Antitrust Law Daily Wrap Up, PRIVACY—EDMich: Class Certification Denied in TCPA Action, (Jun 4, 2013)

By John W. Arden, J.D., LL.M.

A community organization, bringing an action against a mortgage lender for sending unsolicited facsimile advertisements in violation of the Telephone Consumer Protection Act, was not entitled to maintain a class action on behalf of 4,271 other persons or businesses in Michigan who allegedly received the same unsolicited facsimile, the federal district court in Port Huron, Michigan ruled (Bridging Communities, Inc. v. Top Flite Financial, Inc., June 3, 2013, Zatkoff, L.). The organization failed to establish that the issues in the proposed class action applicable to the class as a whole predominated over issues subject to individualized proof.

Bridging Communities, Inc. brought suit in the federal district court, alleging that, on March 20, 2006, Top Flite Financial, Inc. sent it an unsolicited advertisement by facsimile, promoting its residential mortgage business in violation of the TCPA. Bridging Communities further alleged that Top Flight sent the same unsolicited facsimile to 4,271 other persons or businesses in Michigan through a third-party fax broadcaster in New York.

The community organization asked the district court to certify a class including all persons sent one or more faxes in March 2006 by Top Flight Financial, offering mortgages on purchases or refinancings.

To proceed with a class action, a plaintiff must satisfy the requirements of Federal Rule of Civil Procedure 23(a) and (b). Rule 23(a) authorizes a party to bring a class action 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 representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.

At least one of the three elements of Rule 23(b) must be satisfied. In this case, Bridging Communities sought to proceed under Rule 23(b)(3), which requires that questions of law or fact common to class members predominate over any questions affecting only individual members and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.

The district court determined that Bridging Communities had to establish that the issues in the class action were subject to generalized proof and that issues applicable to the class as a whole predominated over issues subject only to individualized proof.

Fatal to the motion for certification was the court’s failure to find that common issues predominated. “The factual core of this case is not whether Defendant sent facsimile transmissions but, rather, whether each of the individual class members solicited the facsimiles,” the court found. Because the claim of each class member was inherently individualized, determining liability would require investigation of the factual circumstances of each person or business that received a facsimile transmission from Top Flite.

Bridging Communities cited an affidavit from the operator of the third-party fax broadcaster to support the assertion that none of the proposed class members gave consent to receive the facsimile. The operator testified that the broadcaster generally purchased database information but did not contact any of the companies or persons on the list to ask for express permission before sending the facsimile.

The court found this argument misplaced, since (1) it described the fax broadcaster’s general practices and (2) did not foreclose the possibility that some of the proposed class members gave consent to Top Flite or the fax broadcaster prior to receiving the facsimiles at issue.

Thus, the court exercised its discretion to deny the request for class certification.

The case is No. 09-14971.

Attorneys: Brian J. Wanca (Anderson & Wanca) for Bridging Communities, Inc. Karen A. Smyth (Lipson, Neilson) for Top Flite Financial, Inc.

Companies: Bridging Communities, Inc.; Top Flite Financial, Inc.

Cases: Advertising Privacy MichiganNews