John J. Tharp, Jr., United States District Judge.
Before the Court is the plaintiffs' Motion for Partial Summary Judgment in a TCPA junk fax case. For the reasons explained below, the plaintiffs' motion is granted in its entirety.
In February 2014, this Court granted the plaintiffs' Motion for Class Certification and denied defendant Daniel Wagener's Motion to Dismiss. The class definition that the Court certified was:
The Court appointed Paldo Sign & Display Company as the representative of the class. On March 31, 2014, the Seventh Circuit denied the defendants' motion for leave to appeal the class certification. See Arnold Chapman and Paldo Sign & Display Co. v. Wagener Equities, Inc., et al., 747 F.3d 489 (7th Cir.2014). The plaintiffs have now filed a motion for partial summary judgment.
The Court assumes familiarity with the background that was set forth in detail in its opinion certifying the class and denying Wagener's motion to dismiss. See Chapman v. Wagener Equities, Inc., No. 09 C 7299, 2014 WL 540250 (N.D.Ill.Feb. 11, 2014). This opinion addresses only the facts relevant to resolving the present motion, which are taken from the parties' Local Rule 56.1 statements and responses. Only facts that this Court deems material and supported by admissible evidence are included.
The plaintiff class alleges that the defendants violated the Telephone Consumer Protection Act ("TCPA"), which makes it unlawful for any person "to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement" unless, among other conditions, (1) the "unsolicited advertisement is from a sender with an established relationship with the recipient" and (2) the sender obtained the fax numbers through that established business relationship or from a directory, advertisement, or site on the web to which the recipient voluntarily agreed to make its fax number available for public distribution. 47 U.S.C. § 227(b)(1)(C), (b)(1)(C)(i), (ii). Specifically, the plaintiffs allege that Wagener Equities, Inc., an Illinois corporation involved in commercial real estate, and its president, Daniel Wagener (collectively "WEI"), directed a company named Business to Business Solutions (B2B) to fax an advertisement to thousands of fax numbers, and that 10,145 different fax numbers received the fax on November 9 and 10, 2006, without the recipients' consent and in violation of the TCPA. Defs. 56.1 Resp. (Dkt. 242) ¶¶ 9, 10, 45.
The debate is not directly relevant to the question of WEI's potential liability, but to the question of the admissibility of evidence regarding the transmission of the fax at issue. WEI denies that Abraham (or her son, who assisted her in the business) can authenticate any of the transmission data on which the plaintiffs rely because she has no personal knowledge regarding the fax broadcasting business that is alleged, and also denies that Abraham was personally involved in sending the fax transmissions at issue in this case, communicating with Wagener or anyone else at WEI, sending faxes to prospective clients, maintaining computers used by B2B, removing the hard drive at issue, backing up any B2B data, or compiling lists of fax recipients. Id. ¶¶ 17-18; Pls. 56.1 Resp. (Dkt. 248) ¶ 8. WEI adds that Macaw controlled Abraham's computers, and all faxing activity, remotely; the plaintiffs counter that faxes were only sent after Abraham gave instructions to Macaw, including what was to be faxed and when and where it was to be faxed. Pls. 56.1 Resp. ¶ 5. The plaintiffs assert that B2B and Macaw "were engaged in a joint business effort to obtain customers for their fax broadcasting endeavor ... Simply put, the efforts of B2B-Abraham and Macaw were inextricably intertwined as one business operation." Id. ¶ 8.
The plaintiffs also state that B2B marketed itself as "Maxileads" or "Marketing Research Center," but WEI denies this fact, asserting instead that "Maxileads" and "Marketing Research Center" were "letterhead" names and not actual companies or entities. Defs. 56.1 Resp. ¶ 12.
