Judges: Rovner
Filed: Aug. 14, 2018
Latest Update: Mar. 03, 2020
Summary: In the United States Court of Appeals For the Seventh Circuit _ No. 17-1282 HELPING HAND CAREGIVERS, LTD., Plaintiff-Appellant, v. DARDEN RESTAURANTS, INC., et al., Defendants-Appellees. _ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:14-cv-10127 — Manish S. Shah, Judge. _ ARGUED DECEMBER 5, 2017 — DECIDED AUGUST 14, 2018 _ Before WOOD, Chief Judge, and ROVNER and HAMILTON, Circuit Judges. ROVNER, Circuit Judge. Helping Hand Caregiver
Summary: In the United States Court of Appeals For the Seventh Circuit _ No. 17-1282 HELPING HAND CAREGIVERS, LTD., Plaintiff-Appellant, v. DARDEN RESTAURANTS, INC., et al., Defendants-Appellees. _ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:14-cv-10127 — Manish S. Shah, Judge. _ ARGUED DECEMBER 5, 2017 — DECIDED AUGUST 14, 2018 _ Before WOOD, Chief Judge, and ROVNER and HAMILTON, Circuit Judges. ROVNER, Circuit Judge. Helping Hand Caregivers..
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17‐1282
HELPING HAND CAREGIVERS, LTD.,
Plaintiff‐Appellant,
v.
DARDEN RESTAURANTS, INC., et al.,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:14‐cv‐10127 — Manish S. Shah, Judge.
____________________
ARGUED DECEMBER 5, 2017 — DECIDED AUGUST 14, 2018
____________________
Before WOOD, Chief Judge, and ROVNER and HAMILTON,
Circuit Judges.
ROVNER, Circuit Judge. Helping Hand Caregivers, Ltd.,
(“Helping Hand”) filed a suit against Darden Restaurants,
Inc., Mid Wilshire Consulting, Inc. (“Mid Wilshire”), Brian
Kang, and Greg Jones, alleging a violation of the Telephone
Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. Specifi‐
cally, Helping Hand asserted that Mid Wilshire, through
Kang and Jones, sent an unsolicited fax advertisement to
2 No. 17‐1282
Helping Hand on behalf of Darden. The district court grant‐
ed Darden’s motion for summary judgment and dismissed
the claims against the remaining defendants without preju‐
dice. Helping Hand subsequently stipulated that the dismis‐
sals against the remaining defendants should be treated as
dismissals with prejudice, and therefore the decision was
final and appealable. Helping Hand now appeals the grant
of summary judgment to Darden, arguing that the district
court applied the wrong legal standard in granting summary
judgment and that the court erred in limiting discovery and
denying its motion under Federal Rule of Civil Procedure
56(d).
The district court relied upon the undisputed facts (in‐
cluding facts that were not properly disputed) in its grant of
summary judgment, and we include those relevant facts as
set forth by the district court here. Brian Kang was the CEO
and sole employee of Mid Wilshire, doing business as Social
Wellness. Jones worked as an independent contractor on be‐
half of Social Wellness, which set up “Lunch ‘n Learn” op‐
portunities for doctors to provide wellness presentations at
companies. At those presentations, the doctors would pre‐
order food for attendees, and on behalf of Social Wellness,
Jones contacted Darden Restaurants, Inc.—the owner of cer‐
tain Olive Garden trademarks—to explore a strategic alli‐
ance. Specifically, Jones sought permission from Darden to
use the Olive Garden logo in its advertising to promote So‐
cial Wellness’s programs by offering Olive Garden food to
attendees. Jones handled all communications between Social
Wellness and Darden, and Kang never communicated with
anyone at Darden.
No. 17‐1282 3
A series of email and phone communications ensued be‐
tween Jones and various persons at Darden. Initially, Jones
communicated with Kasha Momot, who was the then‐
Director of Brand Management at Darden. Momot and Jones
exchanged emails and spoke once or twice by phone begin‐
ning in July 2014, and Jones also communicated with Ken
Bott, the Director of Commerce Programs and Partnerships
for Darden. A month or two after the initial email with
Jones, Momot left Darden for employment elsewhere. After
Momot’s departure, Jones communicated primarily with
Bott.
