Professional Plaintiff Who Manufactured Claims Can Sue But Can’t Represent Class

A recent denial of a professional plaintiff’s motion for class certification shows that, irrespective of whether such plaintiffs have standing to sue on their own behalf, courts are increasingly skeptical that contrived claims are amenable to class treatment. See Hirsch v. USHealth Advisors, LLC, No. 4:18-CV-00245-P, 2020 WL 7186380, at *1 (N.D. Tex. Dec. 7, 2020).

The Facts

The plaintiff in this case, Aaron Hirsch, was a real estate agent who used his cell phone for both business and personal use. He had listed his cell phone number on the national Do-Not-Call Registry, but also advertised his business using his cell phone number and even took partial tax deductions for his cell phone. Eventually, Hirsch and his friend Max Maccoby, a lawyer, developed a plan to profit through the TCPA. Hirsch would log any telemarketing calls that he received, and Maccoby would review the log for potential TCPA litigation. Through this scheme, Hirsch learned to feign interest to elicit additional calls from the caller or the company on whose behalf the caller was allegedly calling.

One of the calls Hirsch received was from a lead-generation vendor called Dosys, who was allegedly calling on behalf of USHA, to ask if Hirsch was interested in buying health insurance. Although Hirsch was not interested, he said he was and scheduled a call with a USHA agent. When the USHA agent called Hirsch as scheduled, Hirsch first confirmed the call was from USHA, and then asked to be placed on USHA’s internal do-not-call list. USHA complied. This pattern repeated three more times—with Dosys calling Hirsch, Hirsch feigning interest and scheduling a call from USHA, USHA calling Hirsch, and then Hirsch asking to be placed on USHA’s internal do-not-call list.

Hirsch then brought a putative class action against USHA, alleging TCPA violations and claims under Maryland’s analogous statute. USHA brought counterclaims against Hirsch for fraud. Eventually, Hirsch moved to certify a Maryland subclass, as well as a TCPA class consisting of:

All natural persons in the United States who, from March 29, 2014 to the date of the Court’s Order granting class certification: (a) received more than one telephone solicitation call in a 12-month period made by or on behalf of USHealth more than 31 days after registering the landline, wireless, cell or mobile telephone number on which they received those calls with the National Do-Not-Call Registry, or (b) received one or more calls after registering the landline, wireless, cell, or mobile telephone number on which they received the calls with USHealth’s Internal Do-Not-Call list.

Id. at *2. The proposed TCPA class likely included more than 100,000 members.

USHA opposed class certification, arguing that Hirsch lacked Article III standing and also failed to satisfy the requirements of Federal Rule 23.

The Decision

USHA argued that Hirsch lacked constitutional standing because he did not suffer a concrete injury-in-fact as required by Article III of the U.S. Constitution. Specifically, it argued that he wanted to receive the calls in order to use them as an opportunity to obtain money, and that they helped rather than hurt him. The court rejected this argument, reasoning that because Hirsch was not compensated for his time on the calls and because he asked to be placed on the national and internal do-not-call lists, he had sufficient injury to establish Article III standing.

The court also rejected the contention that Hirsch could not adequately represent a class because his close associate Maccoby—who helped him cook up the claims—was counsel of record. Although the court agreed that the Hirsch-Maccoby relationship “merits review,” it concluded that USHA “fail[ed] to explain how that relationship creates a conflict of interest for counsel or as between Hirsch and the putative class.” Id. at * 5.

But the court was more skeptical of whether Hirsch could satisfy the requirements of commonality, typicality, or predominance under Rule 23.

To establish commonality, the court explained, Hirsch must show that there is at least one common question that will resolve a central issue in each class member’s claims. And common questions alone do not cut it—the common questions must generate common answers that resolve issues central to the dispute. The court also explained that certification under the TCPA was only appropriate where the plaintiff has advanced a viable theory employing generalized proof to establish liability with respect to the class involved.

Hirsch proposed three common questions of law or fact:

  1. defendant’s agents (a) completed more than one telephone solicitation call (b) in a 12-month period (c) more than 31 days after the landline, wireless, cell or mobile telephone number to which the call was placed was registered with the NDNC;
  2. defendant (a) completed one or more calls (b) to a landline, wireless, cell, or mobile telephone number; (c) which was requested to be registered on USHealth’s IDNC; and
  3. defendant is vicariously liable for those calls; and the violations were knowing or willful.

Id. at *6. The court rejected them all, reasoning that, even if established, USHA would not necessarily be liable under the TCPA because at least some of the calls might have been permitted under the statute. For example, there would be open and more individualized, fact-intensive questions of whether class members had consented to the calls; whether the numbers called were residential; and, because various agents were used in differing circumstances, whether defendants were vicariously liable for those calls. Accordingly, the court concluded that Hirsch had failed to advance a viable theory of generalized proof to establish liability, and therefore commonality was not satisfied.

The court then turned to the typicality requirement, which asks whether other class members have the same or similar injury based on same or similar conduct. It reasoned that Hirsch’s claims were not typical because he repeatedly scheduled calls from USHA solely for the purpose of requesting to be placed on its internal do-not-call list. Indeed, under Hirsch’s pleaded facts, USHA would never have contacted him but for his requests, which is “highly atypical.” Id. at 11. Additionally, the fact that Hirsch was defending fraud claims also was atypical. Accordingly, the court concluded that absent class members might suffer if Hirsch were preoccupied with defending a claim that was unique to Hirsch. Id. The court also concluded that Hirsch’s claims were atypical because his scheme might be problematic before a jury, because other class members might have agreed to arbitration, and because he manufactured his claims with the help of his lawyer friend. “Although these issues alone would not defeat typicality, the confluence of these and the other issues create a class representative whose unique issues threaten the absent class members.” Id. For those reasons, the court concluded that Hirsch’s claims and defenses were atypical of the class members’ claims and defenses.

The court then addressed Rule 23’s predominance requirement, and concluded that Hirsch had not shown that common questions predominate over individualized questions. In so concluding, the court echoed much of its analysis regarding the commonality requirement. It also explained that “Hirsch and his behavior would permeate [a] trial.” Although at trial Hirsch would focus on USHA’s TCPA training, scrubbing policies, and lead-gathering methods, “everything falls back to Hirsch’s behavior that created the dispute—Hirsch requested and scheduled four of five alleged calls.” Id. at *13. The court went on to emphasize that “[t]his is not simply a case brought by a professional plaintiff, although it may be that too. Hirsch caused (arguably solicited) Defendants’ Agents to call him. The Court does not consider whether this meets fraud’s prima facie elements, but factually, Hirsch’s acts form this case’s inescapable foundation.” Accordingly, the court concluded that individual issues would likely predominate.

Because Hirsch failed to establish commonality, typicality, or predominance under Rule 23, the court denied his motion for class certification.

The Takeaway

Although the court in Hirsch did not condemn the practice of professional plaintiffs per se, it did not mince words in distinguishing the manufactured claim of a professional plaintiff from that of an ordinary plaintiff who is not lying in wait. It remains to be seen whether more courts will deny class certification because the putative representative is a professional plaintiff, but Hirsch shows that there are good reasons for courts to do so.