Antitrust Law Daily Wrap Up, PRIVACY—D. Md.: TCPA class action possible against Burger King, but more information needed, (Apr 17, 2014)

By Jody Coultas, J.D.

Jay Clogg Realty could represent a Telephone Consumer Protection Act (TCPA) class against Burger King Corporation for allegedly sending unwanted facsimile advertisements, the federal district court in Greenbelt, Maryland, has held (Jay Clogg Realty v. Burger King Corp., April 15, 2014, Grimm, P.).

After Jay Clogg received several facsimile advertisements from Burger King advertising food delivery service, it brought a purported class action under the TCPA on behalf of potentially thousands of other fax recipients. Burger King argued that Jay Clogg failed to state a TCPA claim because it did not allege that the advertisements were received on a facsimile machine, and that TCPA actions are not appropriate for class actions.

The TCPA prohibits any person “to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.” Burger King argued that the complaint did not specifically state that Jay Clogg received the advertisements on “a telephone facsimile machine,” as opposed to another electronic device that does not transcribe the text or images received onto paper. Rather, the complaint alleged that “Burger King and/or its agents transmitted unsolicited facsimile advertisements to the Plaintiff.” Claims are facially plausible when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Here, the court was well within its discretion to infer that the advertisements were received on a traditional fax machine.

Class actions under TCPA. Neither the Fourth Circuit nor the district court had ruled on whether a TCPA claim may be brought as a class action. Other courts, however, had found that class actions were proper under the TCPA because the main issues, such as whether a given fax is an advertisement, were common to all fax recipients. Although there have been any number of cases where courts have declined to certify a class, there is no authority stating that a class action may never be certified under the TCPA.

Burger King relied on the legislative history of the TCPA to support is argument against the availability of class actions. This was the sort of argument that the Supreme Court rejected in Mims v. Arrow Fin. Servs, LLC, 132 S. Ct. 740, 752 (2012). The TCPA was designed to make it “as easy as possible” for consumers to bring TCPA claims in court and to protect consumers from unwanted and aggressive solicitations. Because individual suits are unlikely to deter large commercial entities from sending unwanted solicitations, it was clear that Congress intended to allow consumers to bring aggregated class actions. Therefore, the court held that class actions were available under the TCPA.

Burger King’s motion to strike the class action was denied by the court. Burger King argued that a class action under the TCPA was not the superior method available for adjudicating the claims because its statutory damages provision would allow for large damages that would not represent the actual harm to the consumer, but could annihilate the telemarketer. Although harsh, such an outcome was more likely to accomplish the objectives of the TCPA than would restricting TCPA enforcement to individual actions.

Jay Clogg’s motion to certify the class was denied without prejudice to Jay Clogg filing a properly supported motion once discovery was concluded, according to the court. The proposed class included: All persons or entities within the United States to whom Burger King sent, or caused to be sent, facsimile advertisements promoting Burger King and its services at any time within four years prior to the filing of the instant Complaint. The court noted that there was no evidence that Burger King’s advertising campaign spanned four years, and that the primary significance of the four-year time period seemed to be that it matched the statute of limitations. It was unlikely that Jay Clogg would receive certification of the class as defined unless there was more evidence of a four-year campaign.

The case is No. PWG-13-662.

Attorneys: Edward A. Broderick (Broderick Law PC) for Jay Clogg Realty Group, Inc. Daniel Scott Blynn (Kelley Drye and Warren LLP) for Burger King Corp.

Companies: Jay Clogg Realty; Burger King Corp.

Cases: Privacy ConsumerProtection MarylandNews