A federal judge has certified a plaintiff class in a suit over irksome junk faxes, despite a New Jersey appeals court ruling that cases under the Telephone Consumer Protection Act are a better fit for small-claims adjudication.
U.S. District Judge Stanley Chesler on Monday declined to follow Local Baking Product Inc. v. Kosher Bagel Munch Inc., 421 N.J. Super. 268 (App. Div. 2011), which held TCPA suits can’t meet the superiority requirement for class-action status.
“The New Jersey appeals court got it wrong. … Their holding on superiority is very much a minority opinion,” says Brian Wanca, the plaintiff’s lead counsel in the case at bar, A&L Industries Inc. v. P. Cipollini Inc., 12-cv-7598. “These cases have been certified for years in every other place,” including at least a dozen federal districts.
A&L Industries was one of 4,573 recipients of an unsolicited fax advertisement in September 2006 from Business to Business Solutions of Brooklyn, which was enlisted by P. Cipollini Inc. to promote its roofing business.
A&L, seeking class certification for the recipients, claimed violations of the TCPA, which allows regulatory or private suit for unsolicited faxes and provides for $500 in statutory damages per violation (or $1,500 if the violation is knowing and willful).
Cipollini contended that the statutory award and the availability of relief in state small-claims court makes class action an inferior method of adjudicating TCPA cases. It relied entirely on Local Baking, a nonbinding case that nonetheless had very similar facts.
There, the Appellate Division ruled that, because of the ease and cost-effectiveness of small-claims adjudication, a TCPA plaintiff could not make the required showing that class action is superior to an individual claim.
Chesler disagreed and granted class certification under Rule 23.
He noted that there’s no Third Circuit authority that directly answers whether TCPA suits may be handled as class actions, but found Cipollini’s “reliance on Local Baking to be misplaced[.]“
Significantly, a number of federal courts have questioned Local Baking‘s analysis, he wrote.
The fact that a $500 recovery is much larger than the actual damages incurred in receiving a junk fax is “of no moment when the statutory recovery is, in absolute terms, still minimal,” Chesler added.
Chesler relied on Landsman & Funk PC v. Skinder-Strauss Assocs., 640 F.3d 72 (3d Cir. 2011), where the panel questioned whether the TCPA’s statutory damages are enough to incentivize suit.
Practically, foreclosing class-action status would mean that “evidence … would have to be provided in hundreds if not thousands of individual lawsuits,” Chesler said.
And as a policy matter, Chesler was, “like the Third Circuit … skeptical that the possibility of numerous individual suits deters TCPA violations as effectively as an aggregated class action.”
In the ruling, Chesler found that A&L also met Rule 23′s numerosity, commonality, typicality, adequacy-of-representation and predominance requirements.
It wasn’t clear until recently whether private TCPA actions, even nonclass suits, could be brought in federal court at all.
The statute, passed in 1991, grants jurisdiction to state courts but is silent on federal courts.
The U.S. Supreme Court in Mims v. Arrow Financial Services, 132 S.Ct. 740 (2012), held that U.S. courts have federal-question jurisdiction over private TCPA suits because they “arise under” U.S. law, reversing a contrary ruling by the Court of Appeals for the 11th Circuit.
The Mims court, which didn’t address class actions, “had an opportunity to kill class actions if they wanted to but recognized” that Rule 23 applies to all causes of action, Wanca says.
Phillip Bock of Bock & Hatch in Chicago, Wanca’s co-counsel in Local Baking as well as A&L Industries, agrees that “Rule 23 apples to every case, unless Congress says it doesn’t.”
A&L Industries’ local counsel, Michael Canning of Giordano, Halleran & Ciesla in Red Bank, defers comment to Wanca.
Cipollini’s lawyer, John Bashwiner of Bashwiner & Deer in Cedar Grove, did not return a call Thursday.