers Am., Inc., No. C 12-05160 WHA, 2013 WL 6073426, at *4 (N.D.

Cal. Nov. 18, 2013)(“Thus, even if consent is an affirmative defense, individualized inquiries

regarding consent remain. Plaintiffs have failed to prove predominance under Rule 23(b) and

their motion to certify a nationwide text-receipt class is hereby Denied.”)(emphasis in original).

Undisputed evidence confirms that Allscripts obtained consent prior to sending faxes

promoting Allscripts’ goods and services. (See supra II.A.3-4). Brian Moffett is currently the

direct of product support at Allscripts and has been employed by Allscripts for 21 years. (Moffett

A-S Dep., p. 6). Moffett, who is familiar with Allscripts’s business practices and with how

Allscripts keeps track of its customers, testified that Allscripts always asked permission prior to

sending faxes promoting its goods and services. (Id. at 45-46; see also Moffet Allscripts Dep.,

pp. 51, 39-40, 43, 65-66). According to Moffett, Allscripts had a policy and practice of obtaining

consent prior to sending any promotional or informational faxes to clients or prospects. (Moffett

A-S Dep., pp. 45-46). Moffett also noted that Allscripts’ clients and prospects frequently

requested information regarding Allscripts’ products and services via fax. (Id. at 45). Putative

class members also confirmed that they consented to receive fax advertisements from Allscripts.

(See supra II.F).

At the time Allscripts obtained consent from many putative class members to send faxes

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about its various products and services, the MSG was still a part of Allscripts. (See, e.g.,

Williams Aff., ¶ 2; Jones Aff., ¶¶ 2-3; Oliver Aff., ¶¶ 2-3; APA, p. 5). Thus, the consent secured

by Allscripts was broad enough to encompass products and services marketed and sold by

Allscripts’s MSG. This is confirmed by the fact that Allscripts sent fax advertisements marketing

products and services offered by its MSG prior to divesting the business. (Cull Aff., ¶ 3; see also

Exemplar Allscripts MSG Fax, attached hereto as Exhibit S). It is further confirmed by

affidavits from putative class members indicating that they provided general consent to receive

faxes “regarding Allscripts’ products and services,” as opposed specific consent to receive

specific faxes or only faxes offering certain specific goods or services. (See, e.g., Williams Aff.,

¶ 2; Oliver Aff., ¶ 7; Jones Aff., ¶ 2-3; Smith Dec., ¶¶ 6-8; Lucas Dec., ¶ 5).

In March 2009, after Allscripts had obtained consent from many putative class members

to send the fax advertisements regarding its various products, Allscripts sold its MSG to A-S

Medication. (See APA, p. 5). A-S Medication purchased “all property and assets primarily used

in or primarily held for use in” the MSG, and also assumed “all liabilities and

obligations...primarily relating to or arising out of the [MSG] Business or the Assets....” (Id. at

13-15, 17). Depending on the scope and context of the consent provided by putative class

members, consent given to Allscripts to receive fax advertisements (which was broad enough to

encompass goods and services marketed by the MSG) may have been broad enough to

encompass subsequent faxes from A-S Medication.

Class members who consented to receive fax advertisements regarding products and

services offered by Allscripts’s MSG may have intended or expected that the consent they

provided would include faxes sent by the business successor of the MSG. From the customer’s

perspective, there was little—if any—difference between Allscripts’s MSG and A-S Medication.

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(See supra II.F). As Oliver explained, she learned that the MSG portion of Allscripts’s business

was sold in 2009 and she was told to use a new tax identification number when paying for

medication products and services, but “[o]therwise this information made no difference to me.”

(Oliver Aff., ¶ 5). According to Oliver, A- S Medication “appeared to me to be a continuation of

the same business.” (Id. ¶ 7; see also Smith Dec., ¶ 5 (“I was aware that Allscripts sold its

Medication Business to A-S, and considered A-S to be continuation of Allscripts’ Medication

Business because it was the same business, just with a different owner.”); Lucas Dec., ¶ 5

(same).

To determine whether the consent each putative class member provided was broad

enough to encompass subsequent faxes by A-S Medication, the finder-of-fact will have to

consider: (1) the facts and circumstances surrounding consent, (2) the intent of each putative

class member when providing consent, (3) the context in which each putative class member

provided consent, and (4) the putative class members’ understanding of Allscripts, Allscripts’s

MSG, and the sale of the MSG to A-S Medication. A number of courts have explained that the

scope of consent is an issue that must be resolved based on the purpose of the consent and the

context in which consent was provided. See, e.g., Kolinek, 2014 WL 3056813 at * 4 (“the scope

of a consumer’s consent depends on its context and the purpose for which it is given.”); Olney v.

