The TCPA is a stupid statute. I’m not sure whether the stupidity is congenital, arose out of a noxious environment after birth, or resulted from a combination of both. But there is no doubt that the TCPA as it exists today has an I.Q. well south of three digits.
Don’t get me wrong. I’m no fan of spam. It can be annoying. But it also can be easily ignored, especially given all the other affronts life serves on a daily basis (Kim Jong-un playing with rockets, terrorist bombing at the Boston Marathon, a massive explosion in West, Texas, global warming, poverty, cancer, etc.).
Unlike these affronts, however, the TCPA yields $1,500 in recompense per act and so far has allowed the plaintiffs’ class action bar to bring companies to their knees with the threat of millions, billions, perhaps trillions of dollars’ worth of potential damages and attorneys’ fees, no matter how trifling the actual harm. While it’s easy for me to ignore spam, it’s impossible for plaintiffs’ lawyers to ignore the TCPA.
When Sen. Ernest Hollings championed passage of the TCPA in 1991, he envisioned the high $1,500 maximum award as incentivizing consumers to bring suit in small claims court. The penalty was intended to compensate for the cost of filing and the inconvenience of pursing the claim. Certainly Sen. Hollings did not anticipate that the TCPA would become what it is today, with thousands of class actions having been filed in state and federal courts based on as little as receipt of a single unwanted text message comprised of just a few words.
In the Mims decision in 2012, Justice Ginsburg wrote for a unanimous Supreme Court in finding that federal question jurisdiction exists for TCPA claims. Mims v. Arrow Fin. Serv., LLC, 132 S.Ct. 740 (U.S. Jan. 18, 2012). She rejected the defense argument that the decision would unleash a tsunami of federal TCPA claims. Id. at 753. It appears the tsunami has arrived.
In my own practice, TCPA claims have ballooned in the past 12 months. And our blog managing editor, Bryan Clark, has confirmed that my anecdotal evidence is reflective of reality generally: TCPA claims in federal courts post-Mims have skyrocketed.
Federal judges are overworked, underpaid, and understaffed, and they now have to deal with the effects of the sequester. Faced with murderers, drug dealers, child molesters, Ponzi scheme architects, securities fraudsters, and the like, federal judges would be more than justified in viewing TCPA claims with a jaundiced eye.
Oftentimes, the TCPA plaintiffs are not upset. Quite the opposite, they are pleased to have received purported spam in violation of the TCPA because they are in league with the plaintiffs’ lawyers. Rather than try to stop the purported spam, they choose not to make a simple phone call to request cessation of the allegedly unwanted facsimiles, calls, and text messages because they know each message they receive may multiply their potential damages. They are professional plaintiffs, tapped by creative plaintiffs’ lawyers with an entrepreneurial strategy to turn the TCPA’s draconian statutory damages into a gold mine by pursuing the claims as a class.
That’s, of course, where I come in. The TCPA has been very, very good to me. As a former newspaper journalist, I aspired to and do on occasion represent newspapers, news broadcasters, and book publishers. But when I graduated from law school, I definitely did not anticipate that at this point in my career I would have defended more than 100 TCPA lawsuits, most of them class actions. The devil on one shoulder encourages me to thank the plaintiffs’ class action bar for their creativity in raining this bounty of work upon me. But the angel on my other shoulder admonishes me to proselytize against the TCPA at every opportunity – hence this blog posting.
There are many ways to attack a TCPA claim, but the strategy perhaps most likely to stem the tide of these claims is arguing predominance under Rule 23. Courts across the country have split, depending on the facts and circumstances, on whether a TCPA claim can be class certified. But the only circuit-level decision to address the issue squarely was Gene and Gene in the Fifth Circuit. Gene and Gene LLC v. Biopay LLC, 541 F.3d 318 (5th Cir. 2008). There, the court found that individual issues predominated over common issues, thus precluding certification. Id. at 326-29. That decision, coupled with the recent U.S. Supreme Court holdings on predominance in Dukes and Comcast, Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (U.S. June 20, 2011); Comcast v. Behrend, 133 S.Ct. 1426 (U.S. March 27, 2013), should serve as a useful broom for federal judges to sweep their dockets of TCPA cases.
TCPA claims are riddled with individual issues. Was each facsimile unsolicited? Was each facsimile an advertisement under the TCPA? Did each facsimile include an opt-out notice? If each facsimile included an opt-out notice, was each notice compliant with the TCPA? Was any facsimile received as email? Did each class member have an existing business relationship with the sender? Was an automatic telephone dialing system used? These issues, as well as numerous others, render TCPA claims inherently ill-suited for class treatment, particularly in this post-Dukes and Comcast era. The sooner federal judges can impart this reality upon TCPA plaintiffs’ lawyers and their clients, the better.
Fortunately, it appears that is already happening. Just last week, I received notice on a single day of three decisions rejecting certification of TCPA claims. West Concord 5-10-1.00 Store, Inc. v. Interstate Mat Corp., 2013 WL 988621 (Mass. Super. March 5, 2013); Jamison v. First Credit Serv., Inc., 2013 WL 1248306 (N.D. Ill. March 28, 2013); Machesney v. Lar-Bev of Howell, Inc., 2013 WL 1721150 (E.D. Mich. April 22, 2013). The Illinois and Michigan decisions relied in part on the predominance analysis. Jamison, 2013 WL 1248306 at *12-15; Machesney, 2013 WL 1721150 at *20-22. The Massachusetts decision squarely criticized the plaintiffs’ lawyers’ business model. (Note that my colleague Jordan Stein will write about these decisions in more depth in upcoming blog postings.)
As Massachusetts Judge Kottmyer reasoned in rejecting certification under the federally analogous Massachusetts Rule 23:
The conclusion is inescapable that these class actions exist for the benefit of the attorneys who are bringing them and not for the benefit of the individuals who are truly aggrieved as a result of receiving the faxes….
This suit exemplifies the undesirable result identified in federal cases. There is an enormous contrast between Interstate Mat’s potential liability and the actual harm suffered by the potential class members…. Plaintiff’s counsel has used the TCPA as a device for the solicitation of litigation and under Rule 23 as a device to generate legal fees in cases in which attorneys have a far greater interest and stake in certification of the class than the putative class members.
2013 WL 988621 at *6, *8.
Hallelujah, Judge Kottmyer! And here’s to your brothers and sisters in the judiciary applying the same logic in the future.
Stop the TCPA madness.