Sandusky Wellness Center v. ASD ( 2017 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 17a0144p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
SANDUSKY WELLNESS CENTER, LLC, an Ohio limited ┐
liability company, individually and as the │
representative of a class of similarly situated persons, │
Plaintiff-Appellant, │
> No. 16-3741
│
v. │
│
│
ASD SPECIALTY HEALTHCARE, INC., D/B/A BESSE │
MEDICAL AMERISOURCEBERGEN SPECIALTY GROUP, │
INC.; JOHN DOES 1–10, │
Defendants-Appellees. │
┘
Appeal from the United States District Court
for the Northern District of Ohio at Toledo.
No. 3:13-cv-02085—Jack Zouhary, District Judge.
Argued: February 2, 2017
Decided and Filed: July 11, 2017
Before: SUHRHEINRICH, SUTTON, and McKEAGUE, Circuit Judges.
_________________
COUNSEL
ARGUED: Glenn L. Hara, ANDERSON + WANCA, Rolling Meadows, Illinois, for Appellant.
Martin W. Jaszczuk, JASZCZUK P.C., Chicago, Illinois, for Appellees. ON BRIEF: Glenn L.
Hara, ANDERSON + WANCA, Rolling Meadows, Illinois, Matthew E. Stubbs,
MONTGOMERY RENNIE & JONSON, Cincinnati, Ohio, for Appellant. Martin W. Jaszczuk,
W. Scott Hastings, Keith L. Gibson, LOCKE LORD LLP, Chicago, Illinois, Jennifer J. Dawson,
MARSHALL & MELHORN, LLC, Toledo, Ohio, for Appellees.
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 2
_________________
OPINION
_________________
McKEAGUE, Circuit Judge. In 2010, Defendant ASD Specialty Healthcare, d/b/a/ Besse
Medical AmerisourceBergen Specialty Group (“Besse”), a pharmaceutical distributor, sent a
one-page fax advertising the drug Prolia to 53,502 physicians. Only 40,343, or 75%, of these
faxes were successfully transmitted. Plaintiff Sandusky Wellness Center, a chiropractic clinic
that employed one of these physicians, claims to have received this so-called “junk fax,” and—
three years later—filed a lawsuit against Besse for the annoyance. Sandusky alleged that Besse
violated the Telephone Consumer Protection Act, 47 U.S.C. § 227, by sending an unsolicited fax
advertisement lacking a proper opt-out notice, and it sought to certify a putative class of all
40,343 Prolia fax recipients. The district court denied Sandusky’s motion for class certification,
and because that decision was not an abuse of discretion, we affirm.
I
We first provide a brief overview of the Telephone Consumer Protection Act before
turning to the facts of this case.
A
In 1991, Congress passed the Telephone Consumer Protection Act (TCPA), see Pub. L.
No. 102-243, 105 Stat. 2394, which was later amended by the Junk Fax Prevention Act of 2005,
see Pub. L. No. 109-21, 119 Stat. 359 (codified at 47 U.S.C. § 227). These legislative efforts
were geared towards curbing the inundation of “junk faxes” that businesses were receiving. H.R.
Rep. 102–317 at 10 (1991). These faxes were seen as problematic because they forced unwitting
recipients to bear the costs of the paper and ink and also monopolized the fax line, preventing
businesses from receiving legitimate messages. Id.In response, the TCPA generally banned the sending of any “unsolicited advertisement”
via fax. 47 U.S.C. §227(b)(1)(C) (emphasis added). A fax is “unsolicited” if it is sent to persons
who have not given their “prior express invitation or permission” to receive it. Id. § 227(a)(5).
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 3
The statute carves out a narrow exception to this general ban by permitting the sending of
unsolicited faxes if a sender can show three things: (1) the sender and recipient have “an
established business relationship”; (2) the recipient voluntarily made his fax number available
either to the sender directly or via “a directory, advertisement, or site on the Internet”; and (3) the
fax contained an opt-out notice meeting detailed statutory requirements. Id. § 227(b)(1)(C)(i)-
(iii). The upshot of this exception is that if an unsolicited fax does not contain a properly worded
opt-out notice, the sender will be liable under the statute, regardless of whether the other two
criteria are met.
Congress also authorized the Federal Communications Commission (FCC) to “prescribe
regulations to implement the requirements of [the TCPA].” Id. § 227(b)(2). In 2006, the FCC
promulgated a rule requiring opt-out notices on solicited faxes, i.e., those faxes sent to recipients
who had given their “prior express invitation or permission” to receive it. See Rules and
Regulations Implementing the Telephone Consumer Protection Act of 1991; Junk Fax
Prevention Act of 2005, 71 Fed. Reg. 25,967, 25,971–72 (May 3, 2006) (now codified at 47
C.F.R. § 64.1200(a)(4)(iv)) (the “Solicited Fax Rule”). After the passage of the Solicited Fax
Rule, both unsolicited and solicited faxes were required to include opt-out notices that, among
other things, were “clear and conspicuous,” informed recipients that a sender was required to
comply with an opt-out request “within the shortest reasonable time,” and included a telephone
number recipients could call to exercise their opt-out rights. See 47 U.S.C. § 227(b)(2)(D)(i)-
(vi).