Job.com, Inc., No. 1:12-CV-01724-LJO, 2014 WL 1747674, at *6 (E.D. Cal. May 1,

2014)(“Under the TCPA, the scope of an individual’s express prior consent governs who may

call that individual and the purpose for doing so.”); see also Aderhold v. Car2go N.A., LLC, No.

C13-489RAJ, 2014 WL 794802, at *5 (W.D. Wash. Feb. 27, 2014)(noting a number of decisions

in which the court focused “on the nature of the transaction in which a consumer provides her

cellular number to determine the scope of ‘her prior express consent’”). As the Sixth Circuit has

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explained with regard to determining the scope of consent, “the context of the consent provided

is critical.” Baisden v. Credit Adjustments, Inc., 813 F.3d 338, 343 (6th Cir. 2016).

The FCC, through a series of orders, has confirmed that the scope and nature of consent

depends on the purpose and context of the consent. See Kolinek, 2014 EL 3056813 at * 2-4

(summarizing a number of FCC orders1addressing the issue of consent and explaining that, “to

the extent the FCC’s orders establish a rule, it is that the scope of a consumer’s consent depends

on the its context and the purpose for which it is given.”). The FCC also noted in a recent order

that “the scope of consent must be determined upon the facts of each situation.” In the Matter of

Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 F.C.C. Rcd. 7961,

7990 (2015).

Courts properly treat the issue of consent as an issue of fact. Olney, 2014 WL 1747674,

at *6. Courts have repeatedly recognized that, depending on the context and purpose for which it

was provided, consent may be broad enough to encompass faxes sent by a third party. As the

court in Olney explained, “[a]n individual may indirectly provide a third-party with express

consent to be called under the TCPA.” 2014 WL 1747674, at *6; see also Baird v. Sabre, Inc.,

995 F. Supp. 2d 1100, 1107 (N.D. Cal. 2014) aff'd, No. 14-55293, 2016 WL 424778 (9th Cir.

Feb. 3, 2016)(plaintiff who voluntarily provided cell phone number to airline “consented to be

contacted on her cellphone about flight-related matters,” and text message sent by airline’s thirdparty vendor offering to provide flight information “fell within the scope of her ‘prior express

consent.’”); Schwartz-Earp v. Advanced Call Ctr. Techs., LLC, No. 15-CV-01582-MEJ, 2016

1

In Kolinek, when the factual nature of the inquiry needed to resolve the scope of consent, the court considered a

number of FCC orders, including: In re Rules and Regs. Implementing Tel. Consumer Protection Act of 1991, 23

FCC Rcd. 559 (Jan. 4, 2008); In re Rules and Regs. Implementing Tel. Consumer Protection Act of 1991, 27 FCC

Rcd. 1830 (Feb. 15, 2012) and In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of

1991, 30 FCC Rcd. 7961 (2015).

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WL 899149, at * 7 (N.D. Cal. Mar. 9, 2016)(“Plaintiff’s act of providing her cellphone was a

voluntary act, she was not forced to obtain the credit card. Thus, under the FCC’s interpretation

of the TCPA, she consented to be contacted on her cellphone about matters related to her credit

card, including by third-party debt collectors.”); Chavez v. Advantage Group, 959 F. Supp. 2d

1279 (D. Colo. 2013)(by providing cell phone number to health care provider, plaintiff consented

to be called by third-party debt collector about the debt plaintiff owed to the health care

provider).

These rulings are consistent with the FCC’s interpretation of consent. In a 2014 order,

the FCC explained that “consent to be called at a number in conjunction with a transaction

extends to a wide range of calls ‘regarding’ that transaction, even in at least some cases where

the calls were made by a third party.” Matter of Groupme, Inc./skype Commc'ns S.A.R.l Petition

for Expedited Declaratory Ruling Rules & Regulations Implementing the Tel. Consumer Prot.

Act of 1991, 29 F.C.C. Rcd. 3442, 3446 (2014).

Here, Defendants are not arguing that Allscripts specifically obtained express consent for

A-S Medication to send fax advertisements after Allscripts divested the MSG. Rather,

Defendants are arguing that at the time Allscripts received consent from putative class members

to send them fax advertisements, that consent was broad enough to encompass products and

services sold by Allscripts’s MSG. Allscripts routinely obtained general consent to advertise

various products to its customers and prospective customers. (See supra II.A.3-4). Depending on

the context and purpose of the consent provided by putative class members, consent may also

have been broad enough to extend to A-S Medication, the successor to Allscripts’s MSG.

