A Michigan procedural rule does not preclude TCPA class actions, the Sixth U.S. Circuit Court of Appeals has ruled, refusing to dismiss a lawsuit and affirming class certification.
In yet another unsolicited facsimile TCPA case based on the operations of fax blaster Business to Business Solutions (“B2B”), American Copper & Brass sued after receiving an unsolicited fax ad in 2006. Defendant Lake City had paid $92 for B2B to send roughly 10,000 faxes advertising its pipe-thread sealing tape.
A federal district court granted class certification and granted American Copper’s motion for summary judgment. Lake City appealed, arguing that the class definition included members who lacked standing to assert claims under the statute because it was not clear whether they actually received a fax. In addition, Lake City said TCPA class actions are prohibited in the state per Michigan Court Rule 3.501(A)(5).
Neither argument swayed the federal appellate panel.
American Copper provided an expert witness report which concluded, based on a review of B2B’s fax records, that a total of 10,627 successful transmissions of the Lake City ad were sent and received by 10,627 unique fax numbers. Lake City questioned the phrase “successfully sent,” suggesting that a fax could be sent and not actually received. But the panel said the defendant “offers no support for this purported distinction,” and that any suggestion that B2B’s records were erroneous was “wholly speculative.”
Turning to Michigan’s Court Rules, the panel again rejected Lake City’s contention. MCR 3.501(A)(5) provides that “[a]n action for a penalty or minimum amount of recovery without regard to actual damages imposed or authorized by statute may not be maintained as a class action unless the statute specifically authorizes its recovery in a class action.” Because the TCPA contains a damages provision providing for a minimum amount of recovery ($500 per violation) without regard to actual damages, Lake City argued that TCPA suits cannot be maintained as class actions in Michigan state or federal court.
But the panel disagreed. Interpreting the TCPA’s language that “[a] person or entity may, if otherwise permitted by the laws or rules of court of a State,” file suit under the statute, the court said the provision did not indicate that Congress intended for state procedural rules to apply in all TCPA suits.
“The better view of this state-oriented language relied on by Lake City, however, is that Congress simply intended to ‘enable states to decide whether and how to spend their resources on TCPA enforcement,’ ” the panel said. Although recognizing that this interpretation could lead to forum shopping, the court then affirmed class certification and summary judgment for the plaintiff.
To read the decision in American Copper & Brass v. Lake City Industrial Products, click here.
Why it matters: The Sixth Circuit disagreed with Lake City’s contention that Michigan state rules barred TCPA class actions, particularly in light of the Supreme Court’s 2012 decision in Mims. The decision is in line with a ruling from the Second Circuit, which reversed a New York federal court judge who twice found that New York’s Civil Practice Law and Rules prevented TCPA class actions in federal court. The trend is thus to allow TCPA classes to proceed, even if state law would prevent such actions from being brought.