Hazel's Cup & Saucer, LLC v. Around The Globe Travel, Inc. , 86 Mass. App. Ct. 164 ( 2014 )

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13-P-1371 Appeals Court
HAZEL'S CUP & SAUCER, LLC vs. AROUND THE GLOBE TRAVEL, INC.
No. 13-P-1371.
Suffolk. May 8, 2014. - August 22, 2014.
Present: Rubin, Wolohojian, & Maldonado, JJ.
Consumer Protection. Practice, Civil, Class action. Telephone.
Advertising.
Civil action commenced in the Superior Court Department on
March 8, 2010.
A motion for class certification was heard by Frances A.
McIntyre, J., and entry of judgment was ordered by her.
Tod A. Lewis, of Illinois, for the plaintiff.
RUBIN, J. The Federal Telephone Consumer Protection Act of
1991 (TCPA) forbids the use of "any telephone facsimile machine,
computer, or other device to send, to a telephone facsimile
machine an unsolicited advertisement." 47 U.S.C. § 227(b)(1)(C)
(2006). The TCPA creates a private right of action for
recipients of unsolicited advertisements received by facsimile
2
(fax), entitling them to collect from the sender the greater of
actual damages or $500. Treble damages are available in the
case of knowing or wilful violations.
Florida travel agency Around The Globe Travel, Inc. (Around
The Globe) hired New York fax broadcaster Business to Business
Solutions (B2B) to assist it with advertising a Super Bowl party
on a cruise ship. Using a list of fax machine telephone numbers
purchased from a third party, B2B sent 2,325 faxes to 1,640
different Massachusetts business fax numbers on August 2 and 3,
2006. One of the recipients was the plaintiff, Hazel's Cup &
Saucer, LLC (Hazel's).
Hazel's brought this case as a putative class action in the
Superior Court against the defendant Around The Globe. 1 The
submissions of Hazel's to the lower court describe some of the
difficult and costly procedures undertaken by Hazel's, its
counsel, and its expert witness in order to find both Around The
Globe and B2B, and to identify the recipients of the
advertisement at issue.
The motion judge denied a motion for class certification
under Mass.R.Civ.P. 23, as amended, 452 Mass. 1401 (2008). 2 With
1
Charlotte Boedigheimer, Around The Globe's president and
sole shareholder, was dismissed below as a defendant, with
prejudice.
2
After entry of the order denying the motion for class
certification, the parties entered into an agreed-upon
3
respect to the four factors listed in rule 23(a) -- numerosity,
commonality, typicality, and adequacy of representation -- the
judge found the requirements of the TCPA easily met. As for the
factors outlined in rule 23(b) -- predominance of common
questions of law and fact over issues affecting only individual
members, and superiority of class action over other methods of
adjudication -- the judge found that the predominance
requirement also was satisfied, before turning to the question
of superiority. On this final inquiry, she concluded that the
class action mechanism was not superior to the adjudication of
each individual class member's claim in the small claims session
of the District Court.
The judge found that allowing class certification would be
"patently unfair" because
"the potential damage award would be disproportionate in
relation to the actual harm suffered by the class. . . .
[A] potential cumulative award of the alleged 2,325 TCPA
violations would range from a minimum of over $1.1 million
to over $3.4 million. Yet, the nature of the harm suffered
by individual claimants -- the cost of paper, ink, and
toner -- amounts to pennies."
The judge found that the disparity between actual damages
suffered and the statutory award was particularly undesirable
because "the class action mechanism for TCPA claims would lend
itself to use as a device for the solicitation of litigation."
stipulated judgment, the contents of which present no issues on
appeal.
4
On the other hand, she reasoned, "The possible damage award for
each violation of the TCPA is not a nominal amount such that,
without the class action device, an individual would be
foreclosed from the courthouse." The judge concluded that,
"[W]ith the facts required to prevail on an individual claim the
same as proving membership in a class, a small claims action
provides a cost effective and straightforward forum for
individual plaintiffs interested in pursuing their TCPA claims."
The parties subsequently reached an agreed-upon stipulated
judgment, which entered without prejudice to Hazel's being able
to appeal the denial of class certification. See note 2, supra.
This appeal followed.
Discussion. Though the question of class certification is
committed to the sound discretion of the judge, a class
certification order must be reversed if it is based upon legal
error. See Salvas v. Wal-Mart Stores, Inc., 452 Mass. 337, 361
(2008). One of the primary purposes of the class action
mechanism is "to overcome the problem that small recoveries do
not provide the incentive for any individual to bring a solo
action prosecuting his or her rights. A class action solves
this problem by aggregating the relatively paltry potential
recoveries into something worth someone's (usually an
attorney's) labor." Amchem Prods., Inc. v. Windsor, 521 U.S.
591, 617 (1997), quoting from Mace v. Van Ru Credit Corp., 109
5
F.3d 338, 344 (7th Cir. 1997). As the Supreme Judicial Court
has explained, "[T]he policies of judicial efficiency and access
to courts that underlie the consumer class action suit [are
that] it aggregates numerous small claims into one action, whose
likely range of recovery would preclude any individual plaintiff
from having his or her day in court." Weld v. Glaxo Wellcome
Inc., 434 Mass. 81, 93 (2001).