Next, Wilson sent Wagener a document describing the process for ordering a fax advertisement, which included detailed instructions to (1) write a check for $668 payable to B2B; (2) make a copy of the check; (3) mail the check to B2B; (4) write on the check copy page, "I have already mailed this check!;" and (5) fax the check copy and note to B2B. Id. ¶ 27. The instructions also stated, "We will start your marketing campaign immediately, if you fax us a copy of our payment check after you mail it;" "To begin your program immediately, follow these simple instructions;" and "Although we will start your campaign immediately upon receipt of
The plaintiffs claim that Wagener followed these instructions and consequently ordered, and gave permission to transmit, 20,000 advertising faxes for $668.00. Id. ¶ 26. WEI denies this fact. Id. WEI admits that Wagener instructed the vice president of WEI to write a check to B2B "as a showing of good faith in order to obtain the list of proposed recipients from `Mr. Wilson.'" Id. ¶ 28(a). WEI denies, however, that it ever paid B2B, "as payment was stopped on the identified check as soon as WEI determined that faxes may have been sent without their authorization." Id. ¶ 28(b). WEI also admits that the check at issue contained the word "ads" under the word "description," but denies that this was a reference to "faxes" or that it described "faxes" as "ads." Id. ¶ 28(b). WEI concedes that "it is possible" that Wagener faxed a copy of the check at some point in time, but denies that the fax included a handwritten note stating "I have already mailed this check!" (although WEI admits that the exhibit does contain this note). Id. ¶ 28(d), (e). Significantly, WEI asserts that Wagener "told `Mr. Wilson' to wait and told him that nothing should be sent or done prior to Mr. Wagener receiving and reviewing the list of potential recipients." Id. ¶ 29. The plaintiffs counter that Abraham testified that she did not recall hearing from Macaw salespeople that the WEI fax should not begin until Wagener reviewed the recipients' list; WEI responds that not all instructions from clients were memorialized and communicated to Abraham. Id. ¶¶ 31-32.
It is undisputed that WEI owns the website address www.FindIndustrialRE.com, and maintains the industrial database found on that site. WEI asserts, however, that the website is "only a database that includes all available industrial properties in Illinois, including those for which WEI does not have an exclusive listing." Id. ¶¶ 37-38, 41.
Separately, WEI asserts that the hard drive "does not contain a `log' directory including `tracelog' files," a fact the plaintiffs admit. Pls. 56.1 Resp. ¶ 16. WEI explains that a fax cannot be determined to have been successfully sent "with a reasonable degree of technical certainty" if there are no "tracelog" files on the hard drive, because the "tracelog" files contain more detailed information than the Hylafax "xferfax" log files. Id. ¶¶ 19, 21.
Summary judgment is appropriate when there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. See Jajeh v. Cnty. of Cook, 678 F.3d 560, 566 (7th Cir. 2012) (citing Fed. R. Civ. P. 56(a)). In addressing the plaintiffs' motion, the Court must construe all facts and draw all reasonable inferences in the defendants' favor. Id. If the moving party demonstrates the absence of a disputed issue of material fact, then "the burden shifts to the non-moving party to provide evidence of specific facts creating a genuine dispute." Carroll v. Lynch, 698 F.3d 561, 564 (7th Cir. 2012).
The plaintiffs move for partial summary judgment on three elements of their TCPA claim: (1) the fax was an "advertisement" as defined by the TCPA; (2) the fax was successfully sent by a telephone facsimile machine, computer or other device to 10,145 different fax numbers; and (3) the faxes were sent without the recipients' prior express invitation or permission to do so. The Court grants the plaintiffs' motion for summary judgment as to all three elements — (1) the fax was an "advertisement" as a matter of law; (2) the fax was successfully sent to 10,145 different fax numbers; and (3) the faxes were was sent without the recipients' consent.
The TCPA defines an "advertisement" as "any material advertising the commercial availability or quality of any property,
The plaintiffs argue that there is no dispute that the fax at issue was an advertisement because WEI's purpose was to "advertise the availability or quality of Defendants' industrial real estate investment management, leasing and sales services and properties." Pls. Mem. (Dkt. 233) at 7. The plaintiffs note that Daniel Wagener testified at his deposition that the "intended targets" of the faxes were
Pls. 56.1 Resp. ¶ 35. In its February 2014 opinion, this Court did not resolve the question of whether the fax was an advertisement, but it did note that Wagener's deposition testimony reflected that Wagener hoped the fax would bring some commercial benefit to Wagener Equities. Feb. 11, 2014 Mem. Op. at 14 n.7.
