A federal court opinion, Forman v. Data Transfer, Inc. 164 F.R.D 400 (E.D.Pa 1995), holds that a class action could not be brought to enforce 47 U.S.C. 227(b)(1)(C), the federal law that prohibits sending unsolicited advertisements via facsimile transmission. As you will see, the plaintiffs sought to bring a class action on behalf all those who had received any unsolicited facsimile advertisement from the defendant, Data Transfer, Inc., since the enactment of the federal statute. The federal district court ruled that a class action could not be brought for several reasons.
First, the court held that defining the class in terms of those who received unsolicited faxes would require the court to determine whether the faxes were unsolicited, and therefore whether the defendant was liable, in order to determine who was in the class. Courts resist class actions where the determination of the members of the class depends upon the determination of whether the defendant is liable.
Second, every facsimile transmission is a separate act, harming only one potential class member. This is distinguished from cases in which the defendant's single act harms many people, all of whom form a class and sue the defendant for its wrongful act. For example, a single illegal dumping of toxic waste in drinking water source can harm all those who drink from it. Consumers harmed by drinking that water might bring suit, as a class, against the dumper. Or, the Forman court cites as an example of an appropriate class action a case of securities fraud where a single fraudulent misstatement causes damage to many people. (Forman v. Data Transfer, supra, 164 F.R.D at 405 [citing Grossman v. First Pennsylvania 1991 U.S. Dist. LEXIS 15373 (E.D.Pa 1991)].)
Third, and most important for the purposes of legislative reform, the court held that in setting the amount at $500 per unsolicited fax and treble damages, the legislature created individual causes of action with sufficient monetary incentive for individuals to bring their own individual law suits. Accordingly, the court held there was no need to authorize a class action. Specifically, the court stated:
A class action would be inconsistent with the
specific and personal remedy provided by Congress
to address the minor nuisance of unsolicited
facsimile advertisements. See Ratner v. Chemical
Bank New York Trust Co., 54 F.R.D. 412, 416
(S.D.N.Y. 1972) (denying class certification where
the Truth in Lending Act's minimum award of $100
each for some 130,000 class members would be a
"horrendous, possibly annihilating punishment,
unrelated to any damage to the purported class or
to any benefit to defendant").
164 F.R.D. at 405.
The Forman court's first two reasons for denying class certification was recently followed in Kenro Inc. v. Fax Daily, Inc., 902 F.Supp. 1162, 1169-70 (S.D.Ind. 1997).
Class actions to enforce the unsolicited fax law received further federal court disapproval in Joseph N. Main P.C. v. Electronic Data Systems Corp., 168 F.R.D. 573 (N.D.Tex 1996). There the court commented:
Ostensibly, TCPA's purpose is to protect the
individual telephone consumer by discouraging and
preventing those annoying telephone calls which
come in the middle of dinner, prerecorded sales
pitches which fill an entire answering machine
tape, and unsolicited faxes which waste time, paper
and ink. . . .
However, in a classic case of the best laid plans
going awry, enterprising attorneys have gleaned,
from the seemingly harmless packaging of consumer
protection, a potent class-action weapon.
168 F.R.D at 575. In this case plaintiff's attorney sought to
certify an inappropriately large class of all persons "who are
now receiving, or who are about to receive unsolicited fax
advertisements in the United States who are located in
metropolitan areas with populations above 150,000 on or after
December 20, 1002 through date of judgement." Although the court
clearly intimated its view of the appropriateness of the class
action, the court did not reach the merits of class certification
question. Instead the court refused to certify the class because
the motion for class certification was not timely brought.
However, these are all federal cases. If a class action were brought in state court, the state's law, not federal law, would govern whether the action is appropriately brought as a class action. However, the state court might look to these federal decision for guidance.
Class actions can be an important, and often the only cost effective means to remedy consumer protection violations. You may wish to consider proposing language that would authorize class actions in legislation proposing to outlaw unsolicited e-mails.