Fuchs v. SpecialtyCare, Inc.

IN THE UNITED STATES DISTRICT COURT FOR THE

MIDDLE DISTRICT OF TENNESSEE

NASHVILLE DIVISION

NATHAN FUCHS et al., )

)

)

Plaintiffs,

)

)

v. ) Case No. 3:23-cv-00892

) CHIEF JUDGE CAMPBELL

SPECIALTYCARE, INC., ) MAGISTRATE JUDGE HOLMES

)

)

Defendant. )

MEMORANDUM

Pending before the Court is Plaintiffs Nathan Fuchs’ (“Fuchs”) and Caitlin Bailey’s

(“Bailey,” collectively “Plaintiffs”) Motion for Rule 23 Class Certification (“Motion”) (Doc. No.

128) to which Defendant SpecialtyCare, Inc. (“SpecialtyCare”) has filed an Opposition (Doc. No.

144), and Plaintiffs have filed a Reply (Doc. No. 147). For the reasons set forth below, the Motion

will be GRANTED in part and DENIED in part.

I. BACKGROUND

The allegations underlying this case are set forth in detail in the Court’s Memorandum on

SpecialtyCare’s Partial Motion to Dismiss. (See Doc. No. 189 at 1–3). Through the pending

Motion, Plaintiffs seek to certify two classes of surgical neurophysiologists (“SNs”), formerly

employed by SpecialtyCare, in connection with claims arising from an agreement (“Repayment

Agreement”), which provides that SNs must pay SpecialtyCare $15,000 to $30,000 if they resign

from their jobs within three years. (See Doc. No. 129 at 1).1 Plaintiffs also move the Court to

appoint them as class representatives, appoint their attorneys as class counsel, and approve and

authorize the distribution of class notice. (See Doc. Nos. 128 at 1, 129 at 17–19).

II. STANDARDS GOVERNING CLASS CERTIFICATION

To certify a class, the Court must be satisfied that the requirements of Federal Rule of Civil

Procedure 23(a) and at least one of Rule 23(b)’s provisions are met. See Comcast v. Behrend, 569

U.S. 27, 33–34 (2013). Plaintiffs here seek certification under Rules 23(b)(2) and 23(b)(3). The

decision whether to certify a class is committed to the sound discretion of the district judge and

turns on the particular facts and circumstances of each individual case. See In re Whirlpool Corp.

FrontLoading Washer Prod. Liab. Litig., 722 F.3d 838, 850 (6th Cir. 2013).

Rule 23(a) establishes four requirements for class certification: (1) the class is so numerous

that joinder of all members is impracticable; (2) there are questions of law or fact common to the

class; (3) the claims or defenses of the representative parties are typical of those of the class; and

(4) the representative parties will fairly and adequately protect the interests of the class. Fed. R.

Civ. P. 23(a). Rule 23(b)(2) allows certification if “the party opposing the class has acted or refused

to act on grounds that apply generally to the class, so that final injunctive relief or corresponding

declaratory relief is appropriate respecting the class as a whole[.]” Fed. R. Civ. P. 23(b)(2).

Rule 23(b)(3) allows certification if:

the court finds that the questions of law or fact common to class members predominate

over any questions affecting only individual members, and that a class action is superior to

other available methods for fairly and efficiently adjudicating the controversy. The matters

pertinent to these findings include:

1 In light of the Court’s Order (Doc. No. 190) on SpecialtyCare’s Partial Motion to Dismiss, the

remaining claims are a violation of the Truth in Lending Act (“TILA”) (Count III), unlawful restraint of

trade (Count IV), and unlawful liquidated damages provision (Count V). The Court will not discuss the

now-dismissed FLSA claims (Counts I and II).

(A) the class members’ interests in individually controlling the prosecution or defense of

separate actions;

(B) the extent and nature of any litigation concerning the controversy already begun by or

against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims in the

particular forum; and

(D) the likely difficulties in managing a class action.

Fed. R. Civ. P. 23(b)(3). Plaintiffs bear the burden of showing that the requirements for class

certification are met. Bridging Communities Inc. v. Top Flite Fin. Inc., 843 F.3d 1119, 1124 (6th

Cir. 2016).

III. ANALYSIS

To certify a class, the Court must be satisfied that the requirements of Federal Rule of Civil

Procedure 23(a)–numerosity, commonality, typicality, and adequate representation–and at least

one of Rule 23(b)’s provisions are met. See Comcast, 569 U.S. at 33–34. In this case, Plaintiffs

seek certification of a declaratory relief class under Rule 23(b)(2) and a liability and damages class

under Rule 23(b)(3). (See generally Doc. No. 129). The proposed definitions of both classes are

identical: “all surgical neurophysiologists employed by SpecialtyCare and subject to its training

repayment agreement at any point from August 23, 2017[,] to the present.” (Doc. No. 129 at 2).

The Court will analyze the requirements of Rule 23(a) for both proposed classes together and the

requirements of Rule 23(b) separately.

A. Rule 23(a)

1. Numerosity

Rule 23(a)(1) requires that the class be so numerous that joinder of all members is

impracticable. “Generally, the number of members of the proposed class, if more than several

hundred, easily satisfies the requirements of Rule 23(a)(1).” Hosp. Auth. of Metro. Gov’t of

Nashville v. Momenta Pharms., Inc., 333 F.R.D. 390, 403 (M.D. Tenn. 2019) (citing Bacon v.

Honda of Am. Mfg., Inc., 370 F.3d 565, 570 (6th Cir. 2004); Bittinger v. Tecumseh Prods. Co., 123

F.3d 877, 884 n.1 (6th Cir. 1997) (joinder of parties impracticable for class with over 1100

members and “[t]o reach this conclusion is to state the obvious”)). However, “as few as forty class

members may satisfy the numerosity requirement.” A.M.C. v. Smith, 620 F. Supp. 3d 713, 732

(M.D. Tenn. 2022) (quoting Snead v. CoreCivic of Tenn., LLC, No. 3:17-CV-0949, 2018 WL

3157283, at *11 (M.D. Tenn. June 27, 2018)). Here, “more than 300 SNs have been subject to

SpecialtyCare’s [Repayment Agreement] during the [proposed class] period.” (Doc. No. 129 at 1).