While it was part of Allscripts, the MSG relied on Allscripts’s marketing and sales staff

to market goods and services offered by the MSG. (Cull Aff., ¶ 3). Allscripts’s marketing was so

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critical to the MSG that the parties entered into a Marketing Agreement when Allscripts divested

the MSG. (See generally Marketing Agreement). In the Marketing Agreement, the parties

acknowledged that a material portion of the consideration that A-S Medication paid for the MSG

was “the continuing provision by Allscripts of the Marketing Services.” (Id. at 1). Under the

terms of the Marketing Agreement, A-S Medication agreed to pay Allscripts $3,600,000

annually for marketing services. (Id. at 3). In exchange, Allscripts agreed to provide an array of

marketing services, including actively promoting A-S Medication’s products to Allscripts’s

existing and new clients. (Id.). Allscripts spent considerable time and effort marketing and

promoting goods and services sold by its MSG prior to the sale of the MSG to A-S Medication,

and agreed to continue doing so after the sale. (See supra II.B-C).

Determining the scope of consent will require inquiry into the purpose and context of

consent, the putative class members’ intent, and other individual issues. This type of individual

inquiry means that common issues do not predominate. As a result, Plaintiff cannot satisfy the

Rule 23(b)(3)’s requirements for class, and certification should be denied.

C. The Retroactive Waiver Applies To The Faxes At Issue

Plaintiff attempts to avoid the individual issue of consent by arguing that, in this case,

consent is irrelevant. Specifically, Plaintiff claims that regardless of consent, every putative class

member still has a claim against A-S Medication for failing to include opt-out language on the

faxes as required by 47 C.F.R. 64.1200(a)(4)(iv). (See Dkt. 147-1, p. 9). Thus, according to

Plaintiff, there is no need to distinguish between putative class members who consented to

receive faxes and those who did not.

Plaintiff’s argument should be rejected. As Plaintiff acknowledges, A-S Medication was

granted a retroactive waiver of the requirements set forth in 47 C.F.R. 64.1200(a)(4)(iv) for faxes

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sent with prior express consent. (Id.). The Consumer and Governmental Affairs Bureau of the

FCC—the agency Congress charged with construing and administering the TCPA—granted A-S

Medication a retroactive waiver of Section 47 C.F.R. 64.1200(a)(4)(iv)’s requirements for all

faxes sent with prior express permission. See In the Matter of Rules & Regulations Implementing

the Tel. Consumer Prot. Act of 1991, 30 F.C.C. Rcd. 8598, 8602 (2015)(“Bureau Order”)(“we

grant waivers to parties similarly-situated to the initial waiver recipients granted relief by the

Commission due to uncertainty whether the opt-out notice requirement applies to faxes sent with

recipient consent.”). The retroactive waiver was granted on August 28, 2015 and applies to the

faxes at issue in this lawsuit.

In issuing the retroactive waiver, the Consumer and Governmental Affairs Bureau relied

on an earlier order from the FCC that granted a number of other petitioners retroactive waivers of

47 C.F.R. 64.1200(a)(4)(iv)’s requirements for faxes sent with consent. See Bureau Order, 30

F.C.C. Rcd. at 8603-4. In its order, the FCC concluded that retroactive waivers were in the public

interest because there was confusion regarding whether the opt-out notice requirement applied to

faxes sent to recipients who had provided prior express permission for such faxes. See In The

Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991 (“Anda

Commission Order”), 29 F.C.C. Rcd. 13998, ¶¶ 22-31 (2014). This confusion was created by a

footnote in the order that states “the opt-out notice requirement only applies to communications

that constitute unsolicited advertisements.” Id. ¶ 24 (quoting In the Matter of Rules &

Regulations Implementing the Tel. Consumer Prot. Act of 1991, Junk Fax Prevention Act of

2005, 21 F.C.C. Rcd. 3787, at 3810, n. 154 (2006)). In addition, the FCC acknowledged that

there was a lack of explicit notice that the order required opt-out language on faxes sent with

prior express permission, which may have contributed to the confusion. Id. ¶ 25.

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Plaintiff does not challenge the FCC’s Anda Commission Order or the Bureau Order

granting A-S Medication a retroactive waiver of 47 C.F.R. 64.1200(a)(4)(iv)’s requirements for

faxes sent with express consent. Instead, Plaintiff argues that the waivers only apply to FCC

enforcement actions, and not to private rights of action such as the instant matter. (Dkt. # 147-1,

p. 9). Plaintiff’s argument, which is purportedly based on the separation of powers, is at odds

with the Bureau Order, which provides:

At the outset, we dismiss arguments that by granting waivers while litigation is

pending violates the separation of powers as several commenters have suggested.

