Gorss Motels, Inc. v. Brigadoon Fitness Inc. ( 2022 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 21-1358
GORSS MOTELS, INC.,
Plaintiff-Appellant,
v.
BRIGADOON FITNESS, INC. and
BRIGADOON FINANCIAL, INC.,
Defendants-Appellees.
Appeal from the United States District Court for the
Northern District of Indiana, Fort Wayne Division.
No. 1:16-cv-00330 — Holly A. Brady, Judge.
ARGUED SEPTEMBER 24, 2021 — DECIDED MARCH 24, 2022
Before EASTERBROOK, ROVNER, and KIRSCH, Circuit Judges.
ROVNER, Circuit Judge. Gorss Motels, Inc. brought an action
under the Telephone Consumer Protection Act (“Act”) seeking
statutory penalties for itself and on behalf of a class of recipi-
ents of purportedly unsolicited facsimile advertisements sent
by the defendants. The district court declined to certify the
2 No. 21-1358
original class or a modified version, finding in each instance
that common issues did not predominate. Gorss then pro-
ceeded to summary judgment on its own claim and prevailed.
On appeal, Gorss challenges the district court’s denial of class
certification. We affirm.
I.
At the relevant time, Gorss Motels, Inc. (“Gorss”) operated
a Super 8 Motel as a franchisee of Wyndham Hotel Group, LLC
(“Wyndham”), under a franchise agreement signed in October
1988.1 Gorss agreed in that contract to furnish the facility in
accordance with Wyndham’s standards, and to purchase from
Wyndham or its approved vendors an extensive list of supplies
and equipment ranging from soap and toilet tissue to carpeting
and mattresses. Brigadoon Fitness, Inc. (“Brigadoon”)2 sells
fitness equipment to hotels and others. Brigadoon is an
approved vendor for Wyndham franchisees and was subject to
a “Sourcing Agreement” with Worldwide Sourcing Solutions,
Inc. (“Worldwide”), a wholly-owned subsidiary of Wyndham
Worldwide Corp. and an affiliate of Wyndham. Under the
Sourcing Agreement, Brigadoon is allowed to sell fitness
1
Gorss signed its original twenty-year franchise agreement with Super 8
in 1988. Super 8 was later acquired by Wyndham, and Gorss executed an
Amendment to the franchise agreement in 2009, extending the franchise
relationship five more years. In 2014, Gorss signed an entirely new
franchise agreement with Wyndham. The 1988 agreement, as amended in
2009, governed at the time of the relevant events.
2
The parties treat Brigadoon Fitness, Inc. and Brigadoon Financial, Inc. as
the same in this appeal. We will refer to the defendants jointly as “Briga-
doon.”
No. 21-1358 3
equipment to Wyndham franchisees through marketing
programs. As part of this arrangement, Wyndham periodically
provided contact information for its franchisees, including fax
numbers, to Brigadoon. Brigadoon had similar “approved
vendor” relationships with others in the hospitality industry
including Interstate Hotels Group, Best Western, Choice
Hotels, and LaQuinta, each of which in turn had contractual
relationships with their franchisees. As was the case with
Wyndham, each of these hotel chains and their franchisees also
periodically provided Brigadoon with contact information,
including fax numbers that had been collected at various times
and under differing circumstances.
Gorss provided contact information, including fax num-
bers, to Wyndham and others for business purposes and for
directories that were available to the hospitality industry and
to the public. Steven Gorss also attended conventions and
trade shows on behalf of Gorss, including in 2012, and person-
ally provided contact information to Wyndham-approved
suppliers at these events, sometimes by swiping an identifica-
tion badge at a convention booth. Gorss received a fax from
Brigadoon on April 17, 2013, advertising its fitness equipment
and offering a special deal on certain purchases. The fax was
part of a large transmission to more than 10,000 recipients.
Brigadoon formulated the list of recipients from a variety of
sources. It obtained some fax numbers from Wyndham as part
of the Sourcing Agreement. Other sources for contacts in-
cluded: Brigadoon’s own databases of existing or potential
customers with whom Brigadoon had previously interacted;
other franchisees of major hotel chains with whom Brigadoon
had vendor status; hotels that were members of or operating
4 No. 21-1358
under a large purchasing network known as the National
Purchasing Network, which authorized Brigadoon to market
to its members; and trade show attendees.
