District Court (Ill.) Denies Class Cert. in TCPA Class Action; Says Soppett Analysis Requires So

Ed.:  to my TCPA readers, this case has it all . . . In Jamison v. First Credit Services, Inc. — F.R.D. —-, 2013 WL 1248306 (N.D.Ill. 2013), Judge Kendall denied a motion for class certification in TCPA case.  Plaintiff was a convicted felon. He pled guilty in 2008 to access device fraud. Specifically, he was part of a scheme to steal credit card and debit card information, transfer that information to other cards, use those other cards to buy iPods and other goods and then sell those goods on the street. Jamison filed this lawsuit a few weeks after his probation ended in 2012.   Jamison did not finance the purchase of an automobile through Honda and was not indebted to Honda. However, Jamison’s sister was indebted to Honda and had failed to pay the monthly installments on her loan. As a result, Honda referred the collection of her account to FCS. FCS ran a “skip-trace” on Jamison’s sister, which yielded the number for Jamison’s cellular telephone.   FCS allegedly obtained the wireless numbers of many Honda Finance customers via running “skip-traces.” It then used its automated dialing system to call 2,887 cellphone numbers that were obtained by skip-trace methods. However, there is an open question as to whether these individuals provided their consent to Honda to call their wireless numbers. Honda Finance then routinely obtained phone numbers from its customers. HFC’s credit application had included a space for cellphone numbers since 2008, and even before then it was common for customers to provide cellphone numbers. However, when HFC gave information about debtors to FCS so that FCS could attempt to collect those debts, HFC provided few, if any, wireless numbers even when HFC had those numbers somewhere in its system. As a result many of the numbers obtained by FCS through skip-tracing were previously provided to HFC. First, Judge Kendall refused to stay the matter pending the outcome of Communication Innovators’ Petition to the FCC, that seeks clarification of whether predictive dialers that are not used for telemarketing purposes and do not have the current ability to generate and dial random or sequential numbers are not “automatic telephone dialing systems” as defined by the Telephone Consumer Protection Act.  Judge Kendall denied the stay on “primary jurisdiction” grounds because (1) it was wells settled that HFC was responsible for FCS’ conduct under the TCPA, (2) the substance of CI’s petition is not a question of ‘first impression’ because other courts had addressed the issue, and (3) even if the FCC changed course, HFC offered no evidence that the FCC’s decision would be retroactive to affect this litigation.

This is clearly not an issue of first impression. Indeed, this is why numerous courts have rejected similar motions to stay based on the primary jurisdiction doctrine. See, e.g., Frydman, 2011 WL 2560221, at *5 (denying motion for stay that re-quested stay on primary jurisdiction grounds so FCC may decide whether debt collectors are exempt from FCC and whether predictive dialers are automated dialing systems within the meaning of the term in the TCPA); Tovar v. Midland Credit Management, No. 10 C 2600, 2011 WL 1431988, at *4 (S.D.Cal. Apr.13, 2011) (rejecting motion to stay, in part, be-cause FCC has already addressed that “predictive dialers used by debt collectors fall within the mean-ing of autodialers”); Robinson v. Midland Funding, LLC, No. 10 C 2261, 2011 WL 1434919 (S.D.Cal. Apr.13, 2011) (same).

Judge Kendall denied class certification.  First, Judge Kendall found that Plaintiff had met commonality and typicality requirements.

Jamison has satisfied both the commonality and typicality requirements. His claim arises from the same course of conduct that gives rise to the claims of the other class members and his claims are based on the same legal theory. Namely, FCS used an automatic telephone dialing system to call Jamison and every other class members’ cellular telephone while undertaking to collect debts on behalf of Honda in violation of the TCPA. There are also four common questions for the class: (1) whether FCS’ dialer functions as an automatic telephone dialing system; (2) whether FCS’ dialer delivers pre-recorded messages; (3) whether the defendants’ conduct was knowing or willful; and (4) whether Honda is liable for FCS’ telephone calls to the class members. Defendants do not dispute, and thus concede, that Jamison has met his burden to show commonality and typicality. The Court agrees and finds that Jamison has met his burden on these elements.

Judge Kendall found, however, that the Plaintiff’s felony conviction disqualified him to act as the class Plaintiff.  Judge Kendall also found that Plaintiff failed to meet predominance on the issue of consent.  Judge Kendall reviewed conflicting authority on the subject in order to glean a rule as to when class certification is and is not appropriate.

