In a TCPA action involving allegedly unsolicited fax advertisements, the Northern District of Illinois applied the plausibility standard articulated in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009) to affirmative defenses. See Mussat v. Power Liens, LLC, No. 13-7853, 2014 U.S. Dist. LEXIS 141561 (N.D. Ill. Oct. 6, 2014). We recently discussed a similar TCPA case where the court held that the plausibility standard did not apply, and in doing so sided with the majority view that the textual differences between Rule 8(a)(2) (claims) and Rules 8(b)(1)(A) (defenses) and 8(c)(1) (affirmative defenses) prevented the application of the plausibility standard to affirmative defenses. See Exclusively Cats Veterinary Hospital, P.C. v. Pharmaceutical Credit Corp., No. 13-14376, 2014 U.S. Dist. LEXIS 132440 (E.D. Mich. Sept. 22, 2014). Perhaps because the defendant focused elsewhere in its briefing, the Mussat court simply cited a 25-year-old decision from the Seventh Circuit holding that courts can strike affirmative defenses that do not satisfy federal pleading standards and then recited the requirements of the Twombly/Iqbal plausibility standard. Mussat, 2014 U.S. Dist. LEXIS 141561 at *2.
Category - "Faxes"
ZocDoc Treats Doctor With Some Rule 68 Medicine
We have discussed several TCPA mootness decisions, mainly those coming out of the federal courts in Florida. Those cases hold that plaintiffs should not file “placeholder” class certification motions solely for the purpose of thwarting an attempted Rule 68 offer of judgment “pick-off.” We now turn our attention to the Southern District of New York, which recently found a TCPA plaintiff’s claim mooted by an offer of judgment made after the plaintiff’s “placeholder” motion for class certification was filed and before that motion was ruled upon.
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New Jersey Federal Court Rejects FCC’s Dish Network Ruling in Blast Fax Case, Relies on FCC’s Letter Brief in Sarris
As we previously reported, on July 17, 2014, the FCC filed a letter brief in Palm Beach Golf Center-Boca, Inc. v. Sarris, No. 13-14013 (11th Cir.) (“Sarris”), in which it took the position that entities can be held directly liable under the TCPA whenever their products or services are advertised in an unsolicited fax—even if they did not actually send the fax, and even if they did not know the fax was going to be sent. The FCC’s letter brief stood in marked contrast to its decision last year in In re Joint Petition Filed by Dish Network, LLC, 28 F.C.C. Rcd. 6574 (2013) (“Dish Network”), where the FCC had limited direct liability to only “telemarketers” that “initiate” calls, and otherwise applied agency principles to determine whether “sellers” might be vicariously liable for calls made on their behalf. As readers may recall, the FCC’s letter brief does not articulate a policy reason why a “seller” in the voice call context should receive more protection than an entity whose goods and services are promoted through a fax advertisement. But whatever the merits of the letter brief, it has yet to be cited by the Eleventh Circuit (which has heard argument but not yet issued an opinion) or, at least for the past few months, any other court.
Court Holds That Twombly/Iqbal Pleading Standard Does Not Apply to Affirmative Defenses in TCPA Case
In a TCPA action concerning allegedly unsolicited fax advertisements, the Eastern District of Michigan recently rejected the argument that the plausibility standard articulated in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009) applies to affirmative defenses. See Exclusively Cats Veterinary Hospital, P.C. v. Pharmaceutical Credit Corp., No. 13-14376, 2014 U.S. Dist. LEXIS 132440 (E.D. Mich. Sept. 22, 2014).
Court Rules That Settlement Term Sheet Is Not Worth The Paper It’s Written On
Judge Amy J. St. Eve of the Northern District of Illinois recently held that a purported settlement agreement in a putative class action filed by Craftwood Lumber Co. against Interline Brands, Inc. was not enforceable. See Craftwood Lumber Co. v. Interline Brands Inc., No. 11-4462 (N.D. Ill. Sep. 23, 2014). Judge St. Eve held that the “Term Sheet” executed at the end of the parties’ mediation session lacked sufficient detail to establish that a binding and enforceable settlement had been reached.