In addition, SpecialtyCare does not contest numerosity. (See generally Doc. No. 144). Therefore,

the Court finds that the proposed classes satisfy this requirement.

2. Commonality

Rule 23(a)(2) requires “questions of law or fact common to the class.” Fed. R. Civ. P.

23(a)(2). “The standard is not demanding.” Rockey v. Courtesy Motors, Inc., 199 F.R.D. 578, 583

(W.D. Mich. 2001). “Rule 23(a) simply requires a common question of law or fact.” Bittinger v.

Tecumseh Prods. Co., 123 F.3d 877, 884 (6th Cir. 1997). Plaintiffs must show that the class

members’ claims depend upon a common contention of such a nature that it is capable of class-

wide resolution. In re Whirlpool Corp., 722 F.3d at 852. “Variation in the ancillary details of the

class members’ cases is insufficient to defeat certification, as long as ‘[i]t is unlikely that

differences in the factual background of each claim will affect the outcome of the legal issue.’”

Grae v. Corr. Corp. of Am., 330 F.R.D. 481, 501 (M.D. Tenn. 2019) (quoting Bacon, 370 F.3d at

570).

The proposed classes also pass muster under this factor. Although Plaintiffs raise multiple

legal theories, all of their claims revolve around the Repayment Agreement. For instance, whether

the Repayment Agreement is unreasonable is a common question for the proposed class. (See Doc.

No. 129 at 12–14). Another common question is whether the Repayment Agreement is a “private

education loan” subject to TILA. Finally, the Plaintiffs’ declaratory judgment claim also presents

common questions such as whether the liquidated-damages provision in the Repayment

Agreement rises to the level of being an unlawful penalty. In their Motion, Plaintiffs explain why

each of these questions is suitable for common proof (see Doc. No. 129 at 12–16), which goes to

the heart of commonality. See Speerly v. Gen. Motors, LLC, 143 F.4th 306, 319 (6th Cir. 2025)

(“the plaintiffs need to identify only one question [central to the claim at hand] suitable for

common proof with respect to each cause of action” (citing Cent. Virginia Cmty. Coll. v. Katz, 546

U.S. 356, 359 (2006)). The Court agrees with Plaintiffs, insofar as all the putative class members

were subject to nearly identical terms and training. Further, SpecialtyCare does not contest

commonality. (See generally Doc. No. 144). The Court therefore finds that this requirement is also

satisfied.

3. Typicality

“Rule 23(a)(3) requires proof that plaintiffs’ claims are typical of the class members’

claims.” Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 542 (6th Cir. 2012). “Typicality is met

if the class members’ claims are ‘fairly encompassed by the named plaintiffs’ claims.’” In re

Whirlpool Corp., 722 F.3d 838 at 852 (quoting Sprague v. Gen. Motors Corp., 133 F.3d 388, 399

(6th Cir. 1998)). “This requirement insures that the representatives’ interests are aligned with the

interests of the represented class members so that, by pursuing their own interests, the class

representatives also advocate the interests of the class members.” Id. at 852–53. A plaintiff's claims

generally will be “typical” of the class’s when all of them arise from the same “course of conduct”

and assert the “same legal theory.” Doster v. Kendall, 54 F.4th 398, 438 (6th Cir. 2022) (citations

omitted); see also Beattie v. CenturyTel, Inc., 511 F.3d 554, 561 (6th Cir. 2007) (“for the district

court to conclude that the typicality requirement is satisfied, a representative’s claim need not

always involve the same facts or law, provided there is a common element of fact or law.” (citation

and internal quotations omitted)).

Plaintiffs argue that their claims are typical of the claims of all proposed class members.

As to the claims for unlawful restraint of trade and declaratory judgment, Plaintiffs argue that their

claims are typical of those of the proposed classes because they “stem[] from SpecialtyCare’s use

of the [Repayment Agreement], which it applied uniformly to the proposed classes.” SpecialtyCare

does not counter this argument. The Court agrees with Plaintiffs that these claims are typical

because they arise from common factual elements, i.e., the terms of the Repayment Agreement

and related practices by SpecialtyCare, and rely on the same legal theories.

As for the TILA claim, for which Bailey is the only named plaintiff, Plaintiffs argue that

her claim is typical because the Repayment Agreement, which according to Plaintiffs’ theory

lacked certain disclosures required for private education loans, did “not wart from one SN to

another.” (See Doc. No. 129 at 17). SpecialtyCare, counters that Bailey’s claim is not typical

because she testified during her deposition that she would not have found forms containing such

disclosures useful because she did not consider SpecialtyCare to be “a college or a university”

when she was applying, which SpecialtyCares interprets as an admission that “she did not

detrimentally rely on SpecialtyCare’s purported failure” to make the disclosures. (See Doc. No.

144 at 15 (redacted portion)).2 In their Reply, Plaintiffs counter that detrimental reliance is not

required for statutory damages under TILA and that the usefulness of specific forms with which

she was not familiar at the time of her deposition is irrelevant because she testified that she would

not have accepted SpecialtyCare’s offer had she received the required disclosures. (See Doc. No.

2 TILA’s definition of “covered educational institution” is broader than simply “a college or

university.” (See Doc. No. 189 at 14–17).

147 at 2).3 The Court agrees that detrimental reliance is not required for statutory damages and

attorneys’ fees under TILA. See Purtle v. Eldridge Auto Sales, Inc., 91 F.3d 797, 800 (6th Cir.

1996). The Court need not discuss the remaining arguments because it will not certify the (b)(3)

class with respect to the actual-damages portion of the TILA claim. (See infra, Section C.1.c).