This case presents an archetypical example of a case in
which the class action mechanism is superior to that of
individual litigation of each claim. Under the TCPA, each
person sent an unsolicited fax is entitled to damages in the
amount of $500. The cost of obtaining counsel to litigate each
case -- particularly given the need for discovery -- would
likely be greater than the expected value of each claim.
It was an error of law to conclude that providing redress
for plaintiffs entitled to it by the TCPA would be "unfair"
because of the cumulative cost to the defendant, and that
therefore a class action was not superior to the individual
litigation of the class members' claims. Congress has made the
judgment that statutory damages in this amount are necessary to
compensate those injured by the receipt of unwanted fax
advertisements, and to deter this unlawful conduct. A judge's
determination of superiority under Mass.R.Civ.P. 23(b) may not
properly include his or her judgment about the wisdom or
6
propriety of the substantive law under which the plaintiff seeks
redress. Nor may the possibility that the class action
mechanism may work successfully as it was intended to by the
enacting Legislature in providing appropriate redress by
aggregating small recoveries be treated as a factor supporting a
conclusion that the class action mechanism would be inferior to
individual litigation of those claims.
We agree with the majority of courts to have discussed the
issue under various cognate class action provisions and hold
that the class action mechanism is a superior avenue for
adjudication of claims under 47 U.S.C. § 227 on facts such as
these. 3 Regardless of the proper construction of the cognate
3
Compare Kavu, Inc. v. Omnipak Corp., 246 F.R.D. 642 (W.D.
Wash. 2007); Reliable Money Order, Inc. v. McKnight Sales Co.,
281 F.R.D. 327 (E.D. Wis. 2012); Vandervort v. Balboa Capital
Corp., 287 F.R.D. 554 (C.D. Ca. 2012); Siding & Insulation Co.
vs. Combined Ins. Group, Ltd., U.S. Dist. Ct. No. 1:11 CV 1062
(N.D. Ohio Apr. 24, 2012); Van Sweden Jewelers, Inc. vs. 101 VT,
Inc., U.S. Dist. Ct., No. 1:10-CV-253 (W.D. Mich. Sept. 19,
2012); Sparkle Hill, Inc. vs. Interstate Mat Corp., U.S. Dist.
Ct., No. 11-10271-RWZ (D. Mass. Dec. 18, 2012); St. Louis Heart
Center, Inc. vs. Vein Centers for Excellence, Inc., U.S. Dist.
Ct., No. 4:12 CV 174 CDP (E.D. Mo. Dec. 11, 2013); C-Mart, Inc.
vs. Metropolitan Life Ins. Co., U.S. Dist. Ct., No. 13-80561
(S.D. Fla. Feb. 4, 2014); Michel vs. WM Healthcare Solutions,
Inc., U.S. Dist. Ct., No. 1:10-CV-638 (S.D. Ohio Feb. 7, 2014);
Arnold Chapman & Paldo Sign & Display Co. vs. Wagener Equities,
Inc., U.S. Dist. Ct., No. 09 C 07299 (N.D. Ill. Feb. 11, 2014);
Hawk Valley, Inc. vs. Taylor, U.S. Dist. Ct., No. 10-CV-00804
(E.D. Pa. Mar. 31, 2014); ESI Ergonomic Solutions, LLC v. United
Artists Theatre Circuit, Inc., 203 Ariz. 94 (2002); Critchfield
Physical Therapy v. Taranto Group, Inc., 293 Kan. 285 (2011);
Display S., Inc. v. Graphics House Sports Promotions, Inc., 992
So. 2d 510 (La. Ct. App. 2008); Karen S. Little, L.L.C. v. Drury
7
Federal and State class action rules, we hold that the
superiority prong of Mass.R.Civ.P. 23(b) was met in this case.
Except to the extent it dismisses all claims against
Charlotte Boedigheimer with prejudice, see note 1, supra, the
stipulated judgment entered on May 21, 2013, is vacated. The
order denying the motion for class certification is reversed,
and the matter is remanded to the Superior Court for entry of an
order certifying the class and for further proceedings
consistent with this opinion.
So ordered.
Inns, Inc., 306 S.W.3d 577 (Mo. Ct. App. 2010); Lampkin v. GGH,
Inc., 146 P.3d 847 (Okla. Civ. App. 2006); with Forman v. Data
Transfer, Inc. 164 F.R.D. 400 (E.D. Pa. 1995); Evans & Green,
LLP vs. That's Great News, LLC, U.S. Dist. Ct., No. 11-3340-CV-
S-ODS (W.D. Mo. Oct. 15, 2012); Hammond v. Carnett's, Inc., 266
Ga. App. 242 (Ga. Ct. App. 2004); Local Baking Prod., Inc. v.
Kosher Bagel Munch, Inc., 421 N.J. Super. 268 (App. Div. 2011);
Cicero v. U.S. Four, Inc., 2007-Ohio-6600 (Ct. App. 2007); Sal's
Glass Co. vs. Duplicating Methods Co., Conn. Super. Ct., No.
HHDCV106016006S (Mar. 11, 2013).