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Orrington v. Scion Dental, Inc.

United States District Court, N.D. Illinois, Eastern Division

November 20, 2017

JAMES L ORRINGTON, II, D.D.S., P.C., on behalf of himself and the class members defined herein, Plaintiff,
SCION DENTAL, INC., and JOHN DOES 1-10, Defendants.



         On July 20, 2017, Plaintiff James Orrington (“Orrington”) brought the present Amended Complaint against Scion Dental, Inc. (“Scion”) and John Does 1-10, collectively “Defendants, ” alleging violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), the Illinois Consumer Fraud Act 815 ILCS 505/2 (“ICFA”), and Illinois common law. Before the Court is Scion's motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) [29]. For the following reasons, the Court grants in part and denies in part Scion's motion to dismiss.


         On June 30, 2017, the Court dismissed Plaintiff's initial Complaint without prejudice. The Court found that while Plaintiff had sufficiently alleged that the fax in question was unsolicited because it did not contain an “opt out” notice, Plaintiff's allegations and the fax itself failed to plausibly suggest that the fax was a pretext to an advertisement, as required to state a claim under the TCPA. (R. 27, June 7, 2017 Opinion.) Plaintiff has since filed an Amended Complaint, which includes additional allegations, described below.


         Scion is a Delaware corporation that maintains its principal office in Menomonee Falls, Wisconsin. (R. 28, Am. Compl. ¶ 4.) Scion's registered agent is Registered Agent Solutions, Inc., of Madison, Wisconsin. (Id.) John Does 1-10 are natural or artificial persons that were involved in the sending of the facsimile (“fax”) advertisements described below. (Id. ¶ 5.) Plaintiff is a dental office located in the Northern District of Illinois, where it maintains telephone fax equipment. (Id. ¶ 3.)

         On July 7, 2016, Plaintiff received an unsolicited fax message on its fax machine inviting Plaintiff to attend an online webinar. (Id. ¶ 9; Ex. A, Fax Message.) Plaintiff alleges that Scion is responsible for sending or causing the sending of the fax. (Am. Compl. ¶ 11.) Plaintiff alleges that Scion's goal in sending the fax was to induce the recipient to enter into a business relationship with Scion, which Scion expected to be mutually profitable for itself and the recipient. (Id. ¶ 12.) Scion is engaged in the business of administering health benefit plans and providing electronic communications between (1) medical providers, like Plaintiff, (2) insurance companies, benefit plans, and government agencies, (3) and patients. (Id. ¶ 13.) Scion's website explains that it provides integrated network management platforms that result in streamlined claims processing and a resulting “significant cost reduction and competitive advantage” for its clients, who are able to service multiple healthcare providers. (Id. ¶¶ 14-15.) Scion claims to have “industry-leading functionality, especially in the area of provider and member self-service web portals.” (Id. ¶ 18.) Plaintiff alleges that, to be profitable, Scion must offer its services to and sign up as many medical providers as possible and induce them to use its latest software and technology. (Id. ¶ 17.) Accordingly, Scion must seek to recruit dentists to enter into business relationships. (Id. ¶ 19.) Recruiting dentists, as well as healthcare providers, builds Scion's network, and results in Scion developing a broader and more effective network. (Id. ¶¶ 17-19.)

         Plaintiff had no prior relationship with Scion before receiving the fax and Plaintiff had not authorized the sending of fax advertisements. (Id. ¶¶ 20, 29.) Plaintiff alleges that the fax itself promoted a webinar at which Scion intended to introduce its services to dental practices, sign them up to Scion's platform, and induce them to use Scion's latest software and technology. (Id. ¶ 21.) Put differently, the webinar described in the fax promoted the commercial availability and quality of Scion's products and services, which would result in streamlined claim processing and access to more patients. (Id. ¶¶ 21-23.) In exchange for this streamlined processing, medical providers agree to Scion's cost-containment practices, which are in turn appealing to Scion's healthcare insurance provider clients. (Id. ¶ 24.) In short, Plaintiff alleges that the fax was an advertisement because Scion intended it to induce the recipient medical providers to enter into a business relationship with Scion, who sent the fax, for mutual profit, even though, in some cases, the patient, insurance company, benefits plan, or governmental agency might ultimately pay Scion. (Id. ¶¶ 20-25.)

