JAMES KNOLL GARDNER, District Judge.
This matter is before the court on Plaintiff's Motion for Class Certification filed July 19, 2013.
The within matter is a putative class action in which plaintiff Hawk Valley, Inc. ("Hawk Valley") asserts a claim, on its own behalf and on behalf of all others similarly situated, against defendants Elaine G. Taylor and Environmental Process Systems, Inc. ("EPSI") for sending an unsolicited facsimile advertisement to plaintiff and the putative class members on June 17, 2006 in violation of the federal Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. 227.
In the within motion, plaintiff seeks to certify a class defined as "All persons sent one or more faxes on June 17, 2006 from `Environmental Process Systems, Inc.' that advertised `EPSI's Grass Grab-er' as a `New way to treat your equipment wash water.'"
Because plaintiff has demonstrated that the four requirements necessary for class certification under Rule 23(a) of the Federal Rules of Civil Procedure, and the two requirements necessary for class certification under Rule 23(b)(3) are each satisfied here, I grant plaintiff's motion and certify the class.
Jurisdiction in this case is based upon federal question jurisdiction pursuant to 28 U.S.C. § 1331 and upon the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d).
Venue is proper because the events giving rise to plaintiff's claim allegedly occurred in the Borough of Denver, Lancaster County, Pennsylvania, which is within this judicial district.
Plaintiff initiated this putative class action on February 24, 2010 by filing its Class Action Complaint ("Class Complaint").
On February 28, 2011 I issued an Order and accompanying Opinion
On March 25, 2011 plaintiff filed a First Amended Class Action Complaint
On March 30, 2012 I issued an Order and accompanying Opinion
I conducted a status conference pursuant to Rule 16 of the Federal Rules of Civil Procedure by telephone conference call on August 23, 2012. The parties did not submit (separately or together) a report, or reports, of a pre-status-conference meeting prior to the August 23, 2012 status conference (as required by Rule 26(f) of the Federal Rules of Civil Procedure). Because the parties were unable to reach an agreement at the August 23, 2012 conference, I directed the parties at the status conference to exchange the mandatory self-executing discovery disclosures require by Rule 26(a), and to submit a proposed discovery plan as required by Rule 26(f) on or before August 31, 2012. I also scheduled a second status conference for September 10, 2012.
The parties were unable to agree upon a proposed schedule and structure concerning this matter, and on August 24, 2012, plaintiff and defendants submitted separate proposed case management plans.
Upon consideration of the parties proposed plans, I established, among other dates and deadlines, a June 21, 2013 deadline for completion of all class discovery, and a July 19, 2013 deadline for plaintiff to file a motion seeking class certification pursuant to Rule 23 of the Federal Rules of Civil Procedure.
On April 9, 2013 Defendant Elaine G. Taylor's Motion for Summary Judgment was filed, seeking summary judgment in her favor and against plaintiff on its claim against her in this matter.
Plaintiff's Motion for Class Certification was filed on July 19, 2013, together with supporting materials.
On September 25, 2013 Defendant, Environmental Process Systems, Inc.'s Motion to Dismiss For Lack of Subject Matter Jurisdiction Pursuant to Fed.R.Civ.P. 12(b)(1) was filed. On September 26, 2013 Defendant, Elaine G. Taylor's Motion to Dismiss for Lack of Subject Matter Jurisdiction Pursuant to Rule 12(b)(1) was filed.
I denied each defendant's respective motion to dismiss by (and for the reasons expressed in) my Order dated October 29, 2013 and filed October 30, 2013.
I held a hearing on Plaintiff's Motion for Class Certification on November 8, 2013. At the class certification hearing, each party moved — and in the absence of objection the court received — in evidence the exhibits upon which each intended to rely in support of their respective positions concerning class certification.
At the November 8, 2013 hearing, counsel for each defendant requested seven days to submit a joint memorandum of law concerning an issue which arose during argument at the hearing. I granted that request and gave defendants until November 15, 2013 to file a joint memorandum. I gave plaintiff until November 22, 2013 to file a response to the joint memorandum to be filed by defendants. Defendants' joint memorandum and plaintiff's response were timely filed on those dates.
