Class Actions – Page 2

Third Circuit Finds Jurisdiction Despite Anti-Aggregation Rule, Holds TCPA Class Settlement Is Not Covered by Insurance Agreement

Sep 27 2016

By Andrew C. Glass, Gregory N. Blase, Roger L. Smerage, and Eric W. Lee

In a precedential but split ruling, the Third Circuit recently held that diversity jurisdiction existed over a declaratory judgment action seeking insurance coverage for a classwide settlement of Telephone Consumer Protection Act (“TCPA”) claims even though no individual member of the underlying class had a claim in excess of the required $75,000 amount in controversy. See Auto-Owners Insurance Company v. Stevens & Ricci Inc., No. 15-2080, — F.3d — (3rd. Cir. 2016). The court also affirmed that the TCPA class settlement did not constitute covered “property damage” or “advertising injury” under the terms of the subject insurance policy.

The case arose when an insurance company sought a declaratory judgment that it had no obligation to defend or indemnify an insured law firm in connection with a class action lawsuit alleging TCPA violations. The named plaintiff in the underlying the class action lawsuit had alleged that the law firm violated the TCPA by sending unsolicited fax advertisements. The insurance company sought a declaratory judgment in the Eastern District of Pennsylvania against both the law firm and the named plaintiff in the underlying class action. At summary judgment, the district court concluded that the sending of unsolicited fax advertisements in violation of the TCPA did not fall within the terms of the applicable insurance policy.

PROFESSIONAL PLAINTIFFS BEWARE: COURTS DISMISS TCPA CLAIMS ON STANDING GROUNDS

Sep 01 2016

By Joseph C. Wylie II, Molly K. McGinley, Nora E. Becerra

At least two courts have recently dismissed TPCA claims where the plaintiffs appeared to manufacture standing. In Telephone Science Corp. v. Asset Recovery Solutions, the Northern District of Illinois dismissed a TCPA complaint brought by a plaintiff whose business model involved the intentional receipt of autodialed or prerecorded calls. There, the plaintiff, Telephone Science Corp. (“TSC”), operated a service called “Nomorobo,” designed to block certain unwanted calls. TSC uses a “honeypot” of telephone numbers, analyzes calls made to those numbers to identify numbers that TSC’s service identifies as being made using an autodialer or artificial or prerecorded voice calls, and then blocks calls made to Nomorobo subscribers made using those identified numbers.

Seventh Circuit Reaffirms Stance On Sender Liability In TCPA Fax Litigation

Jul 13 2016

By Joseph C. Wylie II, Molly K. McGinley, Nora E. Becerra

The Seventh Circuit recently reaffirmed its holding in Bridgeview Health Care Ctr., Ltd. v. Clark, Nos. 14-3728 & 15-1793 (7th. Cir. 2016), which established that agency principles apply in determining whether a fax was sent “on behalf of” a sender under the TCPA.

On June 16, 2016, the court in Paldo Sign & Display Co. v. Wagener Equities, Inc., No. 15-1267, 2016 WL 3348738 (7th Cir.) held that TCPA fax regulations do not impose strict liability on entities whose products or services are being promoted by third parties. In Paldo, a company sued Wagener Equities under the TCPA after receiving an unsolicited fax promoting Wagener’s services. That same communication allegedly was faxed to over ten thousand recipients via a third party distributor, Marketing Research, also known as B2B, which exposed Wagener to potential damages exceeding five million dollars. Paldo maintained that Wagener was liable for B2B’s transfer of the faxes despite never having approved the ads.

Twitter Loses Summary Judgment Bid in TCPA Claim

Jul 06 2016

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

Last week a California federal court ruled that Twitter, Inc. is liable under the Telephone Consumer Protection Act (“TCPA”) for tweets it sent via text message to the new owner of a recycled cell phone number. The Court found that the online social networking service was the “sender” of the tweets, as that term is defined under the statute, rather than the authors of the tweets or the former owner of the cellphone who opted to receive the text messages. In doing so, the Court reiterated the Federal Communications Commission (the “FCC”)’s previous caution that where autodialers are utilized to make robocalls to a wireless number, it is the caller – and not the wireless recipient of the call – who bears the risk that the call was made without the prior express consent required under the statute. The Court also found that Twitter could not be shielded from liability under the Communications Decency Act of 1996.

