True Health Chiropractic Inc v. McKesson Corporation

Background

True Health Chiropractic, Inc. and McLaughlin Chiropractic Associates, Inc. brought a putative class action against McKesson Corporation and McKesson Technologies, Inc. The plaintiffs alleged that the defendants sent unsolicited fax advertisements in violation of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227.

The court had initially certified a class. After an intervening Federal Communications Commission decision changed the requirements for TCPA liability, the court entered summary judgment against recipients who received faxes through an online fax service, and later decertified the stand-alone fax-machine class. The remaining claims were the plaintiffs’ individual claims. The parties agreed to have the court decide those claims through a streamlined bench trial, without live testimony, based on deposition testimony, declarations, briefs, and stipulated evidence.

Findings

McLaughlin received 12 faxes from September 2009 through May 2010 advertising Medisoft and Lytec software. True Health received one fax on April 20, 2010 advertising a $1,500 rebate on Medisoft software. The court found that Medisoft and Lytec were products of McKesson Corporation and that the faxes were sent on its behalf.

The court also found that both McKesson Corporation and McKesson Technologies, Inc. were TCPA “senders.” Under the TCPA regulations, a sender includes the entity on whose behalf an unsolicited advertisement is sent or whose goods or services are advertised. The court found that all 13 faxes were sent using a telephone facsimile machine, computer, or other device and were sent to the plaintiffs’ traditional fax machines.

Conclusions of Law

The TCPA prohibits sending unsolicited advertisements to a telephone facsimile machine. The court concluded that all 13 faxes were unsolicited advertisements and that both defendants violated 47 U.S.C. § 227(b)(1)(C). It therefore found both defendants liable to the plaintiffs.

The TCPA provides statutory damages of $500 per violation. It also permits, but does not require, treble damages when a violation is willful or knowing. The court held that this standard requires proof that the defendant knew, or was reckless in not knowing, that it was sending advertisements to a fax machine without the recipient’s prior express consent. Showing only that the defendant intentionally sent a fax was not enough.

The court found that the plaintiffs had not proved by a preponderance of the evidence that either defendant knowingly or recklessly violated the TCPA. The court noted the 2008 Federal Communications Commission citation but found no additional evidence suggesting that the defendants knowingly or recklessly violated the law. The court also stated that, even if the evidence had been sufficient, treble damages would not have been warranted in its discretion.

Disposition

The court found in favor of True Health and against the defendants and awarded True Health $500 for one TCPA violation. It found in favor of McLaughlin and against the defendants and awarded McLaughlin $6,000 for 12 TCPA violations. The court directed the clerk to enter judgment consistent with the order and close the case. Judge Haywood S. Gilliam, Jr. signed the order.