Additionally, while this matter has been under advisement following the November 8, 2013 hearing, plaintiff and defendants sought,
Hence this Opinion.
Rule 23 of the Federal Rules of Civil Procedure contains the prerequisites for class certification.
To obtain class certification, plaintiffs must establish that each requirement of Rule 23(a) is met, together with one of the requirements of Rule 23(b).
Pursuant to Rule 23(a), a class may be certified only if:
Fed.R.Civ.P. 23(a).
If the requirements of Rule 23(a) are satisfied, Rule 23(b) sets forth the types of class actions which may be maintained.
In this case, plaintiff moves for class certification pursuant to Rule 23(b)(3). Rule 23(b)(3) provides that a class may not be certified unless the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.
Accordingly, the requirements of Rule 23(b)(3) are known as predominance and superiority.
In deciding whether the requirements of Rule 23 have been met to certify a class, the district court must make whatever factual and legal inquiries necessary and must consider all relevant evidence and arguments.
The requirements set forth in Rule 23 are not "mere pleading rules" and the court must "delve beyond the pleadings to determine whether the requirements for class certification are satisfied."
Accordingly, a court must resolve all factual or legal disputes relevant to class certification, even if they overlap with the merits — including disputes touching on elements of the cause of action.
In the within matter, plaintiff alleges that defendants violated the provision of the Telephone Consumer Protection Act governing advertisements sent by facsimile, 47 U.S.C. § 227(b)(1)(C), which provides that
47 U.S.C. § 227(b)(1).
The TCPA defines "unsolicited advertisement" as "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission, in writing or otherwise." 47 U.S.C. § 227(a)(5).
The TCPA provides that, "for purposes only of subsection (b)(1)(C)(i)" of section 227, the term "established business relationship"
47 U.S.C.A. § 227(a)(2).
The regulations promulgated by the Federal Communication Commission ("FCC") provide that
47 C.F.R. § 64.1200(f)(3).
Upon consideration of the pleadings, record papers, exhibits, declarations, and depositions, as required by the forgoing standard of review, the pertinent facts for purposes of class certification are as follows.
Plaintiff Hawk Valley, Inc. ("Hawk Valley") is a Pennsylvania corporation with its principal place of business in Denver, Lancaster County, Pennsylvania.
At the time the fax advertisement at issue here was sent, Hawk Valley was owned by James Fricke, Ph.D. Dr. Fricke does not personally remember receiving that specific fax advertisement.
Defendant Environmental Process Systems, Inc. is in the business of manufacturing and selling industrial wastewater treatment equipment.
Bennett W. Taylor, Jr. — husband of defendant Elaine G. Taylor (together, "the Taylors") — was employed by EPSI during 2006 when the fax was transmitted. Mr. Taylor remained an EPSI employee until 2009, when the Taylors sold EPSI to a company called Separator Solutions.
Before the sale of EPSI, EPSI employed four people, including the Taylors. Mr. Taylor, was President of EPSI. Mrs. Taylor was the Secretary and Treasurer of EPSI. EPSI also employed a man named John Hoke, and another serviceman.
The Taylors were the sole shareholders of EPSI, with Mrs. Taylor owning 51% of EPSI's stock and Mr. Taylor owning the other 49%.
In 2006, Mrs. Taylor's duties and responsibilities involved "answer[ing] the phone" and covering "[a]ll clerical work" for EPSI.
EPSI had a business banking account at First Gaston Bank in Mt. Holly, North Carolina. The Taylors were the only two people with check-writing authority over EPSI's account at that time, and only one of their signatures was required. Mrs. Taylor typically wrote the checks for the business.
From August 2005 until September 2007, Caroline Abraham was doing business under the name Business to Business Solutions ("B2B"). B2B worked with a Romanian business called Macaw, S.R.L. (hereafter "Macaw", but which also utilized the name "MaxiLeads") and was engaged in the business of fax advertising on behalf of businesses within the United States. B2B's fax advertising business was coordinated from Brooklyn, New York.
Customers who engaged B2B to send fax advertisements would direct it to send faxes to a particular geographic location or to a particular type of business. Accordingly, B2B would select a target list of recipients from a database of contact information which B2B had purchased from an entity called InfoUSA in 2004. B2B did not contact any of the businesses on the list that it purchased from InfoUSA to obtain express permission or invitation from those entities for B2B to send fax advertisements to them.