A series of emails and possibly phone calls took place
beginning in early September 2014 between Jones and Bott,
in which the marketing possibilities were discussed in more
detail. In those communications, Jones proposed a market‐
ing plan in which Social Wellness would engage in email
marketing, first by sending emails to a test group informing
people where the food was purchased for the wellness
presentations, and in that way Social Wellness could deter‐
mine whether incorporating the Olive Garden name resulted
in a greater interest in enrollment in Social Wellness’s pro‐
grams. Jones sent Darden a mock‐up email using a different
company’s logo, although no mock‐up of the exact email us‐
ing an Olive Garden logo was ever proposed.
Jones also had contact with another employee of Darden,
Roberto Sanchez, at one point. Jones contacted Bott because
some doctors had problems ordering online from Olive Gar‐
den, and Bott asked Sanchez to help Jones with the online
ordering process. Thereafter, Sanchez spoke with Jones by
phone and sent Jones an “Online Ordering Guide.”
4 No. 17‐1282
No advertising medium other than email was ever dis‐
cussed in the communications regarding the potential mar‐
keting plan between Darden and Social Wellness. Despite
that, Social Wellness engaged in a marketing effort by fax,
using the Olive Garden logo on a flyer that was created us‐
ing Photoshop by a person who Kang and Jones found on
Craigslist. Kang and Jones obtained the Olive Garden logo
and a picture of food through Google searches and/or an
online company selling photos—not from Darden—and in‐
cluded that logo and picture on the flyer. The flyer stated
that Social Wellness was teaming up with Olive Garden for a
“Lunch n’ Learn” and that a complimentary catered lunch
would be provided. All contact information in the flyer such
as the email address and phone number was for Social Well‐
ness. The flyer was faxed to fax numbers that Social Well‐
ness had obtained from a Google search and from a list pur‐
chased from a person on Craigslist. Bott never saw the flyer
prior to its distribution, and Jones admitted that he never
discussed with Darden the possibility of sending faxes and
that only email marketing was discussed.
The marketing by fax was also inconsistent with
Darden’s practices. Darden generally does not market by
fax, nor is its practice to enter into partnerships without a
number of protections. Specifically, Darden’s practice in en‐
tering into partnerships is to require senior management to
sign off, and to utilize written agreements including a mas‐
ter services agreement and statement of work outlining logo
usage and business expectations, as well as a nondisclosure
agreement. Social Wellness and Darden never entered into
any contract together and did not pay each other any money.
Regarding the authorization to use the Olive Garden logo,
Bott maintains that no permission was ever given, and Jones
No. 17‐1282 5
asserts only that “Bott told him Darden had ’no problem
with your telling your companies where the food is coming
from.’” Dist. Ct. Mem. Op. and Order 12‐21‐2016 at 5.
That faxed flyer was received by Helping Hand Caregiv‐
ers, Ltd., on October 31, 2014, and it filed suit against
Darden, Social Wellness, Kang, and Jones on December 17,
2014, alleging that the faxed advertisement violated the
TCPA. That Act addresses in part the problem of unsolicited
fax advertisements which result in the unwanted cost to the
recipient in terms of impeding access to their fax machine for
business uses and in the cost of operation of the machine.
Darden then sent a cease‐and‐desist letter to Kang and
Social Wellness demanding that they cease using Darden’s
Olive Garden trademark. Social Wellness responded with an
email to Darden’s counsel from Kang in which he stated that
“[t]his letter is to inform you that Dardens [sic] Restaurants
& Olive Garden had nothing to do with the message that
was sent to Helping Hand Caregivers LTD. It was totally on
the Social Wellness Group just trying to offer a free lecture
on health and wellness.”
