Robert W. Mauthe, M.D., P.C. v. Optum, Inc. et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.June 15, 2017

1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ) ROBERT W. MAUTHE, M.D., P.C., ) ) ) Civil Action No. 5:17-cv-1643 Plaintiff, ) ) v. ) ) OPTUM, INC., OPTUMINSIGHT, INC. ) ) Defendants. ) ) DEFENDANTS’ MOTION TO DISMISS For the reasons set forth in the accompanying Memorandum of Law, which is expressly incorporated herein by reference, Defendants Optum, Inc. and OptumInsight, Inc. (collectively, “Defendants”) respectfully move to dismiss Plaintiff’s Complaint for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Pursuant to the Court’s Policies and Procedures § II.E.3, Defendants request oral argument. Respectfully Submitted, HOGAN LOVELLS US LLP Dated: June 15, 2017 /s/ Stephen A. Loney, Jr. Stephen A. Loney, Jr. (Pa. No. 202535) stephen.loney@hoganlovells.com 1835 Market Street, 29th Floor Philadelphia, PA 19103 (267) 675-4600 (tel) (267) 675-4601 (fax) Case 5:17-cv-01643-EGS Document 13 Filed 06/15/17 Page 1 of 3 2 Adam K. Levin (pro hac vice) adam.levin@hoganlovells.com Kathryn M. Ali (pro hac vice) kathryn.ali@hoganlovells.com Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 (202) 637-5600 (tel) (202) 637-5910 (fax) Counsel for Defendants Optum, Inc. and OptumInsight, Inc. Case 5:17-cv-01643-EGS Document 13 Filed 06/15/17 Page 2 of 3 3 CERTIFICATE OF SERVICE I hereby certify that on June 15, 2017, a copy of the foregoing Motion to Dismiss, together with all documents in support thereof, were electronically filed with the Clerk of the Court using the CM/ECF system, which will send notification of the filing to all counsel of record. /s/ Stephen A. Loney, Jr. Attorney for Defendant Case 5:17-cv-01643-EGS Document 13 Filed 06/15/17 Page 3 of 3 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ) ROBERT W. MAUTHE, M.D., P.C., ) ) ) Civil Action No. 5:17-cv-1643 Plaintiff, ) ) v. ) ) OPTUM, INC., OPTUMINSIGHT, INC. ) ) Defendants. ) ) ORDER AND NOW, this ____ day of _____, 2017, upon consideration of the Defendants’ Motion to Dismiss, the accompanying Memorandum of Law, any response thereto, and the entire record herein, it is hereby ORDERED that the Defendants’ Motion to Dismiss is GRANTED, and all claims against Defendants Optum, Inc. and OptumInsight, Inc., are hereby DISMISSED with prejudice. BY THE COURT: ___________________________ The Honorable Edward G. Smith United States District Court Judge Case 5:17-cv-01643-EGS Document 13-1 Filed 06/15/17 Page 1 of 1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ) ROBERT W. MAUTHE, M.D., P.C., ) ) ) Civil Action No. 5:17-cv-1643 Plaintiff, ) ) v. ) ) OPTUM, INC., OPTUMINSIGHT, INC., ) ) Defendants. ) ) DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 1 of 22 i TABLE OF CONTENTS Page TABLE OF AUTHORITIES .......................................................................................................... ii INTRODUCTION ...........................................................................................................................1 BACKGROUND .............................................................................................................................2 STANDARD OF REVIEW .............................................................................................................3 ARGUMENT...................................................................................................................................4 I. PLAINTIFF’S TCPA CLAIM FAILS BECAUSE THE FAX AT ISSUE IS NOT AN ADVERTISEMENT .....................................................................4 A. The TCPA’s Prohibition On Sending Unsolicited Faxes Only Applies To Fax “Advertisements” .....................................................................4 B. The Fax Alleged In The Complaint Is Not An Advertisement..........................5 II. THE COURT SHOULD DISMISS PLAINTIFF’S CONVERSION CLAIM.........................................................................................................................11 A. The Court Should Dismiss Plaintiff’s Conversion Claim Pursuant to the De Minimis Harm Doctrine.....................................................11 B. In The Alternative, If The Court Dismisses Plaintiff’s TCPA Claim, It Should Decline To Exercise Supplemental Jurisdiction Over Plaintiff’s Conversion Claim...............................................14 CONCLUSION..............................................................................................................................16 Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 2 of 22 ii TABLE OF AUTHORITIES Page(s) CASES: Able Home Health, LLC v. Onsite Healthcare, Inc., S.C., No. 16-cv-8219, 2017 WL 2152429 (N.D. Ill. May 17, 2017)................................................12 Alston v. Pennsylvania State Univ., No. 16-1290, 2017 WL 1379408 (3d Cir. Apr. 13, 2017) .......................................................15 Ameriguard, Inc. v. Univ. of Kansas Med. Ctr. Research Inst., Inc., No. 06-0369-CV-W-ODS, 2006 WL 1766812 (W.D. Mo. June 23, 2006), aff’d, 222 F. App’x 530 (8th Cir. 2007).....................................................................................8 ARcare v. IMS Health, Inc., No. 16-cv-00080, 2016 WL 4967810 (E.D. Ark. Sept. 15, 2016)...................................6, 7, 10 Ashcroft v. Iqbal, 556 U.S. 662 (2009)...................................................................................................................3 Bailey v. Zoning Bd. of Adjustment of City of Philadelphia, 569 Pa. 147 (2002)...................................................................................................................11 Bell v. Money Res. Corp., No. 08-cv-639, 2009 WL 382478 (E.D. Pa. Feb. 13, 2009) ..............................................12, 13 