As the Commission has previously noted, by addressing requests for declaratory

ruling and/or waiver, we are interpreting a statute, the TCPA, over which

Congress provided the Commission authority as the expert agency. Likewise, the

mere fact that the TCPA allows for private rights of action to enforce rule

violations does not undercut our authority, as the expert agency, to define the

scope of when and how our rules apply.

Bureau Order, 30 F.C.C. Rcd. at 8609.

Plaintiff’s argument has also been rejected by at least two district courts that have applied

retroactive waivers in private party litigation. See Simon v. Healthways, Inc., No.

CV1408022CX, 2015 WL 10015953 (C.D. Cal. Dec. 17, 2015); Bais Yaakov of Spring Valley v.

Graduation Source, LLC, No. 14-CV-3232 (NSR), 2016 WL 1271693 (S.D.N.Y. Mar. 29, 2016).

In Simon v. Healthways, Inc., the court considered whether the FCC had authority to

issue a retroactive waiver of Section 1200(a)(4)(iv) and whether the retroactive waiver was

limited to FCC enforcement actions. 2015 WL 10015953, at *7. The court first concluded that

“the FCC has the authority to grant such a retroactive wavier.” Id. In so doing, the court noted

that: (1) Congress had delegated authority to execute and enforce the TCPA to the FCC; (2) the

FCC remains the authoritative interpreter (within limits of reason) of the TCPA; and (3) the FCC

has authority to waive its rules if there is good cause to do so. Id. The court further noted that the

retroactive waiver was related to the FCC’s own regulation—and not the TCPA itself—because

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the plain language of the TCPA only required opt-out notices on unsolicited advertisements. Id.

Accordingly, the court concluded that the FCC waiver applied to private litigation. Id. And,

despite the lack of compliant opt-out language on the faxes at issue, applying the retroactive

waiver, the court concluded that individual issues of consent predominated and denied the

plaintiff’s request for class certification. Id. at * 7-8.

At least one other court has agreed with Simon. See Bais Yaakov of Spring Valley, 2016

WL 1271693, at *5 (“the Court is persuaded by the analysis undertaken in Simon”). In Bais

Yaakov, the court reviewed both Simon and Physicians Healthsource, Inc. v. Stryker Sales Corp.,

65 F. Supp. 3d 482 (W.D. Mich. 2014)—the decision Plaintiff now relies on to argue that the

retroactive waiver only applies to FCC enforcement actions. Id. The court ultimately agreed with

the analysis set forth in Simon, explaining:

the Court is persuaded by the analysis undertaken in Simon. The Waiver does not,

as Plaintiff contends, retroactively release Defendants from statutory liability. As

stated previously, on its face the TCPA only prohibits the sending of unsolicited

faxes. It is the FCC's regulation interpreting the TCPA that extends the

protections of the statute to solicited faxes. Thus, it is within the FCC's authority

to determine when and how to apply this regulation, and to waive it for good

cause.

Bais Yaakov, 2016 WL 1271693 at * 5.

This Court should adopt the well-reasoned analysis set forth in the Bureau Order, Simon,

and Bais Yaakov and conclude that the retroactive waiver granted to A-S Medication applies to

the faxes at issue in this litigation. While Plaintiff argues that this issue need not be resolved

now, resolution of the issue is crucial to deciding whether or not a class can be certified. See

Simon, 2015 WL 10015953, at * 7 (“‘The Waiver Order itself states prior express consent

“remains a question for triers of fact in the private litigation.’ As such, prior express permission

is a critical—and individualized—issue in this class action.”)(citations omitted). Here, as in

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Simon, prior express consent is the predominate—and individualized—issue in this case. Id.

And, if the retroactive waiver applies, certification should be denied. Id.

IV. CONCLUSION

For the foregoing reasons, Defendants A-S Medication Solutions, LLC, James Barta, and

Walter Hoff respectfully request that this Court deny Plaintiff’s Motion for Class Certification

and grant any other relief this Court deems necessary and proper.

Respectfully submitted,

/s/ Eric L. Samore

One of Defendants’ Attorneys

Eric L. Samore

Albert Bower

Yesha Hoeppner

SMITHAMUNDSEN LLC

150 N. Michigan Avenue #3300

Chicago, IL 60601

(312) 894-3251

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CERTIFICATE OF SERVICE

The undersigned certifies that on May 13, 2016, he served a copy of Defendants’

Memorandum of Law in Opposition to Plaintiff’s Motion for Class Certification upon all counsel

of record via the Court’s ECF filing system:

[x] Pursuant to 28 USC Section 1746(2),

I certify under penalty of perjury that

the foregoing is true and correct.

Executed on: May 13, 2016.

/s/ Eric L. Samore

Case: 1:12-cv-05105 Document #: 171 Filed: 05/13/16 Page 34 of 34 PageID #:2671