Darden subsequently sued Social Wellness and Kang for
trademark infringement, alleging that it had continued to
use the Olive Garden trademarks in faxes sent to third par‐
ties. Social Wellness did not appear in the lawsuit, and
Darden obtained a default judgment and permanent injunc‐
tion in the matter. The district court’s order found that, by
default, the relevant facts in the complaint were admitted
including willful infringement of the Olive Garden trade‐
marks.
6 No. 17‐1282
In its TCPA action, Helping Hand served all defendants
but only Darden appeared. Social Wellness, Kang, and Jones
did not appear, and Helping Hand did not move for class
status nor did it seek to hold them in default. Helping Hand
sought numerous depositions, including from Darden em‐
ployees Bott and Sanchez and former employee Momot. The
district court allowed the deposition of Bott, but to avoid
conducting depositions without all parties to the case, stayed
further depositions of Darden employees until Helping
Hand brought forward a plan either to bring the remaining
defendants into the case or to pursue a default judgment.
Helping Hand proceeded to depose Bott, Kang and Jones.
After those depositions, the court declined to lift the stay on
further depositions after Helping Hand indicated that it still
had no plan either to bring those defendants into the case or
to move for default judgment. Darden then moved for sum‐
mary judgment, and in response to the motion for summary
judgment, Helping Hand filed a motion under Rule 56(d)
requesting that the stay be lifted so that it could depose
Momot and Sanchez. The court denied that stay request,
however, holding that Helping Hand failed to explain how
depositions of either person would add information that was
not available from Jones, Kang, or Bott, all of whom Helping
Hand had already deposed, and granted summary judgment
in favor of Darden against the plaintiff.
In this appeal, Helping Hand challenges the grant of
summary judgment against it on two grounds. On the mer‐
its, it argues that the court erred in its application of agency
law in granting summary judgment. It also argues that the
court erred in refusing to lift the stay of the depositions and
in refusing to grant the Rule 56(d) motion.
No. 17‐1282 7
We turn then to Helping Hand’s challenge to the legal
principles applied by the district court. In granting summary
judgment to Darden, the court reasoned that Helping Hand
had failed to show that Social Wellness acted as Darden’s
agent in that it had express, implied, or apparent authority
from Darden to send faxes on its behalf. Helping Hand as‐
serts that the court erred in relying on agency principles, and
that the language of the statute and regulation instead estab‐
lishes that Darden can be directly liable if it benefitted from
the promotion in the advertisement regardless of whether it
authorized it.
The statute at issue provides that it is unlawful “to use
any telephone facsimile machine, computer, or other device
to send, to a telephone facsimile machine, an unsolicited ad‐
vertisement,” unless it fell within one of the exceptions such
that the sender has an established business relationship with
the recipient, the recipient made its fax number available
through specified means, or the unsolicited advertisement
contained a notice meeting certain statutory requirements.
47 U.S.C. § 227(b)(1)(C); Bridgeview Health Care Ctr., Ltd. v.
Clark, 816 F.3d 935, 938 (7th Cir. 2016). The regulations have
defined the “sender” as “the person or entity on whose be‐
half a facsimile unsolicited advertisement is sent or whose
goods or services are advertised or promoted in the unsolic‐
ited advertisement.” 47 C.F.R. § 64.1200(f)(10).
Helping Hand focuses on the language in the second
clause of the regulation—which defines a sender to include
“a person or entity … whose goods or services are adver‐
tised or promoted in the unsolicited advertisement.” Id. It
argues that the provision lacks the “on whose behalf” lan‐
guage of the first clause, and therefore imposes a direct lia‐
8 No. 17‐1282
bility standard for anyone whose goods or services were
promoted in the advertisement. Under that provision, it ar‐
gues, Darden is liable for any advertisement of Olive Garden
regardless of whether the advertisement was sent on its be‐
half or with its authorization. Helping Hand contends that
Darden and Social Wellness entered into a “strategic alli‐
ance” with Social Wellness whereby Darden benefitted from
the faxes sent by Social Wellness, in that Olive Garden re‐
ceived more business following the fax, and therefore it is
liable under the second clause of the regulation. Helping
Hand points to decisions of other circuits, Palm Beach Golf
Ctr.–Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d 1245
(11th Cir. 2015), and Siding and Insulation Co. v. Alco Vending,
Inc., 822 F.3d 886 (6th Cir. 2016), as consistent with its inter‐
pretation of TCPA liability under the regulation.