To ensure fax senders complied with the TCPA, Congress provided for a private right of
action that allowed individuals and entities to sue for injunctive and monetary relief based on any
violation “of [the statute] or the regulations prescribed [there]under.” Id. § 227(b)(3).
Specifically, fax senders faced a $500 fine for each fax sent that violated the TCPA or any FCC
rule—a fine that could be increased to $1,500 per fax for willful violations. Id.
The import of the TCPA’s damage scheme combined with the FCC’s Solicited Fax Rule
meant vast exposure to liability for businesses that used fax machines to advertise. For example,
even individuals who agreed to receive faxes could nevertheless turn around and sue senders for
$500 per fax if, in their view, an opt-out notice was not sufficiently “clear and conspicuous.”
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 4
For businesses that sent faxes on a mass scale, this liability quickly added up. See, e.g., Nack v.
Walburg, 715 F.3d 680, 682 (8th Cir. 2013) (recognizing that the Solicited Fax Rule’s opt-out
notice requirement subjected Walburg to “a class-action complaint seeking millions of dollars
even though there is no allegation that he sent a fax to any recipient without the recipient’s prior
express consent”). Here, for example, Sandusky proposed a class size of 40,343 individuals and
entities. With a minimum of $500 potentially owed to each class member, Besse could be on the
hook for over $20 million.
Concerned by this specter of crushing liability, businesses (and courts) began to question
whether the FCC possessed the authority to promulgate the Solicited Fax Rule given that the text
of the TCPA appeared to reach only unsolicited faxes. See, e.g., id. (finding it “questionable
whether the regulation at issue . . . properly could have been promulgated under the statutory
section that authorized a private cause of action”). Many fax senders petitioned the FCC for a
declaratory ruling asking the agency to acknowledge its lack of statutory authority, see Anda
Petition for Declaratory Ruling, CG Docket No. 05-338 (Nov. 30, 2010).
But in 2014, the FCC issued an order denying the petitioners’ request, standing by the
Solicited Fax Rule. See Order, Petitions for Declaratory Ruling, Waiver, and/or Rulemaking
Regarding the Commission’s Opt-Out Requirements for Faxes Sent with the Recipient’s Prior
Express Permission, 29 F.C.C.R. 13,998, 13,998, 14,005 (2014) (“2014 Order”). In the same
order, the FCC granted retroactive waivers of liability to the petitioners, exempting them from
compliance with the Rule during a certain timeframe due to confusion over its applicability. Id.
at 13,998. Furthermore, the FCC encouraged other fax senders to “seek waivers such as those
granted in this [2014] Order.” Id. Besse heeded this advice, and in August 2015, the FCC
granted it, along with 100 others, a similar liability waiver. Order, Petitions for Declaratory
Ruling and Retroactive Waiver of 47 C.F.R. § 64.1200(a)(4)(iv) Regarding the Commission’s
Opt-Out Requirements for Faxes Sent with the Recipient’s Prior Express Permission,
30 F.C.C.R. 8598 (2015) (“2015 Order”).
After the 2014 Order was issued, several fax senders filed petitions for review of the
agency’s decision in multiple circuit courts. Bais Yaakov Docket, Notice of Multi-Circuit
Petitions for Review filed on 11/13/14; Attachment A. The United States Judicial Panel on
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 5
Multidistrict Litigation consolidated the petitions in the District of Columbia Circuit. Bais
Yaakov Docket, Consolidation Order filed on 11/14/14. In March 2017, a split panel of the D.C.
Circuit struck down the Solicited Fax Rule, holding it “unlawful to the extent that it requires opt-
out notices on solicited faxes.” Bais Yaakov of Spring Valley v. FCC, 852 F.3d 1078, 1083 (D.C.
Cir. 2017). Applying the Chevron framework, the majority found that the clear text of the TCPA
reached only unsolicited fax advertisements and that the FCC was thus without the authority to
promulgate a rule governing solicited faxes. See id. at 1082 (citing Chevron USA Inc. v. Nat.
Res. Def. Council, Inc., 467 U.S. 837, 842–43 & n.9 (1984)) (“Congress drew a line in the text of
the statute between unsolicited fax advertisements and solicited fax advertisements.”). Because
the majority struck down the Solicited Fax Rule, the question of the FCC’s authority to issue
retroactive waivers—which was also challenged—became moot. Id. at 1083 n.2. The D.C.
Circuit’s invalidation of the Solicited Fax Rule occurred after the district court denied
Sandusky’s motion for class certification in this case.
