Practice Mgmt. Support Servs., Inc. v. Cirque Du Soleil, Inc.
Practice Mgmt. Support Servs., Inc. v. Cirque Du Soleil, Inc.
Opinion of the Court
Honorable Thomas M. Durkin, United States District Judge *844In this class action lawsuit, plaintiff Practice Management Support Services, Inc. challenges the alleged practice of defendants Cirque du Soleil, Inc., and Cirque du Soleil (US), Inc., of using a fax broadcasting service to advertise theatrical shows without providing sufficient instructions about how to opt out, in violation of the Telephone Consumer Protection Act ("TCPA"),
Factual Background
Defendants produce theatrical shows worldwide under the "Cirque du Soleil" trade name. In January 2009, one or both of the defendants contracted with a fax broadcasting company called ProFax to market shows to a list of fax numbers purchased from list providers. R. 68-6 at 18-19; R. 68-5 at 15-17; R. 68-8. A single employee of defendants was in charge of communicating with ProFax with respect to all of the fax blasts at issue in this case, and two other employees were responsible for determining what fax target lists would be sent to Profax. R. 68-6 at 41-44. Defendants' employees do not recall calling any companies on the lists to seek permission to send the faxes. R. 68-6 at 46-47; R. 68-5 at 26.
Transmission logs showing precisely to whom faxes were successfully sent by ProFax at defendants' direction no longer exist. ProFax sends its clients transmission logs via email providing the date and time of each transmission and whether it was successful, but that data is deleted in less than six months unless a client requests that it be retained. R. 68-7 at 19-20. ProFax could not find any of the fax transmission logs for defendants' account.
Practice Management did obtain through discovery in this litigation 21 ProFax invoices associated with defendants' account that show the total number of faxes successfully sent by ProFax on certain dates (as well as the total number of faxes attempted that were not successful). R. 68-4; R. 68-7 at 12-13. The ProFax invoices correspond with 16 different ads for which plaintiffs obtained images during discovery. See R. 68-3; R. 68-4; R. 68-10.
*845Practice Management's expert Robert Biggerstaff produced a report adding together the number of faxes shown as sent in the ProFax invoices for the 16 ads, calculating a total of 40,146 successfully sent faxes. R. 68-10 at 8-9. Biggerstaff also matched four of the ProFax invoices to the four fax target list excel spreadsheets. R. 68-10 at 8-9. He concluded that a spreadsheet titled "cirRockford.xls" corresponds with the invoice for "Rockford Special Offer," a spreadsheet titled "cirROCKFORD_school.xls" corresponds with the invoice for "Rockford Schools," a spreadsheet titled "List_Chicago_Vaudeville _Faxblast_June 2009" corresponds with the invoice for "Chicago Group Fax," and a spreadsheet titled "List_Colorado.xls" corresponds with the invoice for "Denver Group Fax."
A large percentage of the entries in three of these spreadsheets appear to be for Illinois businesses and residents. In the "cirRockford.xls" spreadsheet, 3,927 (82%) of the addresses show "IL" as the "PRIMARY_STATE."
The ad sent to Practice Management and attached to the complaint in this case contains the following opt-out notice at the bottom in fine print:
To opt out from future faxes go to www.deletemyfaxnumber.com. Enter pin # 15263 or call 877-284-7878. The recipient may make a request to the sender not to send any future faxes and failure to comply with the request within 30 days is unlawful.
R. 1 at 12; R. 68-7 at 9. Practice Management alleges that this opt-out notice was deficient (although its complaint does not specify why). R. 1 ¶ 19. ProFax retained an opt-out list associated with defendants' account, which is comprised of 935 fax numbers. R. 153 at 4; R. 161 at 3.
Standard
To be certified, a putative class must satisfy the four prerequisites of Federal Rule of Civil Procedure 23(a) : numerosity, commonality, typicality, and adequacy of representation. Messner v. Northshore Univ. HealthSystem,
"Plaintiffs bear the burden of showing that a proposed class satisfies the Rule 23 requirements." Messner ,
District courts have "broad discretion" when determining whether a proposed class satisfies Rule 23. Howland v. First Am. Title Ins. Co. ,
Discussion
"Class certification is normal" under the TCPA "because the main questions, such as whether a given fax is an advertisement, are common to all recipients." Ira Holtzman, C.P.A. v. Turza ,
Although defendants pull out all the stops, including in several motions to cite supplemental authority that are in reality lengthy additions to their class certification opposition, they do not raise any arguments that differentiate this case sufficiently from the many other TCPA cases in which class certification has been granted under this Circuit's law. The Court does, however, find that the Supreme Court's recent ruling in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty. , --- U.S. ----,
I. Class Scope
As a threshold matter, defendants take issue with what they characterize as Practice Management's belated attempt to revise and broaden the scope of its class claims. They say that class certification should be denied outright on this basis.