The typicality requirement is met.

4. Adequacy

The adequacy requirement of Rule 23(a)(4) requires that the “representative parties . . .

fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). “There are two

criteria for determining whether the representation of the class will be adequate: 1) The

representative must have common interests with unnamed members of the class, and 2) it must

appear that the representatives will vigorously prosecute the interests of the class through qualified

counsel.” Senter v. Gen. Motors Corp., 532 F.2d 511, 525 (6th Cir. 1976) (citing Gonzales v.

Cassidy, 474 F.2d 67, 73 (5th Cir. 1973)).

As for Bailey, SpecialtyCare makes arguments that mirror its typicality arguments (see

Doc. No. 144 at 14–15), which the Court rejects for the same reasons as above.

As for Fuchs, there is no dispute that he is an adequate representative as to the (b)(3) class.4

However, as discussed below (see infra, Section B), the Court construes SpecialtyCare’s standing

argument (see Doc. No. 144 at 15–16) as challenging Fuchs’ ability to serve as an adequate class

representative. See Passa v. City of Columbus, 266 F.R.D. 197, 206 (S.D. Ohio 2010)

3 SpecialtyCare objects to Plaintiffs’ use of a portion of Bailey’s deposition transcript in their Reply,

characterizing any reference thereto as a new argument based on new evidence. (See Doc. No. 144 at 23).

The objection is overruled because Plaintiffs merely respond to SpecialtyCare’s argument based on a

different portion of that same transcript.

4 Fuchs did not release claims against SpecialtyCare, whereas SpecialtyCare released claims against

him. (See Doc. No. 129 at 11 (citations to the record); Doc. No. 187-1 (release))

(“[Defendant’s] arguments as to plaintiff’s standing are construed as challenging plaintiff's ability

to serve as an adequate class representative”). Because the Court finds that Fuchs does not have

standing to bring a declaratory judgment claim or seek injunctive relief, Fuchs is not an adequate

(b)(2) class representative.

Overall—leaving aside Fuchs’ standing as to the declaratory judgment and injunctive relief

claims—Plaintiffs “possess the same interest and suffer[ed] the same injury as the class members.”

Beattie, 511 F.3d at 562 (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 594–95 (1997)).

Plaintiffs also appear to be diligently prosecuting this case. For these reasons, the Court finds that

Plaintiffs are adequate representatives for the (b)(3) class and that Bailey is an adequate

representative for the (b)(2) class. Likewise, based on the firm resume and declarations attached

to the Motion (see generally Doc. No. 129-1; 129-44; 129-46–47) and the lack of argument to the

contrary by SpeicaltyCare, The Court finds that class counsel are well-equipped to represent the

class. Accordingly, the adequacy requirement is met.

Having concluded that the requirements of Rule 23(a) have been satisfied, the Court turns

to the requirements of Rules 23(b)(2) and (b)(3).

B. Rule 23(b)(2)

To certify a class for injunctive and declaratory relief under Rule 23(b)(2), Plaintiffs must

show “the party opposing the class has acted or refused to act on grounds that apply generally to

the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting

the class as a whole.” Fed. R. Civ. P. 23. “In other words, Rule 23(b)(2) applies only when a single

injunction or declaratory judgment would provide relief to each member of the class.” Wal-Mart

Stores, Inc. v. Dukes, 564 U.S. 338, 359 (2011).

Plaintiffs argue that a declaration that the Repayment Agreement is an unenforceable

penalty would benefit the entire class. (See Doc. No. 129 at 20). SpecialtyCare first counters that

the putative class members’ claims are “not cohesive” because “SNs signed various repayment

agreements and experienced different costs associated with their training.” (Doc. No. 144 at 15–

16). However, SpecialtyCare does not provide the court with sufficient elements to support that

any differences in terms would render the class incohesive. SpecialtyCare only points to one

different agreement (Doc. No. 143-9) with minimal differences, which are immaterial to the relief

Plaintiffs seek in Counts IV and V. (Compare Doc. No. 143-12 at 5, with Doc. No. 143-9 at 27–

28).

Next, SpecialtyCare counters that the requirements of Rule 23(b)(2) are not met because

“Nathan Fuchs and several putative class members do not have a reimbursement obligation under

the Repayment Agreement and thus lack standing and would not benefit from the proposed relief.”

(Doc. No. 144 at 15–16). Specifically, SpecialtyCare points to: SNs who are still employed by

SpecialtyCare;5 SNs who fall within exemptions of the Repayment Agreement, SNs for whom

SpecialtyCare has waived the reimbursement obligation, including pursuant to a settlement

agreement; and SNs who have already paid in full. (See id. at 12). Plaintiffs reply with citations to

persuasive authority stating that courts may certify a (b)(2) class even if some members of the

class were not harmed. (See Doc. No. 147 at 2–3 (citing Stewart v. Cheek & Zeehandelar, LLP,

252 F.R.D. 387, 396 n.3 (S.D. Ohio 2008) and Neese v. Becerra, 342 F.R.D. 399, 412 (N.D. Tex.

2022))). In one such case, the court opined:

The absence of injury as to some members of a(b)(2) class is not . . . problematic because

the relief available there is declaratory and injunctive in nature. Class members who were

not harmed would not accrue any benefits as a result of the issuance of a declaratory

5 The Court disagrees that SNs who are still employed by SpecialtyCare would not benefit from the

requested relief, inasmuch as it would effectively render the Repayment Agreement unenforceable and

allow them to leave prior to the three-year mark without penalties.

judgment or injunction, nor presumably would they care that they had been included in

such a class.

Stewart, 252 F.R.D. at 396 n.3. The Court finds this reasoning persuasive and further notes that

“[a] Rule 23(b)(2) class need not be defined as precisely as a Rule 23(b)(3) class [as Rule 23(b)(2)

does not provide for monetary or individualized relief, and does not require notice to allow class

members to opt out].” Duffey v. Pope, No. 2:11-CV-16, 2012 WL 4442762, at *5 (S.D. Ohio Sept.