B
Besse is a distributor of pharmaceuticals and medical products. In 2007, it purchased a
list of physician contact information from InfoUSA, a third-party data provider. Some of the
physicians on that list, Besse later learned, happened to be current or former customers. Besse
condensed the InfoUSA List down to 53,502 names, creating the Prolia List, which it planned to
use to send a fax advertising the drug. On June 16, 2010, WestFax, a fax broadcaster,
transmitted the Prolia fax on Besse’s behalf. The one-page fax stated that “Besse Medical is
proud to offer Prolia” and touted “FREE Overnight Shipping on all PROLIA orders!” See R. 1-
1, Prolia Fax at 1, PID 15. The ad also contained a blank order form, a fax number where
completed orders could be sent, and a fine-print opt-out notice. Id.Although the fax was supposed to reach all 53,502 numbers on the Prolia List, WestFax’s
invoice records confirm that only 40,343, or 75% of the faxes, were transmitted successfully.
While this total number of actual Prolia fax recipients is known, the identity of each is not.
Typically after a fax blast, a fax broadcaster will retain fax logs, listing by fax number each
intended recipient and whether that recipient received a successful transmission of the fax. See
Ira Holtzman, C.P.A. v. Turza, 728 F.3d 682, 684–85 (7th Cir. 2013). Here, however, the fax
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 6
logs no longer exist. Sandusky did not sue Besse until three years after receiving the Prolia fax
and by that time, neither Westfax nor Besse—who has an 18-month document retention policy—
possessed a copy of the logs by which recipients could be identified.
Notwithstanding this roadblock, Sandusky Wellness Center claims it received the Prolia
fax. In 2013, it filed suit against Besse, claiming Besse violated the TCPA by sending an
unsolicited fax with a non-compliant opt-out notice. Following discovery, Sandusky sought
certification of a putative class comprising all 40,343 persons who also allegedly received the
fax. In Sandusky’s view, Besse was liable to this whole lot, with no need to distinguish between
which faxes were unsolicited and which were solicited: the statute itself provided redress for the
former, and the Solicited Fax Rule covered the latter.
The district court, however, denied Sandusky’s motion for class certification. See
generally R. 108, Memorandum Op. at 1–9, PID 24703–11. It held that Sandusky’s proposed
class failed to satisfy Rule 23(b)(3) because two individualized issues—class member identity
and consent—were central to the lawsuit and thus prevented “questions of law or fact common to
class members [from] predominat[ing].” Fed. R. Civ. P. 23(b)(3); R. 108, Memorandum Op. at
3–4, PID 24705–06. As to class member identity, the district court concluded that, in the
absence of fax logs, no classwide means existed by which to identify the 75% of individuals who
received the Prolia fax, and thus were proper TCPA claimants, from the other 25%, who lacked
standing to sue. R. 108, Memorandum Op. at 4, PID 24706. Without fax logs, the district court
determined that “each potential class member would have to submit an affidavit certifying
receipt of the Prolia fax.” Id. at 6, PID 24708. Since the district court foresaw this becoming a
highly individualized process, this counseled against class certification.
As to consent, the district court concluded that those fax recipients who had solicited the
Prolia fax—i.e., consented to receiving it—did not have a valid claim against Besse since the
FCC had granted Besse a retroactive waiver from complying with the Solicited Fax Rule. Id. at
7–8. The district court noted that Besse had produced considerable evidence indicating that at
least some intended Prolia fax recipients had indeed solicited the fax. Thus, weeding out the
solicited from the unsolicited fax recipients to discern proper class membership “would require
manually cross-checking 450,000 potential consent forms [that established a fax was solicited]
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 7
against the 53,502 potential class members,” another individualized inquiry that made class
certification improper. See id. at 6–8, PID 24708–10.
As an alternative to denying Sandusky’s motion on Rule 23(b)(3) predominance grounds,
the district court also found that Sandusky’s proposed class definition did not meet the implicit
ascertainability requirement since identifying class members in the absence of fax logs was not
“administratively feasible.” Id. at 4–6, PID 24706–08. This appeal followed.
II
As explained more fully below, we find no abuse of discretion in the district court’s
denial of class certification. First, the district court was correct to conclude that individualized
questions of consent prevent common questions from predominating under Rule 23(b)(3).
Although the district court credited the FCC’s retroactive waiver for the need to distinguish
between solicited and unsolicited Prolia faxes, the D.C.’s Circuit’s intervening decision in Bais
Yaakov, which invalidated the Solicited Fax Rule, provides alternative grounds for this
differentiation. Second, the district court’s recognition of the difficulty in identifying class
members without fax logs and with sole reliance on individual affidavits was equally sufficient
to preclude certification, regardless of whether this concern is properly articulated as part of
ascertainability, Rule 23(b)(3) predominance, or Rule 23(b)(3) superiority.
A
We review the district court’s denial of class certification for an abuse of discretion.
Rikos v. Procter & Gamble Co., 799 F.3d 497, 504 (6th Cir. 2015). “An abuse of discretion
occurs if the district court relies on clearly erroneous findings of fact, applies the wrong legal
standard, misapplies the correct legal standard when reaching a conclusion, or makes a clear
error of judgment.” Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 536 (6th Cir. 2012).