The Act prohibits the use of “any telephone facsimile
machine … to send, to a telephone facsimile machine, an
unsolicited advertisement.” 47 U.S.C. § 227(b)(1)(c). An
“unsolicited advertisement” is “any material advertising the
commercial availability or quality of any property, goods, or
services which is transmitted to any person without that
person’s prior express invitation or permission, in writing or
otherwise.” 47 U.S.C. § 227(a)(5). Although the Act contains a
safe harbor for senders who have an existing business relation-
ship with fax recipients, the April 17, 2013 fax did not comply
with the statutory requirements for that protection. See 47
U.S.C. § 227(b)(1)(c) and (b)(2)(D) (describing the requirements
for “opt out” notices that would have informed recipients how
to stop receiving future fax advertisements).
When Gorss filed suit under the Act, it sought to certify a
class under Rule 23(b)(3) of all recipients of the April 17, 2013
fax advertisement. Noting that plaintiffs bear the burden of
proving entitlement to class certification under Rule 23, the
district court focused on the Rule 23(b)(3) requirement of
“predominance,” which calls for the court to find, among other
things, “that the questions of law or fact common to class
members predominate over any questions affecting only
individual members.” Because the issue of whether the faxes
were solicited is key to recovery under the Act, and because
Brigadoon assembled the list of recipients from a number of
different relationships and circumstances that could well
indicate that the recipients did in fact solicit the fax advertise-
No. 21-1358 5
ments, the court ultimately concluded that Gorss failed to meet
its burden of demonstrating that common issues of fact
predominated. Instead, the court found, the case presented the
“specter of unlimited mini-trials” to determine the precise
relationship between sender and recipients so that the court
could determine whether prior express permission to send the
faxes had been granted in each instance. For example, some
recipients arguably provided permission in person at trade
shows; others may have consented through one of many
different versions of franchise agreements; still others may
have solicited fax advertisements through their membership
and participation in the National Purchasing Network; and
some arguably provided consent through more than one of
these means. The court therefore declined to certify a class of
all recipients of the April 17, 2013 fax. Gorss then moved for
reconsideration of the order denying class certification or
alternatively for certification of a class of recipients whose fax
numbers were obtained from a list of Wyndham franchisees
only, and whose numbers had been supplied to Brigadoon due
to its status as a Wyndham-approved supplier. Focusing again
on the question of predominance, the court noted that the more
than 3,000 fax numbers in this subset included those of:
Wyndham franchisees with which Brigadoon had pre-existing
relationships; entities that appeared on Brigadoon’s internal
Goldmine contacts database; businesses that were current and
former customers of Brigadoon whose contact information was
stored in Brigadoon’s Sage 500 accounting system; and
individual hotel/motel representatives who had attended an
industry trade convention and shared contact information with
Brigadoon at that time. Wyndham, the court noted, employed
6 No. 21-1358
many different franchise agreements with various hotel/motel
brands. As with the original proposed class, the court con-
cluded that sorting out which of these recipients had engaged
in conduct that met the definition of “soliciting” fax advertise-
ments would require assessment on a case-by-case basis, and
declined to certify the modified class. Gorss appeals both
decisions.
II.
We review class certification orders for abuse of discretion.
Bell v. PNC Bank, Nat’l Ass’n, 800 F.3d 360, 373 (7th Cir. 2015).
The party seeking class certification bears the burden of
demonstrating that certification is proper by a preponderance
of the evidence. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350
(2011) (a “party seeking class certification must affirmatively
demonstrate his compliance with the Rule—that is, he must be
prepared to prove that there are in fact sufficiently numerous
parties, common questions of law or fact, etc.”); Bell, 800 F.3d
at 373. Gorss asserts that the district court abused its discretion
by applying erroneous legal rules to the predominance inquiry.
In particular, Gorss first argues that the court improperly
denied class certification without requiring Brigadoon to
identify any member of the proposed class that provided
express prior permission; instead, Gorss contends, the court
should have required Brigadoon to show with specific evi-
dence that a significant percentage of the class is subject to this
defense. Second, Gorss maintains that the court applied an
erroneous “implied consent” standard for “prior express
invitation or permission” to receive fax advertisements under
the Act rather than employing the standard announced in
Physicians Healthsource, Inc. v. A-S Medication Solutions, LLC, 950
No. 21-1358 7
F.3d 959 (7th Cir. 2020), which was decided after the district
court declined to certify a class. Finally, Gorss complains that
the district court erred in denying certification of the smaller
proposed “Wyndham-only” class by treating permission to
receive fax advertisements as transferrable.
