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The Georgia Court of Appeals has revived a junk fax case that involves 73,500 faxes and potential fines of $110 million. In April, a Gwinnett judge denied class action status to the unwitting recipients of unsolicited car wash ads because plaintiffs’ counsel didn’t do enough to prove those who received the faxes constituted a class, the judge said. If other courts were to adopt the Gwinnett judge’s interpretation of the law, it would make it considerably more difficult to win class status in junk fax cases. The judge also said the actions of plaintiffs’ counsel “leave some room for doubt with respect to their ability to adequately represent any proposed class.” Stinging from the decision, plaintiffs’ counsel requested an interlocutory appeal on the class issue, which the Court of Appeals granted on June 19. The trial court decision by part-time Magistrate Robert W. Mitchum, of Mitchum & Mitchum in Lawrenceville, Ga., sitting by designation in Gwinnett State Court, temporarily put the kibosh on what could have been a $36 million to $110 million verdict against a metro Atlanta car wash for contracting with an ad agency to send 73,500 ads via fax machines. Hammond v. Carnett’s, No. 02CV77622 (Gwinn. St. filed Sept. 20, 2002). The car wash, Carnett’s Inc., has seven metro Atlanta locations. Carnett’s used Sunbelt Communications to mount the fax ad campaign. Carnett’s said it paid $3,200 to Sunbelt to send 73,500 faxes to a legal, “clean” list of recipients who didn’t object to receiving them. Mitchum ruled the plaintiffs’ attorneys didn’t prove the fax recipients met the conditions of a class: commonality, a sufficient number of plaintiffs and no other means to recover losses. The plaintiffs’ attorneys are solo practitioners Marc B. Hershovitz and Michael K. Jablonski, and Weissman, Nowack, Curry & Wilco’s Ned Blumenthal, all of whom have handled dozens of junk fax cases and recently appeared before the Federal Communications Commission. Carnett’s lawyer is Richard C. Foster of Hicks, Casey & Barber in Marietta, Ga. Hershovitz said that Mitchum’s order, drafted by defense counsel, contained “a litany of arguments and allegations that were clearly inaccurate and misleading. … We are some of the most experienced attorneys handling [Telephone Consumer Protection Act] litigation in the nation. … No court should ever adopt gratuitous comments made by counsel.” Hershovitz also claimed that the judge misinterpreted Georgia and federal law and didn’t review all the facts of the case. “The granting of an interlocutory appeal is rare,” Hershovitz said. “We take this as a good sign and anticipate a reversal of the trial court’s order.” Foster could not be reached to respond to Hershovitz’s comments. RAISING THE CLASS BAR The trial judge’s refusal to grant class certification reverses recent case law in Georgia, but Mitchum cited national trends to defend his decision. If it’s upheld, the decision could raise the bar on how to qualify a class for a junk fax case in Georgia under the federal Telephone Consumer Protection Act. The TCPA, 47 U.S.C. 227, generally prohibits sending unsolicited fax advertisements, providing for fines of between $500 and $1,500 per instance. Hershovitz said his appeal will focus on whether Mitchum abused his discretion by ignoring the law. “That order is wrong on so many levels and stands established law on its head. We believe strongly it will be reversed by the Court of Appeals.” The Georgia Court of Appeals upheld class certification in Hooters of Augusta v. Nicholson, 245 Ct. App. Ga. 363 (2000). The case resulted in a $12 million verdict for the recipients of 7,825 unsolicited faxes, or the maximum fine for each unsolicited fax. Hershovitz said the Carnett’s case is almost identical to Hooters — the only difference being that Carnett’s sent out almost 10 times as many faxes as Hooters. In Hooters, Richmond Superior Court Judge J. Carlisle Overstreet found that individual suits would be “unduly burdensome” on the courts. By contrast, Mitchum ruled there were alternatives for handling this matter, either through small claims court or referring the case to the attorney general’s office. Drafters of TCPA made the fines high enough to warrant small claims actions without an attorney, Mitchum wrote. The judge added in his decision that the majority of nationally reported TCPA decisions are enforcement actions, not class actions, brought by state attorneys general and the FCC — for example, Missouri v. Blastfax, No. 02-2705, 02-2707 (8th Cir. Ct. App. March 21, 2003). A FIGHT OVER DISCOVERY The judge also rebuked the plaintiffs’ attorneys for not completing enough discovery. The judge said Carnett’s, which contracted with Sunbelt, didn’t possess any information about the fax recipients. But Hershovitz said the judge refused to grant a motion to compel Sunbelt to produce documents after the class certification hearing on March 27, 2003. The discovery would have shown that Sunbelt didn’t have express authority to send the faxes, Hershovitz said. Mitchum also wrote that plaintiffs’ counsel needed to ask each of the 73,500 recipients if they had given permission to receive the faxes in order to prove there were a sufficient number of plaintiffs. Hershovitz wrote in his appeal application that because Carnett’s wasn’t using the affirmative defense — that they had express permission to send the faxes — that it wasn’t necessary to interview every class member. “It is common sense (as well as law) that there is no need for calling each class member as a witness at trial to testify on the permission issue when defendant’s own employees … will testify they made no effort to obtain such permission,” Hershovitz wrote. Hershovitz added that Carnett’s already had paid some claims to fax recipients and admitted the practice was illegal at the hearing. But plaintiffs’ counsel also didn’t show the class had commonality, the Gwinnett judge ruled. If some of the fax receivers had purchased car washes at Carnett’s or were “VIP” members who signed up for special deals, the judge said their previous business relationship with Carnett’s would invalidate their claims under the TCPA. In a March 2003 case involving Atlanta’s WNNX FM 99.7, known as 99X, and its Freeloader program, a court ruled that a previous business relationship invalidates claims under the TCPA. Schneider v. Susquehanna Radio Corp., No. A02A1654, A02A1655 (Ct. App. Ga. March 14, 2003). But Hershovitz disagreed with the judge’s interpretation of the consumer law. Hershovitz, who with his legal team was plaintiffs’ attorney on the 99X case, said that having a prior business relationship is only a defense with telephone solicitations, not with faxes. The law says “you can’t do this, period,” Hershovitz said of sending unsolicited faxes.

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