Practice Management's complaint identified the following class:
All persons who (1) on or after April 19, 2007, (2) were sent telephone facsimile messages of material advertising the commercial availability of any property, goods, or services by or on behalf of Defendants, (3) from whom Defendants did not obtain prior express permission or invitation to send those faxes, (4) with whom Defendants did not have an established business relationship and (5) which did not display a proper opt out notice.
R.1 at 4. Practice Management now seeks to certify the following class:
All persons or entities who were successfully sent a facsimile from "Cirque du Soleil" from January 29, 2009, through July 8, 2009, offering tickets for sale to the following performances: [1] "Saltimbanco" at Rockford MetroCentre, Rockford, Illinois, opening February 25, 2009; [2] "A New Twist on Vaudeville" at Chicago Theatre, Chicago, Illinois, opening November 19, 2009; [3] "Kooza" at Pepsi Center Grounds, Denver, *847Colorado, opening August 20, 2009; [4] "Kooza" at Santa Monica Pier, Santa Monica, California, opening October 16, 2009; [5] "Kooza" at Orange County Great Park, Irvine California, opening January 7, 2010; [6] "Kooza" at the Broadway/Kellog Lot, St. Paul, Minnesota, opening July 3, 2009; [7] "Saltimbanco" at Conseco Fieldhouse, Indianapolis, Indiana, opening February 12, 2009; [8] "Saltimbanco" at USA Mitchell Center, Mobile, Alabama, opening April 2, 2009; [9] "Saltimbanco" at Sommet Center, Nashville, Tennessee, opening April 9, 2009; [10] "Saltimbanco" at North Charleston Coliseum, North Charleston, South Carolina, opening April 22, 2009; [11] "Saltimbanco" at Von Braun Center, Huntsville, Alabama, opening April 15, 2009.
R. 68 at 2.
Defendants argue that Practice Management's revised class definition expands the scope of the putative class impermissibly in two different ways: (1) the first definition was "based on the single July 7, 2009 Ad featuring the Vaudeville show," whereas the new definition focuses on "18 fax broadcasts involving 15 completely different faxes on different dates promoting two separate touring shows"; and (2) the original definition focused on faxes advertising "Defendants' goods and services," whereas the new definition focuses on faxes sent "from 'Cirque du Soleil.' " R. 125 at 12. Both arguments misconstrue the class definitions.
With respect to the first argument, Practice Management did not limit its class definition in its complaint to fax broadcasts of the July 7, 2009 Vaudeville ad. Although the complaint pleaded that Practice Management received the July 7, 2009 Vaudeville ad, R. 1 at 3, the complaint's class definition included "[a]ll persons" who were sent ad faxes "by or on behalf of Defendants" any time "on or after April 19, 2007" that failed to comply with TCPA opt-out notice requirements. Id. at 4. The complaint further alleges that defendants sent "the same and similar unsolicited facsimiles" to the class, and that the class covered "Exhibit A [the July 7, 2009 Vaudeville ad] and other unsolicited faxed advertisements." R. 1 at 4, 5 (emphasis added). Practice Management's revised class definition thus narrows rather than broadens the scope of the class to focus on specific ads-namely, ads for which Practice Management obtained the fax image and a corresponding ProFax invoice in discovery. And as defendants acknowledge (R. 125 at 6), these fax images and corresponding invoices were all produced during discovery as part of an earlier, related federal action (see id. at 6, 22; R. 125-1), so their inclusion cannot have come as a true surprise to defendants.
Defendants' second argument is based on another misreading of the complaint's class definition. Defendants claim that the complaint's class definition was limited to "people who received faxes advertising Defendants' goods and services." R. 125 at 12. In fact, the complaint definition included "persons ... sent telephone facsimile messages of material advertising the commercial availability of any property, goods, or services by or on behalf of Defendants." R. 1 at 4 (emphasis added). This definition did not limit the class to recipients of fax advertisements for "Defendants' goods and services." Rather, it defined the class as recipients of fax advertisements for "any"
*848goods and services as long as they were "sent ... by or on behalf of Defendants."
As Practice Management explains, it based the definition in its complaint on the FCC regulation defining the "sender" of a fax advertisement as a "person or entity on whose behalf a facsimile unsolicited advertisement is sent...."
The Court agrees that Practice Management's revised definition works to avoid a fail-safe problem and to make the class ascertainable. See also Mullins v. Direct Digital, LLC ,
The foregoing discussion shows why defendants' reliance on Chapman v. First Index, Inc. ,
Here, unlike in Chapman , Practice Management is not seeking to change its theory of liability. It always has premised its case on an opt-out notice theory. Consent is not an issue in this case because there is no claim or evidence of prior express permission by any fax recipient. Practice Management has simply refined its class definition between its complaint and its class certification motion to make it more specific and to avoid a potential fail-safe problem. The Court therefore declines to deny class certification on this threshold basis identified by defendants. The Court *849does, however, note that the class definition will become much narrower than Practice Management's current proposed definition based on the Court's personal jurisdiction holdings below.
II. Rule 23(a) Requirements
The Court turns to whether the putative class satisfies the four prerequisites of Federal Rule of Civil Procedure 23(a) : numerosity, commonality, typicality, and adequacy of representation.
