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City Select Auto Sales, Inc. v. David/Randall Assocs., Inc.

United States District Court, D. New Jersey

March 27, 2015

CITY SELECT AUTO SALES, INC., a New Jersey corporation, individually and as the representative of a class of similarly situated persons, Plaintiff,
v.
DAVID/RANDALL ASSOCIATES, INC. and RAYMOND MILEY, III, Defendants

Page 404

[Copyrighted Material Omitted]

Page 405

For City Select Auto Sales, Inc., Plaintiff: Alan C. Milstein, Esq., SHERMAN, SILVERSTEIN, KOHL, ROSE & PODOLSKY, PC, Moorestown, N.J.; Tod A. Lewis, Esq., Jonathan B. Piper, Esq., BOCK & HATCH, LLC, Chicago, Ill.

For David Randall Associates, Inc. and Raymond Miley, III, Defendants and Third Party Plaintiffs: F. Emmett Fitzpatrick, III, Esq., FLAMM WALTON, P.C., Blue Bell, PA.

OPINION

Page 406

HONORABLE JEROME B. SIMANDLE, Chief United States District Judge.

Contents

I. INTRODUCTION

II. BACKGROUND

A. Factual Background

B. Procedural History

III. Discussion.

IV. Defendants' Motion to Decertify the Class

A. Standard of Review Applicable to Defendants' Motion

B. Defendants Fail to Demonstrate that the Class Must be Decertified

V. Plaintiff's Motion for Class-Wide Summary Judgment

A. Standard of Review Applicable to Plaintiff's Motion

B. Summary Judgment Will Be Granted in Favor of the Class and against

Defendants as to the TCPA Claim

1. The Subject Facsimile Transmissions Constitute " facsimile

advertisements" under the TCPA

2. No Issues of Fact Exist as to the Unsolicited Nature of the

Facsimile Advertisements

3. Defendants Constitute " Senders" under the TCPA

4. Issues of Fact Preclude Summary Judgment with respect to the

Claim of Individual Liability against Mr. Miley

5. The Record Demonstrates the Class's Entitlement to an Award of

Statutory Damages in the Amount of $22,405,000

a. Biggerstaff's Reports and the Underlying B2B Records Constitute

Admissible Evidence for Purposes of Summary Judgment

b. Any Outstanding Issue Concerning the Third-Party Default Defendants

Does Not Preclude the Entry of Summary Judgment in Favor of the Class

c. Determination of Damages and Entry of Judgment

VI. CONCLUSION

Page 407

I. INTRODUCTION

In this class action arising under the Telephone Consumer Protection Act, 47 U.S.C. § 227 (hereinafter, the " TCPA" ), Plaintiff City Select Auto Sales, Inc. (hereinafter, " Plaintiff" ) alleges that Defendants David/Randall Associates, Inc. (hereinafter, " Randall" ) and Raymond Miley, III (hereafter, " Miley" and collectively, the " Defendants" ) transmitted unlawful facsimile advertisements 44,832 times to 29,113 different fax numbers, through a third-party entity Business to Business Solutions (hereinafter, " B2B" ).

Plaintiff now seeks the entry of class-wide summary judgment against Defendants with respect to the TCPA claims (see generally Pl.'s Br. [Docket Item 141]), while Defendants move to decertify the Class. (See generally Defs.' Br. [Docket Item 133].) Both motions, however, principally result from, and/or are motivated by, three prior rulings of this Court.

First, on February 7, 2012, the Court rejected Defendants' position that the limitations period applicable to Plaintiff's claims precluded this action from proceeding. See generally City Select Auto Sales, Inc. v. David Randall Assocs., Inc., No. 11-2658, 2012 WL 426267, at *5-*6 (D.N.J. Feb. 7, 2012). In particular, the Court found, at the Rule 12(b)(6) phase, that the pendency of a related state court action tolled the limitations period for the federal Class members, thereby rendering their claims timely. See Id. at *5-*6.

