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Sixth Circuit Reverses Denial of Class Certification and Dismissal Under Rule 68 in Purported Unsolicited Fax Case

The Sixth Circuit reversed a lower court’s denial of class certification and dismissal of an action following a lapsed offer for individual judgment in a decision released earlier this month.  In doing so, the Sixth Circuit held that a defendant opposing class certification in a Telephone Consumer Protection Act (“TCPA”) case on the ground that issues of individualized consent predominate must do more than present “speculation and surmise to tip the decisional scales” because a “possible defense, standing alone, does not automatically defeat predominance.”  The court also held that a defendant may not escape potential class-wide liability through an unaccepted offer of individual judgment.

Plaintiffs Bridging Communities, Inc. and Gamble Plumbing & Heating, Inc. each filed suit against Top Flite Financial, Inc. (“Top Flite”) alleging that the company violated the TCPA after each purportedly received an unsolicited fax advertising Top Flite’s residential mortgage services. Top Flite had engaged Business to Business Solutions (“B2B”), a fax advertising company, to send a fax to a list of numbers that B2B procured from InfoUSA, Inc.  Although plaintiffs argued that there was class-wide evidence of the absence of consent (evidence that B2B failed to contact anyone on the list it purchased from InfoUSA, Inc. to obtain consent), the district court embraced the defendant’s argument that it was possible that some of the fax recipients had consented to receive faxes.  The district court concluded that class certification was inappropriate because the determination of the presence or absence of consent for each class member would require individualized proof.  The Sixth Circuit reversed, finding that the mere possibility of consent as a defense, without some showing that the defendants had evidence to support a consent defense with respect to some or all of the putative class members, is insufficient to block class certification.  In so holding, the Sixth Circuit relied on precedent from other circuits that “recognized that in cases where, as here, a sender ‘obtained all of the fax recipients’ fax numbers from a single purveyor of such information[,]’ there exists a ‘class-wide means of establishing the lack of consent based on arguably applicable federal regulations.’”

Falling in line with the recent Supreme Court decision in Campbell-Ewald v. Gomez, the Sixth Circuit also reversed the lower court’s dismissal of the action following the plaintiffs’ refusal to accept Top Flite’s offers of individual judgment.  The court held that “[a]n unaccepted settlement offer—like any unaccepted contract offer—is a legal nullity, with no operative effect” and determined that “Top Flite may not rely on such lapsed offers ‘to avoid a potential adverse decision, one that could expose it to damages a thousand-fold larger than’” the offers plaintiffs declined to accept.  Through this opinion, another Circuit Court of Appeals has now weighed in on the application of Campbell-Ewald.

Copyright 2022 K & L GatesNational Law Review, Volume VI, Number 358
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About this Author

Joseph C. Wylie II, KL Gates Law Firm, Commercial Litigation Attorney
Partner

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...

312-807-4439
Molly K. McGinley, KLGates Law Firm, Complex Litigation Attorney
Partner

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...

312-807-4419
Nicole Mueller, KL Gates Law Firm, Securities and Transactional Litigation Attorney
Associate

Ms. Mueller’s practice is focused in litigation under the federal and state securities laws and litigation arising out of mergers and acquisitions, other transactions and corporate governance matters. Her experience includes representing investment advisers, corporate officers and directors, and independent trustees in derivative lawsuits, investigations, and actions brought pursuant to Section 36(b) of the Investment Company Act of 1940. Ms. Mueller also practices in the areas of complex commercial litigation and arbitration, regulatory disputes, and employment law....

312-807-4341
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