WEI asserts that two pages of the fax were unrelated to WEI. Defs. Mem. (Dkt. 243) at 10. The plaintiffs respond that the lawsuit does not pertain to the first two pages of the fax, but rather focuses on the third and final page of the fax, which does pertain to WEI. As to the third page, WEI argues that it "does not promote a commercial service of WEI." Rather, the fax "itself states that it is provided as a courtesy" and "simply provides a link to an informational website that provides no ability to buy a WEI product or service, provides no financial remuneration to WEI as a result of a sale or lease of a property from that website, and contains information that is not specific to WEI." Defs. 56.1 Resp. ¶ 35; Pls. 56.1 Resp. ¶ 32. WEI also denies that the website "guaranteed any type of listing agreement or financial gain for WEI." Pls. 56.1 Resp. ¶ 43.
Advertising the availability of services is covered by the TCPA. In Holtzman v. Turza, the Seventh Circuit held that a fax contained an "advertisement" as defined by the TCPA because although it did not "tout[] the quality of" services, it "did declare their availability." 728 F.3d 682, 685 (7th Cir.2013). The fax at issue "devote[d] about 75% of the space to mundane advice and the remainder to [the defendant's] name, address, logo, and specialties." Id. at 686. The court noted that the TCPA "does not ask whether a notice of availability is incidental to something else" and that "any material advertising the commercial availability or quality of any property, goods, or services" is an "advertisement" under the TCPA. Id. at 687 (citing 47 C.F.R. § 64.1200(f)(1)) (emphasis added). Concluding that "promotion or marketing was the reason these faxes were transmitted," the court found the fax to be an advertisement as a matter of law. Id. at 688.
Similarly, there is no genuine dispute of material fact that the fax here advertises the commercial availability of WEI's services — a free database of industrial real estate listings that is owned and managed by WEI. As Wagener himself acknowledged, the purpose of the fax was to direct traffic to WEI's database. Once there, Wagener hoped recipients would use the database to find industrial properties that would meet their criteria; the recipients would then, Wagener expected, contact WEI about those properties. The fax
In examining whether the class was sufficiently numerous, this Court held in its February 2014 opinion that the hard drive at the center of this case was properly authenticated to establish the foundation for admissibility under FRE 803(6). This Court further held that the fax transmission logs contained on the hard drive were sufficiently reliable to show that 10,145 faxes were sent on November 9 and 10, 2006 and that "most, if not all, of those fax transmissions were successful," meaning the faxes were received by the recipients. Feb. 11, 2014 Mem. Op. at 22. Consequently, this Court found that the plaintiffs showed numerosity.
The question now before the Court is whether the WEI fax was — without factual dispute — successfully sent to all 10,145 fax numbers. WEI again calls into question the source of the hard drive and the source of the data on that hard drive, but the Court has already ruled that the plaintiffs established an adequate foundation to admit this evidence. Id. at 19-20 ("this Court finds the hard drive to be properly authenticated to establish the foundation for admissibility under FRE 803(6) ... Paldo Sign has presented more than enough evidence to make a prima facie showing of genuineness as to the records contained on the hard drive."). And based on this evidence, the plaintiffs' expert, Biggerstaff, opined that 10,145 faxes were "successfully sent," meaning that the faxes were "sent to and received by equipment which has the capacity to transcribe text or images (or both) from an electronic signal received over a regular telephone line onto paper." Biggerstaff Nov. 15, 2010 Report (Dkt. 212-3) at 6.