In the class action context, a district court is given “substantial discretion in determining whether
to certify a class, as it possesses the inherent power to manage and control its own pending
litigation.” Rikos, 799 F.3d at 504 (quoting Beattie v. CenturyTel, Inc., 511 F.3d 554, 559 (6th
Cir. 2007)). Therefore, our review is “very limited,” and we will reverse “only if a strong
showing is made that the district court clearly abused its discretion.” Young, 693 F.3d at 536.
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 8
“The class action is ‘an exception to the usual rule that litigation is conducted by and on
behalf of the individual named parties only.’” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338,
348 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700–01 (1979)). To merit certification,
a putative class must satisfy the four requirements of Rule 23(a)—numerosity, commonality,
typicality, and adequate representation—plus fit within one of the three types of classes listed in
Rule 23(b). Young, 693 F.3d at 537. Rule 23(b)(3) classes—the kind at issue here—must meet
predominance and superiority requirements, that is, “questions of law or fact common to class
members [must] predominate over any questions affecting only individual members” and class
treatment must be “superior to other available methods.” Fed. R. Civ. P. 23(b)(3). In addition,
Rule 23(b)(3) classes must also meet an implied ascertainability requirement. Cole v. City of
Memphis, 839 F.3d 530, 541 (6th Cir. 2016). It is the party seeking class certification—here,
Sandusky—that bears the burden of “affirmatively demonstrat[ing]” compliance with Rule 23.
Wal-Mart, 564 U.S. at 350.
B
The district court determined that questions of consent presented an individualized issue.
See R. 108, Memorandum Op. at 6–9, PID 24708–11. Acknowledging that the FCC had
retroactively waived Besse’s liability for failure to comply with the Solicited Fax Rule, it
concluded that Besse had a valid defense as to the solicited Prolia fax recipients—they were not
proper class claimants. See id. at 7, PID 24709. Identifying these individuals, however, entailed
combing through hundreds of thousands of customer forms that Besse had produced as evidence
of consent, a recipient-by-recipient inquiry that was prohibitive of class certification. Id. at 8,
PID 24710.
1
While the district court assumed the FCC’s retroactive waiver exempted Besse from
liability for sending solicited Prolia faxes, the intervening D.C. Circuit decision striking down
the Solicited Fax Rule means reliance on this waiver is no longer necessary. Instead, the
invalidation of the Rule altogether confirms the district court’s conclusion that Besse cannot be
liable to any individuals who solicited the Prolia fax. See Bais Yaakov, 852 F.3d at 1083
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 9
(holding the Solicited Fax Rule “unlawful to the extent that it requires opt-out notices on
solicited faxes”).
Once the Multidistrict Litigation Panel assigned petitions challenging the Solicited Fax
Rule to the D.C. Circuit, that court became “the sole forum for addressing . . . the validity of the
FCC’s rule[].” Peck v. Cingular Wireless, LLC, 535 F.3d 1053, 1057 (9th Cir. 2008) (quoting
MCI Telecomms. Corp. v. U.S. West Comms., 204 F.3d 1262, 1267 (9th Cir. 2000)). And
consequently, its decision striking down the Solicited Fax Rule became “binding outside of the
[D.C. Circuit].” Id. This result makes sense in light of the procedural mechanism Congress has
provided for challenging agency rules. See 28 U.S.C. §§ 2112, 2342–43. By requiring
petitioners to first bring a direct challenge before the FCC, the statute allows this expert agency
to weigh in on its own rules, and by consolidating petitions into a single circuit court, the statute
promotes judicial efficiency and ensures uniformity nationwide. See CE Design, Ltd. v. Prism
Bus. Media, Inc., 606 F.3d 443, 450 (7th Cir. 2010). Thus, since the Solicited Fax Rule is no
longer valid, the district court would reach the same conclusion as it did initially: that questions
of consent present individualized issues counseling against class certification.
Sandusky contends that the district court is not bound by Bais Yaakov. Its argument is as
follows: The D.C. Circuit struck down only the FCC’s 2014 Order validating the Solicited Fax
Rule. That order applied only to specific petitioners. Besse did not petition the FCC for relief
from the Rule until later, and its denial came in the 2015 Order. Thus, according to Sandusky,
this court must assume the Solicited Fax Rule’s validity until the 2015 Order is separately (and
successfully) challenged in a circuit court. See App. R. 34, Sandusky Rule 28(j) Letter at 1–2.