Then, on December 20, 2013, the Court granted Plaintiff's motion for class certification, and certified Plaintiff's TCPA claim under Federal Rule of Civil Procedure 23(b)(3) on behalf of the following class:

All persons or entities, with whom David Randall Associates did not have an established business relationship, who were successfully sent one or more unsolicited faxes during the period March 29, 2006, through May 16, 2006, stating, " ROOF LEAKS??? REPAIRS AVAILABLE Just give us a call and let our professional service technicians make the repairs!" and " CALL: David/Randall Associates, Inc. TODAY."

City Select Auto Sales, Inc. v. David Randall Assocs., Inc., 296 F.R.D. 299, 308 (D.N.J. 2013). Finally, on September 24, 2014, the Court denied Defendants' motion for summary judgment with respect to Plaintiff's TCPA, state law conversion, and individual liability claims, principally on the basis that the undisputed facts failed to demonstrate Defendants' entitlement to judgment as a matter of law. See City Select Auto Sales, Inc. v. David Randall Assocs., Inc., No. 11-2658, 2014 WL 4755487 (D.N.J. Sept. 24, 2014).

Page 408

In seeking the entry of class-wide summary judgment, Plaintiff relies in part upon the Court's denial of Defendants' motion for summary judgment, and argues that the undisputed record establishes the Class's entitlement to judgment as a matter of law to statutory damages under the TCPA in the amount of $22,405,000. (See generally Pl.'s Br. [Docket Item 141].) Plaintiff, in particular, submits that the uncontroverted record demonstrates that Defendants hired B2B to send facsimile advertisements on Defendants' behalf without the recipients' prior express invitation or permission, nor the appropriate opt-out notice, and in violation of the TCPA. (Id. at 4, 14-24.) Defendants, however, insist that factual disputes pervade the record as to the admissibility of Plaintiff's reconstruction of the B2B computer records, certain Class members consent to receive facsimile advertisements, and Mr. Miley's personal liability for the disputed transmissions. (See generally Defs.' Opp'n [Dock Item 146].)

In addition to opposing Plaintiff's motion, however, Defendants move to decertify the Class on the basis that the Court's December 20, 2013 Certification Order rested upon " a false factual premise," namely, that only residents of New Jersey comprised the putative class members encompassed by Plaintiff's proposed class definition. (See Defs.' Br. [Docket Item 133].) In particular, Defendants argue that Plaintiff's " belated production" of the names and addresses of the class members recently revealed that non-New Jersey residents comprise 64% of the Class. (Defs.' Reply [Docket Item 140], 3-5.) Therefore, Defendants assert that the presently certified Class suffers from a " fundamental jurisdictional" deficiency, because this Court " indisputably lacks subject matter jurisdiction" over any recipient of facsimile transmissions beyond the borders of the State of New Jersey. (Id. at 1-5.)

The pending motions present three primary issues. First, the Court must consider whether the inclusion of non-New Jersey residents in the certified Class constitutes newly discovered evidence. Second, the Court must determine whether such composition requires modification of the Court's prior decision on class certification. Finally, the Court must consider whether genuine issues of disputed fact concerning Defendants' liability under the TCPA preclude the summary disposition of this action in favor of the Class.[1]

For the reasons explained below, Defendants' motion to decertify class will be denied, and Plaintiff's motion for class-wide summary judgment will be granted with respect to Defendant David/Randall Associates, Inc., but denied with respect to Defendant Raymond Miley, III.[2]

II. BACKGROUND

A. Factual Background

The factual record in this action remains largely unchanged from that set forth in the Court's September 24, 2014 Opinion.[3]

Page 409

Nevertheless, the Court turns to the parties' respective statements of material facts.

In the spring of 2006, Raymond Miley, III acted as President, Shareholder, Officer and Director of David/Randall Associates, Inc., a commercial roofing company organized under the laws of the Commonwealth of Pennsylvania. (See Pl.'s SMF at ¶ ¶ 2-3.) During the same period, third-party defendants Caroline Abraham and Joel Abraham " operated an unincorporated advertising business" named " 'Business to Business Solutions,'" or " B2B," which disseminated facsimile advertisements, on behalf of its clients, to a list of U.S. companies purchased from InfoUSA.[4] (Id. at ¶ ¶ 10, 12, 17.)

