October 13, 2019

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Seventh Circuit Denies Class Certification in TCPA Case; Finds No Injury Possible Where Call Recipients Consented to Calls, Even if Consent Not in Writing

The Northern District of Illinois recently refused to certify a class in a case brought under the Telephone Consumer Protection Act, 47 U.S. Code § 227 (“TCPA”), on the grounds that the class could not include members who lacked Article III standing, and that determining whether individual class members had standing would lead to a multiplicity of mini-trials. See Christopher Legg et al. v. PTZ Insurance Agency LTD, et al., Case No. 14-C-10043. The decision was based in part on the Court’s finding that class members could not have suffered a concrete injury under Spokeo v. Robins if they consented to the calls, irrespective of the TCPA’s requirement that “advertising” calls require express written consent.  Thus, the Court granted the defendants’ motion to strike class allegations and denied plaintiffs’ cross-motion to certify a class.

Plaintiffs Christopher Legg and Page Lozano brought a putative class action lawsuit against Pethealth Inc. (“Pethealth”), which offers consumer services related to pet adoption and pet insurance through various subsidiaries, including co-defendant PTZ Insurance Agency LTD (“PTZ”). PTZ offers a 30-day free gift of pet insurance to those who adopt pets at PTZ’s partner animal shelters. During the adoption process, customers who want to receive the free gift must provide their email address and opt-in to receiving communications from Pethealth and PTZ. Adopters fill out additional paperwork with contact information, and the shelter informs them that unless they opt-out, their personal information may be shared with third parties for marketing purposes. As part of the free insurance program, PTZ sends two reminder emails and two prerecorded calls. Plaintiffs alleged that the prerecorded calls violated the TCPA because the calls constituted advertisements, and defendants had not received written consent from the call recipients.

In ruling on defendant’s motion to strike the class allegations, and plaintiffs’ cross-motion to certify a proposed class, Judge Gettleman first analyzed the four requirements of Federal Rule of Civil Procedure 23. To certify a class, plaintiffs must meet all four requirements: numerosity, commonality, typicality, and adequacy of representation. The calls in question were sent to nearly 350,000 telephone numbers, which the Court found sufficient to establish numerosity. He also found that the case met the commonality and typicality requirements, because every potential class member, including the proposed class representatives, gave his or her contact information in a similar manner and received the same prerecorded calls.

Yet, the Court held that plaintiffs could not satisfy the predominance requirement of Rule 23(b)(3), namely that “the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” The Court noted that the issue of whether each class member consented to receive calls would require inquiries into what occurred during each adoption process. Plaintiffs argued that defendants’ calls constituted advertising under the TCPA, which requires written consent of recipients, and the parties agreed that none of the proposed class members gave consent in writing. But the Court held that whether or not the calls constituted advertising, class members who gave express consent and expected to receive the calls could not possibly have been injured by the calls. If the class members agreed to receive the calls, stated the judge, they lack a “genuine controversy” under Spokeo. Finding that issues of individualized consent predominated, Judge Gettleman declined to certify the class.

Courts have issued inconsistent and contradictory decisions applying Spokeo to TCPA class actions, both as to whether particular conduct causes concrete harm, and whether that question can be resolved on a class-wide basis, and it remains to be seen how these inconsistencies will be resolved.

Copyright 2019 K & L Gates

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Joseph C. Wylie II, KL Gates Law Firm, Commercial Litigation Attorney
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Mr. Wylie’s practice focuses on complex class-action defense and complex commercial litigation with a particular emphasis on consumer and securities matters. He represents clients in defending against a wide range of individual and class-action consumer claims, including consumer fraud actions and claims brought under the Telephone Consumer Protection Act. He also represents investment advisers and mutual fund families in connection with government investigations and investor claims, including claims made under the Investment Company Act. Mr. Wylie also represents...

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Andrew Glass, KL Gates Law Firm, Financial Litigation Attorney
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Mr. Glass is a partner resident in K&L Gates’ Boston office, and a member of the firm's Consumer Financial Services Litigation and Class Action Litigation Defense groups, with extensive experience in complex commercial litigation. Mr. Glass's practice focuses on the defense of federal and state class action litigation brought against consumer financial services, mortgage lending, and consumer credit institutions. These class actions concern challenges under federal statutes, including the Fair Housing Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, Real Estate Settlement Procedures Act, Truth in Lending Act, Telephone Consumer Protection Act, and Racketeer Influenced and Corrupt Organizations Act, state unfair and deceptive acts and practices statutes, and common law claims. He also represents consumer financial services institutions in government enforcement proceedings and individual litigation matters.

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Gregory Blace, KL Gates Law Firm, Class Action Litigation Attorney
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Mr. Blase is a partner in the Boston office of K&L Gates where he is a member of the firm's Class Action Litigation Defense group. Mr. Blase has experience in complex commercial litigation, and has represented mortgage lenders, servicers and other financial institutions in class action and individual suits under the Telephone Consumer Protection Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, Truth in Lending Act, Fair Housing Act, Equal Credit Opportunity Act, Real Estate Settlement Procedures Act, and various state unfair and deceptive practices...

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Molly K. McGinley, KLGates Law Firm, Complex Litigation Attorney
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Molly K. McGinley concentrates her practice at K&L Gates in commercial litigation with a focus on complex litigation, including investment company litigation, securities litigation and consumer class action defense. Ms. McGinley is a member of the firm’s Securities and Transactional Litigation Practice and Class Action Litigation Defense Groups. Ms. McGinley has litigated in numerous state and federal jurisdictions, representing a broad range of clients, including small companies, Fortune 500 Companies and investment advisers. She has handled various commercial...

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Lexi Bond, Commercial Litigation, KL Gates Law Firm
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Alexandria (Lexi) Bond focuses her practice on commercial litigation, including the representation of clients in contractual disputes, business torts, false advertising and unfair competition claims, consumer complaints, and investment company and securities litigation. Her investment company litigation experience includes representing investment advisers and independent trustees in class actions, derivative lawsuits, and actions brought pursuant to Section 36(b) of the Investment Company Act of 1940. Ms. Bond also practices in the areas of regulatory compliance, internal investigations,...

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