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State Courts Disagree About Whether Statutory Damages Make Class Actions an Inferior Method for Adjudicating TCPA Claims
The statutory damages that have caused so many plaintiffs to file TCPA class actions have also caused some courts to find that class actions are not the superior method for adjudicating them. Federal Rule of Civil Procedure 23(b)(3) requires not only that common questions predominate over individual ones, but also that “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). Whether a class action is the superior method for adjudication depends on a number of stated and unstated considerations, among them “the class members’ interests in individually controlling the prosecution or defense of separate actions.” Fed. R. Civ. P. 23(b)(3)(A). As we have noted before, some courts have held that TCPA claims are categorically unfit for class treatment because $500-$1,500 plus attorneys’ fees and costs is adequate to incent individuals to file claims, is disproportionate to any actual damages, and is potentially ruinous if aggregated in a class action. Two state courts recently addressed this issue and reached contrary conclusions.
FCC Letter Brief Suggests That Faxes and Phone Calls are Different for Purposes of Direct Liability Under the TCPA
At the invitation of the Eleventh Circuit Court of Appeals, the FCC recently filed a letter brief in Palm Beach Golf Center-Boca, Inc. v. Sarris, No. 13-14013 (11th Cir.). The letter brief took the position that defendants can be held directly liable any time their products or services are advertised via a fax that violates the TCPA—even if they did not send the fax or even know that it was going to be sent.
FCC Seeks Comment on Petitions Concerning the FCC’s Rule on Opt-Out Notices for Fax Advertisements
On July 25, 2014, the FCC issued a Public Notice seeking comment on five petitions, filed by American Caresource Holdings, Inc. (“ACH”), CARFAX, Inc.(“CARFAX”), UnitedHealth Group, Inc. (“UnitedHealth”), MedLearning, Inc. and Medica, Inc. (“Medica”), and Merck and Company, Inc.(“Merck”) (collectively, the “Petitioners”) requesting a declaratory ruling and/or a waiver of section 64.1200 (a)(4)(iv) of the FCC’s rules. This rule requires certain fax advertisements to include an opt-out notice. ((See 47 C.F.R. § 64.1200 (a)(4)(iv).)) Comments in response to this Public Notice must be filed by August 8, 2014; reply comments are due August 15, 2014.
Sixth Circuit Vacates Denial of Class Certification in Blast Fax Case
In April, we reported on the denial of a class certification motion in a blast fax case in the Northern District of Ohio. On June 12, the Sixth Circuit vacated that order. A copy of the court’s order in In re Sandusky Wellness Center, LLC, No. 14-0301, 2014 U.S. App. LEXIS 12093 (6th Cir. June 12, 2014), is available here.
Plaintiff Sandusky Wellness Center (“Sandusky Wellness”) had alleged that defendants Wagner Wellness, Inc., and its owner, Robert Wagner (collectively “Wagner”), had violated Section 227 of the TCPA by purchasing a list of fax numbers from a third party and sending unsolicited advertisements via fax. See 47 U.S.C. § 227(b)(1)(C) (making it unlawful “to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement” unless certain exceptions apply).
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Offer of Judgment Served Hours Before Motion for Class Certification Filed Moots TCPA Claim
In Barr v. The Harvard Drug Grp., LLC, 13-62019, 2014 U.S. Dist. LEXIS 79422 (S.D. Fla. June 11, 2014), the court found that an offer of judgment served via email mooted the plaintiff’s claim despite the filing of a motion for class certification later that same day.
The class action complaint alleged that the defendant sent faxes in violation of the TCPA. The defendant served an offer of judgment on the plaintiff’s attorneys via email on November 27, 2013, at 11:12 am and also via UPS. The defendant offered to pay $1,500 for each alleged violation of the TCPA, to pay any costs and reasonable attorneys’ fees, and to stipulate to an injunction and the entry of a judgment against it. At 3:25 pm that same day, the plaintiff moved for class certification.