Kan. high court certifies class in suit over faxed ads

Jessica M. Karmasek Oct. 5, 2011, 3:36pm


TOPEKA, Kan. (Legal Newsline) - The Kansas Supreme Court last week affirmed the decision of a district court to certify a class of plaintiffs in an action seeking damages under the Telephone Consumer Protection Act.

At issue is a company's transmission of advertisements via fax. The class contends the transmissions were made in violation of the federal law, which governs the conduct of telephone solicitations or telemarketing.

The TCPA restricts the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages received by cell phones, and the use of fax machines to send unsolicited advertisements.

Its primary purpose is to prevent businesses from shifting their advertising costs to the recipients of unsolicited fax advertisements.

The defendant Taranto Group Inc. is a small business incorporated in Kansas and located in Leawood. It distributes and resells aesthetic medical devices such as microdermabrasion equipment and medical lasers to physicians and aesthetic professionals.

From March 2005 to March 2008, Taranto contracted with two outside vendors to send out advertising via fax on its behalf. These vendors were AmeraScope Media Inc. of Nebraska, which sent faxes from March 2005 to November 2006, and Westfax Inc. of Colorado, which sent faxes from February 2007 to March 2008.

Taranto did not own or review the databases or transmission logs used by AmeraScope. AmeraScope purchased its databases from a third party. Those databases are no longer available.

Westfax obtained its physician database from Taranto, which purchased a database from a third party. Taranto did not, however, possess or review the Westfax transmission logs.

Some of the fax recipients may have been customers who had consented to receive fax transmissions from Taranto or who had an ongoing business relationship with Taranto, but it is unknown how many.

Missouri doctor Radha Geismann originally sued Aestheticare, also a Kansas company, alleging violations of the TCPA. An amended petition named Taranto as an additional defendant.

The action sought damages and injunctive relief under the TCPA and tort damages for conversion.

Missouri-based Critchfield Physical Therapy, P.C., doing business as Montgomery County Physical Therapy subsequently filed a petition seeking to intervene as an additional class representative.

The parties later dismissed Aestheticare as a party defendant without prejudice. They also agreed to dismiss Geismann without prejudice and substitute Critchfield as the sole individual plaintiff and representative of the proposed class.

The Johnson County District Court issued an order certifying the proposed class and, in an amended order, certified the order for interlocutory appeal. After the state Court of Appeals granted Taranto's application for permission to take an interlocutory appeal, the state's high court granted Taranto's motion to transfer.

The Court, in its 35-page opinion filed Friday, said the plaintiffs presented "sufficient" evidence and "reasonable" allegations to allow the district court to conclude that class certification was appropriate.

Taranto argues that two fundamental flaws undermine class certification.

First, it contends there is no commonality among persons receiving the fax advertising, because some of those persons may have given consent or may have had an established business relationship with Taranto.

Second, it argues that there is no commonality because there is no proof that the persons on the data lists actually received the fax transmissions.

"Although Taranto may be able to show that some putative members of the plaintiff class fall within the statutory exceptions, this possibility does not defeat certification at this stage of the proceeding," wrote Justice Eric S. Rosen.

Rosen noted that the TCPA specifically prohibits using electronic devices "to send" unsolicited advertisements. The statute creates no requirement that a transmission be received, although the statute addresses exceptions for "recipients" who had established business relationships or who gave permission for advertisers to send them fax promotions.

"The reality that some plaintiffs may not have received the unlawful fax transmissions does not defeat their entitlement to damages. Although the harm resulting from unsolicited fax transmissions is often described in terms of recipients, the harm also extends to intended recipients, or targets of mass fax advertising," he wrote.

The Court said if some members of the class are later determined to have consented to the transmission of the fax advertisements, they may be removed.

Taranto also contends that more than 100,000 individual small claims actions would be superior to a single class action.

Not so, the Court said.

"While the defendant in such an action might benefit if only a small number of plaintiffs found it worth their while to bring suit or were aware of their rights under the TCPA, this small turnout would serve only to frustrate the intent of the TCPA and to protect junk fax advertisers from liability. It would, accordingly, not provide a 'superior' method for individual plaintiffs," Rosen wrote.

The Court did, however, take issue with the plaintiffs' use of the phrase "end user."

It agreed with Taranto that the definition is not "sufficiently precise" to determine which parties are included in the class and that it does not have a single, authoritative meaning.

However, this flaw is not fatal to the class certification, the Court said. A trial court retains the ability to modify a class at any time before final judgment, it explained.

"Rather than reverse the certification as overly vague, we note the advantages that a class action may offer, including judicial economy and protection of consumers' rights, and direct the district court to modify the class definition to clarify which parties constitute the plaintiff class," Rosen wrote.

The Court remanded the order with instructions to modify the class definition to clarify the parties.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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