A New Jersey appellate court recently ruled that a plaintiff could not bring a class action suit when pursuing a private cause of action under the federal Telephone Consumer Protection Act.

The plaintiff, a local New Jersey business, filed suit under the act after it received an unsolicited one-page fax from the defendant advertising its restaurant. According to the complaint, the faxing was the result of a “blast fax,” whereby the defendant caused the advertisement to be sent to 4,649 businesses. The plaintiff brought a class action suit on behalf of all recipients of the faxed advertisement and sought the $500 statutory damages available to private claimants under the TCPA for all members of the class.

The appellate court, affirming the lower court’s dismissal of the class action claims, concluded that the plaintiff could not maintain a class action under the TCPA’s private remedy provision, because the class action was not “superior to other available methods for the fair and efficient adjudication of the controversy” and, therefore, lacked the superiority requirement for class certification.

The court stated, “A class action suit is not a superior means of adjudicating a TCPA suit. Class actions are generally appropriate where individual plaintiffs have ‘small claims’ which ‘are, in isolation, too small . . . to warrant recourse to litigation.’ In such instances, ‘the class-action device equalizes the claimants’ ability to zealously advocate their positions.’ That equalization principle remedies the incentive problem facing litigants who seek only a small recovery.”

The court further noted that “by imposing a statutory award of $500, a sum considerably in excess of any real or sustained damages, Congress has presented an aggrieved party with an incentive to act in his or her own interest without the necessity of class action relief. As the motion judge observed, ‘the nature of the harm . . . as near as I can tell, is about two cents worth of paper and maybe a little ink and toner.’ . . . Ultimately, we note that the same facts required to prevail on an individual TCPA claim – an unsolicited fax was received from a sender with whom the recipient had no prior business relationship – are identical to the facts that would have to be proven to merely identify a single class member. We discern no superiority in such a situation.”

To read the decision in Local Baking Products v. Kosher Bagel Munch, click here.

Why it matters: The court’s decision exposes the rift in both state and federal courts on the issue of whether plaintiffs may bring class actions under the TCPA. Seven states – Arizona, California, Florida, Indiana, Missouri, North Carolina, and Oklahoma – have reported decisions allowing class certification for TCPA claims; the New Jersey decision adds it to the five other states – Colorado, Connecticut, New York, Ohio, and Texas – that have denied certification. The federal courts are similarly split, the decision noted. The Fifth Circuit has reversed certification of a class and district courts in Indiana and Pennsylvania have denied certification. A federal court in Washington, however, has certified a class under the act.