Sandusky misreads the breadth of the D.C. Circuit decision. That court was clear that the
“Solicited Fax Rule is unlawful” and vacated the 2014 Order because it “interpreted and applied
[that Rule].” Bais Yaakov, 852 F.3d at 1083. Thus, it was the Solicited Fax Rule itself that was
struck down, which is itself an “order.” See Leyse v. Clear Channel Braod., Inc., 545 F. App’x
444, 455 (6th Cir. 2013) (citing Columbia Broad. Sys., Inc. v. United States, 316 U.S. 407(1942)). Since the 2015 Order likewise “interpreted and applied [the Solicited Fax Rule],” that
order is also no longer good law post-Bais Yaakov. Moreover, the 2015 Order purported to
“follow[] the Commission’s 2014 fax opt-out notice order.” 2015 Order, 30 F.C.C.R. at 8598.
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 10
Thus, Sandusky’s argument that the district court would be required to turn a blind eye to the
D.C. Circuit decision invalidating the Solicited Fax Rule, and instead follow the 2015 Order that
relies on an abrogated rule, is without merit.
2
Not only was the district court correct to identify consent as presenting individualized
questions, such questions were sufficient to keep common questions from predominating and
preclude certification under Rule 23(b)(3). This rule provides that “questions of law or fact
common to class members must predominate over any questions affecting only individual
members.” In discerning whether a putative class meets the predominance inquiry, courts are to
assess “the legal or factual questions that qualify each class member’s case as a genuine
controversy,” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623 (1997), and assess whether
those questions are “subject to generalized proof, and thus applicable to the class as a whole,”
Bridging Cmtys., Inc. v. Top Flite Fin. Inc., 843 F.3d 1119, 1124 (6th Cir. 2016) (internal
citation omitted). “If the same evidence will suffice for each member to make a prima facie
showing, then it becomes a common question.” Sandusky Wellness Ctr., LLC v. Medtox
Scientific, Inc., 821 F.3d 992, 998 (8th Cir. 2016). Plaintiffs need not prove that every element
can be established by classwide proof. Bridging Cmtys., 843 F.3d at 1124. But the key is to
“identify[] the substantive issues that will control the outcome,” in other words, courts should
“consider how a trial on the merits would be conducted if a class were certified.” Gene & Gene,
LLC v. BioPay, LLC, 541 F.3d 318, 326 (5th Cir. 2008) (quotation marks omitted).
Here, if Sandusky’s 40,343-member class were certified, the district court would be
tasked with filtering out those members to whom Besse was not liable—those individuals who
solicited the Prolia fax. Regardless of other questions that may be common to the class,
identifying which individuals consented would undoubtedly be the driver of the litigation. See
id. In other words, “one substantive issue undoubtedly will determine how a trial on the merits
will be conducted if the proposed class is certified.” Id. at 327. “This issue . . . is whether
[Besse’s] fax advertisements were transmitted without the prior express invitation or permission
of each recipient. Thus, the predominant issue of fact is undoubtedly one of individual consent.”
Id.No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 11
The undertaking is individualized because Besse produced evidence that “several
thousand” individuals on the Prolia List of intended fax recipients are “current or former Besse
customers.” See App. R. 18, Decl. of Eric Besse ¶¶ 5, 9, APX 0002–03. This evidence consisted
of over 450,000 pages of various forms where customers had provided Besse with their fax
numbers. See, e.g., id. ¶ 9, Exhs. 1, 7, and 13, APX 0003, 0022, 0034, and 0047. Upon review
of a sample of these documents, the district court concluded that many forms would demonstrate
that these customers—if their names also appeared on the Prolia List—had given the requisite
consent, or “prior express invitation or permission,” to receive the fax, and thus would not have
valid claims against Besse. R. 108, Memorandum Op. at 8, PID 24710. But identifying these
individuals “would require manually cross-checking 450,000 potential consent forms against the
53,502 potential class members.” Id. Identifying solicited fax recipients through a form-by-form
inquiry is sufficiently individualized to preclude class certification.
This court’s decision in Bridging Communities, Inc. v. Top Flite Financial, Inc. does not
require otherwise. In that junk fax case, we held that “the mere mention of a defense is not
enough to defeat the predominance requirement of Rule 23(b)(3).” Bridging Cmtys., 843 F.3d at
1126. But there, the defendant had simply “raised the possibility” that “individual class
members might have solicited or consented to receiving the challenged faxes.” Id. at 1123, 1125
(emphasis added). And, we were “unwilling to allow such speculation and surmise to tip the
decisional scales in a class certification ruling.” Id. at 1125 (internal quotation marks omitted).
Here, by contrast, Besse has produced concrete evidence of consent, evinced by hundreds of
thousands of customer documents, some of which we know for certain match the names of
individuals on the Prolia List. Reviewing these documents, discerning which provide the
requisite consent, and then manually cross-checking each individual customer name against the
Prolia List—with a match indicating Besse has a valid defense as to that individual—is no
hypothetical scenario. Were the class certified, this undertaking would be a tangible reality for
the district court, sufficiently distinguishing the facts of this case from the mere “speculation and
surmise” that existed in Bridging Communities.