A.
Although plaintiffs seeking to certify a class bear the
burden of demonstrating compliance with Rule 23, “prior
express invitation or permission” is an affirmative defense for
which defendants bear the burden of proof at trial. Physicians
Healthsource, 950 F.3d at 964–65. Because Brigadoon carries this
burden at trial, Gorss faults the district court for denying class
certification without requiring Brigadoon to prove that any
class member met the standard for prior express permission set
forth in Physicians Healthsource.3 According to Gorss, the court
should have required Brigadoon to show with specific evi-
dence that a “significant percentage” of the class was subject to
this defense, citing the district court decision in Physicians
Healthsource, Inc. v. A-S Medication Solutions, LLC, 318 F.R.D.
712, 725 (N.D. Ill. 2016).
The district court did not err, however, on either the facts
or the law. The predominance inquiry, which “tests whether
proposed classes are sufficiently cohesive to warrant adjudica-
tion by representation, … calls upon courts to give careful
3
At the time the district court issued its orders denying class certification,
this court had not yet decided Physicians Healthsource. As we discuss below,
although the district court did not have the benefit of Physicians Healthsource
at the time it rendered its decisions, the court did not apply any erroneous
legal standards in deciding the predominance question.
8 No. 21-1358
scrutiny to the relation between common and individual
questions in a case.” Tyson Foods, Inc. v. Bouaphakeo, 577 U.S.
442, 453 (2016). An individual question is one where members
of a proposed class will need to present evidence that varies
from member to member; a common question is one where the
same evidence will suffice for each member to make a prima
facie showing or the issue is susceptible to generalized,
class-wide proof. Tyson Foods, 577 U.S. at 453. The district court
here correctly noted that the question of whether the fax
advertisement was sent without prior express permission was
the key issue to be resolved in order for the proposed class to
recover under the Act. The question for class certification
purposes is whether resolving this key issue is susceptible to
generalized, class-wide proof.
There are certainly instances in which the issue of prior
express permission might be amenable to class-wide proof. For
example, in some cases brought under the Act, prior express
permission may be given by some uniform means such as
identical product registration forms or standardized end-user
licensing agreements. See e.g. True Health Chiropractic, Inc. v.
McKesson Corp., 896 F.3d 923, 932 (9th Cir. 2018). In circum-
stances where there is little or no variation in the form em-
ployed for obtaining permission, the predominance require-
ment of Rule 23(b)(3) may be satisfied because prior express
permission, or lack thereof, is ascertainable by examining the
uniform product registrations and licensing agreements. Id.Similarly, in some cases brought under the Act, where the fax
sender purchased a contact list from a third-party vendor and
made no attempt to seek permission from any of the recipients
before sending the fax advertisement, there is a generalized,
No. 21-1358 9
class-wide manner of proving lack of consent. Bridging Commu-
nities, Inc. v. Top Flite Fin., Inc., 843 F.3d 1119, 1125 (6th Cir.
2016) (where the plaintiff presented evidence that the fax
sender failed to verify consent with anyone on a list of fax
numbers purchased from a third party, suggesting a class-wide
absence of consent, the sender’s mere allegation that class
members might have given consent in some other way was
insufficient to defeat class certification); Gene & Gene LLC v.
BioPay LLC, 541 F.3d 318, 327–28 (5th Cir. 2008) (noting that
lack of consent to receive a fax advertisement may be decided
on a class-wide basis when the sender obtained all of the fax
recipients’ numbers from a single purveyor of such informa-
tion, especially in light of a federal regulation which requires
that senders who obtain fax numbers from a commercial
database must take reasonable steps to verify that the recipi-
ents agreed to make the number available for distribution).