Mr. Miley, who directed David/Randall's " marketing and advertising" campaigns (id. at ¶ 5), became aware of B2B's services after B2B solicited David/Randall's business, and offered to market David/Randall's roofing services through B2B's fax advertising services. (Id. at ¶ ¶ 26.) Following the solicitation, Mr. Miley directed his administrative assistant/office manager, April T. Clemmer, to contact B2B on his behalf, in order to inquire into the specific pricing and distribution details of B2B's fax marketing services.[5] (Clemmer Dep. at 9:22-16:1.)

Page 410

After Ms. Clemmer obtained additional information concerning B2B, Mr. Miley suggested that the service might be beneficial for advertising David/Randall's service repairs. (Clemmer Dep. at 15:8-13.) Ms. Clemmer, accordingly, continued to communicate with B2B concerning B2B's pricing, proposed advertisements, and the targeted audience for the potential " fax blast" campaign. (Pl.'s SMF at ¶ ¶ 35-36; see also Pl.'s Ex. 3 to Miley Dep.) Following an exchange of proposed advertisements, on March 26, 2006, Ms. Clemmer faxed " the approved ad" to B2B, along with a list of zip codes to be " solicited for business." (Pl.'s Ex. 8 to Miley Dep.; Pl.'s SMF at ¶ 41.)

The approved fax, which appears to have remained unchanged throughout the remainder of B2B and David/Randall's relationship, stated " ROOF LEAKS??? REPAIRS AVAILABLE," and directed recipients in " Eastern PA, NJ, and Mid-State DE" to call David/Randall for " the repair and maintenance of most major roofing systems." (Pl.'s Exs. 6-7 to Miley Dep.; see also Pl.'s SMF at ¶ 42.) In addition, the ad provided an array of contact information for David/Randall, and indicated that the advertisement had been sent to the recipient because some " person" at the recipient's business " supplied the fax number and permission to send faxes." (Pl.'s Exs. 6-7 to Miley Dep.) Nevertheless, the advertisement provided " a toll free 'Remove' number" for recipients to be removed from the distribution list. (Id.)

Thereafter, David/Randall received a letter (directed to the attention of Ms. Clemmer), which stated that B2B had " everything needed to start [David/Randall's] faxing campaign, except payment." (Exs. 8-9 to Clemmer Dep.) Ms. Clemmer, in turn, faxed B2B a " David/Randall Associates, Inc." check for $422.00 in connection with David/Randall's " campaign for 12,000 faxes" on March 28, 2006, and directed that the transmissions be sent on the " morning" of March 29, 2006. (Pl.'s Ex. 9 to Miley Dep (emphasis in original).)

Following the first " advertisement blast," however, David/Randall received multiple complaints concerning the unsolicited nature of the advertisements. (See Exs. 12, 27 to Clemmer Dep.) Several complaints further stated that the remove hotline seemed ineffective and/or unavailable, and suggested that the advertisements violated applicable law. (See Ex. 27 to Clemmer Dep.) As a result, Ms. Clemmer forwarded the list of " Annoyed Recipients" to B2B on March 29, 2006, and requested that the identified fax numbers be removed from any future distribution lists. (Id.; see also Pl.'s SMF at ¶ 49.)

Despite the complaints, Ms. Clemmer wrote to B2B on March 31, 2006, and stated that David/Randall " would like to do another fax marketing blitz" during the morning of an upcoming " rainy day." (Exs. 13-14 to Clemmer Dep. (emphasis in original).) In particular, Ms. Clemmer indicated that David/Randall sought to send another 12,000 transmissions of the previously-approved ad, and requested that the " areas solicited for th[e] campaign" include " New Jersey: Hunterdon, Mercer, Burlington, Camden, Gloucester & Salem Counties[; ] Delaware: New Castle County only [; and] Pennsylvania: Bucks & Chester Counties." (Id.) Following confirmation from B2B, Ms. Clemmer faxed a David/Randall check to B2B in the amount of $394.00 as " payment-in-full" for the second " fax blitz." (Ex. 15 to Clemmer Dep.)

After the second advertisement blast, however, Ms. Clemmer again advised B2B to " REMOVE" various entities from the distribution list, particularly because several of the complainants " threatened to pursue legal action" and/or to contact the Federal Communications Commission.