After B2B obtained approval of the copy and content of, and received payment for, the advertisement from its customer, B2B would cause the advertisement to be sent simultaneously, en masse over telephone lines which ran through computers in Ms. Abraham's home.
InfoUSA is a vendor of business information which its customers purchase to utilize for various business-development and marketing purposes. A business's fax number is among the numerous pieces of contact information InfoUSA collected from a variety of sources so it could sell that information to InfoUSA customers like B2B.
To increase the reliability (and thus the value) of the information it collects indirectly from various sources, InfoUSA called businesses directly to verify the information it has already obtained. Prior to 2011 (and in 2004 when B2B purchased contact information from InfoUSA), it was InfoUSA's practice verify the fax number for the businesses in its database and to ask for a business's fax number if InfoUSA did not already have that number at the time of the verification call.
Chris Fruehwald, Director of Compilation, testified that some of the businesses contacted by InfoUSA during the verification process would express interest in having their contact information made available to InfoUSA's customers.
However, there is no record evidence that InfoUSA obtained express permission or invitation from any of the businesses in its database for those businesses to receive fax advertisements generally, or fax advertisements from B2B or from either defendant specifically.
The June 17, 2006 facsimile advertisement in this case was the first time that EPSI was involved with fax advertising.
Earlier in 2006, EPSI was contacted by B2B. EPSI responded to B2B's overture and entered into an agreement with B2B for B2B to send facsimile advertisements for the Grass Graber on EPSI's behalf.
In communications between EPSI and Kevin Wilson (identified by Caroline Abraham as a sales agent for Macaw), EPSI identified "[g]olf course superintendents" as the target of the advertisement and "emphasi[zed] that superintendents must be targeted" because "[t]he Pro shops do not buy or have any input on the purchase of Grass [G]rab-er™."
EPSI did not furnish B2B with any of the fax numbers utilized in the June 17, 2006 transmission.
The June 17, 2006 fax advertisement for EPSI's Grass Grab-er was sent successfully to 4,521 fax numbers,
The Taylors reviewed a sample of the businesses associated with 2,369 of the 4,521 fax numbers utilized in the June 17, 2006 transmission and identified 61 of 2,369 with whom EPSI had previously done, or was doing, business as of June 2006. From review of that same sample, the Taylors identified approximately 570 businesses which do not have a golf course on the premises.
The record evidence does not suggest that Mrs. Taylor, any other employee or agent of EPSI, or any employee or agent of B2B obtained or received express permission or invitation from any of the recipients of the June 17, 2006 transmission for such recipients to receive advertisements by fax.
Plaintiff contends that the numerosity requirement under Rule 23(a)(1) is satisfied because there is record evidence that fax advertisement at issue here was sent to, and received by, 4,521 unique fax numbers.
Plaintiff contends that the commonality requirement under Rule 23(a)(2) is satisfied because defendants are alleged to have engaged in standardized conduct with respect to Hawk Valley and the putative class members. Moreover, plaintiff contends that there are common questions of fact concerning the creation and sending of the fax advertisement, and common questions of law concerning the requirement for liability and the damages available under the federal Telephone Consumer Protection Act.
Plaintiff contends that the typicality requirement under Rule 23(a)(3) is clearly satisfied because the claims of plaintiff and the putative class members are based upon the same legal theory (that is, that defendants Taylor and EPSI are each liable under the TCPA for the fax advertisement sent June 17, 2006).
Plaintiff contends that the adequacy requirement under Rule 23(a)(4) is satisfied because Hawk Valley is interested in prosecuting this matter as a class action and does not have any conflicts with other putative class members. In addition, plaintiff's attorneys have been litigating TCPA claims for many years, have been appointed a lead or co-lead class counsel in many cases, and will continue to devote adequate time and resources to the prosecution of this action.
Plaintiff contends that the predominance requirement under Rule 23(b)(3) is satisfied here because "[i]n this case, no individualized issues are present."