In other instances, however, prior express permission is an
issue that must be decided on an individualized basis. For
example, in Brodsky v. HumanaDental Ins. Co., 910 F.3d 285,
291(7th Cir. 2018), the plaintiff had a market agreement with
the fax sender in which he agreed that the sender could
communicate with him by fax, raising the possibility that the
plaintiff consented to receipt of the disputed fax. We noted that
the “question of what suffices for consent is central, and it is
likely to vary from recipient to recipient (or so the district court
reasonably could have concluded),” especially because it was
unclear what agreements the sender might have had with the
other recipients that the plaintiff sought to represent. Id. These
transaction-specific inquiries were the “hallmarks” of an issue
that required individual scrutiny. We therefore held that the
10 No. 21-1358
district court did not abuse its discretion when it concluded
that the Rule 23(b)(3) criteria were not met. Id.The district court similarly did not abuse its discretion here.
The fax numbers that Brigadoon used for this broadcast were
obtained in multiple ways. The numbers were collected
through franchise agreements that were not uniform among
fax recipients; the National Purchasing Network; oral permis-
sion or badge swiping at trade conventions; lists of past or
present customers of Brigadoon; or some combination of these
and other sources. Even the smaller “Wyndham-only” list was
collected from a variety of sources including more than ten
different franchise agreements; franchisees that had prior
existing relationships with Brigadoon; Brigadoon’s internal
Goldmine contacts database; prior and existing Brigadoon
customers whose contact information was stored in the com-
pany’s Sage 500 accounting system; and individual hotel/motel
representatives who shared contact information with Briga-
doon at trade conventions. As the district court noted, Briga-
doon made more than vague assertions about prior permission;
it provided specific evidence about the various relationships,
contracts, and personal contacts that it had with the fax
recipients, necessitating individualized analysis of prior
express permission.
Although Gorss contends that Brigadoon failed to prove
that any single recipient consented, it is not the final merits of
the permission inquiry that matter for Rule 23(b)(3) purposes;
it is the method of determining the answer and not the answer
itself that drives the predominance consideration:
No. 21-1358 11
The Rule 23(b)(3) predominance requirement inher-
ently requires the court to engage with the merits of
the case, yet without deciding the merits. To decide
predominance, the court must understand what the
plaintiffs will need to prove and must evaluate the
extent to which they can prove their case with
common evidence. “In other words, a court weigh-
ing class certification must walk a balance between
evaluating evidence to determine whether a common
question exists and predominates, without weighing
that evidence to determine whether the plaintiff
class will ultimately prevail on the merits.” Bell v.
PNC Bank, N.A., 800 F.3d 360, 377 (7th Cir. 2015)
(emphases added). We recognize the contradiction
built into the standard. The judge must examine the
evidence for its cohesiveness while studiously
ignoring its bearing on merits questions[.]
In re Allstate Corp. Sec. Litig., 966 F.3d 595, 603 (7th Cir. 2020).
This analysis applies not only to the elements that plaintiffs
must prove but also to affirmative defenses like prior express
permission. See Gene & Gene, 541 F.3d at 327 (predominance of
individual issues necessary to decide an affirmative defense
may preclude class certification). As the district court noted
here, although Brigadoon’s evidence for the fax recipients may
not hold up as constituting prior permission, “there is no
generalized proof that can be used to resolve the issue of prior
permission on a class-wide basis across the various methods
that Brigadoon used to obtain fax numbers.” Gorss Motels, Inc.
v. Brigadoon Fitness, Inc., 331 F.R.D. 355, 360 (N.D. Ind. 2019).
“At class certification, the issue is not whether plaintiffs [or
12 No. 21-1358
defendants] will be able to prove these elements on the merits,
but only whether their proof will be common for all plaintiffs
[or defendants], win or lose.” Allstate, 966 F.3d at 604. The
district court did not abuse its discretion in denying certifica-
tion on the ground that Gorss failed to carry its burden of
demonstrating predominance.
B.
Nor did the district court rely on an incorrect understand-
ing of the legal standard for “prior express permission” when
it analyzed the predominance issue. As we noted, a party that
sends a transmission by fax is liable under the Act only for
unsolicited advertisements. 47 U.S.C. 227(b)(1)(C)(iii). Whether an
advertisement is unsolicited turns on whether the ad was
transmitted without the recipient’s prior express invitation or
permission, in writing or otherwise. 47 U.S.C. § 227(a)(5).
Although the district court did not explore the limits of the
permission inquiry in its initial ruling denying certification, it
did probe the standard in more depth on reconsideration,
finding that express permission requires that the consumer
understand that by providing a fax number, he or she is
agreeing to receive faxed advertisements. Gorss Motel, Inc. v.