The plaintiffs having adduced admissible evidence in support of their position, the defendants are required to adduce contrary evidence in order to demonstrate that there is a material question of disputed fact regarding the successful transmission of the faxes. See Local Rule 56. 1(b)(3)(B) (requiring that a party opposing summary judgment properly set forth their challenge by citing the "specific references to the affidavits, parts of the record, and other supporting materials relied upon."); see also Carroll v. Lynch, 698 F.3d 561, 566 (7th Cir.2012) (where non-movant offered no evidence of specific facts contradicting or undermining the movant's conclusion, no genuine dispute of material fact exists; "neither a desire to cross-examine an affiant nor an unspecified hope of undermining his or her credibility suffices to avert summary judgment.") (quoting Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Argonaut Ins. Co., 701 F.2d 95, 97 (9th Cir.1983)). In an effort to adduce contrary evidence, the defendants offer their own expert witnesses, who conclude that "it cannot be demonstrated that any number of faxes have been `successfully sent'" because the hard drives did not include "tracelogs," which, according to the defendants, would provide a more definitive record of successful or unsuccessful fax transmissions (because the trace logs show a full file structure and the "xferfax" logs do not). Without these tracelogs, the defendants argue, false positives are conceivable and therefore it cannot be said with certainty that all 10,145 transmissions that Biggerstaff identified were successfully sent. Defs. Mem. at 12-14.
This evidence does not meet the defendants' burden in opposing summary judgment. In opposition to Biggerstaff's testimony, the defendants offer only speculation that it is possible that some of the
The TCPA contains three important exceptions — there can be no TCPA violation (1) where the advertisement is from a sender
47 C.F.R. § 64.1200(f)(6). Additionally, the FCC requires the sender to obtain the "prior express invitation or permission"
At the class certification stage, this Court noted that there was no evidence in the record that any of the alleged recipients of the WEI fax consented to receive the fax, and that the defendants did nothing to confirm that the intended 20,000 recipients of their fax had affirmatively consented to receive such faxes. Feb. 11, 2014 Mem. Op. at 11-12. This Court added that the defendants appeared to have simply hired the services of a "fax blaster" company without any inquiry as to whether or how that company obtained consent. Id.
This record compels judgment in favor of the class on this issue. The defendants have adduced no evidence that they had any business relationship with any recipient of the fax blast, or that any recipient had consented to receive it. Consent is an affirmative defense — see Grant v. Capital Mgmt. Servs., LP., 449 Fed.Appx. 598, 600 n. 1 (9th Cir.2011) (unpublished); see also Thrasher-Lyon v. Ill. Farmers Ins. Co., 861 F.Supp.2d 898, 905 (N.D.Ill. 2012) (noting that the TCPA contains the affirmative defense of express consent) — so it is the defendants' burden to adduce such evidence, but the defendants offer no evidence of consent at all. Instead, the defendants argue that they relied on Wilson's word that potential recipients consented to receive faxes. Defs. Resp. at 11. In support of its position, WEI asserts that Macaw (or B2B, depending on which party you ask) had permission from potential recipients to send those recipients faxes and that Wilson told Wagener that WEI had an existing business relationship with all potential recipients. Id.; Defs. 56.1 Resp. ¶ 58.
Nothing in the statute, however, suggests that intent is an element of a TCPA violation. See Penzer v. Transportation Ins. Co., 545 F.3d 1303, 1311 (11th Cir.2008) ("Numerous courts have determined that the TCPA does not require intent, except when awarding treble damages"); State Industries, Inc. v. Twin City Fire Ins. Co., 158 Fed.Appx. 694, 697 (6th Cir.2005) (unpublished) (the TCPA does not require proof of intent, which means that plaintiffs can recover for negligent violations). The plaintiffs also point to a recent FCC opinion in which the FCC clarifies that the sender is still liable for TCPA violations "even when relying upon the assertion of an intermediary that the consumer has consented to the [communication]." In the Matter of GroupMe, Inc./Skype Comms., 29 F.C.C.R. 3442, at *4 (Mar. 27, 2014). The Court therefore holds that, in contesting their intent, the defendants have failed to present evidence sufficient to create a jury issue as to the issue of consent.
For the reasons set forth above, the Motion for Partial Summary Judgment is granted.