Finally, plaintiff contends that the superiority requirement under Rule 23(b)(3) is satisfied here because (1) common issues predominate plaintiff's claim and the claims of the more-than-four-thousand putative class members, and (2) the minor nature of the actual injury suffered and monetary recovery available, together with the absence of a provision in the TCPA awarding attorney fees to successful plaintiffs, combine to render individual actions impractical and unfeasible.
Defendants do not contest the numerosity requirement of Rule 23(a)(1). However, defendants contend that the commonality, typicality, and adequacy requirements of Rule 23(a)(2)-(4) are not satisfied.
Defendants contend that the commonality requirement of Rule 23(a)(2) is not satisfied here.
Defendants contend that the typicality requirement of Rule 23(a)(3) cannot be satisfied here. Defendants each argue that typicality is unsatisfied because there are issues and defenses individual to each potential class member.
Defendants also contend that the adequacy requirement of Rule 23(a)(4) has not been satisfied. Specifically, defendants contend that Hawk Valley is not an adequate class representative. They make that argument because James Fricke, Ph.D., who owned Hawk Valley at the time the fax involved was sent in June 2006 (but has since sold Hawk Valley), testified at his deposition that he does not have a specific recollection of whether, or when, Hawk Valley received a fax advertisement from defendant EPSI. Defendants both contend that because Hawk Valley (through Dr. Fricke) has no fundamental knowledge of the fax, the corporate plaintiff is essentially a pawn of plaintiff's counsel, and therefore is not an adequate class representative.
Defendant EPSI further contends that Hawk Valley is not an adequate class representative because Hawk Valley signed a retainer agreement which provides that Hawk Valley will not oppose the anticipated request of putative-class counsel for a fee award of one-third of any recovery obtained by the class.
Although EPSI states that it will "focus upon the adequacy of Plaintiff, Hawk Valley", EPSI nonetheless notes that "many other TCPA cases arising from the activities of [Business to Business Solutions] have challeng[ed] the actions of Plaintiff[`s] counsel".
Defendant EPSI contends that the predominance requirement under Rule 23(b)(3) is unsatisfied because "the claim asserted by plaintiff and the putative class members requires investigation into numerous individualized inquiries specific to potential class members such that predominance cannot be satisfied."
Defendant EPSI contends that the defenses available to it under the Telephone Consumer Protection Act, 47 U.S.C. § 227, will require individualized inquiries regarding each potential class member. Specifically, defendant EPSI contends that, for an advertisement to be considered "unsolicited", it must have been sent "without [the recipient]'s prior express invitation or permission, in writing or otherwise". Accordingly, EPSI argues, an individualized inquiry is required for each potential class member to determine whether the potential class member gave "express invitation or permission, in writing or otherwise".
Defendant EPSI makes the same individualized-inquiry argument about the three "unless" conditions — that is, section 227(b)(1)(C)(i) to (iii) quoted above — which exclude certain advertisements from section 227(b)(1)(C)'s prohibition. In other words, EPSI argues that an individual inquiry is required for every potential class member to determine whether each of the three necessary requirements of § 227(b)(1)(C)(i) to (iii) is met and the advertisement is thus prohibited by section 227(b).
Defendant Taylor similarly argues against predominance, and focusses on the necessity of individualized inquiry into whether (1) EPSI had a pre-existing business relationship with each potential class member and (2) the recipient voluntarily made its fax number available for public distribution.
Additionally, defendant EPSI contends that B2B only had authority to send the advertisement to a narrow category of recipients (namely, golf-course superintendents) and that B2B greatly exceeded the scope of its authority in transmitting the fax. Therefore, defendant EPSI argues, an individualized inquiry will be required to determine whether each potential class member was a recipient within the scope of authority granted to B2B, or whether B2B essentially acting on its own (without authority from defendants) by sending the advertisement to a particular class member.
Defendant EPSI also contends that individualized inquiries are required for each potential class member to determine whether that class member actual received a fax transmission from EPSI through B2B, or, rather, whether the fax transmission from B2B was received by a third-party messaging service, converted into email form, and then sent to the final recipient in email form.
Finally, defendant EPSI contends that plaintiff has not shown that any of the 4,521 potential class members (1) owned the fax machine or other equipment which received the alleged June 17, 2006 fax advertisement, and (2) is currently the owner of the same fax number.
