First Circuit Affirms Dismissal of TCPA Class Action / $12 Million in Statutory Damages Avoided

The United States Court of Appeals for the First Circuit Attorneys affirmed Attorneys Scott Ober and Margarita Warren’s motion for summary judgment in a TCPA (Telephone Consumer Protection Act) Class Action case. The Act allows each recipient of unsolicited fax advertisements to recover from the sender $500 in statutory damages (trebled for willful and knowing violations) for each fax transmission. Given a putative class of more than 8,000 fax recipients, the defendant faced more than $4,000,000 in damages, potentially tripled to $12,000,000 if the defendant was found to have willfully and knowingly violated the Act.

The defendant, a manufacturer of floor mats, paid a marketing firm approximately $500 to distribute an advertisement by fax to 10,000 potential customers. Two recipients, represented by the same plaintiffs’ counsel, filed separate class actions against the defendant floor mat manufacturer alleging violations of the TCPA. The first class action was filed in Massachusetts state court. The second federal class action was commenced over four years after the alleged facsimiles were sent, beyond the applicable statute of limitations. In order to cure their late filing, the plaintiffs asserted that the first state class action tolled the limitations period for all putative federal class action members.

The plaintiff in the state court action moved to certify the class as to all persons in Massachusetts who were sent a facsimile from the defendant. About a month later, the plaintiff in the federal case moved to certify the class as well. Attorneys Ober and Warren objected to the class certification on several grounds including a lack of predominant facts among the purported class members and the stark contrast between the defendant’s potential liability and the actual harm suffered by the potential members of the class. The federal court acted first and certified the plaintiff’s request to certify the class. However, the state court refused to certify the class because of the court’s doubts that the named plaintiff could adequately represent the class.

The state court subsequently refused to certify the class because of the court’s doubts that the named plaintiff could adequately represent the class. Further, the state court denied certification on the ground that the class action vehicle was not the superior method of adjudicating members’ claims based on “the inescapable conclusion that these class actions exist for the benefit of the attorneys who are bringing them and not for the benefit of individuals who are truly aggrieved.” West Concord 5.10-1.00 Store, Inc. v. Interstate Mat Corp., No 10-00356-C (Mass. Super. Ct. March 5, 2013).]

In the federal court action, the plaintiff moved for summary judgment. Attorney Ober and Warren opposed the plaintiff’s motion by disputing both that the faxes were unsolicited advertisements and that it had willingly and knowingly violated the TCPA. The defendant also filed a cross-motion for summary judgment asserting that the applicable 4-year statute of limitations barred the plaintiff’s claims under the Act. The defendant further argued that the plaintiffs could not use the state court action to toll the limitations period in order to save their untimely class action TCPA claim. The plaintiff failed to file any opposition to the defendant’s cross-motion for summary judgment.

In its decision, the U.S. District Court addressed the merits of the defendant’s statute of limitations defense and entered summary judgment on the plaintiff’s class action complaint in favor of the defendant. Further, the federal court ruled that the plaintiff may not “stack” one class action on top of another in an effort to continue the statute of limitations indefinitely.

The plaintiff appealed the U.S. District Court’s ruling to the First Circuit, but offered no argument for its failure to previously argue the statute of limitations issues. Instead, the plaintiff argued that the waiver of any argument was harmless and that the burden of proving the limitations defense rested with the defendant. Essentially the plaintiff failed to address the statute of limitations argument in its’ opposition to the defendant’s motion.

The First Circuit found that even if it ignored the plaintiff’s failure to raise any argument as to the defendant’s statute of limitations arguments, the plaintiff would be unsuccessful in meeting the standard required to prove any “plain error” argument it may assert given the complexity of the tolling argument and First Circuit class action tolling precedent. Accordingly, the First Circuit affirmed the lower’s court ruling granting summary judgment in favor of the defendant business owner.