Class Decertified: Wireless Provider’s Data Demonstrates Individualized Issues of Consent

The United States District Court for the Northern District of Illinois recently decertified a class after the defendant, Yahoo! Inc., submitted new evidence showing that tens of thousands of putative class members may have consented to receive the text messages at issue. See Johnson v. Yahoo! Inc., No. 14-2028 (N.D. Ill. Feb. 13, 2018).

The dispute relates to the Yahoo! Messenger service, which allows Yahoo! users to send text messages to cell phones. After a user would send an initial text message to a specific cell phone number, Yahoo! would send an additional “Welcome Message” text message to that number: “A Yahoo! user has sent you a message. Reply to that SMS to respond. Reply INFO to this SMS for help or go to y.ahoo.it/imsms.” The plaintiff alleges that these Welcome Messages violate the TCPA based on a theory that Yahoo! did not have the “prior express consent” of the “called party” (the third party to whom the Yahoo! user had sent the original text message).

The court had previously certified a nationwide class of persons who had received Welcome Messages during a one-month period in 2013 at a certain national wireless provider’s telephone numbers that were not associated with Yahoo! accounts. In opposing class certification, Yahoo! had argued that individualized issues of consent predominated because many of the putative class members were likely users who had consented to receive such messages by accepting Yahoo!’s Universal Terms of Service. The court disagreed, reasoning that the class definition excluded persons whose numbers were associated with accounts, and that Yahoo! had presented no “specific evidence” of putative class members who had Yahoo! accounts without an associated number.

In August 2016, however, the wireless provider produced customer records in response to a subpoena that the plaintiff had served in an effort to identify class members. These records included the names and telephone numbers of the wireless provider’s subscribers who had received Welcome Messages. Yahoo! conducted an analysis of its own accountholder database and determined that 47,672 of these names matched at least one Yahoo! account and 65,061 of these numbers matched a number provided to Yahoo! in registering an account.

Yahoo! filed a motion to decertify the class based on the analysis of that new evidence. The court granted this motion and decertified the class. In doing so, it explained that Yahoo!’s analysis was a “concrete showing that individual consent issues will predominate the case moving forward.” Notably, the court found that such evidence did not conclusively establish that these tens of thousands of people had consented to the text messages. Rather, the determination of whether a class member accepted the Universal Terms of Service “could not be done in a single proceeding through records and an expert witness because the requisite identity-match may be dependent on class member testimony.” For example, the fact that the name of a wireless subscriber matches the name of a Yahoo! user does not establish that the two accounts belong to the same person. And, Yahoo!’s evidence showed that such an individualized inquiry would be necessary for 20-25% of the class, which the court deemed “a significant percentage.”

The court also rejected the plaintiff’s proposal to redefine the class to exclude class members who might have consented, noting that the plaintiff had not proposed the specific language of an alternative definition and refusing to evaluate the idea in the abstract. The court also noted that, given the duty of class counsel to represent the interests of all class members, “counsel’s idea to exclude potential class members based on defendant’s investigation invites concerns over adequacy of representation and loyalty to the class.”

This case reinforces that evidence reflecting variations in the status of some putative class members can present a barrier to class certification.