A. Numerosity
The numerosity requirement of Rule 23(a)(1) is satisfied where joinder of all putative class members is "impracticable." McCabe v. Crawford & Co. ,
B. Commonality
Commonality requires the plaintiff to demonstrate that the putative class members' "claims ... depend upon a common contention ... of such a nature that it is capable of classwide resolution-which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Dukes,
Practice Management brings only one claim-an alleged violation of the TCPA. The TCPA prohibits (with certain exceptions) the use of "any telephone facsimile machine ... to send, to a telephone facsimile machine, an unsolicited advertisement."
Addressing a similar TCPA class action involving faxes that lacked compliant opt-out notices, the Seventh Circuit in Turza explained that "class certification is normal" in such cases "because the main questions, such as whether a given fax is an advertisement, are common to all recipients" and have common answers.
*850C. Typicality
"A claim is typical if it [1] arises from the same event or practice or course of conduct that gives rise to the claims of other class members and [2] [the] claims are based on the same legal theory." Arreola v. Godinez,
Practice Management maintains that typicality is easily satisfied in this case. It says its claim arises from the same practice or course of conduct as other putative class members' claims-namely, defendants' alleged practice of using a single fax broadcaster (ProFax) to send, at the direction of the same defendant employees, unsolicited faxes bearing the Cirque du Soleil trade name to promote shows during a discrete period of time. And, Practice Management says, its claim and the putative class members' claims are based on the same legal theory of unsolicited advertisements sent without compliant opt-out notices under the TCPA. As Practice Management explains, courts routinely hold that these facts make a named plaintiff's claim typical in a TCPA case. E.g. , Holtzman v. Turza ,
Defendants try to parse the question more finely, arguing that Practice Management's claims are not typical because Practice Management was sent only the single fax attached to the complaint, but it seeks to represent a class of people or entities sent faxes on different dates advertising other shows. The Eastern District of Missouri rejected a similar argument in a TCPA fax case where the defendant sent fax advertisements in ten different broadcasts over two years targeting physicians in five practice areas and the plaintiff received only the last broadcast. St. Louis Heart Ctr., Inc. v. Vein Centers for Excellence, Inc. ,
Although it has not addressed a typicality argument like defendants' in a TCPA case, the Seventh Circuit rejected a similar argument in the Fair Debt Collection Practices Act context. In Keele v. Wexler , the Seventh Circuit held that the named plaintiff's claim was typical because it was based on the same "course of conduct" and "legal theory" as other putative class members' claims, even though the letter the named plaintiff received was only one of a number of different forms used by defendants to collect on debts.
*851In other words, typical does not mean identical. As the Seventh Circuit explained in Keele , the typicality inquiry "is closely related to the question of commonality."
Defendants say they have a unique defense against Practice Management that they do not have against other class members. They maintain that the Practice Management's claim "is invalid" because "the July 7, 2009 Ad" that Practice Management received "does not advertise Defendants' goods or services." Instead, defendants say, the July 7, 2009 ad promotes a show presented and operated by Cirque du Soleil Burlesco, a separate entity allegedly created for the sole purpose of operating and receiving revenue from the Vaudeville show. R. 125 at 19. Defendants imply that other entities may have been created to operate and receive revenue from the Saltimbanco and Kooza shows promoted in the other ads. See R. 125 at 13.
But this argument misunderstands Practice Management's legal theory with respect *852to the "sender" element of its claim. "The fax sender is defined in federal regulations as either [a] the person 'on whose behalf' the unsolicited ad is sent or [b] the person whose services are promoted in the ad." Bridgeview Health Care Ctr., Ltd. v. Clark ,
And this legal theory is consistent across the class. Crucially, defendants admit that defendant "Cirque du Soleil, Inc. purchased fax lists and contracted with and paid ProFax to send the July 7, 2009 Ad promoting the Vaudeville Show." R. 125 at 7. The evidence supports that it did the same with respect to the other advertisements at issue. R. 68-8; R. 68-5 at 15, 16. Although the Court need not decide merits questions at this stage, it notes that this admission and evidence likely satisfies the standard for "sender" liability recently approved by the Seventh Circuit in Paldo Sign : a defendant is liable for faxes sent by a fax broadcaster on its behalf where the defendant "caused by words or conduct the fax broadcaster ... to believe reasonably that [defendant] approved the sending of the fax broadcast transmission." 825 F.3d at 797. In any event, the question of whether contracting with and paying ProFax to send ads makes one or more defendants "senders" liable under the first, on-whose-behalf prong of the regulations is common among Practice Management and the rest of the putative class-it can be decided in a single stroke. That also means that Practice Management's legal theory with respect to the sender element of its TCPA claim is typical of the rest of the class.
In sum, because Practice Management's claim is based on the same course of conduct (sending fax blasts through the same fax broadcaster, at the direction of the same employees, bearing the Cirque du Soleil trade name, and promoting Cirque shows during a discrete period of time) and legal theory (an opt out notice theory based on faxes sent on behalf of defendants) as the other class members it seeks to represent, the Court holds that typicality is satisfied.