Supreme Court Decision on Article III Injury-in-Fact in Spokeo Potentially Impacts Class Certification

May 19 2016

By Andrew C. Glass, Joseph C. Wylie II, Gregory N. Blase, Molly K. McGinley, Roger L. Smerage, and Eric W. Lee

On Monday, the United States Supreme Court issued its long-awaited decision in Spokeo, Inc. v. Robins, — U.S. — (No. 13-1339). In rendering its decision, the Court reiterated that to establish Article III standing, a plaintiff must plead an injury-in-fact that is both particular to the plaintiff and concrete. The Court explained that whether a plaintiff has pleaded sufficient facts to allege a concrete injury requires more than just examining whether the plaintiff has pleaded that the defendant violated a federal statute. In particular, the Court held that “a bare procedural violation, divorced from any concrete harm,” does not suffice to “satisfy the injury-in-fact requirement of Article III.” As such, the Spokeo plaintiff’s allegation that the defendant’s actions had violated the Fair Credit Reporting Act, 15 U.S.C. §§ 1681, et seq., would not, by itself, demonstrate a plausible injury-in-fact. Rather, “Article III standing requires a concrete injury even in the context of a statutory violation.”

Sixth Circuit Rejects Application of Agency Principles to Fax Broadcast Liability Under TCPA

May 16 2016

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

In its May 9, 2016, ruling in Siding and Insulation Co. v. Alco Vending, Inc., the Sixth Circuit rejected the application of traditional agency principles to determine whether a company was liable for faxes sent “on its behalf.” Instead, the Sixth Circuit held that the FCC’s 1995 Order, imposing liability on “the party on whose behalf a solicitation is made,” represented the FCC’s decision not to base TCPA liability for fax activity on a vicarious liability analysis. In so holding, the Sixth Circuit joins the Eleventh Circuit in adopting this analysis, and rejects the vicarious-liability analysis recently adopted by the Seventh Circuit for fax activity.

Eighth Circuit Articulates New Ascertainability Standard in TCPA Class Actions

May 11 2016

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

The Eighth Circuit Court of Appeals recently reversed a trial court’s decision not to certify a TCPA class on grounds that the proposed class was not ascertainable. In so doing, the Eighth Circuit declined to adopt the Third Circuit’s heightened standard for ascertainability as a “separate, preliminary requirement” for class certification. In the published opinion, the Court articulated its own “rigorous analysis of Rule 23 requirements, which includes that a class ‘must be adequately defined and clearly ascertainable.’”

In Sandusky Wellness Center, LLC v. Medtox Scientific, Inc., Plaintiff alleged that MedTox, a toxicology lab, transmitted a single-page fax to approximately 3,000 fax numbers, all recorded onto a log in the plaintiff’s possession. Plaintiff moved to certify a class that included all people in the four years prior to the action’s filing who received a fax message from Medtox regarding lead testing services that did not display a proper opt-out notice. The district court, in denying class certification, held the plaintiff failed to show ascertainability because it could not establish who was included in the class. The trial court focused on the potential for multiple claimants with respect to individual faxes, noting that the class could be seen as including both the subscriber of the telephone line on which the fax was received, and the intended recipient of the fax.

Circuit and District Courts Grapple with Questions Raised in the Wake of Campbell-Ewald v. Gomez

Apr 27 2016

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

In the wake of Campbell-Ewald v. Gomez, in which the Supreme Court held that an unaccepted Rule 68 offer of complete relief does not moot a plaintiff’s individual claims, the Third Circuit recently held that an unaccepted settlement offer “has no force” and therefore neither the plaintiffs’ individual claims nor the class claims in the suit were mooted by defendant’s offer of full relief prior to the filing of a motion to certify a class in Weitzner et al. v. Sanofi Pasteur Inc. et al. (Our previous analysis of Campbell-Ewald can be found here.)

Seventh Circuit Holds That TCPA Fax Regulations Do Not Impose Strict Liability for Actions of Contractors

Apr 26 2016

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

On March 21, 2016, the Seventh Circuit issued its decision in Bridgeview Health Care Ctr., Ltd. v. Clark, Nos. 14-3728 & 15-1793 (7th. Cir. 2016), holding that agency principles apply to TCPA claims in determining whether a fax sent by a third-party is sent “on behalf of” a principal. In doing so, the Seventh Circuit applied a uniform standard of agency principles to fax advertisements and calls under the TCPA despite the Federal Communications Commission’s (the “FCC”) previous assertions that vicarious liability for fax activity is subject to a different and potentially broader test. As previously discussed, other courts have declined to apply agency principles to decide this question, in effect applying different standards to fax and call activity.

Your Money Is No Good Here: U.S. Supreme Court Holds That an Unaccepted Rule 68 Offer of Complete Relief Does Not Moot an Individual’s Claims, but Questions Remain

Jan 22 2016

By Andrew C. Glass, Gregory N. Blase, Jennifer J. Nagle, Jeremy M. McLaughlin, and Matthew Lowe

On January 20, 2016, the United States Supreme Court issued its decision in Campbell-Ewald Company v. Gomez regarding Rule 68 offers of judgment.[1] The Court held that a defendant cannot moot a case by merely offering complete relief to a plaintiff but left unanswered whether a defendant may do so by actually providing complete relief. Nor did the Court reach the question of whether a plaintiff can continue to seek to represent a putative class when his or her individual claims are mooted before a class is certified.

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