Brigadoon Fitness, Inc., 2019 WL 5692168, *3 (N.D. Ill. Nov. 4,
2019) (citing CE Design Ltd. v. King Architectural Metals, Inc., 637
F.3d 721, 726 (7th Cir. 2011)). CE Design, in turn, relied on the
definition of express permission given by the Federal Commu-
nications Commission. 637 F.3d at 726 (citing In re Rules and
Regulations Implementing the Telephone Consumer Protection Act
of 1991, 18 F.C.C.R. 14014, 14129, 2003 WL 21517853) (hereafter
“FCC 2003 Order”)). The district court also correctly noted that
No. 21-1358 13
the statute did not require a specific form of invitation or
permission. The court assessed the proposed revised class
definition and again concluded that questions of prior express
invitation or permission were individual inquiries that pre-
dominate over common issues. The court emphasized that
Gorss had the burden of establishing that class certification was
appropriate, requiring Gorss to:
proffer a viable method of determining a recipient’s
consent that does not require individualized,
fact-based mini-trials for each potential class mem-
ber. Answering the bona fide issue of whether a
particular fax was solicited—as Plaintiff argues
Brigadoon must do at this stage—would require an
individualized inquiry. This is telling because the
method of determining the answer, not the answer
itself, is the driving consideration under Rule 23(b).
See Messner v. Northshore Univ. Healthsystem, 669
F.3d 802, 819 (7th Cir. 2012) (noting that Rule
23(b)(3) requires common evidence and methodol-
ogy, but not common results).
Gorss Motels, Inc. v. Brigadoon Fitness, Inc., 2019 WL 5692168, *5
(N.D. Ill. Nov. 4, 2019). There was nothing erroneous in that
conclusion.
Gorss argues nevertheless that we narrowed the standard
for “express prior permission” in Physicians Healthsource, and
that the district court erroneously applied a less rigorous
“implied consent” standard in denying class certification.
Gorss first cites a number of district court decisions (including
the district court decision in Physicians Healthsource) for the
14 No. 21-1358
proposition that the district court here should have required
Brigadoon to set forth specific evidence that a “significant
percentage” of the putative class consented before finding that
individual issues predominate. Gorss then argues that even
though it has the burden of demonstrating that it meets the
Rule 23 requirements, the defendant’s burden of proof on
permission strongly affects the analysis on Rule 23(b)(3)
predominance, allowing courts to consider only those permis-
sion claims that a defendant has actually advanced and for
which it has presented evidence.
But Brigadoon did advance a plausible permission defense
and it did present evidence in support of that defense to the
district court. At the class certification stage, the court was not
required to determine the merits of that defense but only to
consider whether determining the merits would require
individual inquiries rather than class-wide proof. Obviously,
if Brigadoon’s claim of permission were based on a legally
flawed definition, the company’s argument regarding predom-
inance would fail. But the district court did not rely on a
flawed definition of prior express permission; it applied a
definition that was consistent with the standard we later
announced in Physicians Healthsource: that express permission
requires that the consumer understand that by providing a fax
number, he or she is agreeing to receive faxed advertisements.
The refinements that we made to that standard in Physicians
Healthsource do not affect the predominance analysis in this
case because, under either definition, Gorss has offered no
generalized class-wide manner to resolve the permission
question.
No. 21-1358 15
In Physicians Healthsource, we sought to give a clear stan-
dard for prior express invitation or permission that was
consistent with the FCC’s guidance, including the FCC 2003
Order as cited in CE Design, as well as a 2006 Order from the
FCC. 950 F.3d at 965. We began by noting that we are bound by
the FCC’s interpretation when it has not been appealed, as is
the case here:
In its 2003 Order, the FCC explained that “[e]xpress
permission to receive a faxed ad requires that the
consumer understand that by providing a fax
number, he or she is agreeing to receive fax adver-
tisements.” 18 FCC Rcd. at 14129. Per the FCC, such
permission may be written or oral. In the Matter of
Rules & Regulations Implementing the Tel. Consumer
Prot. Act of 1991 Junk Fax Prevention Act of 2005, 21
F.C.C. Rcd. 3787, 3811 (2006). That said, the FCC has
explicitly found that “negative options,” in which a
sender presumes consent unless advised otherwise,
are insufficient to prove express permission. Id. at
3811 n.168 (explaining that “[a] facsimile advertise-
ment containing a telephone number and an instruc-
tion to call if the recipient no longer wishes to
receive such faxes, would constitute a ‘negative
option’ ”); see also 18 FCC Rcd. at 14130 (“ ‘negative
option[s]’ [are] contrary to the statutory requirement
for prior express permission or invitation”).
