A federal judge in Camden has certified a junk-fax class-action suit despite objections that class counsel acted unethically in obtaining information about potential plaintiffs and soliciting their participation.
Chief U.S. District Judge Jerome Simandle called some of the lawyers’ actions ‘curious,” “clumsy” and even a violation of New Jersey ethics rules but said “courts must disregard ‘petty issues’ manufactured by defendants” to distract the judge from the “proper focus”—whether counsel will serve class interests with competence and loyalty.
The suit, City Select Auto Sales, Inc. v. David Randall Associates, is one of more than 50 such actions filed against companies in various states that utilized Business to Business Solutions (B2B), a fax advertising company.
According to the complaint, B2B sent 44,382 faxes to 29,113 fax numbers between March and May of 2006 on behalf of David Randall & Associates, a commercial roofing company in Harleysville, Pennsylvania.
With statutory damages set at $500 per fax, recovery could exceed $20 million, and damages can be trebled if the court finds a willful violation.
Randall allegedly had an arrangement with B2B that it would send the faxes on rainy days to persons and companies situated in specified zip codes.
The faxed flyers read: “Roof Leaks??? Repairs Available.” and provided Randall’s name and contact information.
A hard drive subpoenaed from B2B by the law firm of Anderson & Wanca in Rolling Meadows, Ill., in an earlier suit, contained copies of the ads B2B had faxed for its customers, including Randall, and the fax numbers to which the ads were sent.
The Anderson firm has been using the information on the drive to find clients for junk-fax class-action suits, including plaintiff City Select Auto Sales, a used car dealership with sales lots in the cities of Burlington and Camden.
Randall opposed class certification on the ground that the firm behaved unethically in dealing with B2B owner Caroline Abraham, of Brooklyn, N.Y., and in contacting potential plaintiffs.
Randall claims class counsel not only misused the hard drive but obtained it by deceit, falsely promising Abraham that they would keep the contents confidential and that they would protect her from being sued, contrary to the interests of the class.
Class counsel did not sue B2B, and when Randall added Abraham as a third-party defendant and then sought to enter a default against her, class counsel unsuccessfully argued against it.
Simandle saw the decision not to sue Abraham as strategic given that she was insolvent, and although the attempt to block the default was “curious,” it did not impact the adjudication or show any disloyalty to the class and thus, did not prevent class certification, he found.
Randall made an issue of a $5,000 check sent by the Anderson firm in 2009 to Abraham’s attorney, Eric Rubin of Rubin, Winston, Diercks, Harris & Cooke in Washington, D.C. It was sent without a cover letter and bore the notation “document retrieval.”
The Anderson firm claimed the money was meant to compensate Abraham and her son for their time and expenses in responding to document requests and testifying in 10 to 50 lawsuits over B2B junk faxes.
Rubin refused to accept the money, however, saying, “I regard this attempt to pay my client for their cooperation in providing you with information or documents…at the very least, to be of questionable propriety.”
Simandle did not see the check as meant to “corrupt the process” because it was consistent with a course of dealing in which the firm had been paying small reimbursement sums to Rubin. It claimed the single large check was meant to simplify matters.
Though the firm’s solicitation letter to City Select did not contain the language mandated by New Jersey ethics rules, Simandle said it was not deceptive. The purpose of the solicitation rules is to protect clients, “not to help defendants combat potentially meritorious claims,” he noted.
Simandle also dispatched Randall’s attack on the adequacy of City Select as plaintiff. Its president, Louis Pelligrini testified that he did not know who represented him, had not read the complaint and did not recall signing the retainer with the Anderson firm and its cocounsel, Bock & Hatch, of Chicago.
Simandle found Pelligrini had sufficient knowledge and motivation, given his testimony that junk faxes were a “pet peeve.”
In response to the defense contention that class counsel were the actual parties in interest and were controlling the litigation, Simandle said that is typical of class actions, adding, “Every experienced federal judge knows that any statement to the contrary is sheer sophistry.”
At oral argument, Anderson & Wanca dropped out of the case, leaving Bock & Hatch to be certified as class counsel along with Sherman, Silverstein, Kohl, Rose & Podolsky in Moorestown.
Anderson’s David Oppenheim says his firm stepped aside in order not to “complicate the process” but he believes certification would have been granted anyway.
He says there are almost 10 other rulings rejecting similar attacks on the adequacy of class counsel, including one in New Jersey by U.S. District Judge Stanley Chesler on Nov. 21, in A.L. Industries v. P. Cippolini.
Randall’s lawyer, F. Emmett Fitzpatrick III of Flamm Walton in Blue Bell, Pa., did not return a call.
Rubin declines comment.