Defendants also contend that the superiority requirement of Rule 23(b)(3) is unsatisfied. Specifically, each argues that a class action is not a superior method of resolving this dispute because the individualized issues addressed in the predominance arguments will require mini-trials for each class member.
The definition of the class to be certified, as proposed by plaintiff, and approved in the Order accompanying this Opinion, is:
In their respective memoranda, both defendants further contended that, in the event Plaintiffs' Motion for Class Certification were granted, the class definition proposed by plaintiff should be modified.
Defendants contend in their supplemental briefs that the additional case law cited therein provides further support for their proposition that the individualized inquiries which would be required concerning each potential class member predominate and, thus, warrant a denial of the motion for class certification.
Satisfaction of the numerosity requirement does not require evidence of the exact number or identification of the members of the proposed class.
Defendants do not contend, and could not plausibly contend (given the number of purported recipients (4,521) of the June 17, 2006 fax advertisement), that plaintiff fails to satisfy the numerosity requirement.
Commonality requires a showing of the existence of questions of law or fact common to the class. A common question is one arising from a common nucleus of operative facts.
The commonality requirement itself is not an onerous one, and the United States Court of Appeals for the Third Circuit has recognized that the less-stringent test of commonality is subsumed by the more-stringent predominance requirement.
As noted in the above section concerning defendants' contentions regarding commonality, neither defendant expressly concedes that the commonality requirement has been met here. However, review of their answer, response, exhibits, and briefs in opposition to class certification demonstrates that their arguments concerning the individualized nature of the claim and defenses is primarily aimed at the more stringent predominance and superiority requirements of Federal Rule of Civil Procedure 23(b)(3), and that the less-stringent commonality requirement has been satisfied here.
I conclude that plaintiff has satisfied the commonality requirement imposed by Rule 23(a)(a). Specifically, both EPSI and Mrs. Taylor contend that B2B exceeded the scope of authority granted to it by sending the fax to recipients other than golf-course superintendents.
The third element of Rule 23(a) requires that the claims or defenses of the representative parties are typical of the claims or defenses of the class. Fed.R.Civ.P. 23(a)(3).
"If a plaintiff's claim arises from the same event, practice or course of conduct that gives rise to the claims of the class members, factual differences will not render that claim atypical if it is based on the same legal theory as the claims of the class."
In a nutshell, the court must be satisfied that "the incentives of the [class representatives] are aligned with those of [the absentees]."
I conclude that the typicality requirement is satisfied in this matter because plaintiff is, and the putative class members would be, asserting the same legal claim (that defendants violated 47 U.S.C § 227(b)(1)(C)) against the same defendants (Mrs. Taylor and EPSI) based upon the same incident (the June 17, 2006 fax transmission).
Adequacy is satisfied by showing that (1) class counsel is competent and qualified to conduct the litigation; and (2) class representatives have no conflicts of interests.
Although defendant EPSI states that it will "focus upon the adequacy of Plaintiff, Hawk Valley", defendant EPSI notes that "many other TCPA cases arising from the activities of B2B have challeng[ed] the actions of Plaintiff[`s] counsel".
Although the district court in
Moreover, the district court in
For the reasons expressed above (and based upon the qualifications set forth in the thorough resumes submitted by Attorneys Milstein, Wanca, and Bock)
As noted above, defendants contend that Hawk Valley is not an adequate class representative. They argue that Dr. Fricke (who owned Hawk Valley at the time the fax involved was sent, but has since sold Hawk Valley) testified at his deposition that he does not have a specific recollection of whether, or when, Hawk Valley received a fax advertisement from defendant EPSI. Defendants both contend that because Hawk Valley (through Dr. Fricke) has no fundamental knowledge of the fax, the corporate plaintiff is essentially a pawn of plaintiff's counsel, and therefore not an adequate class representative.
However, defendants have not provided, and I am not aware of any, authority establishing a requirement that a recipient or a recipient's representative (in the case of a business-entity recipient) have direct personal knowledge of the individual fax transmission involved in an action under the TCPA based on an unsolicited fax advertisement.