950 F.3d at 965.
Consistent with this interpretation, we concluded that
evidence of permission to generally send faxes does not
16 No. 21-1358
establish prior express permission to fax advertisements. 950
F.3d at 966. We also rejected any claim that post hoc statements
that an individual would have given consent sufficed because
they do not demonstrate that the fax sender had prior express
permission to send the faxes. Instead, in order to demonstrate
that the recipient has given permission on an ongoing basis to
fax advertisements:
the consumer must affirmatively and explicitly give
the advertiser permission to send it fax advertise-
ments on an ongoing basis. The invitation or permis-
sion cannot simply authorize a single, specific fax, or
state that the consumer consented to receive faxed
ads from the defendant in the past. Instead, it must
explicitly convey that the consumer gives the adver-
tiser ongoing permission to send ads via fax until
such time as the consumer withdraws its consent.
Physicians Healthsource, 950 F.3d at 966.
Applying this rule in Physicians Healthsource, we considered
the three categories of evidence that the fax sender claimed in
support of its defense of prior express permission. First, we
found that the defendant could not meet its burden on prior
express permission by showing that the recipient agreed to
receive “product information” by fax after a purchase of goods
or services, unless the language also suggested that the consent
included promotional materials or information regarding
products not yet purchased, i.e., advertising. 950 F.3d at 967.
Moreover, evidence that one consented to a fax advertisement
in the past and would have consented to receive faxed ads
again if asked would not be sufficient to meet the standard. Id.
No. 21-1358 17
Nor would general permission to receive faxes suffice. 950 F.3d
at 965–66. Because those three categories of evidence covered
the universe of the asserted defense, the court in Physicians
Healthsource was able to decide the issue of prior express
permission on a class-wide basis. Moreover, to the extent that
such permission had been given, it was undisputed that it had
been given to the defendant’s predecessor-in-interest, not the
defendant, and we concluded that the permission was not
transferrable to a third party. 950 F.3d at 967.
None of this is contrary to the district court’s analysis in the
present case. In this instance, Brigadoon demonstrated that it
had a large variety of contracts, relationships, and personal
contacts with the recipients of the faxes. Hotels and motels like
Gorss signed franchise contracts in which they agreed to use
approved vendors like Brigadoon to stock and furnish their
motels and hotels. Some of the franchisors, including
Wyndham, also required franchisees to use approved vendors
to remedy deficiencies identified during inspections, and those
franchisees agreed in Property Improvement Plans that their
contact information (which in some cases included fax num-
bers) would be provided to vendors so that the vendors could
offer their products and services, in other words so that the
vendors could advertise their products and services to the
franchisee. Some of the recipients operated under the National
Purchasing Network, a members-only buying network for
hotels and motels, for which Brigadoon was an approved
vendor. And some of the recipients attended trade shows
where they provided their contact information, including fax
numbers, to vendors at those events after requesting sales
materials. Brigadoon also identified hundreds of recipients
18 No. 21-1358
with whom it had prior business arrangements that would
have to be examined individually to assess permission to
receive fax advertisements. And of course, Brigadoon also
identified recipients who appeared on the fax list from multiple
sources. At the class certification stage, the court’s only task
was to determine whether the plaintiff had carried its burden
of demonstrating that there was some sufficiently cohesive
class-wide way to resolve the permission issue to justify class
certification. The district court acted within its discretion in
finding that Gorss, which has yet to propose a class-wide
method of resolving this issue, failed to meet its burden under
the predominance standard.
We add that Gorss’s reliance on district court cases to
establish a rule that defendants must present evidence of
permission given by a “significant percentage” of the proposed
class to defeat class certification reflects an over-reading of
those cases. True, the district court in Physicians Healthsource
and district courts in other cases found that where defendants
presented specific evidence showing that a significant percent-
age of the putative class consented to certain contacts, issues of
individualized consent predominated over any common
questions of law or fact. But Gorss conflates that which is
sufficient to answer the predominance question with that which
is necessary. Gorss points to no appellate court decision
requiring this “significant percentage” evidence, and there are
many ways to demonstrate that issues of individualized
consent predominate over any common questions as Briga-
doon demonstrates here. See True Health, 896 F.3d at 931–32 (a
defendant can produce evidence of a predominance-defeating
consent defense in a variety of ways).