25, 2012) (quoting Finch v. New York State Off. of Child. & Fam. Servs., 252 F.R.D. 192, 198

(S.D.N.Y. 2008)); see Cole v. City of Memphis, Tenn., No. 2:13-CV-02117-JPM, 2014 WL

8508560, at *15 (W.D. Tenn. Sept. 29, 2014), modified, No. 2:13-CV-02117-JPM, 2015 WL

3442277 (W.D. Tenn. May 28, 2015); see also Weathers v. Peters Realty Corp., 499 F.2d 1197,

1200 (6th Cir. 1974) (a (b)(2) class may be broader than a (b)(1) or (b)(3) class)).

In any event, the Court could easily exclude the categories of SNs that would not benefit

from declaratory relief from the class definition. See Powers v. Hamilton Cnty. Pub. Def. Comm’n,

501 F.3d 592, 619 (6th Cir. 2007) (“district courts have broad discretion to modify class definition”

(collecting cases)). When a class is not so overly broad as to require denial of certification, courts

often prefer to refine the class definition rather than deny certification. See, e.g., Cunningham v.

Vanderbilt Univ., No. 3:19-CV-00788, 2020 WL 13443878, at *4 (M.D. Tenn. Jan. 10, 2020);

Sauter v. CVS Pharmacy, Inc., No. 2:13-CV-846, 2014 WL 1814076, at *9 (S.D. Ohio May 7,

2014); Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th Cir. 2012). The Court

will do so in later stages of this litigation if need be.

A separate issue is that “[a] potential class representative must demonstrate individual

standing vis-as-vis [sic] the defendant; he cannot acquire such standing merely by virtue of

bringing a class action.” Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 423 (6th Cir. 1998).

SpecialtyCare correctly argues that Fuchs is not subject to the Release Agreement anymore (see

generally Doc. No. 187-1) and therefore lacks standing to bring a declaratory judgment claim. But,

as noted above (see supra, Section A.4), this is an adequacy issue, not a Rule 12(b)(2) issue.

Indeed, there is no dispute that Bailey is still subject to the Repayment Agreement and therefore

has standing to bring the declaratory judgment claim. As such, the Court will not deny class

certification on this basis. Cf. Rouse v. Caruso, No. 2:06-CV-10961, 2013 WL 588916, at *6 (E.D.

Mich. Jan. 7, 2013), report and recommendation adopted, No. 06-CV-10961, 2013 WL 569638

(E.D. Mich. Feb. 13, 2013) (denying class certification on (b)(2) grounds where “none of the

named plaintiffs remaining in the case could benefit from injunctive relief”).

For class certification on the ground that the defendant has acted or refused to act on

grounds that apply generally to the class, it is sufficient if class members complain of a pattern or

practice that is generally applicable to the class as a whole. See Gooch v. Life Invs. Ins. Co. of Am.,

672 F.3d 402, 428 (6th Cir. 2012). Such is the case here. Therefore, the Court finds that the

requirements of Rule 23(b)(2) are met.

C. Rule 23(b)(3)

“Rule 23(b)(3) classes . . . 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.’” Sandusky Wellness Ctr., LLC v. ASD Specialty Healthcare, Inc., 863 F.3d 460, 466

(6th Cir. 2017) (quoting Fed. R. Civ. P. 23(b)(3)). “In addition, Rule 23(b)(3) classes must also

meet an implied ascertainability requirement.” Id. (citing Cole v. City of Memphis, 839 F.3d 530,

541 (6th Cir. 2016)).

1. Predominance

“To meet the predominance requirement, a plaintiff must establish that issues subject to

generalized proof and applicable to the class as a whole predominate over those issues that are

subject to only individualized proof.” Hicks v. State Farm Fire & Cas. Co., 965 F.3d 452, 459–60

(6th Cir. 2020); see Young, 693 F.3d at 544 (“While the commonality element of Rule 23(a)(2)

requires showing one question of law or fact common to the class, a Rule 23(b) (3) class must

show that common questions will predominate over individual ones.”) (emphasis in original). “The

Supreme Court has emphasized that ‘Rule 23(b)(3) requires a showing that questions common to

the class predominate, not that those questions will be answered, on the merits, in favor of the

class.’” Bridging Communities, 843 F.3d at 1124 (quoting Amgen Inc. v. Connecticut Ret. Plans

& Tr. Funds, 568 U.S. 455, 459 (2013)) (emphasis in original). “Common questions are those ‘that

can be proved through evidence common to the class.’” Id. (quoting In re Whirlpool Corp., 722

F.3d at 858).

In Section II.A.2, supra, the Court found that common questions of law exist for the

unlawful restraint of trade and TILA claims. The Court must now determine whether those

questions will predominate over individual ones such that class certification on each claim is

appropriate. “The predominance inquiry begins with the elements of the underlying cause of

action.” Momenta Pharms., Inc., 333 F.R.D. at 406 (citing Erica P. John Fund, Inc. v. Halliburton

Co., 563 U.S. 804, 809 (2011)). However, the predominance inquiry is not focused on whether

proof will establish the elements of the claim, but rather whether common questions will

predominate over individual ones for each claim. See In re Whirlpool Corp., 722 F.3d at 858. In

other words, Plaintiffs seeking class certification based on predominance do not need to prove that

each element of a claim can be established by class-wide proof, rather they need to prove that

common questions predominate over questions affecting only individual class members. See

Weiner v. Tivity Health Inc., 334 F.R.D. 123, 131 (M.D. Tenn. 2020) (citing Bridging

Communities, 843 F.3d at 1124). The predominance inquiry is tied to the proof, not to the answer,

and the fact that there may be some individual questions does not, in and of itself, mean this inquiry

cannot be satisfied.

a. Class Definition

As a threshold issue, the Court addresses the proposed class definition. Indeed, many of

SpecialtyCare’s arguments regarding predominance boil down to overbreadth. Specifically,

SpecialtyCare points out that:

some putative class members, such as those who resigned their employment within 30 days,

satisfied the three-year term of employment, qualified for an exception, or otherwise had

their reimbursement obligation waived by SpecialtyCare, have no reimbursement

obligation and therefore suffered no economic harm associated with signing the Repayment

Agreement. Likewise, some SNs are still currently working for SpecialtyCare and may

never have a reimbursement obligation if they remain employed for three years.