Here, given the fact that plaintiff's putative evidence of the June 17, 2006 fax transmission is based upon documents and electronic records, I conclude that Dr. Fricke's deposition testimony indicating that he does not personally remember whether, or when, Hawk Valley received the June 17, 2006 fax advertisement for EPSI's Grass Grab-er product does not render Hawk Valley an inadequate class representative.
Defendant EPSI further contends that Hawk Valley is not an adequate class representative because Hawk Valley signed a retainer agreement which provides that Hawk Valley will not oppose the anticipated request of its attorneys for a fee award of one third of any recovery obtained by the class.
In
Defendant EPSI does not explain how or why plaintiff Hawk Valley's entry into a one-third contingent-fee agreement creates a conflict of interest between plaintiff and the putative class members. While it may be argued that plaintiff should not have foregone a future right to contest a fee award in this matter, plaintiff did not attempt to bind any putative class members to the fee agreement into which it entered, nor did plaintiff purport to waived the right of class members to object to any future fee award to class counsel in this matter. For these reasons, I conclude that the fee agreement entered into by plaintiff does not render plaintiff an inadequate representative of the putative class.
In sum, plaintiff's has sufficiently demonstrated both that its attorneys are competent to represent the putative class, and that plaintiff is interested in, and capable of, diligently prosecuting this action, and does not have interests which conflict with those putative class members which it seeks to represent here.
For all of the foregoing reasons, I conclude that plaintiff has satisfied the necessary requirements for class certification set forth in Rule 23(a) of the Federal Rules of Civil Procedure.
As noted above, plaintiff contends that the predominance requirement of Federal Rule of Civil Procedure 23(b)(3) is satisfied because "[p]laintiff's claims are identical to the claims of the other class members" and "[b]ecause each class member is entitled to statutory damages in the same amount, there will be no need to conduct an individualized inquiry into the question of damages."
Defendants contend that the predominance requirement is unsatisfied here because of individualized determinations which will have to be made with respect to each class member in order to determine if each class member can sustain an unsolicited-fax-advertisement claim against defendants Taylor and EPSA under 47 U.S.C. § 227(b)(1)(C).
Those inquiries, according to defendants, include whether each putative class member (1) gave "express permission, in writing or otherwise" to receive fax advertisements from defendants; (2) had an existing business relationship with EPSI prior to the June 17, 2006 fax transmission; (3) made its fax number available for public distribution; (4) was within the scope of the authority given to B2B to send fax advertisements for EPSI's Grass Grab-er to golf-course superintendents; and (5) actually received the June 17, 2006 fax transmission.
The parties have not provided, and I am not aware of any, controlling authority from the United States Court of Appeals for the Third Circuit regarding class certification in a TCPA unsolicited-fax case, or the narrower issue of predominance in such a case.
Defendants understandably highlight the decisions of courts in cases involving TCPA unsolicited-fax advertisement claims which have found individual issues to predominate in such cases and, accordingly, have denied motions for class certification.
However, a substantial body of case law supports the opposite conclusion. Specifically, numerous district courts have found that although TCPA unsolicited-fax cases do present some individualized issues, common issues of law and fact predominate, and, thus, have granted class certification.
In addition to the district court decisions concerning class certification in similar cases involving the utilization by defendants of B2B in fax advertising efforts (which I find persuasive concerning the within motion), two cases from the United States Court of Appeals for the Seventh Circuit —
In
With respect to defendant's argument in
In other words, the district court in
Following the district court's decision to grant class certification in
Here, as in the
Nevertheless, I conclude that those individualized issues do not predominate over the common questions presented here, considering the scope of this action as a whole, and given, in particular (1) the lack of record evidence suggesting that anyone along the contact-information chain — that is, anyone at InfoUSA, B2B, or EPSI (including defendant Taylor) — sought or received express permission or invitation from any of the 4,521 recipients to receive fax advertisements; and (2) the small percentage of the sample (and thus the likely-small percentage of entire 4,521 recipients) with whom Hawk Valley or the Taylors had done or were doing business as of June 2006.
In
The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision to grant class certification. In doing so, the Seventh Circuit noted that "[c]lass certification is normal in litigation under § 227 [of the TCPA] because the main questions, such as whether a given fax is an advertisement, are common to all recipients."
