A recent ruling by the U.S. District Court for the Northern District of Illinois in favor of a group of “pet insurance” defendants who allegedly made unsolicited advertising calls to over 300,000 cellphones arguably suggests that (1) oral consent not only may be a defense to Telephone Consumer Protection Act (TCPA) liability but also may defeat class certification under Fed. R. Civ. P. 23 and (2) lack of standing under Spokeo may likewise defeat class certification.

In Legg v. PTZ Ins. Agency, Ltd., No. 14 C 10043, 2017 WL 3531564 (N.D. Ill. Aug. 15, 2017), the defendants offered consumers products and services relating to pet adoption and insurance. The product/service at issue was a 30-day “free gift” of pet health insurance offered to pet adopters through the defendants’ “partner” animal shelters. To receive the free gift, the adopters had to submit, in the adoption paperwork, a valid email address and an opt-in to receive emails from the defendants. More specifically, the adoption paperwork—which required the adopter to give his or her name, address, and email and telephone information—provided that (1) unless adopters opted out, they may be sent “special offers by mail or email relating to other products or services that may also be of interest” and (ii) their personal information may also be shared with third parties so that they could contact adopters “by mail or email for their own marketing purposes.” Although the opinion is not entirely clear, the paperwork apparently did not mention calls (landline or cellphone) or text messages.

The plaintiff alleged that, after completing the adoption paperwork, the putative class members (adopters) received two emails from the defendants reminding them of their “free gift” as well as two alleged prerecorded robocalls also reminding them of the “gift.” Discovery revealed that the prerecorded calls were sent to at least 341,288 unique cellphone numbers, which was the basis of the plaintiff’s underlying TCPA claim.

The district court first walked through the requirements of Fed. R. Civ. P. 23(a)—numerosity, commonality, typicality and adequacy of representation—and found that the plaintiff had met all of them. Turning to the “predominance” requirement of Rule 23(b)(3), however, the district court agreed with the defendants’ argument that individualized questions of consent predominated over any common questions and, consequently, denied the plaintiff’s class certification bid.

In essence, the defendants argued that (1) during the adoption process adopters agreed to receive communications from defendants, were “told” and had agreed and expected to receive such communications by phone in addition to email, even though the agreement to receive calls was not in writing; (2) as such, the case centered on what happened during each individual adoption process; and (3) in any event, the adopters had not suffered a concrete injury necessary for Article III standing under Spokeo v. Robins. In response, the plaintiff argued, among other things, that (1) the calls in question were advertising in nature, which requires prior express written consent under the TCPA regulations, and (2) there was “no question that none of the proposed class members signed a form specifically agreeing to receive calls on their cellular phones” from the defendants (which the defendants had apparently conceded).

At first blush, the court appeared to reject the Spokeo argument, holding that just “receiving the call itself constitutes an injury.” However, the court then ruled that “the lack of a writing d[id] not make the calls unsolicited” and “[i]f the class members agreed to receive the calls, they lack[ed] a ‘genuine controversy,’” which is necessary to establish Rule 23(b)(3) predominance in the Seventh Circuit. The court did not expressly state that the plaintiff failed to establish Article III standing under Spokeo.

The court also ruled, citing prior Northern District precedent, that “when the defendant provides specific evidence showing that a significant percentage of the putative class consented to receiving calls, issues of individualized consent predominate.” And since the defendants supplied, among other specific evidence, (1) affidavits from an unknown “number of adopters who state[d] that they [had] agreed to and expected to receive calls on their cellular phones from defendants about the offered pet insurance” and (2) affidavits from shelter employees who stated that they orally “told the adopters to expect to receive ‘communications’ from defendants” of some kind, the district court held that the trial would “involve hundreds, if not thousands, of mini-trials on the issue of consent alone.” Thus, the court denied the plaintiff’s motion to certify and granted the defendants’ competing motion to strike the class allegations. The plaintiff has filed an appeal to the Seventh Circuit. See Case No. 17-8018, Petition filed Aug. 31, 2017, Dkt. 1.

Why it matters: This decision is significant for several reasons. First, under TCPA regulations, advertising calls made to cellphones indeed require prior express written consent, and the district court’s opinion seems to suggest that oral consent could be sufficient—an issue which will likely be hotly contested on appeal. Second, while the court appears to invoke Seventh Circuit precedent governing Rule 23(b)(3) rather than Spokeo, the net result is the same (i.e., a lack of concrete injury) and thus the opinion can arguably be viewed as a rare Spokeo “win” for a TCPA defendant in the Northern District of Illinois. Third, while Spokeo is more commonly used as a threshold argument to defeat cases from the outset due to a lack of standing, it was used at a much later stage in the case to defeat class certification. Fourth, this case shows that, as a matter of strategy, a plaintiff’s failure to plead a concrete injury can be contested at any stage of a case. Fifth, this case serves as a lesson in how to defeat Rule 23(b)(3) through the use of concrete evidence, particularly when that evidence comes in the form of affidavits from putative class members.