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)...........................................................................................................3, 4, 8 Bright v. Westmoreland County, 380 F.3d 729 (3d Cir.2004)......................................................................................................15 Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343 (1988).................................................................................................................14 G.M. Sign, Inc. v. Elm St. Chiropractic, Ltd., 871 F. Supp. 2d 763 (N.D. Ill. 2012) .................................................................................12, 14 Grind Lap Servs., Inc. v. UBM LLC, No. 14-c -6448, 2015 WL 6955484 (N.D. Ill. Nov. 10, 2015), appeal dismissed (Mar. 17, 2016)..............................................................................................5 Friedman v. Torchmark, No. 12–cv–2837, 2013 WL 4102201, at *6 (S.D. Cal. Aug. 13, 2013) … ......................................................................................................................9 Hedges v. Musco, 204 F. 3d 109 (3d. Cir. 2000)...................................................................................................14 Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 3 of 22 TABLE OF AUTHORITIES—Continued Page(s) iii Hill v. Cosby, No. 15-cv-1658, 2016 WL 491728 (W.D. Pa. Feb. 9, 2016).....................................................4 Holmes v. Back Doctors, Ltd., 695 F. Supp. 2d 843 (S.D. Ill. 2010)........................................................................................10 Iseley v. Talaber, No. 05-cv-444, 2008 WL 906508 (M.D. Pa. Mar. 31, 2008) ....................................................8 Luminent Mortg. Capital, Inc. v. Merrill Lynch & Co., 652 F. Supp. 2d 576 (E.D. Pa. 2009) .......................................................................................15 Lutz Appellate Serv., Inc. v. Curry, 859 F. Supp. 180 (E.D. Pa. 1994) ..............................................................................................8 Malleus v. George, 641 F.3d 560 (3d Cir. 2011).......................................................................................................4 Mallory v. S & S Publishers, 168 F. Supp. 3d 760 (E.D. Pa. 2016) .....................................................................................3, 8 Mauthe v. Gaither Technologies, et al., No. 17-cv-2154 (E.D. Pa. 2017) ................................................................................................2 Mauthe v. MedTech Imaging, Inc., No. 15-cv-656 (M.D. Pa. 2015) .................................................................................................2 Mauthe v. Nat’l Imaging Assocs., Inc., No. 17-cv-1916 (E.D. Pa. 2017) ................................................................................................2 Mauthe v. Optum360, No. 17-cv-945 (E.D. Pa. 2017) ..................................................................................................2 Mauthe v. Pharmakon Solutions, LLC et al., No. 15-cv-4275 (E.D. Pa. 2015) ................................................................................................2 Mauthe v. Versa Cardio, No. 16-cv-570 (E.D. Pa. 2016) ..................................................................................................2 Mayer v. Belichick, 605 F.3d 223 (3d Cir. 2010).......................................................................................................5 McLaverty v. Liberty/Commerz 1701 JFK Boulevard, L.P., No. 501 EDA 2012, 2014 WL 10919556 (Pa. Super. Ct. June 6, 2014) .................................11 Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 4 of 22 TABLE OF AUTHORITIES—Continued Page(s) iv MGJ v. Sch. Dist. of Philadelphia, No. 17-cv-318, 2017 WL 2277276 (E.D. Pa. May 25, 2017)....................................................5 N.B. Indus. v. Wells Fargo & Co., No. C 10-03203 LB, 2010 WL 4939970 (N.D. Cal. Nov. 30, 2010), aff’d sub nom. N.B. Indus., Inc. v. Wells Fargo & Co., 465 F. App’x 640 (9th Cir. 2012)............8, 9, 10 P&S Printing LLC v. Tubelite, Inc., No. 14-cv-1441, 2015 WL 4425793 (D. Conn. July 17, 2015) ...............................................10 Phillip Long Dang, D.C., P.C. v. XLHealth Corp., No. 109-cv-1076, 2011 WL 553826 (N.D. Ga. Feb. 7, 2011)...................................................6 Phillips Randolph Ent., LLC v. Adler–Weiner Research Chicago, Inc., 526 F. Supp. 2d 851 (N.D. Ill. 2007) .........................................................................................8 Physicians Healthsource, Inc. v. Janssen Pharm., Inc., No. 12-cv-2132, 2013 WL 486207 (D.N.J. Feb. 6, 2013) .......................................4, 5, 6, 9, 10 Rossario’s Fine Jewelry, Inc. v. Paddock Publications, Inc., 443 F. Supp. 2d 976 (N.D. Ill. 2006) .......................................................................................12 Sandusky Wellness Ctr., LLC v. Medco Health Sols., Inc., 788 F.3d 218 (6th Cir. 2015) .........................................................................................4, 5, 6, 9 Schutt v. Melmark, Inc., No. 15-cv-2731, 2017 WL 1477130 (E.D. Pa. Apr. 24, 2017)..........................................14, 16 Shaffer v. Bd. of Sch. Dirs. of Albert Gallatin Area Sch. Dist., 730 F.2d 910 (3d Cir. 1984).....................................................................................................15 Stonecrafters, Inc. v. Foxfire Printing & Packaging, Inc., 633 F. Supp. 2d 610 (N.D.Ill. 2009) ............................................................................12, 13, 14 Sturdy v. Medtrak Educ. Servs. LLC, No. 13-cv-3350, 2014 WL 2727200 (C.D. Ill. June 16, 2014)..........................................12, 13 STATUTES: 28 U.S.C. § 1367(c)(3)...................................................................................................................14 