For the reasons expressed above, I find that the
In
In
The Fifth Circuit reached its conclusion that the individual issue of consent by each class member predominated (and, thus, rendered class certification inappropriate) based upon a distinction it drew between
Specifically, the Fifth Circuit explained that the issue of consent to receive fax advertisements was susceptible to common proof (and, thus, that class certification was appropriate) in
The Fifth Circuit stated explicitly that violations of 47 U.S.C. § 227(b)(1)(C) "are not per se unsuitable for class resolution" and that the factual circumstances of each case will determine whether class certification is proper.
While, as discussed above, I find the determination in
Defendants contend that the question of whether a particular class member is within the scope of the authority given to B2B for B2B to send fax advertisements concerning EPSI's Grass Grab-er is inherently individualized and weighs against a finding that common questions predominate in this action.
While this argument is not wholly meritless, it is ultimately unavailing. This is so because the second-stage question highlighted by defendants — that is, "Is X class member within the scope of the authority granted to B2B?" — necessarily requires the answer to an equally-if not more-significant first-stage question — namely, "What is the scope of the authority given to B2B to send fax advertisements for the Grass Grab-er?"
In
The district court further noted, correctly, that the relevant FCC regulations define a "sender" as "the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited advertisement" and that the FCC does not require a formal relationship in order to establish on-behalf-of liability.
Accordingly, the district court concluded, a plaintiff asserting an unsolicited-fax-advertisement claim could rely upon ratification or apparent authority to establish a defendant's vicarious liability for the fax transmission of a third-party transmitter under common law agency principles.
Here, while defendants raise this scope-of-authority argument in opposition to the predominance requirement, the factual and legal questions concerning the existence, nature, and extent of the relationship between B2B and either defendant are common questions.
A dispute arose during closing arguments at the November 8, 2013 class-certification hearing which became the subject of post-hearing briefing by the parties. That dispute concerns the operative date of the so-called opt-out-notice requirement added to section 227(b)(1)(C) of the TCPA,
The parties do not dispute that the JFPA was enacted on July 9, 2005 (prior to the June 17, 2006 fax transmission at issue here) or that the regulations subsequently promulgated by the Federal Communications Commission concerning the opt-out notice required by section 227(b)(2)(D)— as amended by the JFPA — became effective on August 1, 2006 (after the June 17, 2006 fax transmission at issue here). As the parties each recognize, "[i]t is well-established that, absent a clear direction by Congress to the contrary, a law takes effect on the date of its enactment."
Plaintiff contends that the JFPA contains no such clear direction from Congress and, accordingly, that the opt-out-notice requirement imposed by sections 227(b)(1)(C)(iii) and 227(b)(2)(D) took effect immediately upon enactment of the JFPA and prior to the June 17, 2006 fax transmission at issue in this case.
Defendants contend that the JFPA contains a clear directive from Congress that the amendments to section 227 provided in the JFPA (including the opt-out-notice requirement) would not take effect until regulations promulgated by the FCC pursuant to the JFPA became effective.
Section 2(h) of the JFPA provides: "REGULATIONS.— Except as provided in section 227(b)(2)(G)(ii) of the Communications Act of 1934 (as added by subsection (f)), not later than 270 days after the date of enactment of this Act, the Federal Communications Commission shall issue regulations to implement the amendments made by this section." JFPA, § 2(h).
While defendants are correct (and plaintiff does not contest) that the JFPA created a mandatory obligation on the FCC to promulgate regulations implementing the JFPA's amendments to the TCPA, it is similarly undisputed that Congress did not state explicitly in the JFPA that the obligations established in section 227(b)(1)(C) of the TCPA by the JFPA would not take effect until any such implementing regulations subsequently promulgated by the FCC became effective.
When defendants sought leave at the class certify-cation hearing to brief the issue of the applicability and effective-date of the opt-out-notice requirement, counsel for defendant EPSI suggested that defendants would present authority clearly and unequivocally demonstrating that the opt-out-notice requirement in section 227(b)(1)(C)(iii) did not take binding effect until the implementing regulations became effective on August 1, 2006.
