Takeaway: A March 2017 D.C. Circuit decision excluding solicited faxes from the scope of the TCPA may spell trouble for class action plaintiffs. The Northern District of Illinois recently ruled that, at least where there is concrete evidence that some class members had consented to receive the fax advertisements, individualized issues involved in determining whether each class member consented preclude class certification. The decision provides another arrow in the quiver of TCPA class action defendants.
In Alpha Tech Pet Inc. v. Lagasse, LLC, No. 16 C 4321, 2017 WL 5069946, at *4 (N.D. Ill. Nov. 3, 2017), the district court granted the defendants’ motion to deny class certification, finding that the mini trials required to determine whether each class member consented to receive faxes would defeat predominance and superiority. Alpha Tech is one of the first class certification decisions rendered since the D.C. Circuit’s decision in Bais Yaakov of Spring Valley v. FCC, 852 F.3d 1078 (D.C. Cir. 2017).
In Bais Yaakov, the D.C. Circuit invalidated the FCC’s Solicited Fax Rule, which required all fax advertisements (whether solicited or unsolicited) to display a TCPA-compliant opt-out notice, to the extent it required an opt-out notice on solicited fax advertisements. The D.C. Circuit held that, because the plain language of the TCPA extended only to unsolicited fax advertisements, the FCC lacked authority to regulate solicited faxes. After Boris Yaakov, a TCPA class can no longer include class members who consented to receive faxes from the defendant.
The plaintiffs in Alpha Tech argued that Boris Yaakov was binding only in the D.C. Circuit. The Illinois district court easily rejected that argument, finding that, because the petitions challenging the “FCC’s Solicited Fax Rule” were consolidated and assigned to the D.C. Circuit, the decision invalidating the FCC rule’s application to solicited faxes was controlling outside the circuit, including in the Seventh Circuit.
After determining that Boris Yaakov applied, the district court turned to its impact on class certification. The class in Alpha Tech had been previously rejected as “fail-safe” and was re-defined to include all persons who received a fax from the defendants that included a specifically-worded opt-out notice. (A “fail safe” class is a class defined so that whether a person qualifies as a member depends on whether the person has a valid claim. See our prior post, Filing an early motion to strike class allegations.) Prior to Boris Yaakov, so long as the opt-out notice did not comply with the TCPA, every class member could state a TCPA claim, even if he or she had consented to receive faxes. But after Boris Yaakov, a district court is required to assess whether each class member consented to receive fax advertisements from the TCPA defendant. The district court held that determination of consent would require a “form-by-form inquiry” that was sufficiently individualized to preclude class certification.
But Alpha Tech suggests that Boris Yaakov does not preclude class certification in every TCPA fax case. Instead, there must be “concrete evidence of consent.” The defendants in Alpha Tech had produced evidence that thousands of putative class members had submitted consent forms. Identifying the class would thus require cross-checking thousands of consent forms against the tens of thousands of class members. And because the database containing the consent data was unreliable, and some of the consent forms had been destroyed in a hurricane, assessing consent was especially complex and would have required a series of mini-trials.