Sandusky makes two additional arguments as to why consent evidence should not prevent
certification. First, Sandusky argues that there is actually a class-wide absence of consent since
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 12
Besse compiled its Prolia List using fax numbers obtained from third-party data provider,
InfoUSA. It would have us hold that “if a fax sender is buying a list of fax numbers from a third
party, then it cannot have prior express permission as a matter of law.” See Appellant Br. at 30;
see also Bridging Cmtys., 843 F.3d at 1126 (recognizing the possibility that in cases “where . . . a
sender ‘obtained all of the fax recipients’ fax numbers from a single purveyor of such
information’ there exists a ‘class-wide means of establishing the lack of consent based on
arguably applicable federal regulations’”) (quoting Gene & Gene LLC, 541 F.3d at 327–28).
This argument is unavailing. Besse’s enlistment of a third party to send the Prolia fax on
its behalf does not somehow negate previous consent. Perhaps Besse risked a lack of consent by
relying on this data collector initially, but its ability to produce later consent evidence saves
Besse from this downfall. The case Sandusky cites in support—a district court case—is
inapposite. See Siding & Insulation Co. v. Combined Ins. Grp. Ltd., Inc., No, 1:11 CV 1062,
2012 WL 1425093 (N.D. Ohio 2012). Unlike the voluminous consent evidence in the record
before us, in Siding & Insulation there was “nothing in the record to support the claim that any of
the recipients consented to receiving the fax.” Id. at *3. Therefore, in that case it may very well
have been reasonable for the court to assume a universal lack of consent.
Additionally, no “arguably applicable federal regulation[s]” compel a different
conclusion. One regulation that Sandusky cites, 47 C.F.R. § 64.1200(a)(4)(ii)(B), states that if a
“sender obtains the facsimile number from [a commercial database], the sender must take
reasonable steps to verify that the recipient agreed to make the number available for public
distribution.” Presumably Sandusky’s argument is that Besse did not verify consent before
sending the Prolia fax, so it was in violation of this regulation. However, this regulation applies
only to the senders of unsolicited faxes. 47 C.F.R. § 64.1200(a)(4) (prohibiting “[u]se of a
telephone facsimile machine, computer, or other device to send an unsolicited advertisement”)
(emphasis added). Since there is evidence that Besse had already obtained consent from certain
individuals on the Prolia List, the faxes sent to those individuals by definition could not have
been unsolicited. Besse did not simply cull fax numbers from one purchased database.
Although it utilized the InfoUSA list in compiling its list of recipients, many of those recipients
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 13
had in fact already provided their fax numbers to Besse and consented to receive advertisements.
Cf. Gene & Gene LLC, 541 F.3d at 329.
Sandusky’s second contention, as stated by counsel at oral argument, is that the district
court should have certified the class and then created subclasses based on the different types of
consent forms produced. According to counsel, he would then proceed subclass-by-subclass and
prove that none of the evidence Besse produced actually amounted to consent under the Act.
However, it was not an abuse of discretion for the district court to deny counsel this opportunity.
See Fed. R. Civ. P. 23(c)(5) (stating that only “[w]hen appropriate, a class may be divided into
subclasses”). To even create subclasses would have required the district court to analyze each
individual form, and further assumes that the forms could be easily categorized. And after this
painstaking sorting process, allowing Sandusky to then litigate the validity of consent as to each
subclass would result in the exact “myriad mini-trials” that Rule 23(b)(3) seeks to prevent. See
Gene & Gene, LLC, 541 F.3d at 329.
Because Besse presented actual evidence of consent to the district court, which required
the need for individualized inquiries in order to distinguish between solicited and unsolicited
Prolia faxes, the district court did not abuse its discretion in denying class certification on these
grounds.
C
In addition to issues surrounding consent, the district court premised its denial of
certification on the inability to identify class members. In its view, this difficulty was a problem
for Sandusky under both Rule 23(b)(3) predominance and ascertainability. Sandusky’s proposed
class consisted of “[a]ll persons who were successfully sent [the Prolia fax].” R. 91 at 12; R.
107. But while Besse intended the fax to be sent to all 53,502 individuals and entities on the
Prolia List, only 40,343 actually received it. Both parties agreed that the 25% who did not
receive the Prolia fax are not valid class members. In the absence of fax logs listing the status of
each attempted transmission, the district court resolved that “each potential class member would
have to submit an affidavit certifying receipt of the Prolia fax. Given that the fax was sent in
2010, the recollection of a putative class member that he, she, or it had received a particular
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 14
unsolicited fax would be somewhat suspect.” R. 108, Memorandum Op. at 6, PID 24708. Thus,
it concluded that using affidavits to identify class members was yet a second individual issue that
prevented common questions from predominating, and reliance on these 7-year-old, self-serving
statements was not an “administratively feasible” way to ascertain class membership. 1 Id. at 4–
5, PID 24706–07.
