In a recent TCPA case, the United States District Court for the Southern District of Ohio struck plaintiff’s class action allegations because plaintiff proposed a “fail-safe” class in which membership was dependent on the validity of the putative class member’s claim.

Plaintiff Chris Sauter filed suit against CVS Pharmacy for violations of the TCPA, alleging that CVS enrolled customers in a program that automatically refills their prescriptions without consent in order to meet internal sales goals. As part of the program, Sauter claimed he received a total of 12 calls from CVS with prerecorded messages about a prescription refill and the location of his pharmacy.

Sauter said he did not provide CVS with his phone number and never expressly consented to receive the calls. He proposed to represent a class defined as “all persons within the United States who received a non-emergency telephone call from CVS to a cellular telephone through the use of an automatic telephone dialing system or an artificial or prerecorded voice and who did not provide prior express consent for such calls” over a four-year period.

CVS responded with a motion to strike the class claims. Because the classes were defined so that whether a person qualified as a member depended on whether the person has a valid claim under the TCPA, they were “fail-safe” classes, CVS told the court.

U.S. District Court Judge James L. Graham agreed with CVS that Sauter’s classes met the definition of a “fail-safe” class – that is, a class that includes only those entitled to relief. “Each of the plaintiff’s proposed classes is defined to include only those individuals who did not expressly consent to the receipt of the defendant’s phone calls made with the use of an ATDS,” the court said – solely those persons who can establish CVS violated the TCPA.

“If the plaintiff successfully demonstrates that the defendant made calls using an ATDS or an artificial or prerecorded voice to the class members’ cell phones without the class members’ prior consent, then the class members win,” Judge Graham explained. “However, if the plaintiffs are unsuccessful in meeting their burden of proof, the class does not exist and the class is not bound by the judgment in favor of the defendant. This is the definition of a prohibited fail-safe class.”

The court noted limited case law on the issue of fail-safe classes in the TCPA context with contradictory results. A federal court in Illinois reached a contrary conclusion earlier this year in Wolfkiel v. Intersections Insurance Services Inc., while courts in California (Olney v. and Missouri (Lindsay Transmission LLC v. Office Depot) reached holdings in line with Sauter last year.

Because the proposed class definition was impermissible, the court granted CVS’s motion to strike but also granted Sauter 14 days in which to file an amended complaint.

To read the opinion in Sauter v. CVS, click here.

Why it matters: The Sauter decision recognizes a possible line of argument for TCPA defendants, albeit with the possibility that plaintiffs will be granted leave to amend and redefine their proposed class. However, a redefined and likely broader class raises another line of defense: the need for individualized analysis of whether each class member provided his or her express consent. This decision thus emphasizes the problems with class actions and the TCPA – a statute that has no class action provision.