In Clark, we considered the same statute and regulation
and rejected an interpretation which would hold an entity
strictly liable if its goods or services were advertised in a fax
regardless of its authorization of such advertisement. 816
F.3d at 938. We reaffirmed that holding in Paldo Sign & Dis‐
play Co. v. Wagener Equities, Inc., 825 F.3d 793, 797 (7th Cir.
2016), noting that under a strict liability approach, a compet‐
itor could send out thousands of unsolicited facts promoting
another company’s goods or services, thereby bankrupting
that company, even though the company played no part in
sending or authorizing the faxes. Id. We noted that
“[a]lthough the literal language of the regulation suggests
that such a result is possible, … to be liable as a sender, a
person must have done something to advertise goods or ser‐
vices.” Id. Therefore, in both Clark and Wagener we held that
agency rules should be applied to determine whether the ac‐
No. 17‐1282 9
tion was done on behalf of a principal. Clark, 816 F.3d at 938;
Wagener, 825 F.3d at 797.
Although Helping Hand argues that those holdings are
inconsistent with other circuit decisions, that argument does
not withstand scrutiny. In Palm Beach Golf Center, the Elev‐
enth Circuit held that a person whose services are advertised
in an unsolicited fax transmission could be held liable direct‐
ly under the TCPA so long as the advertisement was sent
“on its behalf.“ 781 F.3d at 1254. Thus, that decision is con‐
sistent with our recognition that liability attaches only as to
those persons and entities on whose behalf the unsolicited
fax is sent.
The Sixth Circuit’s decision in Alco Vending included lan‐
guage interpreting the second clause of the regulation as im‐
posing a strict liability standard, but it held that the conduct
in that case preceded the addition of that language and
therefore did not impose that standard in its case. 822 F.3d at
891–92. In a subsequent decision, however, Health One Medi‐
cal Center, Eastpointe P.L.L.C. v. Mohawk, Inc., 889 F.3d 800
(6th Cir. 2018), the Sixth Circuit addressed a case that is fac‐
tually analogous to this one, and rejected the strict liability
standard. In that case, Mohawk Medical, a pharmaceutical
wholesaler, sent unsolicited faxes to medical providers ad‐
vertising its prices for various drugs. Id. at 801. In addition to
suing Mohawk Medical, from whom it obtained a default
judgment, a medical provider sued Bristol‐Meyers Squibb
and Pfizer based on the theory that they had “sent” the faxes
for purposes of the TCPA because drugs that they manufac‐
tured were among the ones for which discounted pricing
was advertised in the faxes. Id. The Sixth Circuit looked to
the language of the statute itself which requires that a person
10 No. 17‐1282
“use any … device to send, to a telephone facsimile machine,
an unsolicited advertisement.” Id.; 42 U.S.C. § 227(b)(1)(C).
The court held that by its language, therefore, the statute re‐
quires that a defendant must “send” an advertisement, and
the common meaning of send is either to cause to be con‐
veyed or to dispatch. Mohawk, 889 F.3d at 801. The court held
that the defendants neither caused the faxes to be conveyed
nor did they dispatch them, and therefore could not be liable
under the statue. Id. The court held that the regulation must
be read in the context of the statutory text it implements, and
therefore could not be read as expanding liability to a person
or entity who could not be characterized as a sender. Id. at
802. The court held that Alco Vending could not be read as
holding that “an innocent party—like Bristol or Pfizer here—
could by some legal alchemy be held liable for having ‘sent’
the faxes.” Id. Therefore, after Mohawk it is clear that the
Sixth Circuit interpretation of the statute is not inconsistent
with our caselaw recognizing that a defendant who has no
connection whatsoever to the sending of the fax cannot be
held liable under the TCPA.