(Doc. No. 144 at 16–17). SpecialtyCare also notes that TILA’s statute of limitations renders the

proposed class definition overly broad because it “include[s] several SNs whose claims would be

time barred by the statute of limitations.” (Id. at 19). Finally, SpecialtyCare contends that “the

putative class includes SNs who have released their claims against SpecialtyCare,” and that three

identified individuals signed general releases applying to “any and all claims, known or unknown,

each may have against SpecialtyCare.” (Id. at 19 (citing Doc. No. 143-9 (releases)). Implicitly

conceding that the class is overbroad, Plaintiffs make the following suggestion in their Reply:

To address the one-year statute of limitations, the Court may divide the Class into a

Restraint of Trade Class or Subclass and TILA Class or Subclass. And the Court may

modify the proposed class definition to exclude anyone who released claims.

(Doc. No. 147 at 5).

The Court agrees that the proposed (b)(3) class contains SNs whose claims are time-barred

and others who have no reimbursement obligation. However, these questions go to the merits of

individual class members’ claims, which the Court may only consider to the extent necessary to

decide if the pre-requisites of Rule 23 are satisfied. See In re Whirlpool Corp., 722 F.3d at 851;

see Foster v. D.B.S. Collection Agency, No. 01-CV-514, 2002 WL 484500, at *10 (S.D. Ohio Mar.

26, 2002) (“to deny certification on the grounds that the Defendants may raise a statute of

limitations defense would be to reach the merits of that defense, which the Court may not do on a

motion for class certification” unless he assertion of a statute of limitations defense destroys

predominance); Ruiz Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1136 (9th Cir. 2016) (“even

a well-defined class may inevitably contain some individuals who have suffered no harm as a result

of a defendant’s unlawful conduct . . . . This merely highlights the possibility that an injurious

course of conduct may sometimes fail to cause injury to certain class members [and is irrelevant

to predominance if] it fails to reveal a flaw that may defeat predominance, such as the existence of

large numbers of class members who were never exposed to the challenged conduct to begin

with.”). The Court will therefore not inquire into the merits of the class members’ claims more

than strictly necessary for purposes of ruling the Pending Motion.

At this time, the Court finds it sufficient to (1) exclude from the (b)(3) class definition

putative class members who signed general releases and (2) split the class into two (b)(3)

subclasses: one unlawful-restraint-of-trade subclass and one TILA subclass. The Court and parties

can address SpecialtyCare’s liability first and, if SpecialtyCare is found liable as to one or both

claims, narrow the definition of one or both subclasses in due time to exclude non-meritorious

claimants. For instance, the Court could refine the TILA subclass based on the statute of

limitations, i.e., based on the date of the first finance charge.6 Because the Court will only certify

the TILA subclass as to statutory damages (see infra, Subsection c), it will not be necessary to

exclude SNs who have no reimbursement obligation.

As to the unlawful-restraint-of-trade subclass, the Court will, at this time, exclude SNs who

resigned within 30 days and those who qualified for a contractual exception to the repayment

obligation. Any further refinement would be premature at this stage because unresolved issues

could dispose of this subclass entirely. Indeed, it is unclear whether Plaintiffs requested damages

in connection with their unlawful-restraint-of-trade claim and whether Tennessee law even allows

such damages. (See infra, Subsection b). Answering either of these questions in the negative would

obviate the need for this subclass. In addition, its membership will depend on the type of damages.

For instance, damages for suppressed wages could apply to SNs who received a waiver by

SpecialtyCare or worked for SpecialtyCare for three years, while damages stemming from

Repayment Agreement payments would not apply to them. (See Doc. No. 129 at 1 (linking restraint

of trade to wage suppression), 8–9 (“There are at least two categories of potential class-wide

damages here: (1) wage suppression, and (2) [Repayment Agreement] payments.” (citing Doc. No.

127-31)).

With the above refinements to the class, and as discussed below, the Court is confident that

common questions will predominate. Once those common questions are resolved, the Court can

6 “As a general rule an action under TILA must be brought ‘within one year from the date of the

occurrence of the violation’” United States v. Petroff-Kline, 557 F.3d 285, 296 (6th Cir. 2009) (quoting 15

U.S.C. § 1640(e). “[T]he limitations period of 15 U.S.C. § 1640(e) is not measured from the date on which

the disclosure was required by law to be made, but instead from the date on which a finance charge was

first imposed[.]” Raney v. First Nat. Bank of Nebraska, Inc., No. CIV.A. 06-8-DLB, 2006 WL 2588105, at

*5 (E.D. Ky. Sept. 8, 2006) (citing Goldman v. First Nat. Bank of Chicago, 532 F.2d 10 (7th Cir. 1976)).

further narrow the (b)(3) class or subclasses and decertify them if need be. See Tyson Foods, Inc.

v. Bouaphakeo, 577 U.S. 442, 453 (2016) (for predominance purposes, “the action may be

considered proper under Rule 23(b)(3) even though other important matters will have to be tried

separately, such as damages or some affirmative defenses peculiar to some individual class

members”); see also Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 823 (7th Cir. 2012)

(“some class members’ claims will fail on the merits if and when damages are decided, a fact

generally irrelevant to the district court’s decision on class certification); Hilao v. Estate of

Marcos, 103 F.3d 767, 786 (9th Cir. 1996) (class-action interest was “only in the total amount of

damages for which it will be liable,” not “the identities of those receiving damage awards”).