D. Adequacy
Rule 23(a)(4) requires representative parties-both the named plaintiff and class counsel-to "fairly and adequately represent the class." Rosario v. Livaditis,
First addressing Practice Management's competency as putative class representative, Practice Management's owner John Zulaski filed a declaration explaining that Practice Management has been involved in the litigation and is willing to do whatever is necessary to protect the interests of the absent class. R. 68-9 ¶¶ 8, 9. Practice Management rejected an earlier settlement offer based on its obligations and responsibilities to the class, and it is unaware of any conflicts with absent class members. Id. ¶¶ 9, 10. Defendants do nothing to counter these representations or to show that Practice Management is inadequate.
Next turning to putative class counsel's adequacy, Rule 23(g) describes four factors for a court to consider: "(i) the work counsel has done in identifying or investigating potential claims in the action; (ii) counsel's experience in handling class actions ...; (iii) counsel's knowledge of the applicable law; and (iv) the resources that counsel will commit to representing the class." See Creative Montessori Learning Centers v. Ashford Gear LLC ,
Here, putative class counsel-Anderson + Wanca and the Margulis Law Group-satisfy all four factors. With respect to the first factor, putative class counsel have done significant work in identifying or investigating the claim in this case. Anderson + Wanca have been pursuing claims related to the fax campaign at issue since 2009. With respect to the second and third factors, putative class counsel have considerable experience and knowledge of this area of the law. Both Anderson + Wanca and the Margulis Law Group have been appointed lead or co-lead counsel in many TCPA cases. See R. 68-12 (Anderson + Wanca firm resume); R. 68-13 (Margulis firm resume); see also , e.g. , CE Design Ltd. v. Cy's Crabhouse N., Inc. ,
Defendants argue that the history of this litigation (set forth in more detail in this Court's opinion on defendants' first summary judgment motion, R. 63) establishes putative class counsel's inadequacy. They accuse putative class counsel of "seeking to use tolling and subsequent lawsuits to: (1) excuse their failure to comply with court orders and deadlines in the [earlier, related] Federal Action; and, (2) forum shop and judge shop." R. 125 at 21 *854(citing in support prior summary judgment filings).
As an initial matter, the Court takes issue with defendants' "incorpor[ation] by reference" of their summary judgment briefing to support their adequacy argument, which "effectively negate[s]" the local rule's page-limit requirements (that defendants were already given leave to exceed). See, e.g. , Miller UK Ltd. v. Caterpillar, Inc. ,
The Court also disagrees with defendants that the circumstances here are akin to those in Physicians Healthsource, Inc. v. Allscripts Health Solutions, Inc. & Allscripts Healthcare, LLC ,
These circumstances are not present here. It is true that this litigation has a long and complex history, involving many prolix filings. But the Court finds both parties responsible for that history. Both parties have, for instance, filed multiple oversized briefs in this case. See R. 143 at 5. And with respect to the related, prior litigation, the multiple suits were in part putative class counsel's doing, but in part due to the array of corporate entities defendants have established (including Cirque du Soleil Burlesco, the entity discussed above), which resulted in the current defendants not being sued in the first federal action. See R. 143 at 6; R. 140 at 5 (explaining that class counsel filed related state court action because federal judge denied plaintiff the ability to add other Cirque corporate entities who were more appropriate defendants). As this Court found in its summary judgment opinion, "there is no evidence that either of the [prior, related] actions were frivolously filed to toll time." R. 63 at 11.
The Court also disagrees with defendants' arguments that putative class counsel are inadequate because they: (1) continued pursuing this case despite the alleged defense discussed above pertaining to Cirque du Soleil Burlesco's operation of the Vaudeville show; and (2) included ads in addition to the July 7, 2009 Vaudeville ad (all of which were identified in discovery years earlier) in their proposed class definition. To the contrary, putative class counsel's adequacy is demonstrated by their prior success in this case, including defeating two prior dispositive motions filed by defendants. See R. 63; R. 116.
In sum, the Court finds that both Practice Management and putative class counsel meet the adequacy requirement for class certification.
III. Rule 23(b)(3) Requirements
Plaintiffs seek certification under Rule 23(b)(3). This means that in addition to the *855Rule 23(a) requirements, plaintiffs also must show that "[1] questions of law or fact common to class members predominate over any questions affecting only individual members, and [2] that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Fed. R. Civ. P. 23(b)(3). The Court addresses each of these factors in turn.
A. Predominance
"There is no mathematical or mechanical test for evaluating predominance." Messner ,
"Analysis of predominance under Rule 23(b)(3) 'begins, of course, with the elements of the underlying cause of action.' "
Defendants argue that "individualized inquiries are necessary to determine whether-and which-members of Practice Management's proposed class were 'successfully sent' a fax." R. 125 at 2. This argument can be broken down into two parts. First, there are the questions of whether faxes were successfully sent (for purposes of TCPA liability), and if so, how many total (for purposes of calculating statutory damages). Class members can make a prima facie showing as to both of these questions based on common evidence: the ProFax invoices showing both that faxes were successfully sent and the total number of faxes successfully sent as part of each broadcast.