No. 21-1358 19
In short, Brigadoon’s claim of permission was not specula-
tive, vague or unsupported; it was based on a multitude of
contracts, relationships, memberships and personal contacts,
evidence sufficient for the district court to conclude that class-
wide analysis of the permission issue would not be feasible. In
fact, two of our sister circuits have concluded that Gorss
provided prior express permission to approved vendors for
advertising faxes through the 2014 version of its franchise
agreement with Wyndham, an agreement that Gorss signed
after receiving the fax at issue here. See Gorss Motels, Inc. v.
Lands’ End, Inc., 997 F.3d 470, 476–80 (2d Cir. 2021); Gorss
Motels, Inc. v. Safemark Systems, LP, 931 F.3d 1094, 1100–02 (11th
Cir. 2019). Those courts considered the language of the 2014
franchise agreement that governed at the time each allegedly
offending fax was sent, as well as the vendor programs in place
for franchisees in deciding whether the standard for prior
express permission was met. These cases demonstrate that the
language and nature of a particular franchise agreement as
well as other factors may amount to prior express permission
to receive fax ads as that term is defined. With proposed class
members signing many different franchise agreements with
different franchisors at different times, determining whether
franchisees gave prior express permission for fax advertise-
ments is an individual rather than a common question, or so
the district court could have reasonably found. When a court
also considers the other sources of possible permission that
Brigadoon presented here, such as trade show interactions,
membership in a purchasing network, and prior communica-
tions during business dealings, it becomes all the more appar-
20 No. 21-1358
ent that the district court was within its discretion in finding
that individual questions predominated.
C.
The final issue is whether the district court erroneously
allowed Brigadoon to rely on permission to Wyndham that
was “transferred” to Brigadoon. According to Gorss, for the
Wyndham-only class, the court should have found, on a class-
wide basis, that any permission that franchisees granted to
Wyndham in franchise agreements was not “transferrable” to
vendors like Brigadoon. In support of this argument, Gorss
cites Physicians Healthsource, which rejected the idea that “a
company could solicit express prior permission to send fax
advertisements, then transfer that permission to a completely
different company,” finding that “such a practice could
eviscerate the entire statutory scheme which is designed to
protect consumers from receiving unwanted contact from
unknown entities or individuals.” Physicians Healthsource, 950
F.3d at 967. In that case, the defendant had purchased part of
another company’s business, and in the process acquired a
customer database listing fax numbers. We found that permis-
sion to send faxed ads granted to the original company did not
transfer to the successor that acquired the contact list in the
purchase. 950 F.3d at 967–68.
But we also distinguished that scenario from the circum-
stances alleged here. In this case, Brigadoon has provided
evidence that class members arguably granted permission in
franchise agreements to receive faxed advertisements not only
from the franchisors but from the franchisors’ approved
vendors and affiliates. We found that consenting to the ability
No. 21-1358 21
of a group of individuals to send faxed ads was distinguishable
from permission given to one entity and then transferred to
another. Physicians Healthsource, 950 F.3d at 968. When permis-
sion is granted broadly to a group of possible senders, those
senders may be able to demonstrate that the statutory defense
of prior express permission or invitation has been met. See also
Gorss, 997 F.3d at 480–81 (applying the Seventh Circuit’s
reasoning from Physicians Healthsource and concluding that a
franchise agreement between Wyndham and Gorss expressly
permitted both Wyndham and its affiliates to send faxed
advertisements); Gorss, 931 F.3d at 1100–02 (“A fax recipient
may provide his express permission to receive faxes from third
parties, which the hotels did when they agreed in their
franchise agreements with Wyndham to receive assistance with
purchasing items from Wyndham affiliates.”). The district
court committed no legal error on the issue of transferred
consent.
III.
At the class certification stage, it was not Brigadoon’s
burden to prove the merits of its permission defense, which it
supported with a viable theory and specific evidence. Rather,
it was the plaintiff’s burden to demonstrate that common
issues of law or fact would predominate when resolving the
question of permission later, at the merits stage. The district
court did not abuse its discretion in finding that Gorss failed to
meet that burden.
AFFIRMED.