That is the clear import of the plain language of the stat‐
ute. Nothing in the statute allows the imposition of liability
on an entity wholly unaware of the use of its logo in a fax.
The interpretation adopted by this circuit in Clark and
Wagener is proper, and there is no reason for us to depart
from it now.
Under that standard, Helping Hand could demonstrate
liability if it produced evidence that Social Wellness had ex‐
press actual authority to send the fax on Darden’s behalf, or
even if it had implied actual authority or apparent authority.
Clark, 816 F.3d at 938. Helping Hand has failed to provide
No. 17‐1282 11
any such evidence. At best, it provided testimony that
Darden and Jones, representing Social Wellness, engaged in
discussions regarding a joint marketing plan to involve the
sending of emails. No written or digital correspondence, or
testimony, indicates any discussion of fax advertising. In
fact, Jones—who was responsible for sending the fax adver‐
tisement—acknowledged that there was never any discus‐
sion with Darden of sending fax advertisements. Helping
Hand fails in its arguments to distinguish the type of mar‐
keting discussed, but of course the type of marketing is pre‐
cisely the issue that implicates TCPA liability. Email market‐
ing does not run awry of the TCPA; the relevant question
here is whether there were any communications that would
indicate an authorization to send a fax advertisement, and as
to that issue Jones and Bott are in agreement that fax adver‐
tisements were not discussed or approved, and no written or
testimonial evidence allows for a contrary inference.
Helping Hand asserts, however, that the lack of such ev‐
idence is a result of the district court’s refusal to allow it to
depose two witnesses—Kasha Momot and Roberto
Sanchez—and that the court erred in refusing that discovery
and in denying its subsequent motion under Federal Rule of
Civil Procedure 56(d). Rule 56(d) provides that “[i]f a non‐
movant shows by affidavit or declaration that, for specified
reasons, it cannot present facts essential to justify its opposi‐
tion, the court may: (1) defer considering the motion or deny
it; (2) allow time to obtain affidavits or declarations or to
take discovery; or (3) issue any other appropriate order.” As
Helping Hand acknowledges, we review discovery decisions
of the district court only for abuse of discretion. Kuttner v.
Zaruba, 819 F.3d 970, 974 (7th Cir. 2016). Moreover, “’[a] trial
judge’s decision to consider a defendant’s motion for sum‐
12 No. 17‐1282
mary judgment before allowing the plaintiff to depose cer‐
tain witnesses is a discovery matter, which we review under
the abuse of discretion standard.’” Davis v. G.N. Mortg. Corp.,
396 F.3d 869, 885 (7th Cir. 2005), quoting Grayson v. O’Neill,
308 F.3d 808, 815–16 (7th Cir. 2002). We will affirm such de‐
terminations unless the court’s ruling lacks any basis in law
or fact or clearly appears to be arbitrary. Kuttner, 819 F.3d at
974.
Both Momot and Sanchez had conversations with Jones,
although the timing and nature of their communications
render them lesser players in the discussions than Bott, who
was deposed. Sanchez was consulted by Jones only to assist
in the online ordering process, and nothing in the docu‐
ments or testimony in this case implies an involvement in
the marketing discussions. And Momot was not an employ‐
ee of Darden for the communications with Jones which im‐
mediately preceded the fax advertisement, as she left
Darden in early September 2014. Jones pointed only to his
discussions with Bott as the basis for his belief that he could
send the advertisements with the Olive Garden logo, and
both Bott and Jones were deposed. The contention that
Momot or Sanchez could provide relevant testimony thus
necessarily rests on the notion that Jones was provided the
authorization to engage in fax advertising but did not re‐
member it or that he lied about it, because Jones—who sent
the fax advertisements—testified by deposition that he never
discussed fax marketing with anyone at Darden.