To the extent defendants challenge the reliability of the ProFax invoices to make such a showing (see R. 125 at 14), that position is foreclosed by the Seventh Circuit's decision in Turza . There, like here, a fax broadcasting company sent the faxes, and data from that company showed the total number of faxes "delivered successfully" (in that case, 8,630 of 11,945 faxes attempted).
The second part of Practice Management's argument goes to class member identification-i.e. , identifying to whom the faxes were sent. It is with respect to this issue that the absence of the fax transmission logs showing who successfully received the faxes presents a problem. As described in the petition for certiorari in Sandusky , courts of appeals are split as to whether class identification issues like this one pertain to class ascertainability, predominance, or superiority. Sandusky , petition for cert. at 22-29 (U.S. Dec. 4, 2017) (No. 17-803). But the Seventh Circuit's position on this issue is clear. It squarely held in Mullins that class identification issues relate to "superiority" under Rule 23(b)(3).
The Court concludes that common questions predominate in this case.
B. Superiority
" Rule 23(b)(3)'s superiority requirement ... is comparative: the court must assess efficiency [of a class action] with an eye toward other available methods." Mullins ,
Here, factors (A), (B), and (C) plainly weigh in favor of certification. Putative class members have little economic incentive to sue individually based on the amount of potential recovery involved, there are no known existing individual lawsuits, and judicial efficiency is served by managing claims in one proceeding. See, e.g. , Mussat v. Global Healthcare Res., LLC ,
The central theme of defendants' opposition to class certification in this case is the absence of fax transmission logs to facilitate class identification. Defendants argue that this absence will lead to likely manageability difficulties under part (D) of Fed. R. Civ. P. 23(b)(3) (and also, as explained above, that the absence of logs defeats predominance). To be sure, there are TCPA cases supporting defendants' position that the absence of fax transmission logs defeats class certification, including the Sixth Circuit's decision in Sandusky on which defendants heavily rely. See, e.g. , Sandusky ,
*857Physicians Healthsource ,
But this Court is bound by Seventh Circuit law. And the Seventh Circuit in Mullins expressly rejected the heightened ascertainability requirement adopted by other courts of appeals that "[m]ove[s] beyond examining the adequacy of the class definition itself to examine the potential difficulty of identifying particular members of the class and evaluating the validity of claims they might eventually submit."
The Mullins court made clear that class member identification issues instead must be assessed in the context of "the likely difficulties of managing a class action" prong of the superiority requirement ( Fed. R. Civ. P. 23(b)(3)(D) ), which involves a relative assessment of the "costs and benefits of the class device."
Specifically addressing manageability concerns regarding proof of claims through affidavit, the Mullins court instructed that courts "should not decline certification merely because the plaintiff's proposed method for identifying class members relies on affidavits."
*858Specifically addressing manageability concerns regarding notice to class members, the Mullins court explained that Rule 23(c)(b)(2)"does not insist on actual notice to all class members in all cases. It recognizes that it might be impossible to identify some class members for purposes of actual notice."
Applying Mullins in the TCPA context in a very similar situation-where discovery had revealed ProFax invoices showing how many faxes were successfully sent, but no fax transmission logs showing who got them-Judge Tharp recently granted a motion for class certification. G.M. Sign, Inc. v. Stealth Security Sys., Inc. ,
At this juncture, the problem does not appear to be insoluble. To begin, there is a list of over 1,700 individuals who in response to [defendant's] fax advertisement requested not to be contacted. Even if no one beyond those individuals is ever identified, classes as small as forty people are sufficient to warrant class adjudication. [Defendant] contends that there is no "definitive means of determining whether any of the numbers on the opt-out list received the subject fax without conducting an individualized inquiry," ... but that again conflates the issues of the adequacy of the class definition and the means of proving a claim.... And again, evidence of receipt may be supplemented by other evidence, such as retained copies of faxes received, affidavits of receipt, evidence relating to fax machine ownership, or other facts that are probative of whether or not an individual received a fax described in the class definition.
Id. at *2.
The same reasoning applies here. Like in Stealth Security , there is a starting point for identifying potential class members. In Stealth Security , that starting point was the list of 1,700 individuals who had requested opt-outs from ProFax back in 2006. Here, it is not only the 935-member ProFax opt-out list, but also the lists of names, addresses, and fax numbers of 17,568 individuals targeted with four of the fax broadcasts at issue back in 2009.