47 U.S.C. § 227(a)(5).......................................................................................................................4 47 U.S.C. § 227(b)(1) ..............................................................................................................1, 3, 4 Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 5 of 22 TABLE OF AUTHORITIES—Continued Page(s) v 47 U.S.C. § 227(d)(1)(B) ...............................................................................................................10 RULES: Fed. R. Civ. P. 12(b)(6)............................................................................................................3, 5, 8 Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 6 of 22 1 INTRODUCTION This case arises out of an alleged violation of the Telephone Consumer Protection Act (“TCPA”), which generally prohibits certain calls and faxes from being made without a recipient’s consent. Here, Plaintiff Robert Mauthe (“Plaintiff”) alleges that Defendants Optum, Inc. and OptumInsight, Inc. (collectively, “Defendants”) sent him a single unauthorized, one- page fax and asserts claims “on information and belief” on behalf of a putative class that allegedly received similar faxes from Defendants. On the basis of these allegations, Plaintiff asserts claims under the TCPA and for a supposed “conversion” in violation of Pennsylvania law. As shown below, however, both of Plaintiff’s claims fail as a matter of law and should be dismissed. Plaintiff’s TCPA claim should be dismissed because the TCPA only prohibits unsolicited fax “advertisements,” 47 U.S.C. § 227(b)(1), and the fax at issue here is not an advertisement within the meaning of the statute. Rather, as is evident from the face of the fax, it is an informational message that is exempt from TCPA liability. Because Plaintiff’s own Complaint makes clear that he cannot establish this required element of his TCPA claim, and because no amendment could cure this deficiency, the Court should dismiss the TCPA claim (Count I of the Complaint). The Court also should dismiss Plaintiff’s conversion claim (Count II), which is predicated on a theory that, by sending Plaintiff a one-page fax, Defendants somehow “converted” his fax machine, toner, paper, and employee time. Any supposed harm that Plaintiff suffered as a result of the alleged conversion is de minimis and insufficient to state a plausible claim for relief. Alternatively, in the event the Court dismisses Plaintiff’s TCPA claim, it should decline to exercise supplemental jurisdiction over Plaintiff’s state-law conversion claim. Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 7 of 22 2 Accordingly, for these reasons and those that follow, Plaintiff’s entire Complaint should be dismissed. BACKGROUND Plaintiff “is a private medical practice in Center Valley, Pennsylvania.” Complaint, Dkt. 1 (“Compl.”) ¶ 6. Plaintiff is also a serial TCPA plaintiff. See, e.g., Mauthe v. Gaither Technologies, et al., No. 17-cv-2154 (E.D. Pa. filed May 10, 2017); Mauthe v. Nat’l Imaging Assocs., Inc., No. 17-cv-1916 (E.D. Pa. filed April 26, 2017); Mauthe v. Versa Cardio, No. 16- cv-570 (E.D. Pa. filed Feb. 4, 2016); Mauthe v. Pharmakon Solutions, LLC et al., No. 15-cv- 4275 (E.D. Pa. filed August 4, 2015) (voluntarily dismissed with prejudice Nov. 3, 2015); Mauthe v. Versa Cardio, LLC, No. 16-cv-570 (E.D. Pa. filed April 2, 2015). In fact, Plaintiff originally filed suit in this Court against a different Optum entity, Optum360, only to voluntarily dismiss that case and then re-file this suit.1 Mauthe v. Optum360, No. 17-cv-945 (E.D. Pa. filed March 1, 2017) (voluntarily dismissed April 11, 2017); Mauthe v. MedTech Imaging, Inc., No. 15-cv-656 (M.D. Pa. filed April 2, 2015). The crux of Plaintiff’s Complaint is the allegation that “Defendants sent Plaintiff at least one advertisement by facsimile” without his consent. Compl. ¶ 2. Plaintiff refers to and attaches a copy of the fax at issue as Exhibit A to his Complaint. Dkt. 1-1. That fax states its purpose at the top of the page: As part of ongoing data maintenance of our Optum Provider Database product, Optum regularly contacts health care practitioners to verify demographic data regarding your office location(s). This outreach is independent of and not related to your participation in any Optum network. By taking a few minutes to verify your practice information is current, your information will be promptly updated in the Optum Provider Database. 1 The fax Mauthe attached to his initial complaint was actually not sent to Mauthe at all, but to another individual, who has since filed a TCPA suit against Optum360 based on that fax. Compare Mauthe, 17-cv-945, Dkt 1-1, with Conner v. Optum360, 17-cv-01642, Dkt. 1. Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 8 of 22 3 This data is used by health care related organizations to aid in claims payment, assist with provider authentication and recruiting, augment their own provider data, mitigate health care fraud and publish accurate provider directories. There is no cost to you to participate in this data maintenance initiative. This is not an attempt to sell you anything. Id. The fax then lists and asks for verification of Plaintiff’s last-known contact information. Id. (listing Plaintiff’s last-known name, address, phone number, national provider identifier, and fax number and stating: “Check below if the displayed data is correct. If not correct, write the correct data in the space provided.”).2 The fax contains no offer of services or goods. STANDARD OF REVIEW To survive a motion to dismiss, a complaint must contain more than “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Those “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. at 555. In this District, the 12(b)(6) “inquiry is normally broken into three parts: (1) identifying the elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the inquiry are sufficiently alleged.” Mallory v. S & S 2 The fax also contains an opt-out notice with instructions regarding how recipients can “opt out” of receiving future fax communications. The rules governing opt-out notices on advertising faxes do not apply to non-advertising faxes, and so are inapplicable to the fax at issue in the Complaint. 