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Faegre Drinker

View the full bio for Faegre Drinker at the Faegre Drinker website.

Articles by Faegre Drinker:

Second Circuit: TCPA Class Actions Can Proceed in New York Federal Courts

The Second Circuit recently held that Federal Rule of Civil Procedure 23 governs whether TCPA class actions can proceed in New York federal courts, and concluded that a prior Second Circuit ruling to the contrary no longer was good law. Bank v. Independence Energy Group LLC, No. 13-1746-cv (2d Cir. Dec. 3, 2013).

Previously, in Bonime v. Avaya, Inc., 547 F.3d 497 (2d Cir. 2008), the Second Circuit had held that state procedural rules governed whether a TCPA action could proceed as a class action in federal court, instead of Rule 23. Because N.Y. C.P.L.R. § 901(b) bars class actions seeking statutory damages unless the statute at issue expressly authorizes recovery in a class action (which the TCPA does not), the Bonime court ruled that a TCPA plaintiff could not pursue a class action for statutory damages in New York federal courts. This effectively sounded the death knell for TCPA class actions in New York.

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Genesis Healthcare’s Impact on TCPA Mootness Efforts

We previously discussed some recent mootness decisions coming out of the federal courts in Florida. Within the context of those cases, we explained that the offer must be “complete” and its language must be carefully considered. We also noted that the Supreme Court in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) analyzed but did not reach the mootness issue, leaving lower courts to their own devices. Quite conveniently, a recent decision out of the District of Maryland touched upon both of these topics. See Kensington Physical Therapy, Inc. v. Jackson Therapy Partners, LLC, 8:11-cv-02467, 2013 U.S. Dist. LEXIS 142527 (D. Md. Oct. 2, 2013). A copy is available here.

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TCPA Class Action Against The Buccaneers Is Mooted … Rematch Already Underway

As we recently discussed, in Stein, et al. v. Buccaneers LP, No. 13-2136 (M.D. Fla.), the Bucs filed a motion to dismiss a putative TCPA class action on the ground that its pre-certification offer of judgment mooted the named plaintiffs’ claims. In response to the motion to dismiss—indeed, one day later—plaintiffs filed a motion for class certification. Although Judge Merryday immediately denied plaintiffs’ class certification motion as “premature” and lacking “evidentiary support,” he did not rule on the underlying motion to dismiss.

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Court Says Premature TCPA Class Certification Motion Raises “Serious Public Policy Concerns”

We previously discussed the growing trend of moving for TCPA class certification at the outset of litigation in order to prevent a defendant from trying to moot a named plaintiff’s claims by making a Rule 68 offer of judgment.

In Haight v. Bluestem Brands, Inc., No. 13-1400 (M.D. Fla.), the Middle District of Florida recently denied the plaintiff’s motion to certify a class of individuals who allegedly received “automated calls” to cell phones in violation of the TCPA. Plaintiff conceded that the motion was filed “solely to prevent any individual ‘buy off’ of the putative class representative.” The court did not take kindly to the preemptive motion. Indeed, it stated that the motion was motivated by the self-interest of counsel, and raised “serious public policy concerns about whether class action litigation should be driven by the interests of counsel rather than the issues of the client.” The Court ultimately denied the motion because the plaintiff had failed to perfect service of the complaint. But in doing so, it cautioned plaintiff’s counsel not to file another motion for class certification until he has “adequate facts and legal authority” to do so.

It is clear that the court was less than pleased with the preemptive class certification motion. Whether that plays a role in the outcome of the case remains to be seen.

A copy of the decision is available here.

TCPA Class Certification Denied — Necessity of Individualized Consent Inquiries Doom Certification of TCPA Class Actions

Once again, a defendant has defeated a TCPA class certification motion on the ground that the liability inquiry would require individualized inquiries into class members’ consent to receive calls, precluding a finding of predominance.

In Connelly v. Hilton Grand Vacations Co., LLC, — F.R.D. —-, Case No. 12CV599 JLS (MDD), 2013 WL 5835414 (S.D. Cal. Oct. 29, 2013), plaintiffs sued a resort properties operator alleging that its third party marketer violated the TCPA by using an ATDS to make telemarketing calls to cell phones without obtaining prior express consent. Id. at *1. Plaintiffs sought to certify a sprawling class of all recipients of any of 37 million calls to 6 million different numbers over a four-year period, and sought statutory damages for this would-be class “that could total between $18 and $54 billion.” Id. at *1.

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Buyer Beware: When the Financially Challenged Marketing Partner is a Co-Defendant in TCPA Litigation

A recently proposed class action settlement agreement illustrates the potential litigation perils when any established business relies on outsourced, undercapitalized marketing agents who lack either the assets or insurance to adequately defend TCPA class action litigation. Indeed, the only proposed recovery for the class is an agreement to provide testimony and documentary evidence of the co-defendant’s actual knowledge of the conduct that violated the TCPA, and its alleged authorization of the subject unlawful text messaging.

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District Court Endorses FCC Liability Limitation for ‘Fax Broadcasters’

A federal district court judge in Maryland gave a clear endorsement of the FCC’s regulation limiting fax broadcasters’ liability under the TCPA. Asher & Simons, P.A. v. J2 Global Canada, Inc., No. JKB-13-0981, 2013 U.S. DIST. LEXIS 148972 (D. Md. Oct. 16, 2013). FCC regulations limit the liability of so-called fax broadcasters (those who transmit faxes for a fee on behalf of others) to those circumstances in which a broadcaster “demonstrates a high degree of involvement in, or actual notice of, the unlawful activity and fails to take steps to prevent such facsimile transmissions.” 47 C.F.R. § 64.1200 (a)(4)(vii). The Canadian affiliate of j2 Global asserted the FCC regulation as an affirmative defense, and the plaintiffs challenged this particular defense by a motion for partial summary judgment. The plaintiffs argued that FCC regulatory authority under the TCPA is limited, and could not be read to include the power to limit liability for any transmission of an unsolicited fax.

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Federal Court Takes Narrow View of What Constitutes an ATDS

The TCPA prohibits the use of an automatic telephone dialing system (“ATDS”) to place calls to wireless phones without the called party’s prior express consent. Because calls placed without the use of an ATDS are not subject to the TCPA’s prior express consent requirements, what constitutes an ATDS has been a hotly contested issue. This issue can be expected to take on even greater importance under the new FCC rules that take effect on October 16, because the “prior express consent” requirement will now require written consent. Telemarketers, it can be expected, may explore ways to abandon the use of equipment that would fall within the definition of ATDS and to modify or replace that equipment with something that would not be an ATDS.

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Offer of Judgment Prompts Motion for Class Certification, Which Is Immediately Denied

Fairly or unfairly, plaintiffs are disproportionately leveraged at the outset of a consumer class action case. The threat of aggregate damages and the power to inflict non-reciprocating discovery costs on a defendant is unsettling enough. Lately, some defendants have fought back by making offers of judgment under Federal Rule of Civil Procedure 68 at the inception of the case. In some courts, a prompt offer of judgment can moot the named plaintiff’s claims, leaving him or her without a “personal stake” in the litigation and thus no basis on which to pursue claims on behalf of a putative class. Cf. Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1528-29 (2013) (noting but not resolving circuit split). For what may be a relatively small payment to the named plaintiff, a defendant in those courts can avoid engaging in protracted litigation and the risk of class-wide statutory damages awards.

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