Faegre Drinker

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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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Seventh Circuit: Facsimiles Feigning to Be Newsletters Are Still Advertisements under the TCPA

In its recent decision in Holtzman v. Turza, No. 11-3188, 2013 WL 4506176 (7th Cir. Aug. 26, 2013), the Seventh Circuit held that unsolicited advertisements, even those presented in the guise of a newsletter providing advice, violate the TCPA.

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