47 U.S.C. § 227(b)(1)(C). However, in the event this case is not dismissed, Defendants do not waive and reserve their right to challenge Plaintiff’s allegations regarding the sufficiency of the opt-out notice. Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 9 of 22 4 Publishers, 168 F. Supp. 3d 760, 766 (E.D. Pa. 2016) (quoting Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011)). “[A] Motion to Dismiss should be granted if a party fails to allege facts, which could, if established at trial, entitle him/her to relief.” Hill v. Cosby, No. 15-cv-1658, 2016 WL 491728, at *2 (W.D. Pa. Feb. 9, 2016) (citing Twombly, 550 U.S. at 563, n.8). ARGUMENT I. PLAINTIFF’S TCPA CLAIM FAILS BECAUSE THE FAX AT ISSUE IS NOT AN ADVERTISEMENT. A. The TCPA’s Prohibition On Sending Unsolicited Faxes Only Applies To Fax “Advertisements.” The TCPA’s fax provision only prohibits the transmission of fax “advertisements,” which means that no TCPA liability can arise from the sending of a fax unless the fax is an advertisement. 47 U.S.C. § 227(b)(1)(C). The statute defines “advertisement” as “any material advertising the commercial availability or quality of any property, goods, or services.” Id. § 227(a)(5). To state a claim under the TCPA, therefore, the fax at issue “must promote goods or services that are for sale.” Sandusky Wellness Ctr., LLC v. Medco Health Sols., Inc., 788 F.3d 218, 222 (6th Cir. 2015); see also Physicians Healthsource, Inc. v. Janssen Pharm., Inc., No. 12- cv-2132, 2013 WL 486207, at *4 (D.N.J. Feb. 6, 2013) (dismissing TCPA complaint for failure to state a claim on the basis that fax did not promote the quality or availability of goods or services and thus was not an advertisement). “Congress intended that non-commercial faxes fall outside the TCPA’s prohibition,” Janssen Pharm., 2013 WL 486207, at *2, so messages that are primarily informational are exempt from the TCPA. Id. (“[T]he statute draws a line between informational messages and advertisements.”). Importantly, “whether the sender will ultimately obtain an ancillary commercial benefit from sending an informational message” does not convert it into an advertisement; “the potential Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 10 of 22 5 to gain some benefit from sending information, without the presence of additional commercial statement in the message, is insufficient to transform an informational message [in]to an advertisement.” Id. at *4 (collecting cases where courts determined fax was not an advertisement despite some potential economic benefit that might derive from sending the fax); see also Grind Lap Servs., Inc. v. UBM LLC, No. 14-c-6448, 2015 WL 6955484, at *3 (N.D. Ill. Nov. 10, 2015), appeal dismissed (Mar. 17, 2016) (finding “as a matter of law” that a fax was not an unsolicited advertisement and that the inclusion of “questions about plaintiff’s business” in the fax did “not transform it into an unsolicited advertisement”). Thus, “[t]he appropriate inquiry under the TCPA is not whether there is some ancillary commercial benefit to either party, but whether the message is an advertisement which tends to propose a commercial transaction.” Janssen Pharm., 2013 WL 486207, at *4; see also Sandusky, 788 F.3d at 225 (same). B. The Fax Alleged In The Complaint Is Not An Advertisement. Though Plaintiff alleges that “Defendants sent Plaintiff at least one advertisement by facsimile,” Compl. ¶ 2, the face of the fax, Dkt. 1-1, makes clear that it does not “promote the commercial availability or quality” of any good or service and thus is not an advertisement.3 As the fax states, its purpose is information verification: “As part of ongoing data maintenance of our Optum Provider Database product, Optum regularly contacts health care practitioners to verify demographic data regarding your office location(s). This outreach is independent of and not related to your participation in any Optum network . . .. This data is used by health care related organizations to aid in claims payment, assist with provider authentication and recruiting, 3 Plaintiff attached the fax at issue as Exhibit A to his Complaint. See Dkt. 1-1. The Court therefore may consider the content of the fax in deciding Defendants’ motion. MGJ v. Sch. Dist. of Philadelphia, No. 17-cv-318, 2017 WL 2277276, at *4 n.42 (E.D. Pa. May 25, 2017) (in deciding a Rule 12(b)(6) motion, courts may consider not only the complaint, but any exhibits attached thereto) (quoting Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010)). Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 11 of 22 6 augment their own provider data, mitigate health care fraud and publish accurate provider directories.” Dkt. 1-1. Indeed, there is no plausible reading of the fax that would suggest it is promotional in nature. The fax does not offer to sell the Optum Provider Database (or any other product) to recipients. It does not list the price of any product. It does not contain any information about where or how the recipient can purchase the Optum Provider Database, or any other product. And the fax expressly disclaims any commercial purpose, stating: “There is no cost to you to participate in this data maintenance initiative. This is not an attempt to sell you anything.” Id. (emphasis added). Moreover, the fax is not a “blast” communication, but rather is tailored to the specific recipient, listing pre-populated contact information and asking for verification of that information. Id. Under these circumstances, this fax is simply not an