To be sure, just as in Stealth Security , ProFax invoices reveal that a portion of the faxes were not successfully sent to the lists targeted, and there is no way of verifying from the available data which exact faxes these were. Compare R. 68-10 at 18 with Stealth Security ,
To the contrary, as in other junk fax cases, notice beyond the individuals and entities on the opt-out list and four target lists can be performed by publication. See, e.g., Birchmeier ,
Importantly, this process of identifying class members will "affect neither the defendant[s'] liability nor the total amount of" calculable, statutory "damages [they] owe[ ] to the class" if found liable. See Briseno v. ConAgra Foods, Inc. ,
As numerous courts have observed, a contrary holding denying class certification based on the absence of records would create perverse incentives. If the absence of defendants' records could defeat class certification, defendants would be motivated to destroy their own records to avoid liability. See, e.g. , Mullins ,
This is also why it would be inappropriate to certify the class only with respect to advertisements for which defendants produced fax target lists on the basis of manageability, as defendants request in the alternative. Judge Kennelly in Birchmeier , a TCPA unsolicited call case, rejected a similar argument "that the contours of the class should be defined by defendants' own recordkeeping."
This would result in an artificial class definition that would leave out individuals who actually received the calls in *860question-an unquestionably objective criterion-and who possess a record that is at least circumstantial evidence of class membership, a picture they can complete with their own sworn statements. Doing this-or declining to certify a class altogether, as defendants propose-would create an incentive for a person to violate the TCPA on a mass scale and keep no records of its activity, knowing that it could avoid legal responsibility for the full scope of its illegal conduct. The Court does not agree that the classes should be limited in the way defendants propose.
Defendants further complain that it would be unfair for them to face exposure for the total number of faxes that the invoices show as successfully sent when few people are likely to come forward with affidavits or other identifying information regarding faxes sent back in 2009. But this claimed unfairness is a legislative problem rather than a judicial one. "[T]he [TCPA], with its draconian penalties for multiple faxes, is what it is." Creative Montessori ,
In sum, at this juncture, the Court finds the superiority element met. If "class counsel cannot, down the road, propose a feasible solution for managing the litigation or for identifying and providing notice to class members, Defendants can move to decertify the class." Toney v. Quality Res., Inc. , --- F.Supp.3d ----, ----,
IV. Personal Jurisdiction
In defendants' third motion for leave to cite supplemental authority (R. 150), they argue that the Supreme Court's recent decision in Bristol-Myers ,
A. Applicability of Bristol-Myers to Federal Court Class Actions
In Bristol-Myers , a group of mostly non-Californian plaintiffs injured outside of California brought a mass tort products liability action against Bristol-Myers Squibb-a pharmaceutical manufacturer not subject to general jurisdiction in California-in California state court. 137 S.Ct. at 1778. The California Supreme Court held that the lower court had specific personal jurisdiction over Bristol-Myers with respect to the nonresidents' claims because those claims could be aggregated with the California residents' claims. Id. at 1779. The Supreme Court reversed, holding that for purposes of specific (as opposed to general) personal jurisdiction, "[t]he mere *861fact that other plaintiffs were [harmed in] California-and allegedly suffered the same injury as nonresidents-does not allow the State to assert specific jurisdiction over the nonresidents' claims." Id. at 1781.
The Supreme Court explained that the "primary focus of our personal jurisdiction inquiry is the defendant's relationship to the forum state." Id. at 1779. "A court with general jurisdiction may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different state." Id. at 1780. But "[s]pecific jurisdiction is very different." Id. For purposes of "specific jurisdiction, the suit must aris[e] out of or relat[e] to the defendant's contacts with the forum. " Id. The Court found that defendants' rights under the Fourteenth Amendment due process clause, "acting as an instrument of interstate federalism," would be violated through an exercise of personal jurisdiction over defendants with respect to nonresidents' claims based on injuries outside the forum. Id. at 1780-81. "This remains true," the Court explained, "even when third parties ... can bring claims similar to those brought by the nonresidents." Id. at 1781. As Justice Sotomayor noted in her dissent, the majority decision in Bristol-Myers left open "the question whether its opinion here would also apply to a class action in which a plaintiff injured in the forum State seeks to represent a nationwide class of plaintiffs, not all of whom were injured there." Id. at 1789 n.4.
In response to defendants' supplemental authority motion, Practice Management first argues that the reasoning in Bristol-Myers does not extend to class actions. Although, as noted above, courts are in disagreement about this issue, three courts in this district have recently held that Bristol-Myers applies with equal force in the class action context. See DeBernardis ,
This Court agrees with these courts. Indeed, it not clear how Practice Management can distinguish the Supreme Court's basic holding in Bristol-Myers simply because this is a class action. The Supreme Court has emphasized that " Rule 23's [class action] requirements must be interpreted in keeping with Article III constraints, and with the Rules Enabling Act, which instructs that the [federal court] rules of procedure 'shall not abridge, enlarge, or modify any substantive right.' " Amchem Prods., Inc. v. Windsor ,
*862Practice Management further argues that applying Bristol-Myers in the class action context is inconsistent with Phillips Petroleum Co. v. Shutts ,
In Shutts , the Supreme Court rejected an argument that an exercise of personal jurisdiction "over the claims of nonresident class members ... violated the due process rights of these class members because they lacked minimum contacts with the state." Bristol-Myers , 137 S.Ct. at 1782 (emphasis added). The Supreme Court in Bristol-Myers explicitly distinguished Shutts , explaining that Shutts dealt with the due process rights of nonresident class members-not the due process rights of defendants. Id. at 1782-83. "Since Shutts concerned the due process rights of [nonresident] plaintiffs ," the Court explained, "it has no bearing on the question presented." Id. at 1783. The Court went on to reject respondents' argument, much like Practice Management's here, that " Shutts supports their position because ... it would be 'absurd to believe that [this Court] would have reached the exact opposite result if [the defendant] had only invoked its own due-process rights, rather than those of the non-resident plaintiffs.' " Id. at 1783. The Court explained that the defendant in Shutts simply "did not assert that Kansas improperly exercised personal jurisdiction over it, and the Court did not address that issue." Id.
