Questions of Consent Preclude Class Certification

TCPA Connect

Finding that too many questions remained about individual consent, an Illinois federal court judge denied certification of a class that allegedly received fax advertisements.

Alpha Tech Pet Inc. sued LaGasse LLC on behalf of all entities that received faxes from LaGasse between May 1, 2011, and May 1, 2015. The plaintiff—which claimed to have been sent eight fax ads—estimated the class would encompass 1.5 million faxes in 725 separate transactions to nearly 24,000 unique fax numbers. Alpha Tech proposed dividing the class into three categories based on the content of the faxes.

The defendant objected, pointing to a recent change in the law. In March 2017, a panel of the U.S. Court of Appeals, D.C. Circuit invalidated the Federal Communications Commission’s (FCC) Solicited Fax Rule in Bais Yaakov of Spring Valley v. FCC.

Created by the FCC in a 2006 order, the Solicited Fax Rule required that fax advertisements sent with a recipient’s prior express invitation or permission contain an opt-out notice with specific information. But a majority of the D.C. Circuit panel found the Telephone Consumer Protection Act’s (TCPA) clear statutory text reached only unsolicited fax advertisements, meaning that the FCC did not have the authority to promulgate a rule regarding solicited faxes.

In light of the individualized consent issues resulting from the Bais Yaakov decision—with the need to determine whether each class member consented to receive the faxes—the defendants argued that the plaintiff could not satisfy the requirements of predominance and superiority mandated by Rule 23 of the Federal Rules of Civil Procedure. Alpha Tech responded that the D.C. Circuit opinion was not governing law in the circuit governing the Illinois court.

U.S. District Judge Thomas M. Durkin first tackled the impact of the Bais Yaakov opinion. While the case was decided by the D.C. Circuit, the holding was not binding only in that circuit, the court said. The Judicial Panel on Multidistrict Litigation (JPML) consolidated several petitions for review originally filed in multiple courts of appeal seeking to set aside the FCC’s Solicited Fax Rule in the Bais Yaakov case.

Once the JPML assigned the consolidated case to the D.C. Circuit, “that court became ‘the sole forum for addressing … the validity of the FCC’s rule,’” the court explained. “And consequently, its decision striking down the Solicited Fax Rule ‘became binding outside of the [D.C. Circuit].’”

Judge Durkin rejected the plaintiff’s attempt to limit the holding of Bais Yaakov as well as its effort to rely upon a 2013 Seventh Circuit decision that found the TCPA itself extended the opt-out notice requirement to solicited faxes, regardless of the Solicited Fax Rule (and thus regardless of Bais Yaakov). That case runs contrary to precedent and the plain text of the TCPA, the court said.

“The holding in Bais Yaakov striking down the Solicited Fax Rule is controlling here,” the court concluded. “And even if it was not controlling, this Court finds its holding persuasive and would follow it.”

The court noted that since Bais Yaakov was decided, several courts have found class certification inappropriate in TCPA cases where the court would be required to determine whether each proposed class member “solicited” or consented to the faxes it received.

To demonstrate the difficulties, the defendants presented several types of consent-related evidence, including 5,281 consent forms from customers agreeing to receive faxes, entries in the company’s database showing more than 25,000 fax numbers for which a consent form was collected from a customer, and a declaration from a sales director explaining the reasons why the database may underrepresent consent.

The defendants also provided a description by the sales director of the company’s practice of obtaining consent from some customers orally, and by way of example, declarations from 25 customers who consented to receive faxes (including advertising faxes) but who are not reflected in the database as consenting and for whom consent forms have not been located.

“This is ‘concrete evidence of consent,’” Judge Durkin found. “Defendants have provided evidence that many thousands of potential class members provided a consent form or are shown in the [database] as having consented. And defendants have provided the same types of evidence that other courts have looked to when evaluating whether individualized consent issues make class certification inappropriate.”

The evidence presented by the defendants showed that assessing consent would require manually cross-checking the thousands of identified consent forms and 25,000 fax numbers in the database against the many thousands of potential class members, the court said. “Such ‘a form-by-form inquiry’ alone ‘is sufficiently individualized to preclude class certification.’”

Other factors in the case made the consent determination even more involved. The defendants acknowledged that the database “was not a perfect system” and a “No” in the consent field of the database did not necessarily indicate that a customer had not provided a consent form—as evidenced by the 25 declarations of customers who stated they consented even though the defendant could not locate consent forms for them and who are not identified in the database as having provided consent.

On top of the database issues, one of the defendant’s New Orleans, LA, facilities was damaged by Hurricane Katrina in 2005, with binders of consent forms wiped out.

“Taken together, this evidence means that for each putative class member, the Court would have to undertake an inquiry as to whether that member provided a consent form, was marked as having consented in the [database], or otherwise consented, including orally or as reflected in the customer account file,” the court said. “An ‘evaluati[on] of the specific evidence available to prove consent’ thus reveals numerous individual questions that spell doom for plaintiffs’ proposed classes.”

Alpha Tech did not “meaningfully contest” that if Bais Yaakov was controlling, consent would be an individualized issue, instead challenging some of the forms of consent-related evidence.

Given the defendant’s evidence, “the Court finds that individualized consent issues would require a series of mini-trials, thus defeating predominance and superiority,” Judge Durkin wrote. “‘Regardless of other questions that may be common to the class, identifying which individuals consent would undoubtedly be the driver of the litigation.’ The Court therefore grants defendants’ motion to deny class certification.”

To read the opinion and order in Alpha Tech Pet Inc. v. LaGasse LLC, click here.

Why it matters: This reasoned decision indicates that plaintiffs will face a steeper uphill battle in obtaining class certification in junk fax cases where there is evidence some class members consented and is consistent with similar court rulings finding that certification was inappropriate given the individualized consent issues. This decision also confirms that Bais Yaakov is binding on courts across the country; thus, plaintiffs can no longer rely solely on the lack of an opt-out notice to establish a TCPA claim.



pursuant to New York DR 2-101(f)

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