advertisement within the meaning of the TCPA. See, e.g., Sandusky, 788 F.3d at 222–23 (faxes were not advertisements where they “call items (medications) and services (Medco’s formulary) to [plaintiff’s] attention, yes. But no record evidence shows that they do so because the drugs or Medco’s services are for sale by Medco, now or in the future. In fact, the record shows that Medco has no interest whatsoever in soliciting business from [plaintiff]”).4 Another district court’s recent decision in ARcare v. IMS Health, Inc. is instructive. No. 16-cv-00080, 2016 WL 4967810 (E.D. Ark. Sept. 15, 2016). There, the fax at issue stated in part 4 See also Janssen Pharm., Inc., 2013 WL 486207, at *3-6 (fax notifying the recipient of a pharmaceutical product’s reclassification was not an advertisement, in part because fax did not state “where or how [the product] is available for purchase”); Phillip Long Dang, D.C., P.C. v. XLHealth Corp., No. 9-cv-1076, 2011 WL 553826, at *4 (N.D. Ga. Feb. 7, 2011) (“[T]he Court finds as a matter of law that the Defendants’ communication was not an advertisement under the TCPA. Instead of ‘promoting goods and services’ in the commercial sense, Defendants’ communication alerted the recipient that a free seminar would be offered, wherein the recipient could learn more about the Defendants’ billing processes and thereby speed up payment to the recipient.”). Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 12 of 22 7 as follows: “Healthcare Data Solutions (HDS) works with pharmacies and prescribers to ensure the confidential exchange and confirmation of patient information. We want to verify that your fax number is compliant and secure to protect patient’s information and allow pharmacies to verify prescriber information regarding prescription refill requests.” Id. at *1. Like the fax in question here, the fax asked the recipient “to verify the practice’s address, phone number, fax number, office manager, and website; the identity of the medical professional who provides services at the practice; and the direct fax number for that medical professional.” Id. And, as here, the fax provided “a space for a signature, where the recipient can affirm that the information provided is true and correct.” Id. The defendant in ARcare moved to dismiss on the basis that the fax was not an advertisement. The court agreed, concluding that “the faxes in dispute are non-commercial messages that fall outside that TCPA’s ban on unsolicited advertisements.” Id. at *3. As the court reasoned, the fax did not “indicate where or how” the product or service referenced in the fax “is available for purchase by the fax recipient. . . . What, if any, services are commercially available to [plaintiff] is unclear.” Id. (emphasis in original). The court further explained that the plaintiff “does not even speculate in its complaint that . . . the fax would be followed by a commercial solicitation for the recipient to purchase services from IMS Health. And nothing in the fax itself suggests that verifying the recipient’s fax number and information about the practice was a pretext for pitching a particular service.” Id. So too here. Plaintiff alleges that the fax on which he relies is “a pretext” to “obtain fax recipients’ participation in Defendants’ proprietary database” and to “increase awareness and use of Defendants’ proprietary database service.” Compl. ¶¶ 22-23. As a threshold matter, it is unclear what possible good-faith basis Plaintiff has for making such an allegation, and this assertion Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 13 of 22 8 should be struck at the 12(b)(6) stage as conclusory and lacking factual support. See Mallory, 168 F. Supp. 3d at 765-66. But even taking these allegations as true for purposes of this motion, the cases are legion that a fax seeking the recipient’s participation in a voluntary program does not, without more, make it an advertisement. See, e.g., Lutz Appellate Serv., Inc. v. Curry, 859 F. Supp. 180, 181 (E.D. Pa. 1994) (fax announcing the existence of job openings was not an advertisement); Phillips Randolph Ent., LLC v. Adler-Weiner Research Chicago, Inc., 526 F. Supp. 2d 851, 852-53 (N.D. Ill. 2007) (fax inviting recipient to participate in a research study on a health care program, offering an honorarium of “$200.00 cash” was not an advertisement).5 Plaintiff further alleges that the fax “promotes the quality of Defendants’ Optum Provider Database product,” Compl. ¶ 19, and that it “promotes Defendants’ commercially available, proprietary Optum Provider Database by offerings [sic] its services and supposed benefits to fax recipients while Defendants are collecting valuable data to provide to paying customers,” id. ¶ 24. These allegations, too, are insufficient to demonstrate that the fax is an advertisement. As an initial matter, these allegations are contradicted by the fax itself, and Plaintiff’s contention thus is not “plausible on its face.” Iseley v. Talaber, No. 05-cv-444, 2008 WL 906508, at *2 (M.D. Pa. Mar. 31, 2008) (quoting Twombly, 550 U.S. at 570); see also Phillips Randolph, 526 F. Supp. 2d at 853 (rejecting plaintiff’s allegation that the defendants’ “products or services were advertised in the fax” where, “[o]n its face, the fax [did] not promote a ‘commercially available service’”). As discussed above, there is no product advertised or 5 See also N.B. Indus. v. Wells Fargo & Co., No. C 10-03203 LB, 2010 WL 4939970, at *1 (N.D. Cal. Nov. 30, 2010), aff’d sub nom. N.B. Indus., Inc. v. Wells Fargo & Co., 465 F. App’x 640 (9th Cir. 2012) (fax “promoting an annual Asian Business Leadership Award sponsored by USPAACC and Wells Fargo and [ ] containing an application for the award” was not an advertisement); Ameriguard, Inc. v. Univ. of Kansas Med. Ctr. Research Inst., Inc., No. 06-0369- CV-W-ODS, 2006 WL 1766812, at *1 (W.D. Mo. June 23, 2006), aff'd, 222 F. App’x 530 (8th Cir. 2007) (concluding “as a matter of law” that a fax seeking “participants in a clinical research trial” and stating that participants would receive compensation was not an advertisement). Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 14 of 22 9 promoted in the fax at issue. The description of what providers’ contact information might ultimately be used for does not “promote” the Provider Database, but rather explains why a provider might wish to ensure that his or her contact information is accurate. Indeed, the fax itself makes clear that that data sought is to be used to assist “health care related organizations,” Dkt. 1-1, rather than to be sold to the recipient physician. This, too, compels the conclusion that the fax is not an advertisement; to be an advertisement, the seller must be promoting the commercial availability of goods and services to the recipient of the communication. See, e.g., Friedman v. Torchmark, No. 12-cv-2837, 2013 WL 4102201, at *6 (S.D. Cal. Aug. 13, 2013) (fax was not an advertisement “[e]ven though the messages contained an offer to participate in a free webinar,” because “this webinar was not part of an overall marketing campaign to sell access to a customer-base to Plaintiff” (emphasis added)). Likewise, even if the Optum Provider Database were “commercially available” to someone at some indeterminate point in the future, this fact would not make the fax an advertisement within the meaning of the TCPA. “The fact that the sender might gain an ancillary, remote, and hypothetical economic benefit later on does not convert a noncommercial, informational communication into a commercial solicitation.” Sandusky, 788 F.3d at 225. To the contrary, “[t]he possibility that future economic benefits will flow from a non-commercial fax, ancillary to the content of the fax, is legally irrelevant to determining whether the fax is an ad.” Id. (emphasis added); see also Janssen Pharm., 2013 WL 486207, at *4 (inquiry is not whether there is an ancillary commercial benefit to either party but instead is whether the message itself advertises a good or service); N.B. Indus. v. Wells Fargo & Co., No. C 10-03203 LB, 2010 WL 4939970, at *10 (N.D. Cal. Nov. 30, 2010), aff’d sub nom. N.B. Indus., Inc. v. Wells Fargo & Co., 465 F. App’x 640 (9th Cir. 2012) (same). Nor does the fact that the fax lists Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 15 of 22 10 “Optum’s name, address, logo, and contact information,” and refers recipients to Defendants’ website, Compl. ¶¶ 17, 20, change the result. ARcare, 2016 WL 4967810, at *3 (rejecting argument that inclusion of defendant’s “logo, address, and phone number, the description of [defendant’s business]” converted informational fax message into an advertisement); N.B. Indus., 2010 WL 4939970, at *8 (“[I]nclusion of [defendants’] logos and website addresses is incidental information that does not transform the messages into advertisements”).6 Indeed, “the TCPA expressly requires that the sender’s name appear on the fax when sending any informational messages.” Janssen Pharm., 2013 WL 486207, at *5 (citing 47 U.S.C. § 227(d)(1)(B)). Plaintiff’s additional allegation that “Defendants’ Provider Profiles FAQs provides a telephone number to reach Optum’s sales department,” Compl. ¶ 21, obviously does not make the fax an advertisement. For one thing, the Provider Profiles FAQ does not appear anywhere on the face of the fax. The sole “reference” to the FAQ, if it could even be called that, is a single sentence: “For additional information, visit us at http://www.optum.com/landing/provider- profile-faqs.html.” Dkt. 1-1. And the alleged sales department phone number is buried in multiple pages of information in the FAQ. In any event, the inclusion of a telephone number allegedly connected to a sales department is far too remote to convert this informational fax into an advertisement. See Janssen Pharm., 2013 WL 486207, at *5. That Plaintiff felt the need to include this allegation at all speaks volumes regarding the tenuousness of his claim. 6 See also P&S Printing LLC v. Tubelite, Inc., No. 14-cv-1441, 2015 WL 4425793, at *6 (D. Conn. July 17, 2015) (“While Tubelite may experience some incidental benefit of having its logo and a few positive phrases on this communication, the mere presence of a logo on a document does not transform that entire document into advertising under the TCPA.”); Janssen Pharm., 2013 WL 486207, at *5 (“[T]he inclusion of marketing logos also does not transform the faxes into advertisements. Indeed, as a general matter, an incidental advertisement of the sender’s goods or services does not convert the entire communication into an advertisement.”); Holmes v. Back Doctors, Ltd., 695 F. Supp. 2d 843, 851 (S.D. Ill. 2010) (that one-seventh of a fax consisted of advertising did not convert that entire document into an advertisement under the TCPA). Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 16 of 22 11 Accordingly, because the fax alleged in the Complaint is not an advertisement, Plaintiff’s TCPA claim (Count I) fails to state a claim and should be dismissed. Because Plaintiff cannot change the non-advertising nature of the fax, any amendment of the Complaint also would be futile. Defendants therefore request that Count I be dismissed with prejudice. II. THE COURT SHOULD DISMISS PLAINTIFF’S CONVERSION CLAIM. In addition to alleging a TCPA violation, Plaintiff contends that by “sending advertisements to [his] fax machine[],” Defendants unlawfully converted his fax machine’s “paper and toner” and “Plaintiff’s time.” Compl. ¶ 64. Due to the de minimis nature of Plaintiff’s alleged injury, the Court should dismiss this claim for failure to state a claim upon which relief can be granted. Alternatively, if the Court dismisses Plaintiff’s TCPA claim, it should decline to exercise supplemental jurisdiction over