Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—3rd Cir.: Class certification over unsolicited fax messages properly denied, (Jan 30, 2025)

By Brian Criag, J.D.

Class certification would have required thousands of mini trials on the individualized issue of whether the fax messages had been unsolicited.

In a proposed class-action lawsuit brought by a podiatrist against a health care rehabilitation services provider alleging violations of the Telephone Consumer Protection Act over unsolicited fax messages, the U.S. Court of Appeals for the Third Circuit has affirmed denial of class certification. The appeals court affirmed the decision because class certification would have required thousands of mini trials on the individualized issue of whether the fax messages had been unsolicited. The appeals court also held the podiatrist’s individual claim survived a First Amendment challenge over commercial speech. Circuit Judge Paul Matey dissented arguing that the government failed to a substantial interest in restricting unsolicited fax advertisements (Conner v. Fox Rehabilitation Services, P.C., Nos. 23-1550 & 23-1684 (3rd Cir. Jan. 24, 2025)).

A rehabilitation services provider that offers various physical, occupational, and speech therapy services to patients in their homes sent faxes to more than 20,000 fax numbers in a blast fax campaign. A podiatrist sued a rehabilitation services provider for sending eight unsolicited fax messages to the podiatrist that promoted the rehabilitation services provider’s business. The podiatrist alleged violations of the Telephone Consumer Protection Act (TPCA) over the unsolicited fax messages in a proposed class-action lawsuit. The district court denied class certification. Following a trial, the district court entered judgment on the podiatrist’s individual claims. Both the podiatrist and the rehabilitation services provider cross appealed. The podiatrist challenged the district court’s denial of class certification, and the rehabilitation services provider challenged the constitutionality of the TCPA. The United States intervened on appeal to defend the constitutionality of the TCPA.

Constitutional challenge. The appeals court held that the rehabilitation services provider’s First Amendment challenge fails. The panel first found that the fax messages qualify as an advertisement under the TCPA. The faxes, on their face, tout a specific model of care used by the rehabilitation services provider described as high quality and unique. Applying intermediate scrutiny, the appeals court also held that the TCPA is narrowly tailored to advance the government’s substantial interests in protecting consumers against unfair shifting of advertising costs and from unwanted interference with their fax machines, and in protecting them against invasions of privacy. The commercial-speech regulation survives intermediate scrutiny under the four Central Hudson factors established by the U.S. Supreme Court.

Class certification. The Third Circuit also affirmed the decision by the district court to deny class certification. The panel recognized that if proof of the essential elements of the cause of action requires individual treatment, then class certification is unsuitable. In this case, individualized questions about consent, or the unsolicited element under the claims, precluded predominance. The district court found that the putative class would require thousands of mini trials on the individualized issue of whether the faxes had been unsolicited to determine the type of consent each individual class member. The individualized questions on whether other health providers gave consent precludes common questions to merit class certification. Thus, the appeals court affirmed the order denying class certification.

Dissent. Circuit Judge Matey wrote a dissenting opinion on the constitutional challenge writing that “tradition endures, but technology does not.” Judge Matey argued that the government failed to show a substantial interest in restricting unsolicited fax advertisements under the TCPA. Decades-old congressional statements about tied up fax machines and the cost of the expensive paper used to print out faxes would qualify as substantial interests today.

The Case is Nos. 23-1550 & 23-1684.

Judge: Roth, J.

Attorneys: Barry Blonien(Bock Hatch Lewis & Oppenheim LLC) for Steven A. Conner. Abigail Howd (Watstein Terepka LLP) for Fox Rehabilitation Services PC.

Companies: Fox Rehabilitation Services PC

Cases: Advertising ConsumerProtection DelawareNews NewJerseyNews PennsylvaniaNews