Instead, defendants' joint memorandum on this issue relied upon the general proposition set forth by the United States Supreme Court in
Plaintiff's post-hearing memorandum concerning the effective date of the opt-out-notice requirement similarly opens with the
In addition to distinguishing
Although the trial court there did rule that both the existing-business-relationship defense and the opt-out-notice requirement did not become effective until August 1, 2006, the appellate court did not resolve the issue disputed here. Rather, the Ohio intermediate appellate court concluding that "[w]hether we apply the [FCC] rules extant from the time of the TCPA or look to the law as established by the JFPA, an established business exception to the junk fax advertisement ban existed at the time [defendant] sent its fax."
The above is set forth at some length to say that the parties have not identified any binding (or highly persuasive) authority concerning the effective date of the opt-out-notice requirement. Moreover, the dispute between the parties concerning the applicability of the opt-out-notice requirement to the June 17, 2006 fax transmission is substantially less clear-cut than suggested by the parties at the hearing or in their post-hearing memoranda.
In light of the foregoing, and because the question of whether certain class members had an existing business relationship with defendants at the time of the June 17, 2006 fax would not predominate over the common questions presented here even if defendants are correct and they are not foreclosed from asserting the established business relationship exception as the result of an insufficient opt-out notice,
For all of the reasons expressed above, I conclude that common questions predominate in this matter.
An Opinion of United States District Judge Catherine D. Perry provides a thoughtful and concise discussion of the superiority issue as it pertains to a TCPA unsolicited-fax action, and I adopt and incorporate her ruling and analysis here.
For all of the reasons expressed above, I grant Plaintiff's Motion for Class Certification and certify the proposed class.
On August 16, 2013, Defendant Elaine G. Taylor's Answer in Opposition to Plaintiff's Motion for Class Certification was filed (Document 100)("Taylor Answer to Motion"), together with
Also on August 16, 2013, Defendant, Environmental Process Systems, Inc.'s Response in Opposition to Plaintiff's Motion for Class Certification was filed (Document 101)("EPSI Response to Motion"), together with
On November 7, 2013, with leave of court, Defendant, Elaine G. Taylor's Supplemental Brief in Further Support of Her Response in Opposition to Class Certification was filed ("Taylor Supplemental Brief")(Document 117), together with
Also on November 7, 2013, with leave of court, Defendant, Environmental Process Systems, Inc.'s Supplemental Brief in Further Support of Its Response in Opposition to Class Certification was filed ("EPSI Supplemental Brief")(Document 119), together with
On November 8, 2013, a class certification hearing in the within action was held before me and, as described further in the Procedural History section below, the parties submitted additional materials concerning class certification following the November 8, 2013 hearing.
Specifically, plaintiff admitted in evidence Plaintiff's Exhibits A through E (Documents 98-2 through 98-6, respectively); Plaintiff's Exhibit G (Documents 98-10 through 98-13); and Plaintiff's Exhibit H (Document 100-11).
Defendant EPSI admitted in evidence EPSI Exhibits B and C (Documents 101-5 and 101-6, respectively); EPSI's Exhibits F through J (Documents 101-9 through 101-13, respectively); EPSI Exhibit K (Documents 101-14 through 101-20); EPSI Exhibit L (Document 101-21); and EPSI Exhibits N-1 through N-3 (Documents 101-23 through 101-25, respectively).
Finally, defendant Taylor admitted in evidence Taylor Exhibits A through C (Documents 100-3 through 100-5, respectively); Taylor Exhibit D (Documents 100-6 and 100-7); and Taylor Exhibits E through H (Documents 100-8 through 100-11, respectively).
Fed. R. Civ. P. 23(b)(3).
Specifically, and as pertinent to this matter, section 2(c) of the JFPA provided:
Junk Fax Prevention Act of 2005, § 2(c).
By contrast, according to plaintiff, the requirements for the opt-out-notice are set forth in the TCPA as amended by the JFPA, 47 U.S.C. § 227(b)(1)(c), (2)(D)(E). Therefore, plaintiff argues, the June 17, 2006 fax advertisement was required to satisfy the opt-out-notice requirement provided in the statute, prior to the effective date of any future regulations.