Plaintiff’s state-law conversion claim and dismiss this claim together with the TCPA claim. A. The Court Should Dismiss Plaintiff’s Conversion Claim Pursuant to the De Minimis Harm Doctrine. The Court should dismiss Plaintiff’s conversion claim on the basis that this claim is barred by the doctrine of de minimis non curat lex, a “common legal principle meaning that the law does not care for small or trifling matters.” Bailey v. Zoning Bd. of Adjustment of City of Philadelphia, 569 Pa. 147, 166 n.20 (2002). “Pursuant to this principle, courts disregard trivial matters that serve merely to exhaust the court’s time.” Id.; see also McLaverty v. Liberty/Commerz 1701 JFK Boulevard, L.P., No. 501 EDA 2012, 2014 WL 10919556, at *1 (Pa. Super. Ct. June 6, 2014) (“We dismiss this appeal on the principle of de minimis non curat lex (the law does not concern itself with trifles).”). Numerous courts have applied this doctrine to dismiss conversion claims premised on the alleged “generation of a one-page unsolicited fax advertisement,” as Plaintiff’s claim is here. Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 17 of 22 12 Able Home Health, LLC v. Onsite Healthcare, Inc., S.C., No. 16-cv-8219, 2017 WL 2152429, at *6 (N.D. Ill. May 17, 2017) (dismissing conversion claim based on junk fax because plaintiff’s alleged harm was too small to warrant relief) (internal quotation marks and citation omitted); see also G.M. Sign, Inc. v. Elm St. Chiropractic, Ltd., 871 F. Supp. 2d 763, 768 (N.D. Ill. 2012) (“The loss of a single sheet of paper and a minuscule amount of toner . . . is too trivial an injury to amount to an actionable conversion.”).7 As one court put it: “[T]he ancient maxim de minimis non curat lex might well have been coined for the occasion in which a conversion claim is brought based solely on the loss of paper and toner consumed during the generation of a one- page unsolicited fax advertisement.” Stonecrafters, Inc. v. Foxfire Printing and Packaging, Inc., 633 F. Supp. 2d 610, 613 (citing Rossario’s Fine Jewelry, Inc. v. Paddock Publications, Inc., 443 F. Supp. 2d 976 (N.D. Ill. 2006)) (internal quotation marks omitted). This Court should adhere to that result. Defendants acknowledge that, in the only case where a court in this District has addressed the question of whether a conversion claim can properly be based on a single so-called “junk fax,” that court in an unpublished opinion rejected the argument that such claims are subject to dismissal pursuant to the de minimis doctrine. See Bell v. Money Res. Corp., No. 08- cv-639, 2009 WL 382478, at *4–5 (E.D. Pa. Feb. 13, 2009). In Bell, the court reasoned that “[w]hile the costs of lost paper and ink are minimal, Pennsylvania courts permit conversion claims for only nominal damages . . . Accordingly, even accepting Defendant’s argument that 7 See also Sturdy v. Medtrak Educ. Servs. LLC, No. 13-CV-3350, 2014 WL 2727200, at *5 (C.D. Ill. June 16, 2014) (“[T]his court agrees with the reasoning in those decisions that have applied the de minimis doctrine to bar conversion claims in junk fax cases”); Stonecrafters, Inc. v. Foxfire Printing & Packaging, Inc., 633 F. Supp. 2d 610, 615 (N.D.Ill. 2009) (“Because plaintiff’s claim for conversion of paper and toner was insufficient at its inception to merit a judgment, the de minimis doctrine applies in this case”). Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 18 of 22 13 Plaintiff’s actual damages are trivial, the Court declines to dismiss a conversion claim that could, if successful, recover nominal damages.” Id. Since Bell was decided, however, several district courts have rejected this reasoning on the basis that it “conflate[s] the concept of nominal damages with the doctrine of de minimis non curat lex.” Stonecrafters, 633 F. Supp. 2d at 614. As those courts have explained: [T]he propriety of awarding nominal damages for a conversion claim in a particular case does not render the de minimis doctrine inapplicable to conversion cases, as these are two separate and distinct concepts. An award of nominal damages “presupposes a violation of sufficient gravity to merit a judgment, even if significant damages cannot be proved.” Thus, for example, nominal damages might be appropriate in a case in which the defendant converts plaintiff’s valuable antique coin collection but then, during the pendency of the lawsuit, returns the coins to plaintiff unharmed. In this example, at the time the complaint was filed, the conversion of the coins had caused a significant injury, thus warranting a judgment against the defendant. However, if the plaintiff is unable to prove any damages resulting from the temporary loss of use of his coin collection, only nominal damages would be awarded. In contrast, a claim barred by the de minimis doctrine concerns a different category of claims in which the plaintiff has suffered no more than negligible damages from the beginning. For example, if the defendant takes the plaintiff’s inexpensive ball point pen and a notebook without his permission, uses the pen and one sheet of paper from the notebook to write a short letter, and then immediately returns the remainder of the plaintiff’s supplies to him, the de minimis doctrine would be implicated. Technically, plaintiff still would have a claim for conversion based on the loss of the ink from the pen and the missing sheet of paper that was used to write the letter. However, this claim would be so insignificant or trifling that the de minimis doctrine would bar the plaintiff from proceeding on such a claim. … Because plaintiff’s claim for conversion of paper and toner was insufficient at its inception to merit a judgment, the de minimis doctrine applies in this case, and no amount of damages, nominal or otherwise, would be appropriate. Id. at 614-15 (citations omitted); see also Sturdy v. Medtrak Educ. Servs. LLC, No. 13-CV-3350, 2014 WL 2727200, at *4 (C.D. Ill. June 16, 2014) (“[W]hile Plaintiff may be able to recover nominal damages in Illinois, courts applying Illinois law have found that damages for a single sheet of paper and some toner present a classic situation for applying the de minimis doctrine”); Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 19 of 22 14 G.M. Sign, 681 F. Supp. 2d at 934 (“[A]lthough nominal damages are at times appropriate in a conversion action, the existence of nominal damages does not in itself invalidate the applicability of the de minimis doctrine.”). Defendants respectfully submit that the reasoning of Stonecrafters and G.M. Sign is correct, and that the fact that Pennsylvania law allows nominal damages for conversion claims does not bar application of the de minimis doctrine here. Given that Plaintiff’s stated harm is based on the alleged receipt of a single one-page fax, the Court should find that Plaintiff’s alleged harm is de minimis and dismiss Plaintiff’s conversion claim on that basis. B. In The Alternative, If The Court Dismisses Plaintiff’s TCPA Claim, It Should Decline To Exercise Supplemental Jurisdiction Over Plaintiff’s Conversion Claim. Plaintiff’s conversion claim should be dismissed as a matter of law for the reasons set forth above. At the very least, however, if the Court dismisses Plaintiff’s TCPA claim, it should decline to exercise supplemental jurisdiction over and dismiss Plaintiff’s conversion claim. Where a district court has dismissed all claims over which it has original jurisdiction, it generally should decline to exercise supplemental jurisdiction over any state-law claims. Schutt v. Melmark, Inc., No. 15-cv-2731, 2017 WL 1477130, at *7 (E.D. Pa. Apr. 24, 2017) (citing 28 U.S.C. § 1367(c)(3)). “Ordinarily, when ‘all federal-law claims are eliminated before trial, the balance of factors to be considered under the pendant jurisdiction doctrine—judicial economy, convenience, fairness, and comity—will point toward declining to exercise jurisdiction over the remaining state-law claims.’” Id. (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988)). Indeed, the Third Circuit has instructed that “where the claim over which the district court has original jurisdiction is dismissed before trial, the district court must decline to decide the pendent state claims unless considerations of judicial economy, convenience, and fairness to the parties provide an affirmative justification for doing so.” Hedges v. Musco, 204 F. Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 20 of 22 15 3d 109, 123 (3d. Cir. 2000) (emphasis added) (quotation marks removed); see also Shaffer v. Bd. of Sch. Dirs. of Albert Gallatin Area Sch. Dist., 730 F.2d 910, 912 (3d Cir. 1984) (“We have held that pendent jurisdiction should be declined where the federal claims are no longer viable, absent ‘extraordinary circumstances.’”); Luminent Mortg. Capital, Inc. v. Merrill Lynch & Co., 652 F. Supp. 2d 576, 598 (E.D. Pa. 2009) (“The cases are clear that when all of the federal claims are dismissed at an early stage, the district court should decline the exercise of supplemental jurisdiction over the state claims absent extraordinary circumstances.”). Here, no “extraordinary circumstances” exist that would counsel in favor of this Court retaining jurisdiction over Plaintiff’s conversion claim in the event the TCPA claim is dismissed. To the contrary, this case is in its nascent stages. “No scheduling order has been issued by the Court. There is no trial date, and no lengthy motion practice has occurred. Judicial economy and convenience to the parties therefore do not weigh in favor of retaining supplemental jurisdiction[.]” Luminent, 652 F. Supp. 2d at 599. Accordingly, in the event the Court dismisses Plaintiff’s TCPA claim, and to the extent the Court does not independently dismiss Plaintiff’s conversion claim on the basis of the de minimis doctrine, it should decline to exercise supplemental jurisdiction over Plaintiff’s state-law conversion claim. Alston v. Pennsylvania State Univ., No. 16-1290, 2017 WL 1379408, at *2 (3d Cir. Apr. 13, 2017) (“[B]ecause Alston’s complaint failed to state a claim based on federal law, it was appropriate for the District Court to decline to exercise supplemental jurisdiction over Alston’s state-law claims and to instead dismiss those claims without prejudice to pursue them in state court.”); Bright v. Westmoreland County, 380 F.3d 729, 751 (3d Cir.2004) (“[A]bsent extraordinary circumstances, where the federal causes of action are dismissed the district court Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 21 of 22 16 should . . . refrain from exercising [supplemental] jurisdiction.”) (internal quotation marks removed).8 CONCLUSION For all the foregoing reasons, Defendants respectfully request that the Court dismiss with prejudice Plaintiff’s Complaint for failure to state a claim. In the event the Court dismisses Plaintiff’s TCPA claim but declines to independently dismiss Plaintiff’s conversion claim, Defendants request that the Court decline to exercise supplemental jurisdiction over and dismiss Plaintiff’s conversion claim. June 15, 2017 /s/ Stephen A. Loney, Jr. Stephen A. Loney, Jr. (Pa. No. 202535) stephen.loney@hoganlovells.com Counsel for Defendants HOGAN LOVELLS US LLP Optum, Inc. and OptumInsight, Inc. 1835 Market Street, 29th Floor Philadelphia, PA 19103 (267) 675-4600 (267) 675-4601 (fax) Adam K. Levin (admitted pro hac vice) adam.levin@hoganlovells.com Kathryn M. Ali (admitted pro hac vice) kathryn.ali@hoganlovells.com HOGAN LOVELLS US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 (202) 637-5600 (202) 637-5910 (fax) 8 Where a district court decides not to exercise supplemental jurisdiction, the appropriate relief is to dismiss the state law claims without prejudice. Schutt, 2017 WL 1477130, at *7. Case 5:17-cv-01643-EGS Document 13-2 Filed 06/15/17 Page 22 of 22