We have held that a district court does not abuse its dis‐
cretion in denying additional discovery “where the request
‘was based on nothing more than mere speculation and
would amount to a fishing expedition.’” In re Dairy Farmers
No. 17‐1282 13
of America, Inc. Cheese Antitrust Litig., 801 F.3d 758, 766 (7th
Cir. 2015), quoting Davis, 396 F.3d at 885. The mere hope,
without more, of revealing a “smoking gun” is insufficient to
support unbounded discovery. See id. We need not deter‐
mine whether the discovery request in this case rested on
more than a speculative hope of evidence, however, because
the district court’s discovery determination must be upheld
on a more fundamental ground.
The district court in this case did not deny the plaintiff
the ability to take the depositions of Momot and Sanchez in
this case; the court merely required the plaintiff to proceed
on a course of action as to the other defendants before taking
such depositions. At the time of the deposition request,
Momot was no longer an employee of Darden. Sanchez was
an employee but as mentioned above was tasked with help‐
ing with the online ordering system and there is no indica‐
tion that he had any involvement in marketing issues. The
district court in August 2015 stayed the depositions as to
those persons because three of the four defendants in the
case had yet to appear although they had been served, and
the plaintiff was unable to tell the court what its plan was to
either bring those defendants into the action or move for de‐
fault as to them. The court expressed the same concerns at
subsequent hearings in October 2015 and June 2016 when
Helping Hand again asked the court to lift the stay of depo‐
sitions. Helping Hand once again was unable to inform the
court as to any plan with respect to those defendants to ei‐
ther bring them into or remove them from the case.
Decisions by a district court to cut off or limit discovery
so as to avoid piecemeal litigation fall squarely within the
management province of the district court. Kallal v. CIBA
14 No. 17‐1282
Vision Corp., 779 F.3d 443, 446–47 (7th Cir. 2015). Here, the
court properly was concerned with the expansion of
depositions prior to a determination as to whether the
plaintiff would proceed with its case against the remaining
defendants. Its determination to stay further depositions was
a reasonable means of streamlining discovery, encouraging
prosecution of the case, and avoiding duplication in
discovery which would occur if the defendants subsequently
appeared in the case and sought the same depositions. The
power to obtain the depositions in this case rested squarely
with Helping Hand—with the court requiring Helping Hand
only to reveal a plan either to seek default or to otherwise
proceed against the remaining defendants. It was an
insubstantial burden, but one that Helping Hand chose to
ignore. It now argues that it did not want to seek default
because it would impede its likelihood of obtaining class
status, but it did not present that justification to the district
court and did not move for class status despite having
completed depositions as to the main parties to the
marketing conversations. We consistently have upheld the
district court’s discretion to manage its cases and control
discovery, and do so here. See Citizens for Appropriate Rural
Roads v. Foxx, 815 F.3d 1068, 1082 (7th Cir. 2016) (“[a] party
who fails to comply with deadlines related to discovery or
otherwise forestalls prosecution of their own case is not
entitled to seek additional discovery when the opposing side
moves for summary judgment.”); Olivieri v. Rodriguez, 122
F.3d 406, 409 (7th Cir. 1997) (“[p]retrial discovery is time
consuming and expensive; it protracts and complicates
litigation; and judges are to be commended rather than
criticized for keeping tight reins on it.”). Where the failure to
secure discovery is due to a party’s own lack of diligence,
No. 17‐1282 15
the district court can in its discretion hold the party to the
consequences of its choice and decide the summary
judgment motion. See, e.g., Davis, 396 F.3d at 886; Flint v.
City of Belvidere, 791 F.3d 764, 768 (7th Cir. 2015). Here,
Helping Hand chose to ignore the remaining defendants
despite the court’s repeated determination that it could not
proceed with those depositions until it formulated a plan to
address those other defendants so as to ensure a manageable
discovery procedure. Its lack of diligence in responding to
the court’s concerns and addressing that issue left it with the
consequence of an inability to take those depositions prior to
the disposition of the summary judgment motion. The
district court did not abuse its discretion in its case
management decision that had been clearly communicated
to Helping Hand and its holding Helping Hand to its own
choices, particularly where the only action requested of
Helping Hand was to inform the court as to its plan to
address the prosecution of the case against the remaining
defendants.
Accordingly, the decision of the district court is
AFFIRMED.