Here, by contrast, defendants are asserting an improper exercise of personal jurisdiction over them with respect to nonresident class members' claims. Shutts does not speak to this argument. See Greene ,
Finally, Practice Management notes that Bristol-Myers left "open the question whether the Fifth Amendment['s due process clause] imposes the same restrictions on the exercise of personal jurisdiction by a federal court." 137 S.Ct. at 1784. As defendants point out, however, that open question is not relevant here. "Because the TCPA does not authorize nationwide service of process, the court ... look[s] to Illinois law for the limitation on the exercise of personal jurisdiction." Bakov v. Consol. Travel Holdings Grp., Inc. ,
In sum, this Court agrees with the Greene , McDonnell , and DeBernardis courts that Bristol-Myers extends to federal court class actions, at least for causes of action where courts look to state law for the limits on personal jurisdiction.
B. Forfeiture
Practice Management maintains that even if Bristol-Myers applies in the class action context as a general matter, defendants have forfeited any personal jurisdiction defense by not raising it in their answer (R. 11) and by litigating this case for many years without raising it. The Court disagrees.
Defendants raise their personal jurisdiction defense in a motion that timely followed *863the Supreme Court's decision in Bristol-Myers making that defense available to them. The Second Circuit has rejected a similar argument that a defendant waived a personal jurisdiction defense timely raised following an intervening Supreme Court decision. See Holzsager v. Valley Hosp. ,
Like in these cases, the Court finds that raising a personal jurisdiction defense as to unnamed, nonresident class members would have been "futile" ( Bennett ,
And even if defendants had waived this defense, the Court finds that it would be appropriate to excuse the forfeiture. Judge Feinerman excused defendant's forfeiture of a Bristol-Myers argument in Greene even though the personal jurisdiction defense as to the named plaintiff's claim in that case had a clearer basis in prior precedent. Judge Feinerman reasoned that " '[t]he court ... retains the independent power to identify and apply the proper construction of governing law,' even where the parties 'fail[ ] to advert' to the applicable rule in their own briefing."
The Court finds that there is even more reason to excuse any forfeiture here than in Greene . Unlike in Greene , defendants are not seeking to assert a personal jurisdiction defense as to the named plaintiff Practice Management's claim. Defendants make clear that they "do not object to the court's exercise of specific jurisdiction over Plaintiff with respect to its individual *864claim." R. 160 at 3; see also R. 150 at 4 ("Because Plaintiff is an Illinois corporation that received an allegedly offending fax in Illinois ..., Plaintiff's individual claim arises out of Defendants' alleged contact with Illinois-specifically, their alleged involvement in directing faxes to this state"). Instead, defendants seek to assert a personal jurisdiction defense only with respect to unnamed, nonresident class members' claims. Those unnamed, nonresident class members were not even parties to the litigation until now. See Smith v. Bayer Corp. ,
C. Application of Bristol-Myers to this Case
Finally, the Court analyzes the implications of Bristol-Myers in this case. "Personal jurisdiction comes in two forms, general and specific." E.g. , McDonnell ,
That means the only basis for this Court's exercise of personal jurisdiction over defendants is specific jurisdiction. Again, for an exercise of specific personal jurisdiction, "the suit must aris[e] out of or relat[e] to the defendant's contacts with the forum. " Bristol-Myers , 137 S.Ct. at 1780. And under Bristol-Myers , "[t]he mere fact" that Practice Management received a fax in Illinois "does not allow" for an exercise of "specific jurisdiction over the nonresidents' claims" with respect to faxes received outside of Illinois (and whose claims thus do not relate to defendants' contacts with Illinois). Id. at 1781. Because these nonresidents' claims do not relate to defendants' contacts with Illinois, exercising specific personal jurisdiction over defendants with respect to them would violate defendants' due process rights. Thus, as in DeBernardis and McDonnell , the Court finds it appropriate to dismiss the claims of the non-Illinois-resident class members. DeBernardis ,
*865This ruling does not change this Court's holdings with respect to the class certification elements. In particular, numerosity is easily established "by a preponderance of the evidence" ( Messner ,
Because the impact of Bristol-Myers arose by way of defendants' motion for leave to file supplemental authority, the parties did not have an opportunity to brief the issue of how the class should be defined if the Court were to rule, as it has, that it lacks personal jurisdiction over defendants with respect to class members who are not Illinois residents. Defendants suggest in their motion that the "proposed class definition" could be "limited to persons or entities located in Illinois who received faxes in Illinois." R. 150 at 4. But they do not give focused treatment to this issue. And Practice Management, because its response argued that Bristol-Myers is inapplicable, never addressed the issue.