On appeal, Sandusky argues that difficulties in identifying class members are not relevant
to either ascertainability or Rule 23(b)(3) predominance; in its view, this concern should be
accounted for under Rule 23(b)(3)’s superiority prong, which requires courts to determine
whether “a class action is superior to other available methods for fairly and efficiently
adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). Analyzing superiority entails balancing
the “the desirability” of class treatment with “the likely difficulties in managing a class action,”
among other things. Id. So although scrutinizing individual affidavits may be burdensome,
Sandusky argues that these burdens are outweighed by the benefits of affording its TCPA claim
class action treatment, which include furthering the deterrent purposes of the TCPA and ensuring
that Besse does not walk away from its alleged wrongdoings scot-free. According to Sandusky,
if the district court had conducted this balancing inquiry, rather than relying on predominance or
ascertainability, it would have certified Sandusky’s proposed class.
We disagree. Even if Sandusky is correct that class member identity is properly analyzed
under Rule 23(b)(3) superiority—something we do not decide—it would not have been an abuse
of discretion for the district court to conclude that class action treatment was not the superior
method for resolving Sandusky’s claim. To be sure, courts have been inconsistent in how they
have accounted for difficulties in identifying class members, especially within the context of the
TCPA. Some consider it when deciding whether common questions of law or fact predominate.
See, e.g., Ira Holtzman, C.P.A. v. Turza, 728 F.3d 682, 685 (7th Cir. 2013) (concluding that fax
logs listing the fax numbers of each individual who received the fax obviated the “need for
recipient-by-recipient adjudication,” and consequently, “the district court did not err in
1
On appeal, Sandusky argues that class members could submit copies of the fax as proof of receipt, as
Sandusky has done. However, even after discovery Sandusky produced no evidence that other fax recipients still
possessed copies of the Prolia fax. And more importantly, Sandusky did not argue this point below, so we deem it
forfeited. See Overstreet v. Lexington-Fayette Urban Cty. Gov’t, 305 F.3d 566, 578 (6th Cir. 2002).
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 15
concluding that the questions of law or fact common to class members predominate over any
questions affecting only individual members”) (internal quotation marks omitted).
Other courts frame it as a question of ascertainability. In order to meet Rule 23(b)(3)’s
implied ascertainability requirement, a “class definition must be sufficiently definite so that it is
administratively feasible for the court to determine whether a particular individual is a member
of the proposed class.” Young, 693 F.3d at 537–38 (citing 5 James W. Moore et al., Moore’s
Federal Practice § 23.21[1] (Matthew Bender 3d ed. 1997)). In the context of the TCPA, where
fax logs have existed listing each successful recipient by fax number, our circuit has concluded
that such a “record in fact demonstrates that the fax numbers are objective data satisfying the
ascertainability requirement.” See Am. Copper & Brass, Inc. v. Lake City Indus. Prods., Inc.,
757 F.3d 540, 545 (6th Cir. 2014).
Recently, the Second Circuit affirmed a district court’s denial of class certification on
ascertainablity grounds under similar circumstances as present here. See Leyse v. Lifetime
Entm’t Servs., Inc., No. 16-1133-cv, 2017 WL 659894 (2d Cir. Feb. 15, 2017). In Leyse, the
plaintiffs brought a putative class action against Lifetime for violating the TCPA by making a
series of unlawful, prerecorded telephone calls. Id. at *2. They proposed identifying class
members through soliciting affidavits from individuals who would testify to receipt of the calls.
Id. The district court concluded—and the Second Circuit affirmed—that this was not an
ascertainable way to identify class members given “(1) no list of the called numbers existed;
(2) no such list was likely to emerge; and (3) [] proposed class members could not realistically be
expected to recall a brief phone call received six years ago or . . . to retain any concrete
documentation of such receipt.” Id. (internal citations and quotation marks omitted). These
ascertainability concerns mirror the ones present here where (1) fax logs no longer exist; (2) they
are not likely to emerge; and (3) Prolia fax recipients are not realistically expected to remember
receiving a one-page fax sent seven years ago.
And still other courts take a dual-approach, considering both predominance and
ascertainability in tandem, much like the district court did here. See Medtox, 821 F.3d at 997–98
(finding that “whether a class member received the unsolicited fax” was a common question of
fact that predominated when fax logs existed to identify recipients and that “fax logs showing the
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 16
numbers that received each fax are objective criteria that make the recipient [class member]
clearly ascertainable”).
Outside the context of the TCPA, two sister circuits have cautioned against an aggressive
take on ascertainability, and have instead concluded, as Sandusky advocates, that class member
identity concerns should be taken into account under Rule 23(b)(3) superiority. See Mullins v.
Direct Digital, LLC, 795 F.3d 654, 658 (7th Cir. 2015) (declining to reverse district court
decision finding that a putative class of all purchasers of Instaflex within the relevant time period
was clearly ascertainable despite the fact that affidavits alone might be the only means of
identifying class members); Briseno v. ConAgra Foods, Inc., 844 F.3d 1121, 1123 (9th Cir.
2017) (rejecting ConAgra’s argument that there was no administratively feasible way of
identifying putative class of Wesson Oil purchasers who were unlikely to have proof of
purchase, and affirming certification of class because it was defined by objective criteria).
