Federal court decertifies TCPA class action based on D.C. Circuit ruling

Class action lawsuits brought under the Telephone Consumer Protection Act (TCPA) can have serious financial consequences if the class is certified as damages can be up to $1,500 per call.  For this reason, if a plaintiff wins a motion for class certification, the case will often settle as the defendant cannot risk a catastrophic financial reward.  But occasionally, circumstances arise and the judge can reconsider certification as recently occurred in the Northern District of Illinois.

In Brodsky v. HumanaDental Ins. Co., 2017 U.S. Dist. LEXIS 137608 (N.D. Ill. Aug. 28, 2017), Judge Robert Blakely decertified a TCPA class action after the court determined it would have to conduct a series of mini-trials to determine whether the fax recipients had prior business relationships or provided consent to receive faxes from HumanaDental Insurance Company.  Brodsky had alleged he received faxes from HumanaDental Insurance Company that failed to comply with the TCPA’s Solicited Fax Rule, which requires an opt-out notice on certain faxes.

As discussed in a previous article, the D.C. Circuit struck down the Solicited Fax Rule in Bais Yaakov of Spring Valley v. Federal Communications Commission, 852 F.3d 1078 (D.C. Cir. 2017), holding it unlawful to the extent that it requires opt-out notices on solicited faxes.  The court held the clear text of the TCPA reaches only unsolicited fax advertisements and that the FCC did not have authority to enforce a rule governing solicited faxes. 

Relying on Bais Yaakov, Judge Blakely held that to determine whether any member of the proposed class had a TCPA claim, he would first have to determine whether the proposed class member solicited the faxes.  This issue of individual consent meant that class treatment was no longer appropriate under federal class action rules.

A growing number of courts have held Bais Yaakov is good law outside of the D.C. Circuit.  For example, the Sixth Circuit recently affirmed in a TCPA class action that (1) Bais Yaakov is controlling and invalidates the Solicited Fax Rule; and (2) whether faxes were solicited or unsolicited prevented common questions from predominating and denied class certification.  Sandusky Wellness Ctr. Ltd. Liab. Co. v. ASD Specialty Healthcare, Inc., 863 F.3d 460 (6th Cir. 2017).

If you have questions regarding the Solicited Fax Rule or the applicability of the TCPA to your business practices, please contact me.