Here, Honda contends that determining whether any particular class member gave Honda his or her cellphone number “during the transaction that resulted in the debt owed” would require careful review of Honda’s individual records on a member-by-member basis. In other words, Honda argues that the Court would be required to engage in a class-member-specific inquiry to determine whether each recipient consented to receiving calls on their cellphone. This, according to Honda, would result in individualized questions predominating over common questions of law or fact. There is a split of opinion in TCPA cases on whether issues of individualized consent predominate over common questions of law or fact so as to prevent class certification. Compare, e.g., Gene & Gene L.L.C. v. BioPay, L.L.C., 541 F.3d 318, 326–29 (5th Cir.2008) (holding that district court abused its discretion in certifying class because the individualized issue of whether “fax advertisements were transmitted without the prior express invitation or permission of each recipient” prevented plaintiff from “ad-vanc[ing] any viable theory employing generalized proof concerning the lack of consent with respect to the class … [which] leads to the conclusion that myriad mini-trials cannot be avoided.”); G.M. Sign, Inc. v. Brink’s Mfg. Co., No. 09 C 5528, 2011 WL 248511, at *8 (N.D.Ill. Jan.25, 2011) (St.Eve, J.) (holding that individualized issues of consent pre-dominated over common issues because defendant set forth specific evidence showing large amount of the putative class consented to receive faxes); Versteeg v. Bennett, Deloney & Noyes, P.C., 271 F.R.D. 668, 674 (D.Wyo.2011) (holding that because “the TCPA claims will require extensive individual fact inquiries into whether each individual gave ‘express consent’ by providing their wireless number to the creditor during the transaction that resulted in the debt owed … individual inquiries [ ] predominate over the class action”); Kenro, Inc. v. Fax Daily, 962 F.Supp. 1162, 1169 (S.D.Ind.1997) (same), with Balbarin v. North Star, 10 C 1846, 2011 WL 211013, at *1 (N.D.Ill. Jan.21, 2011) (Bucklo, J.) (denying motion for reconsideration on class certification be-cause the court “tailored the class so that it would capture those individuals whose numbers were obtained through defendant’s routine use of third party information providers, but exclude individuals who provided their numbers to either defendant or the original debtor. The possibility that some putative class members might ultimately be found to be outside the class does not preclude class certification.”); G.M. Sign, Inc. v. Franklin Bank, S.S.B., No. 06 C 949, 2008 WL 3889950, at *6 (Aug. 20, 2008) (Kocoras, J.) (rejecting individualized inquiry into consent as a bar to certification because “[s]uch evidence would be within the knowledge of the potential class member, and a party would need a good-faith basis to believe that he or she satisfies the class definition before making a representation to this court to that effect.”); G.M. Sign, Inc. v. Finish Thompson, Inc., No. 07 C 5953, 2009 WL 2581324, at *6 (N.D.Ill. Aug.20, 2009) (Kendall, J.) (The defendant “cannot defeat class certification by asserting the vague pos-sibility that some of the individuals on the anony-mous lists have perchance consented to receiving the fax.”). *14 The rule that can be extracted from these cases is that issues of individualized consent predominate when a defendant sets forth specific evidence showing that a significant percentage of the putative class consented to receiving calls on their cellphone. However, if the defendants fail to set forth this specific evidence and instead only make vague assertions about consent, then individualized issues regarding consent will not predominate over common questions of law or fact so as to prevent class certification.

Judge Kendall also found the class to be unascertainable because, even if revised, because ‘called party’ under the TCPA could not be determined.

Jamison, likely realizing this deficiency, proposed an alternative class definition in his reply brief. This definition specifically excludes all individuals whose wireless numbers are located in Honda’s business records. Honda and FCS still contend that the class cannot be ascertained because there is no practicable way to determine whether called numbers were cellphone numbers at the time of the call. They also contend that the actual “called party” at the time the call was made cannot be determined.  . . . However, defendants’ second point raises a valid objection to Jamison’s proposed class definition. In his reply brief, Jamison argues that the term “called party” refers to the regular user of the cellphone. He also argues that the identities of the regular users the cellphone numbers at issue could be identified through a search of the Defendants’ records or through the use of a public record database such as Accurint. However, this ignores what is required by the Seventh Circuit in Soppet v. Enhanced Recovery Company. For purposes of the TCPA a subscriber is not just the regular user of the cellphone; rather, a subscriber is the person subscribing to the called number at the time the call is placed. See Soppet, 679 F.3d at 643. A search of defendants’ records may identify who the defendants intended to call. However, as Jamison and Soppet demonstrate, debt collectors do not always call who they intend to call.  An Accurint search may identify the current regular user of a cellphone number. However, Jamison’s proposed class covers four years-worth of alleged telephone calls. The current subscribers of the cellphone num-bers that were called over that period are likely not to be the same people as who were the subscribers when the calls were made.  As a result Jamison’s solutions are insufficient to identify the regular user of a particular wireless number at the specific point in time FCS placed calls that were violative of the TCPA. This identification is necessary under the Seventh Circuit’s holding in Soppet because only the person subscribing to the called number at the time the call was made would have a viable TCPA claim. See id. (holding that “called party in § 227(b)(1) means the person subscribing to the called number at the time the call is made” and not the intended recipient of the call.); see also Vigus, 274 F.R.D. at 236 (stating that to identify a class under the TCPA, “it would be necessary to identify the people assigned to those numbers at the times the allegedly offending calls were made, which may not be the people currently assigned to those numbers). Jamison has not proposed any method by which this can be accomplished. Therefore, Jamison has failed to establish by clear and convincing evidence that the class is ascertainable.