Sixth Circuit Reverses Denial of Class Certification and Dismissal Under Rule 68 in Purported Unsolicited Fax Case

By Joseph C. Wylie II, Molly K. McGinley, Nicole C. Mueller

The Sixth Circuit reversed a lower court’s denial of class certification and dismissal of an action following a lapsed offer for individual judgment in a decision released earlier this month.  In doing so, the Sixth Circuit held that a defendant opposing class certification in a Telephone Consumer Protection Act (“TCPA”) case on the ground that issues of individualized consent predominate must do more than present “speculation and surmise to tip the decisional scales” because a “possible defense, standing alone, does not automatically defeat predominance.”  The court also held that a defendant may not escape potential class-wide liability through an unaccepted offer of individual judgment.

Plaintiffs Bridging Communities, Inc. and Gamble Plumbing & Heating, Inc. each filed suit against Top Flite Financial, Inc. (“Top Flite”) alleging that the company violated the TCPA after each purportedly received an unsolicited fax advertising Top Flite’s residential mortgage services. Top Flite had engaged Business to Business Solutions (“B2B”), a fax advertising company, to send a fax to a list of numbers that B2B procured from InfoUSA, Inc.  Although plaintiffs argued that there was class-wide evidence of the absence of consent (evidence that B2B failed to contact anyone on the list it purchased from InfoUSA, Inc. to obtain consent), the district court embraced the defendant’s argument that it was possible that some of the fax recipients had consented to receive faxes.  The district court concluded that class certification was inappropriate because the determination of the presence or absence of consent for each class member would require individualized proof.  The Sixth Circuit reversed, finding that the mere possibility of consent as a defense, without some showing that the defendants had evidence to support a consent defense with respect to some or all of the putative class members, is insufficient to block class certification.  In so holding, the Sixth Circuit relied on precedent from other circuits that “recognized that in cases where, as here, a sender ‘obtained all of the fax recipients’ fax numbers from a single purveyor of such information[,]’ there exists a ‘class-wide means of establishing the lack of consent based on arguably applicable federal regulations.’”

Falling in line with the recent Supreme Court decision in Campbell-Ewald v. Gomez (previously discussed here and here), the Sixth Circuit also reversed the lower court’s dismissal of the action following the plaintiffs’ refusal to accept Top Flite’s offers of individual judgment.  The court held that “[a]n unaccepted settlement offer—like any unaccepted contract offer—is a legal nullity, with no operative effect” and determined that “Top Flite may not rely on such lapsed offers ‘to avoid a potential adverse decision, one that could expose it to damages a thousand-fold larger than’” the offers plaintiffs declined to accept.  Through this opinion, another Circuit Court of Appeals has now weighed in on the application of Campbell-Ewald.