Because the Court "must define the class" in an order granting class certification ( Fed. R. Civ. P. 23(c)(1)(B) ), the Court defines the class, for current purposes, as:
All persons who are residents of Illinois and all entities located in Illinois who were successfully sent a facsimile in Illinois containing the "Cirque du Soleil" trade name from January 29, 2009, through July 8, 2009, offering tickets for sale to the following performances: "Saltimbanco" at Rockford MetroCentre, Rockford, Illinois, opening February 25, 2009; and "A New Twist on Vaudeville" at Chicago Theatre, Chicago, Illinois, opening November 19, 2009.
The Court finds that it is unlikely, based on the current record, that any non-Illinois theatrical shows should be included within the class definition. The only available fax target list for a non-Illinois show-the target list corresponding with the "Kooza" show at Pepsi Center Grounds in Denver, Colorado, opening August 20, 2009-lists "CO" as the "PRIMARY_STATE" for all of the addresses included. R. 68-10 at 7. This means that the Colorado show almost certainly should not be included in the class definition, and further indicates that the other non-Illinois shows should not be included. The Court therefore believes its definition is proper.
If the parties believe that any modifications should be made to the current class definition-which, again, is not an issue on which the parties have previously focused-they can raise that issue at the next status conference, and the Court may allow a limited period of time for the parties to file short position papers regarding the appropriate class definition.
Conclusion
For the foregoing reasons, the Court grants Practice Management's motion for class certification in part (R. 68), appoints Practice Management as class representative, and appoints the law firms of Anderson + Wanca and the Margulis Law Group as class counsel. The Court also grants defendants' motions for leave to file supplemental authority (R. 140; R. 148; R. 150).
The Court finds that the Supreme Court's ruling in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty. , --- U.S. ----,
All persons who are residents of Illinois and all entities located in Illinois who were successfully sent a facsimile in Illinois containing the "Cirque du Soleil" trade name from January 29, 2009, through July 8, 2009, offering tickets for sale to the following performances: "Saltimbanco" at Rockford MetroCentre, Rockford, Illinois, opening February 25, 2009; and "A New Twist on Vaudeville" at Chicago Theatre, Chicago, Illinois, opening November 19, 2009.
The Court sets a status conference for March 20, 2018, at which the parties should be prepared to report on next steps in this litigation. If the parties believe that modifications should be made to the current class definition, they can raise that issue at the status conference, and the Court may allow the parties to file short position papers on that limited issue.
The Court has considered the supplemental authority defendants have provided, and so the Court also grants defendants' motions to supplement (R. 140; R. 148; R. 150).
The invoices also refer to other ads for which "no fax image [was] produced in discovery ... and therefore [Practice Management] has not moved to certify as to these successfully sent fax advertisements." R. 68-1 at 9.
Although only 11 shows are listed in Practice Management's class definition, some of the shows had several different ads associated with them. See R. 68-1 at 9-11; R. 68-3. Thus, the 16 different ads for which Practice Management obtained images during discovery correspond with the 11 shows listed in Practice Management's proposed class definition.
The Court further explains why this is a common issue in its typicality discussion below.
Nor is Practice Management asserting many separate legal claims like in Prado-Steiman ex rel. Prado v. Bush ,
Here, defendants do not contest Practice Management's standing to raise a TCPA claim based on the fax it was sent. R. 68-1 at 7, 11; R. 68-10; see also, e.g. , Am.'s Health & Res. Ctr., Ltd. v. Promologics, Inc. ,
Nor would the fact that defendants' goods or services were being advertised, in and of itself, satisfy this second prong. The Seventh Circuit held in Paldo Sign & Display Co. v. Wagener Equities, Inc. ,
Contrary to what defendants claim, the Seventh Circuit's decision in Turza does not contradict Mullins and hold that class member identification is a predominance issue. In Turza , the defendant argued that predominance was not satisfied because it was unclear "how many faxes" each class member received, requiring individual inquiries.
Notably, three of the four fax broadcasts for which target lists are available correspond with the two shows in Illinois. In light of the Court's holding below with respect to personal jurisdiction, these shows are the ones most relevant here.
"[W]here a federal statute authorizes nationwide service of process," by contrast, there is an open question as to whether the Fifth Amendment due process clause requires "only minimum contacts with the United States as a whole. " E.g. , United States ex rel. Hedley v. ABHE & Svoboda, Inc. ,
Reference
- Full Case Name
- PRACTICE MANAGEMENT SUPPORT SERVICES, INC., an Illinois corporation, individually and as the representative of a class of similarly-situated persons v. CIRQUE DU SOLEIL, INC., Cirque du Soleil (US), Inc., and John Does 1-10
- Cited By
- 26 cases
- Status
- Published