Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—N.D. Ill.: Court declines to modify prior ruling in “junk fax” case brought under TCPA, (Apr 9, 2015)

By Edward L. Puzzo, J.D.

There was no basis to disturb the court’s prior determination that certified a class in a “junk fax” case brought under the Telephone Consumer Protection Act (TCPA), the federal district court in Chicago has ruled (Bridgeview Health Care Center v. Clark, April 8, 2015, Valdez, M.). The court properly limited liability to faxes sent within a set radius of the defendant’s business.

Defendant Jerry Clark, doing business as Affordable Digital Hearing, contracted with Business-to-Business Solutions (B2B) to help advertise his medical equipment repair business. B2B sent out thousands of “junk fax” ads in violation of the TCPA. Bridgeview Health Care Center brought a class action against Clark seeking statutory damages for each fax sent.

On March 19, 2013, the court granted the plaintiff partial summary judgment against Clark as to 100 faxes sent within a 20 mile radius of Clark’s business, located in Terre Haute, Indiana, but declined to grant judgment as to the remainder of faxes B2B sent outside of that radius, because it was not clear that B2B’s actions to send faxes outside that radius was within its actual or implied authority.

On November 21, 2014, the court, relying on a recent Federal Communications Commission decision in DISH Network, 28 FCC Rcd 6589, applying liability where a third party had apparent, if not actual, authority, ruled that the vicarious liability provisions of the TCPA applied where the defendant’s agent had actual, implied, or apparent authority. However, the court further found that these presumptions did not overcome evidence that Clark had not expressly or impliedly ratified or authorized B2B to send faxes to anyone besides 100 parties within the Terre Haute radius. Therefore, the court found that Clark was not liable under the TCPA for the remaining faxes.

Plaintiff’s motion. Plaintiff moved the court to alter its previous judgment. The court declined to do so. The TCPA is silent as to who is considered the “sender” of junk faxes, the court stated. The FCC clarified that the DISH Network decision only addressed telemarketing calls and did not modify prior regulatory treatment of unsolicited fax advertisements.

After discussing competing theories of liability, the court concluded that an appropriate standard for determining “on who’s behalf” a junk ad was sent required a totality-of-circumstances review, which incorporates considerations including, but not limited to: the defendant’s degree of input and control over the content of the faxes, the actual content of the faxes, contractual or expressly stated limitations in the scope of control between the parties, the defendant’s approval of the final draft of the faxes and their recipients, and the defendant’s overall awareness of the circumstances.

Using that standard, the court again found that the faxes at issue were not sent on behalf of Clark. The court found that Clark did not direct B2B to send faxes outside the Terre Haute area and had no reason to think that B2B would do so. Therefore the court denied plaintiff’s motion to alter its prior judgment.

Defendant’s motion. Defendant moved the court to decertify plaintiff’s class because Bridgeview was outside the Terre Haute area for which Clark was found liable for the junk faxes. The court declined to decertify.

The standards for class certification, the court stated, are that a plaintiff may bring his claim on behalf of a class if: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the plaintiff are typical of the claims or defenses of the class; and (4) the plaintiff will fairly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a).

The court rejected Clark’s challenges to Bridgeview’s typicality, commonality, and adequacy of representation. A court need not decertify whenever it later appears that the named plaintiffs were not class members or were otherwise inappropriate class representatives. If the case were still proceeding, a new plaintiff could simply be substituted. Moreover, since plaintiff’s appealed the prior judgment regarding Clark’s liability, this sustained Bridgeview’s claims as common to and typical of the class, as well as its ability to represent the class adequately.

The court further rejected Clark’s challenge regarding the numerosity of the class. Numerosity can be found based on common-sense assumptions about the practicability of joinder versus a class action and is not strictly based on the number of plaintiffs in the class. Pursuant to its broad discretion to certify the class, the court declined to reconsider its decision to certify the class.

The case is Civil Action No. 09 C 5601.

Attorneys: Brian J. Wanca (Anderson & Wanca) for Bridgeview Health Care Center, Ltd. Vincent A. Lavieri (Gardiner, Koch, Weisberg & Wrona) for Jerry Clark.

Companies: Bridgeview Health Care Center, Ltd.

Cases: ConsumerProtection Advertising Privacy IllinoisNews