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(Id. (emphasis in original).) In addition, Ms. Clemmer stated that several of the recipients " notified" her that the law requires that a " '800' number opt out" be provided, and that many recipients reported that the existing hotline remained unavailable. (Id.)

Nevertheless, on April 12, 2006, Ms. Clemmer requested, on a third occasion, that B2B " send 18,000 faxes in [an additional] fax campaign," in addition to providing new numbers to be removed from B2B's distribution list. (Pl.'s SMF at ¶ 60; see also Ex. 17 to Clemmer Dep.) On the same day, Ms. Clemmer sent B2B a check for $565.00 in connection with David Randall's " 3rd campaign [of] another 18,000 faxes," with instructions that the faxes " BE SENT FRIDAY MORNING (4-14-06)!"

Following the third fax " blitz," Ms. Clemmer again advised B2B, on April 17, 2006, of " requests to have FAX numbers removed from [B2B's] list." (Ex. 27 to Clemmer Dep.) Despite the continuing complaints, however, on May 12, 2006, David Randall authorized a " fourth-fax blasting campaign" on May 12, 2006. (Pl.'s SMF at 65.) As with the previous blasts, Ms. Clemmer requested that 12,000 faxes be sent " to the original area [David/Randall] targeted in March," i.e., New Jersey, New Castle County in Delaware, and Bucks and Chester Counties in Pennsylvania. (Ex. 22 to Clemmer Dep.) In addition, Ms. Clemmer enclosed a check for $394.00 and directed that the " Fax blast" be completed during the morning of May 15, 2006.

B. Procedural History

On May 4, 2009, G. Winter's Sailing Center, Inc. filed a putative class action against David/Randall in the Superior Court of New Jersey, alleging that the same series of unsolicited faxes violated the TCPA. See City Select Auto Sales, Inc. v. David Randall Assocs., Inc., No. 11-2658, 2012 WL 426267, at *1 (D.N.J. Feb. 7, 2012). The state court pleading specifically alleged that " 'Defendant faxed the same and similar advertisements to Plaintiff and more than 39 other recipients without first receiving the recipients' express permission or invitation.'" Id. (citation omitted). The state court, however, never certified the action on behalf of a class. Id. Rather, because the plaintiff moved for certification " nearly two years" into the litigation, the state court denied the motion on timeliness grounds, and concluded that the case would proceed to trial only with respect to the claims of the single plaintiff. Id. at *2. The parties reached a settlement shortly thereafter, and the state court closed the case on April 27, 2011. Id. (citation omitted).

This federal action followed on May 10, 2011, similarly on the ground that David/Randall sent " form facsimile" advertisements to " 29,113 unique fax numbers" without " prior express permission or invitation." (See Class Action Compl. at ¶ ¶ 13, 14, 29.) Defendants then moved to dismiss Plaintiff's Complaint, primarily on the grounds that the applicable limitations period barred Plaintiff's claims for relief. (See Defs.' Br. [Docket Item 8].)

On February 7, 2012, however, this Court concluded that, under American Pipe & Construction Company v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), the pendency of the state court putative class action tolled the limitations period for " claims on behalf of unnamed alleged recipients" of unsolicited facsimile advertisements " during at least the first fourteen months of the Superior Court action." City Select Auto Sales, Inc. v. David Randall Assocs., Inc., No. 11-2658, 2012 WL 426267, at *5-*6 (D.N.J. Feb. 7, 2012). Therefore, based upon the face of

Page 412

the Complaint, the Court found the claims against Defendants timely. See id.

Defendants then answered Plaintiff's Complaint, and filed a third-party Complaint against the operators of B2B, Caroline Abraham and Joel Abraham (hereinafter, the " Abrahams" ). [Docket Item 23.] The Abrahams, however, never responded to Plaintiff's Complaint, and the Court entered default on December 17, 2012. [Docket Item 53.]

On December 20, 2013, the Court certified Plaintiff's TCPA claim under Federal Rule of Civil Procedure 23(b)(3) on behalf of the following class:

All persons or entities, with whom David Randall Associates did not have an established business relationship, who were successfully sent one or more unsolicited faxes during the period March 29, 2006, through May 16, 2006, stating, " ROOF LEAKS??? REPAIRS AVAILABLE Just give us a call and let our professional service technicians make ...

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