         Plaintiff alleges, on information and belief, that Scion sent the generic fax as part of a mass mailing and notes that it promoted a series of 30 webinars, each of which had capacity for 100 participants, indicating Scion likely sent it to many medical practices. (Id. ¶ 30.) The fax does not contain an “opt out” notice that complies with the TCPA. (Id. ¶ 31.) Plaintiff alleges that there were no reasonable means for it to avoid receiving Scion's unsolicited faxes because its fax machines must remain in operation in order to receive other, legitimate fax communications. (Id. ¶ 34.)


         “A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the viability of a complaint by arguing that it fails to state a claim upon which relief may be granted.” Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014). Under Rule 8(a)(2), a complaint must include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). Under the federal notice pleading standards, a plaintiff's “factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Put differently, a “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).

         In determining the sufficiency of a complaint under the plausibility standard, courts must “accept all well-pleaded facts as true and draw reasonable inferences in the plaintiffs' favor.” Roberts v. City of Chicago, 817 F.3d 561, 564 (7th Cir. 2016). When ruling on motions to dismiss, courts may also consider documents attached to the pleadings without converting the motion to dismiss into a motion summary judgment, as long as the documents are referred to in the complaint and central to the plaintiff's claims. See Adams v. City of Indianapolis, 742 F.3d 720, 729 (7th Cir. 2014); Fed.R.Civ.P. 10(c). Because Plaintiff attaches a photocopy of the fax message to the Complaint and this document is central to its claim, the Court may consider this attachment in ruling on the present motion.


         I. Count I-TCPA

         Plaintiff alleges that Scion's unsolicited fax violated the TCPA, which prohibits any person from sending unsolicited fax advertisements, unless one of several exceptions applies. Fulton Dental, LLC v. Bisco, Inc., 860 F.3d 541, 542 (7th Cir. 2017). As noted above, the Court has already found that, under Seventh Circuit precedent, the fax at issue here was unsolicited. Scion argues, as it did in its first motion to dismiss, that the Court should dismiss Plaintiff's TCPA claims because Plaintiff has failed to adequately allege that the fax, which offers a free training webinar regarding United Healthcare's web portal to dental providers in United Healthcare's network, was an advertisement.[1]

         As the Court explained in its first Opinion, the TCPA defines an “unsolicited advertisement” as “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission.” 47 U.S.C. § 227(a)(5). “Congress has not spoken directly on the issue of whether advertisements for free services can be unsolicited advertisements under the TCPA.” GM Sign, Inc. v., Inc., No. 08 C 7106, 2009 WL 1137751, at *2 (N.D. Ill. Apr. 24, 2009). Thus, courts within this district have accepted the FCC's construction of the statute, which provides that faxes “that promote goods or services even at no cost, such as free magazine subscriptions, catalogs, or free consultations or seminars, are unsolicited advertisements under the TCPA's definition.” Id. (quoting In re Rules and Reg. Implementing the Tel. Consumer Prot. Act of 1991 and the Junk Fax Prevention Act of 2005, 21 F.C.C.R. 3787, 3814 (Apr. 6, 2006)). Although the FCC's rules “could be read to categorize all faxes promoting free seminars as unsolicited advertisements, ” courts typically require plaintiffs to show that the fax has a commercial pretext-i.e., “that the defendant advertised, or planned to advertise, its products or services at the seminar.” Bais Yaakov of Spring Valley v. Richmond, the Am. Int'l Univ. in London, Inc., No. 13-CV-4564 CS, 2014 WL 4626230, at *3 (S.D.N.Y. Sept. 16, 2014) (citation omitted).

         The Court explained that several courts have found that faxes promoting seminars are advertisements if they have a commercial pretext. See, e.g., N. Suburban Chiropractic Clinic, Ltd. v. Merck & Co., No. 13 C 3113, 2013 WL 5170754, at *1-2 (N.D. Ill. Sept. 13, 2013) (finding that drug company's fax inviting recipients to webinar for health care professionals “may have been a pretext to market its goods” in part because participants had to register on company's corporate website); Physicians Healthsource, Inc. v. Alma Lasers, Inc., No. 12 C 4978, 2012 WL 4120506, at *2 (N.D. Ill. Sept. 18, 2012) (finding plaintiff plausibly alleged that fax promoting a free seminar on medical techniques was part of the defendant's “work or operations to market [its] goods or services”); Mussat v. Power Liens, LLC, No. 13-CV-7853, 2014 WL 3610991, at *2 (N.D. Ill. July 21, 2014) (finding fax ...

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