Having resolved this threshold issue, the Court will address predominance for each claim in turn.

b. Unlawful Restraint of Trade

Under Tennessee law, whether agreements restricting competition are impermissible

depends on whether they are reasonable under the circumstances. See Allright Auto Parks, Inc. v.

Berry, 219 Tenn. 280, 285, 409 S.W.2d 361, 363 (1966).

There is no inflexible formula for deciding the ubiquitous question of reasonableness,

insofar as noncompetitive covenants are concerned. Each case must stand or fall on its own

facts. However, there are certain elements which should always be considered in

ascertaining the reasonableness of such agreements. Among these are: the consideration

supporting the agreements; the threatened danger to the employer in the absence of such

an agreement; the economic hardship imposed on the employee by such a covenant; and

whether or not such a covenant should be inimical to public interest.

Id. “[A] threshold question is whether the employer has a legitimate business interest, i.e., one that

is properly protectable by a non-competition covenant.” Vantage Tech., LLC v. Cross, 17 S.W.3d

637, 644 (Tenn. Ct. App. 1999).

Considerations in determining whether an employee would have such an unfair advantage

include (1) whether the employer provided the employee with specialized training; (2)

whether the employee is given access to trade or business secrets or other confidential

information; and (3) whether the employer’s customers tend to associate the employer’s

business with the employee due to the employee’s repeated contacts with the customers on

behalf of the employer.

Id. (citing Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471, 472 (Tenn. 1984)); see HCTec Partners,

LLC v. Crawford, 676 S.W.3d 619, 634 (Tenn. Ct. App. 2022) (same).

Here, most Allright factors pertaining to the reasonableness of the Repayment Agreement

are amenable to general and common proof. For instance, it flows from logic that the consideration

supporting the Repayment Agreement, the threatened danger to SpecialtyCare, and whether the

Repayment Agreement is against public interest are questions that can be disposed of on a common

basis because each class member was subject to the same or substantially same agreement. (See

supra, Section II.B). Plaintiffs have also shown that the same is true for sub-factors pertaining to

SpecialtyCare’s legitimate business interests given the uniformity of training, job duties, and

structure of the Repayment Agreement. (See Doc. No. 129 at 13–14).

SpecialtyCare argues that individualized issues would predominate as to the second

Allright factor, i.e., economic hardship. (See Doc. No. 144 at 17). To that effect, SpecialtyCare

first argues that each SN’s personal circumstances will affect the Court’s hardship analysis. (See

id.). The Court doubts that inquiries based on personal circumstances will predominate over

common issues, especially because the reasonableness analysis will likely boil down to whether

SpecialtyCare’s interest in enforcing the Repayment Agreement outweighs any impact on SNs’

mobility and wages. The examples of personal circumstances that SpecialtyCare provides, i.e.,

compensation, personal assets, financial support from family, payment plans, and payments from

subsequent employers, are a better measure of post facto mitigation than any underlying impact

on mobility or wages. In other words, that some SNs may have been able to absorb the repayment

obligation does necessarily negate the existence of generalized financial harm to the class. In

addition, that some SNs might have experienced no hardship at all resembles a merits question,

which the Court will not examine at the class certification stage.

Next, SpecialtyCare relies on Fredericks v. Ameriflight, LLC, No. 3:23-CV-1757-X, 2024

WL 4887528 (N.D. Tex. Nov. 25, 2024). There, pilots brought, in relevant part, an unlawful-

restraint-of-trade claim against their employer pursuant to a requirement that “[a] pilot[] . . .

reimburse [the employer] between $15,000 and $30,000 if the pilot resigned or was terminated for

cause within a certain time range.” Id. at *1. The court denied class certification based on lack of

predominance, reasoning:

The common question is whether the training repayment program limitations as to time,

area, and scope are unreasonable, such that it artificially restrains the mobility of labor.

[Plaintiff] argues there will be a common resolution because the training was standardized

and [the employer] calculated the training cost across the class and not individually. The

Court disagrees. The ultimate inquiry doesn’t stop at whether there are reasonable

restrictions. It also assesses whether the restrictions functionally limit mobility of labor.

The 160 pilots in the putative class had different experiences coming into [the employer’s

flight school]. While at [the school], they trained on planes of varying sizes. Some, like

[Plaintiff], found work elsewhere before they completed their time . . . to avoid repaying

training. Some . . . remain employed . . . even after completing the duration of their

agreements. And another 23 have not yet completed the duration of their Agreements but

remain [employed].

Determining the benefit of the training to these different groups is not a one-size-fits-all

endeavor. The real inquiry is what value the training provided them and the consequential

impact on their mobility. As [Plaintiff] herself admitted in her deposition, it would be “very

difficult to quantify” the value each pilot received from the training and that talking to each

pilot would be the way to ascertain that value. But the record [Plaintiff] brings at this stage

did not talk to each pilot.

Id. at *3. The court concluded that the Plaintiff failed to prove predominance. See id. at *4.

The Court finds Fredericks analogous in some aspects and distinguishable in others,7 but

overall not persuasive under the present circumstances. Indeed, the court focused on the value of

7 For instance, it appears that at least two SNs had prior educational experience and that at least one

SN, Plaintiff Nathan Fuchs, had relevant work experience that could have relativized the benefits of their

training in terms of mobility. (See Doc. No. 144 at 5–6). Likewise, some SNs left SpecialtyCare at various

each pilot’s training and its impact individual mobility. Here, Plaintiffs’ theory is that the

Repayment Agreement negatively impacted the mobility of all SNs, which, in the aggregate, led

to wage suppression. (See generally Doc. No. 127-31). In this context, the core question is not the

individual value of each SN’s training but the Repayment Agreement’s impact on mobility across

the board and ultimately on wages. For this reason, individual inquiries related to the value of

training will not predominate.

