Antitrust Law Daily Wrap Up, PRIVACY—S.D. Cal.: Certification of two proposed classes granted in TCPA case against loan broker, (Sep 29, 2015)

By Michael Menzhuber, J.D., LL.M.

A motion for certification of two proposed classes, in an action claiming that Capital Alliance Group and its owner violated the Telephone Consumer Protection Act (TCPA) by sending unsolicited faxes and making pre-recorded message calls, was granted by the federal district court in San Diego. The court denied a motion to strike as untimely the Declaration of Mary Reiten and the plaintiffs’ motion for class certification because the defendants were not prejudiced by the untimely filings (Bee, Denning, Inc. v. Capital Alliance Group, September 24, 2015, Bashant, C.)

Background. Bee, Denning, Inc. (Bee), a California-based consulting company, alleged that it received unsolicited fax advertisements from Capital. Bee did not provide express consent to receive the fax and did not have an established business relationship with Capital. After receiving two more similar faxes which used a different company name, Bee called the number listed on one of the faxes and was ultimately directed to a Capital representative. Bee contended that Capital used at least eleven aliases to disguise the fact that the fax advertisements were sent on its behalf. According to Bee, Capital, and its owner, Narin Charanvattanakit (Narin), contracted with a third-party vendor to solicit business for Capital through these junk faxes.

Gregory Chick (Chick) alleged that: (1) he received an automated call with a prerecorded message to his cell phone which related to preapproval for a business loan; and (2) when a caller dialed the number given in the message, the call was answered by an automated answering system that ultimately connected to Capital. Narin acknowledged that Capital contracted with a marketing company to generate leads and that he provided the “gist of the content” for the prerecorded messages.

Bee and Chick filed a putative class action which proposed two classes: (1) individuals or entities who received unsolicited fax advertisements with the Capital’s business name, as well eleven other business names that Capital allegedly used as aliases (junk fax class); and (2) individuals or entities that received a prerecorded message call, made on behalf of Capital, on their cell phone or residential phone line (automated call class). The court noted that the plaintiffs impermissibly expanded the automated class proposed in their first amended complaint because that complaint did not include persons or entities who received the calls on their residential phones. Consequently, the court amended the definition of that class to include only persons or entities who received the calls on their cell phones.

The defendants filed a motion to dismiss the proposed class certifications.

Ascertainability. The court determined that the junk fax class was ascertainable because: (1 identification of the class was administratively feasible; and (2) the plaintiffs’ intent to use reverse-look-up technology to identify persons who called the toll-free numbers listed on the fax advertisements was an objective approach that reinforced the ascertainability of the class. The automated call class also met the requirement of ascertainability because, as with junk fax class, the plaintiffs proposed to use reverse-look-up technology to identify potential class members.

Rule 23(a). The Rule 23(a) prerequisites for class certification are: (1) numerosity; (2) commonality; (3) typicality; and (4) adequate representation. The court noted that the numerosity requirement is generally satisfied when the class includes at least forty members. It determined that the numerosity requirement was met for both the junk fax class and the automated call class because there was evidence that the classes potentially had 450,000 and 33,000 class members respectively.

The court determined that the commonality requirement was met for the junk fax class because: (1) the plaintiffs’ testimony and exhibits connected the various aliases and toll-free numbers used on different fax advertisements to Capital; (2) call-in log evidence demonstrated that hundreds of thousands of other persons may been on the receiving end of one-or-more of these faxes; and (3) whether Capital, or persons acting on its behalf, sent the faxes in violation of the TCPA clearly involved a common question of law. The court determined that the commonality requirement was met for the automated call class because: (1) the plaintiffs submitted evidence that more than 30,000 persons received a prerecorded voice call traceable to Capital; and (2) whether these calls were made by or on behalf of Capital was a question for which the answer would determine the claims of the putative class members.

The court determined that the typicality requirement was met for the junk fax class because: (1) the plaintiffs produced evidence linking the aliases and toll-free numbers listed on the fax advertisements to Capital; and (2) the putative junk fax class was limited to recipients of those same types of faxes. The court determined that the typicality requirement was met for the automated call class because: (1) the automated call class list consisted only of persons who received a prohibited call to their cell phone from a single toll-free number allegedly traceable to Capital; and (2) this was the precise injury and course of conduct that motivated Chick’s claim.

The court determined that the adequacy of representation requirement was met for both the junk fax class and the automated call class because: (1) the interests of the parties, to receive compensation for alleged violations of the TCPA and to deter the defendants from engaging in the alleged conduct, were clear and were aligned with the interests of the putative class as a whole; (2) there was nothing to suggest that the plaintiffs or their counsel had any conflicts of interest with other class members such that class certification would raise due process concerns; (3) there was no indication that the plaintiffs and their counsel lacked incentive to prosecute the action vigorously; and (4) the plaintiffs’ counsel demonstrated their competency by providing undisputed documentation of their experience litigating consumer class actions in general and TCPA class actions in particular.

Predominance and Superiority. The court determined that the predominance requirement was met for the junk fax class because: (1) the plaintiffs’ theory was that Capital, or its third-party vendor, sent unsolicited fax advertisements to members of the class using aliases that obscured the defendants’ involvement; and (2) the generalized proof was the striking similarity of the various fax advertisements and the frequency with which toll-free numbers listed connected to a Capital representative. The court concluded that, because both the legal theory and the supporting evidence were applicable to the entire class, there was little danger that establishing liability would require a series of individualized inquiries. The court determined that the same analysis held with respect to the predominance requirement. Therefore, it concluded that the predominance requirement was also met for the automated call class.

The court determined that the superiority requirement was met for both the junk fax class and the automated call class because: (1) most class members would find it prohibitively costly to litigate their claims individually; and (2) the defendants did not identify any issue of liability or damages that outweighed the benefit of considering common issues in one trial.

The case is No. 13-cv-2654-BAS-WVG.

Attorneys: Beth Ellen Terrell (Terrell, Marshall, Daudt & Willie, PLLC) for Bee, Denning, Inc. d/b/a Practice Performance Group. Gene S. Stone (Homan & Stone) for Capital Alliance Group.

Companies: Bee, Denning, Inc. d/b/a Practice Performance Group; Capital Alliance Group

Cases: Privacy CaliforniaNews