Moreover, Mullins and Briseno suggest that utilizing affidavits alone as a mechanism to identify
class members need not be a barrier to class certification under Rule 23’s implied ascertainability
requirement. Mullins, 795 F.3d at 658, 672; Briseno, 844 F.3d at 1132; cf. Carrera v. Bayer
Corp., 727 F.3d 300, 309–12 (3d Cir. 2013) (suggesting that use of affidavits is insufficient to
satisfy the ascertainability requirement).
As this synopsis indicates, courts have categorized class member identity concerns
differently within Rule 23’s framework. And the district court’s decision to account for it under
ascertainability and predominance does find some support in the case law. However, we see no
need to add our own opinion to this debate. For even assuming Sandusky is correct that
difficulties in identifying class members should be considered as part of Rule 23(b)(3)
superiority, the facts of this case present a situation where the class device is not “superior to
other available methods” due to “the likely difficulties in managing a class action.” Fed. R. Civ.
P. 23(b)(3). Thus, we may affirm the district court on this alternative ground. Stein v. Regions
Morgan Keegan Select High Income Fund, Inc., 821 F.3d 780, 786 (6th Cir. 2016).
As a general matter, the district court does not know who received the Prolia fax. The
fax logs no longer exist. Yet we know that 13,159 individuals on the Prolia List do not have
valid claims against Besse. Sandusky has proposed no method for weeding out these individuals,
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 17
who comprise approximately 25% of all intended recipients. The district court recognized that
its own proffered solution—having class members submit individual affidavits testifying to
receipt of the Prolia fax—was not feasible, concluding that the reliability of an individual’s
recollection of having received a seven-year-old, single-page fax would be dubious at best.
Furthermore, it is possible that all 53,502 intended recipients might submit affidavits claiming
receipt of the Prolia fax and their entitlement to $500 in damages. Finding out which quarter of
these individuals were being untruthful would require scrutinizing each affidavit and would
undoubtedly be a difficult undertaking. In fact, it may not even be possible, in which case the
district court would be tasked with fashioning some type of reduced equitable relief for all
recipients. Practical concerns such as these highlight the difficulties the district court would
have in managing Sandusky’s proposed class and further underscore the inappropriateness of
class certification.
To our knowledge, no circuit court has ever mandated certification of a TCPA class
where fax logs did not exist, and we decline to be the first. Sandusky cites exclusively out-of-
circuit district court cases as examples of when TCPA classes have been certified despite missing
fax logs. See Appellant Br. at 13–14. But while the district courts in those cases may have
determined, given the specific facts presented, that classwide treatment was manageable, the
district court’s opposite conclusion in this case was not an abuse of discretion.
The two non-TCPA circuit court cases relied on by Sandusky—Mullins and Briseno—
suggest that a district court may rely on affidavits to identify class members, but they do not
mandate that it must do so. Notably, both of those cases affirmed lower court decisions
certifying a class, where the district court had concluded that it was manageable to rely on
affidavits to identify class members. Here, in contrast, the district court came to the opposite
conclusion. We think this difference in procedural posture is important given the “substantial
discretion” we afford district courts in choosing whether to certify a class and our subsequent
“very limited” review of that decision. Rikos, 799 F.3d at 504; Young, 693 F.3d at 536. Finally,
even Mullins contemplates that “[a] plaintiff’s failure to address the district court’s concerns
adequately [with regards to difficult manageability problems] may well cause the plaintiff to
No. 16-3741 Sandusky Wellness Center v. ASD Specialty Healthcare, et al. Page 18
flunk the superiority requirement of Rule 23(b)(3).” See Mullins, 795 F.3d at 672. That is
exactly the scenario we have here.
While class certification may be “normal” under the TCPA, see Appellant Br. at 8
(quoting Turza, 728 F.3d at 683), that does not mean it is automatic. While there may be several
benefits to affording TCPA cases class treatment—for example, as a way to hold businesses
accountable when smaller recovery values provide fewer incentives for solo claims—those
benefits do not always outweigh the difficulties of managing a proposed class. Sandusky waited
three years after receipt of the one-page Prolia fax to sue Besse for failing to include a properly
worded opt-out notice. It did so when fax logs no longer existed to identify each recipient and
without a proposed alternative for identifying class members. Perhaps if Sandusky had brought
suit earlier, fax logs would have existed, and their absence would not pose an independent barrier
to class certification. Or, Sandusky could have filed an individual claim against Besse and
presented a copy of the Prolia fax as evidence of receipt. Instead, Sandusky did neither of these
things. By choosing to file a class action when it did, Sandusky shouldered the burden of
proving that its proposed class satisfied Rule 23. It simply did not meet that burden here. In
sum, we conclude that the difficulty of identifying class members in the absence of fax logs was
a separate and valid concern recognized by the district court that precluded class certification.
III
For the foregoing reasons, we AFFIRM the district court’s denial of class certification.