Finally, SpecialtyCare argues that common questions do not predominate because

Tennessee law does not provide for monetary damages as a remedy for unlawful restraint of trade

and that damages can therefore not be calculated on a class-wide basis. (See Doc. No. 144 at 20–

22). However, no authority SpecialtyCare cites supports this proposition. In their Reply, Plaintiffs

counter that wage suppression is simply a theory of actual damages, allowed by Tenn. Code Ann.

§ 47-25-106(a) (“[a]ny person who is directly or indirectly injured or damaged by any violation of

this part may sue for and recover, in any court of competent jurisdiction, equitable relief and actual

damages”). There are at least two glaring weaknesses in Plaintiffs’ theory. First, it implies that the

claim for unlawful restraint of trade is based on the Tennessee Trade Practices Act (“TTPA”),8,9

which at first glance “applies only to tangible goods, not intangible services,” including

employment services. Bennett, 198 S.W.3d at 751, 752 n.2 (citing McAdoo Contractors, Inc. v.

stages of the training and took various career paths, while others still work there, and at least one left and

returned after working for other employers. (Id. at 6–8). Further, the SNs’ compensation was not uniform.

(Id. at 9–10). On the other hand, contrarily to the pilots who trained on different categories of aircrafts, the

SNs were enrolled in the same program, meaning the value of their training was less disparate.

8 “The title ‘Tennessee Trade Practices Act’ [does not appear in the statute and] appears to have

originated in case law.” Bennett v. Visa U.S.A, Inc., No. CIV.A. 35126, 2004 WL 2115353, at *2 (Tenn.

Ch. Aug. 27, 2004), aff’d in part, rev’d in part sub nom. Bennett v. Visa U.S.A. Inc., 198 S.W.3d 747 (Tenn.

Ct. App. 2006).

9 The Third Amended Complaint does not reference the TTPA, but it is unclear whether an unlawful-

restraint-of-trade claim exists under Tennessee common law. H Grp. Constr., LLC v. City of Lafollette, No.

E201800478COAR9CV, 2019 WL 354973, at *6 (Tenn. Ct. App. Jan. 28, 2019).

Harris, 222 Tenn. 623 (1969)); see also Sherwood v. Microsoft Corp., No. M2000-01850-COA-

R9CV, 2003 WL 21780975, at *26 (Tenn. Ct. App. July 31, 2003) (legislative attempt to expand

the TTPA to services was unsuccessful). Second, under the TTPA, “[a] class action lawsuit must

not be brought to obtain injunctive relief and recover damages[.]” Tenn. Code Ann. § 47-25-106(a)

(emphasis added). In the same vein, SpecialtyCare argues that Plaintiffs may not seek monetary

damages as well as a declaratory judgment or injunctive relief in the same action.” (See Doc. No.

144 at 21–22). SpecialtyCare also questions whether Plaintiffs have pleaded a request for damages

in connection with the unlawful-restraint-of-trade claim altogether. (See Doc. No. 144 at 21).

While these issues raise legitimate concerns, the Court need not address them for purposes

of the pending Motion. Indeed, whether Tennessee law allows monetary damages in an unlawful-

restraint-of-trade action, whether the statute invoked by Plaintiffs applies to the Repayment

Agreement, and whether the unlawful-restraint-of-trade subclass can seek both

injunctive/declaratory relief and damages are questions of law common to this subclass and

therefore proper for resolution on a class-wide basis. Further, a finding that the Third Amended

Complaint does not plead a request for actual damages in connection with the unlawful-restraint-

of-trade claim would not defeat predominance; it would dispose of this entire subclass and obviate

the predominance requirement.

Overall, whether individualized issues of damages will predominate depends on Plaintiffs’

ability to calculate any wage-suppression damages on a class-wide basis. For purposes of the

pending Motion, the Court finds that Plaintiffs’ expert report (Doc. No. 127-31) meets this

burden.10 Should the circumstances change, the Court will reconsider this matter. In re Breast

10 Inasmuch as Plaintiffs have pled and seek damages in the form of Repayment Agreement payments

in connection with their unlawful-restraint-of-trade claim, the Court finds that any related issues will not

Implant Litig., No. 92-3420, 1992 WL 739891, at *1 (6th Cir. May 22, 1992) (“Orders concerning

class certification are inherently tentative in nature [and] may be revisited at any time prior to final

judgment.”)

c. TILA

In a nutshell, “TILA requires that creditors make certain disclosures as to the terms of

lending arrangements and provides for civil liability for failure to comply with its provisions.”

Petroff-Kline, 557 F.3d at 294 (citing 15 U.S.C. § 1640).11 There is no dispute that whether

SpecialtyCare has failed to make such disclosures can be resolved through generalized proof.

However, SpecialtyCare argues that individualized inquiries would predominate as to

actual damages because the core question is whether each putative class member relied upon the

purported lack of disclosures. (See Doc. No. 144 at 18).

TILA § 1640(a) provides for two types of damage awards: statutory damages and actual

damages . . . . and actual damages require a showing of detrimental reliance (In re Smith,

289 F.3d 1155, 1157 (9th Cir.2002) (per curiam), collecting cases, including our decision

in Stout v. J.D. Byrider, 228 F.3d 709, 718 (6th Cir.2000)). To establish detrimental

reliance, the debtor must demonstrate that he or she would either have received a better

interest rate for the loans elsewhere or would have elected not to take the loan had the

required information been available.

Petroff-Kline at 296 (citation omitted). “In order to establish these actual damages, courts have

required the plaintiff to show the TILA violation was the proximate cause of any actual damages.”

Peters v. Jim Lupient Oldsmobile Co., 220 F.3d 915, 917 (8th Cir. 2000). Among other things, this

“requires an individual assessment of what documents the customer reviewed and in what

manner[.]” Stout, 228 F.3d at 718. Therefore, courts “increasingly refuse to [certify TILA claims]

predominate because the payments and their amounts have been recorded and are part of the record. (See

generally Doc. No. 179-9).

