Antitrust Law Daily Wrap Up, PRIVACY—DNJ: Class Certification of TCPA Claims in Federal Court Governed by Federal, Not State, Law, (Dec 18, 2012)

By Tobias J. Gillett, J.D., LLM.

Federal Rule of Civil Procedure 23 applies to class certification of Telephone Consumer Protection Act (TCPA) claims, rather than state law, and therefore motions by defendant advertisers based on state law to deny class certification to TCPA claims against them must be denied, the federal district court in Newark, New Jersey has ruled (Goodrich Management Corp. v. Afgo Mechanical Services, Inc., December 14, 2012, Martini, W.).

In the two consolidated cases, the plaintiffs, Goodrich Management Corp. and Nicholas Fitzgerald, alleged that the defendants, Afgo Mechanical Services and Banco Santander, S.A. and associated companies, sent facsimile advertising to the plaintiffs’ businesses, and that the sending of those facsimiles violated the TCPA.

The plaintiffs sought to represent putative classes of plaintiffs who had similarly received facsimile advertising from the defendants. In response, the defendants filed a motion to deny class certification, arguing that the TCPA required application of state law to their claims and that New Jersey law prohibited private TCPA class action claims.

Under the TCPA, “[a] person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State” an action for an injunction or monetary damages. As the court explained, the “if otherwise permitted by the laws or rules of court of a state” language, as well as the Supreme Court’s decisions in Shady Grove Associates, P.A. v. Allstate Insurance Company, 130 S. Ct. 1431 (2010) and Mims v. Arrow Financial Services, LLC, 132 S. Ct. 740 (2012), has led to judicial discussion concerning the extent to which the TCPA requires application of state law to TCPA claims.

The court concluded that Rule 23 applied to the plaintiffs’ claims, rather than New Jersey law. The court cited a recent district court opinion, which in turn cited the Mims Court’s conclusion that Congress intended the TCPA provision “to serve as a permissive grant to states to enforce the statute.” Under that interpretation, the provision applied only to suits brought in state court, while federal law applied to cases brought in federal court. Moreover, the Mims Court had “bolster[ed] the previous Shady Grove opinion favoring application of Rule 23 in federal court unless specifically barred by Congress,” further favoring application of Rule 23 to class certification of TCPA claims.

Since federal law applied to the class certification at issue, and since the defendants had based their argument against class certification on New Jersey law, the court denied the defendants’ motion to deny class certification.

The case numbers are 09-43 (WJM) and 11-2769 (WJM).

Aytan Yehoshua Bellin (Bellin & Associates LLC) for Goodrich Management Corp. Jay M. Green (Bodell Bove LLC) for Afgo Mechanical Services, Inc.

Cases: Privacy NewJerseyNews