Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—DMinn: Class Action for Unsolicited Fax in Violation of Telephone Consumer Protection Act Survives Dismissal, (Mar 14, 2013)

By Peter Reap, J.D., LLM

A class action complaint filed by Sandusky Wellness Center, LLC, alleging a violation of the Telephone Consumer Protection Act (TCPA) for an unsolicited fax it received from Medtox Laboratories, Inc. survived Medtox’s arguments for dismissal, the federal district court in Minneapolis has determined (Sandusky Wellness Center, LLC v. Medtox Scientific, Inc., March 12, 2013, Doty, D.). Medtox’s motion for class certification, on the other hand, was premature, and was denied without prejudice.

On February 21, 2012, Medtox sent Sandusky a fax via a telephone facsimile machine that was allegedly unsolicited and without Sandusky’s permission. Sandusky asserts that the facsimile “constitutes material furnished in connection with [Medtox’s] work or operations.” Sandusky alleges that Medtox sent the facsimile to at least 39 other recipients.

Sandusky filed this class-action complaint, alleging a violation of the TCPA on August 23, 2012. One day later, it also filed a motion for class certification.

Medtox sought dismissal of the class allegations contained within the complaint by arguing that “the class action allegations should be dismissed because as a matter of law, [Sandusky’s] cause of action under the TCPA is not suitable for class treatment.” Medtox argues that Congress requires TCPA violations to be brought as individual actions and that liability will have to be determined on a case-by-case basis, with the court having to undertake mini-trials to determine whether each facsimile was unsolicited and if the message was sent to a facsimile machine or a computer.

Despite Medtox’s argument to the contrary, nothing in the TCPA limited the statute’s applicability to individual actions, according to the court. Congress authorized a statutory penalty of $500.00 for each TCPA violation, but this fact did not preclude class certification.

Further, the court was unconvinced that no set of circumstances could lead to class certification. For example, discovery could show that Medtox purchased a list of facsimile numbers from a third-party vendor and that no consent was present. Moreover, striking the class allegations at this stage in the proceedings would effectively preclude class certification in future TCPA actions. Other jurisdictions have declined to reach such a conclusion, the court noted.

Although it was uncertain as to whether class certification would ultimately be proper, such a determination can only be made after discovery and briefing.

As to Sandusky’s motion for class certification, no discovery had taken place, and it appeared that the motion for class certification was filed merely as a placeholder, out of fear that Medtox would attempt to moot the action with a Rule 68 offer. The motion was untimely, as it was entirely unclear whether a request for class certification would eventually be warranted, the court observed.

The case is Civil No. 12-2066 (DSD/SER).

Attorneys: Garrett D. Blanchfield, Jr. (Reinhardt, Wendorf & Blanchfield) for Sandusky Wellness Center LLC. Jeffrey R. Mulder (Bassford Remele, PA) for Medtox Scientific, Inc.

Companies: Sandusky Wellness Center LLC; Medtox Scientific, Inc.

Cases: ConsumerProtection MinnesotaNews