11 The Court set forth the specific elements of the surviving portion of Plaintiffs’ TILA claim, which

relies on a long list of statutory definitions, in its Memorandum on SpecialtyCare’s Partial Motion to

Dismiss. (See Doc. No. 189 at 12–18). The Court need not repeat these details here.

in actual damage cases.” Rockey, 199 F.R.D. at 594 (collecting cases). Indeed, “[i]n light of the

need to prove causation for each TILA plaintiff in a case for actual damages, individual issues

predominate.” Id. at 591 (collecting cases).

In their Reply, Plaintiffs rely on the rule that certification under Rule 23(b)(3) is

permissible when liability questions common to the class predominate over damages questions

proper to each putative class member. (See Doc. No. 147 at 5 (quoting In re Whirlpool Corp., 722

F.3d at 861 (“a class may obtain certification under Rule 23(b)(3) when liability questions common

to the class predominate over damages questions unique to class members”)). In Rockey, 199

F.R.D. at 592, the court rejected this argument on grounds that it “misses the mark” because “each

plaintiff must prove, in addition to the amount of damages, causation in fact and reliance,” meaning

that “proof at trial must necessarily focus on whether each individual plaintiff read [understood,

and relied upon] the TILA disclosure[s].” The Court concluded that “[c]ommon issues do not

predominate where . . . the focus must be on minute aspects of individual transactions in order to

establish liability.” (Id. (collecting cases)). The Court finds this reasoning persuasive and likewise

finds that the portion of the TILA claim based on actual damages does not meet the predominance

requirement. Conversely, the Court finds that the portion of the TILA claim based on statutory

damages meets the predominance requirement. See id., at 594 (“If statutory damages had been

available to plaintiff . . . without the requirements of detrimental reliance and proof of actual

damages, Rule 23(b)(3) certification would be entirely appropriate.”).12

12 This moots SpecialtyCare’s argument that “Plaintiffs have not offered any evidence as to how

evidence of [actual] damages would be calculated for the TILA claim.” (Doc. No. 144 at 22).

2. Superiority

To satisfy the superiority requirement, Plaintiffs must demonstrate that “a class action is

superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.

R. Civ. P. 23(b)(3). In undertaking this analysis, the Court examines four factors:

(A) The class members’ interests in individually controlling the prosecution or defense

of separate actions; (B) the extent and nature of any litigation concerning the

controversy already begun by or against class members; (C) the desirability or

undesirability of concentrating the litigation of the claims in the particular forum; and

(D) the likely difficulties in managing a class action.

Fed. R. Civ. P. 23(b)(3); see also Momenta Pharms., Inc., 333 F.R.D. at 403 (same).

The Court finds that the first two factors weigh in favor of class certification. First, the

similarity of claims diminishes the class members’ interest in controlling separate actions. Second,

concentration of the claims in this Court and their common resolution is desirable, as it will

streamline the resolution of the claims and conserve judicial and litigation resources. While

Plaintiffs note that SpecialtyCare has initiated collections against multiple SNs and filed at least

one lawsuit against a SN, Plaintiffs also proffer that “any lawsuit or collections effort has been

paused for many if not all SNs pending the outcome of [the present] case.” (Doc. No. 129 at 24).

This is sufficient to satisfy the first and second factors.

As to the third factor, mirroring its arguments on predominance, SpecialtyCare raises

concerns that individualized inquiries will impact the manageability of the class. (See Doc. No.

144 at 23). Given that the Court mitigated any such inquiries by narrowing the definition of and

splitting the (b)(3) class into two subclasses, as well as for the reasons stated in addressing

predominance (see supra, Subsection 1), the Court is not persuaded that substantial difficulties

will arise in managing the class. As such, superiority is met.

3. Ascertainability

Under the ascertainability requirement, Plaintiffs must show “that the members of the class

[are] capable of specific enumeration.” In re Flint Water Cases, 499 F. Supp. 3d 399, 425–26

(E.D. Mich. 2021) (quoting Cole, 839 F.3d at 542 (emphasis in original)). This requirement is

satisfied with a class description that is sufficiently definite so that it is administratively feasible

for a court to determine whether a particular individual is a member by reference to objective

criteria. See Cole, 839 F.3d. at 541; Young, 693 F.3d at 538–39; Lyngaas v. Ag, 992 F.3d 412, 428

(6th Cir. 2021).

Here, the Court has considered the (b)(3) class and finds that the class definition, as

reshaped herein, is both definite and relies upon objective criteria to determine class membership.

Indeed, the proposed definition was ascertainable. The Court excluded from the proposed

definition: (1) from the entire class, SNs who signed general releases; and (2) from the unlawful-

restraint-of-trade subclass, SNs who resigned within 30 days and those qualified for a contractual

exception to the repayment obligation. (see supra, Subsection 1.a). The record in this case contains

sufficient information to determine membership in these three exclusionary categories. (See e.g.,

Doc. No. 143-12 at 11–12 (citations to record)). Thus, ascertainability is met.

D. Notice

Plaintiffs seek approval and distribution of their proposed notice (Doc. No. 129-41). (See

Doc. No. 129 at 25). SpecialtyCare opposes this request. (See Doc. No. 144 at 24). As for the (b)(2)

class, the Court finds it premature to approve and distribute a class notice because of the pending

Motion for Summary Judgment and Partial Motion to Dismiss (Doc. No. 180), which is potentially

dispositive of this entire case. As for the (b)(3) class, Plaintiffs’ request is moot because their

proposed notice is based on a now-obsolete class definition. Accordingly, the Court will deny

Plaintiffs’ request.

IV. CONCLUSION

For the foregoing reasons, Plaintiffs’ Motion for Rule 23 Class Certification (Doc. No.

128) will be GRANTED in part and DENIED in part. The Motion will be GRANTED as to the

(b)(2) class, GRANTED as to the (b)(3) class as redefined above, and DENIED as to the notice.

An appropriate Order shall enter.

CHIEF UNITED STATES DISTRICT JUDGE

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