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G.M. Sign, Inc. v. Finish Thompson

August 20, 2009

G.M. SIGN, INC., AN ILLINOIS CORPORATION, INDIVIDUALLY AND AS THE REPRESENTATIVE OF A CLASS OF SIMILARLY SITUATED PERSONS, PLAINTIFF,
v.
FINISH THOMPSON, INC., DEFENDANTS.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiff G.M. Sign, Inc. ("GM Sign") filed suit against Defendant Finish Thompson, Inc. ("Finish") under the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227. The TCPA prohibits the use of any telephone facsimile machine, computer or other device to send an unsolicited advertisement to a telephone facsimile machine. 47 U.S.C.A. § 227 (b)(1)(C). GM Sign alleges that Finish hired a fax broadcaster to send out its advertisements via fax. GM Sign filed a motion and then a first amended motion to certify a class pursuant to Fed.R.Civ.P. 23(b)(3) and this Court denied the motion without prejudice finding that GM Sign had no realistic means of identifying potential class members because it had no record of the intended fax recipients. (Dkt. 42.) GM Sign then filed a Second Amended Motion for Class Certification, this time submitting backup fax logs it argues can be used to identify potential class members. In addition, it filed a Motion for Leave to Disclose a Rule 26(A)(2) expert, Doctor Robert Biggerstaff ("Biggerstaff"), who provided a report supporting GM Sign's Second Amended Motion for Class Certification. For the reasons stated below, both Motions are granted.

BACKGROUND

Finish contracted with Maxileads, a company that creates advertisements and then distributes them via mass faxes or "blast faxes." Maxileads sent over 13,000 faxes of a Finish advertisement for a system that recycles solvent for ten cents per gallon in exchange for $288 in fees. Finish did not supply fax numbers to Maxileads but rather Maxileads compiled a list of numbers to which it sent the advertisement from anonymous third-party lists. Finish never reviewed the list of fax numbers and neither Maxileads nor Finish requested or received permission to send the faxes from the recipients.

GM Sign asserts that Maxileads sent 13,626 fax transmissions of the Finish advertisement on October 6-7, 2005 and that 10,859 of those transmissions were successful. It bases this information on a back-up disk it received from Maxileads employee Joel Abraham on January 8, 2009 containing what Biggerstaff found to be fax transmission logs. Specifically, the disks contain archived transmission log files titled Fax-1-Solvent1, Fax1-Solvent2, Fax2-Solvent1 and Fax2-Solvent2, one of which contains the Finish advertisement and each of which contain a list of fax numbers and information as to whether the fax was successful.

MOTION FOR LEAVE TO DISCLOSE RULE 26(A)(2) EXPERT

As an initial matter, GM Sign moves for leave to disclose a Rule 26(A)(2) expert, Biggerstaff, who has submitted a report in support of its Second Amended Motion for Class Certification. On January 8, 2009, GM Sign received a back-up disk allegedly containing fax numbers to which Maxileads sent Finish's advertisement from Joel Abraham, an employee of Maxileads. In response, it hired Biggerstaff to review the disk and report as to its contents. GM Sign represents and this Court accepts that it had no need to hire an expert before it received the back-up disk. In addition, as this Court found in its order granting Finish's motion to file a third-party complaint, despite the parties' diligence, Caroline and Joel Abraham and their fax-blasting companies were very difficult to locate, thus accounting for the delay in finding the back-up disk. As such, GM Sign's Motion for Leave to Disclose is granted, and this Court will consider Biggerstaff's report in reviewing the Second Amended Motion for Class Certification.

STANDARD OF REVIEW

The decision to certify a class action rests within the discretion of the district court. See Mira v. Nuclear Measurements Corp., 107 F.3d 466, 471 (7th Cir. 1997). "[T]he party seeking class certification assumes the burden of demonstrating that certification is appropriate." Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 596 (7th Cir. 1993). A party may pursue its claim on behalf of a class only if it can establish that the four threshold requirements of Federal Rule of Civil Procedure 23 are met: "(1) the class is so numerous that joinder of all members is impracticable [numerosity]; (2) there are questions of law or fact common to the class [commonality]; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class [typicality]; and (4) the representative parties will fairly and adequately protect the interests of the class [adequacy]." Fed.R.Civ.P. 23(a). If the party meets this initial burden, it must also show that the requirements for one of the subsections of Rule 23(b) are met. See Oshana v. Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006). Here, GM Sign seeks to certify a class under Rule 23(b)(3), which permits a class to seek money damages. Therefore GM Sign must show that "questions of law or fact common to the members of the class predominate over any questions affecting only individual members [predominance], and that a class action is superior to other available methods for fair and efficient adjudication of the controversy [superiority]." Fed.R.Civ.P. 23(b)(3). In addition to the Rule 23 requirements, the party seeking class certification must provide a workable class definition by showing that the members of the class are identifiable. See Oshana, 472 F.3d at 513.

DISCUSSION

GM Sign claims that it received Finish's advertisement unsolicited via fax in violation of the TCPA. The TCPA prohibits the use of "any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement, unless... the unsolicited advertisement is from a sender with an established business relationship with the recipient" or "the sender obtained the number of the telephone facsimile machine through... the voluntary communication of such number, within the context of such established business relationship, from the recipient of the unsolicited advertisement, or a directory, advertisement, or site on the Internet to which the recipient voluntarily agreed to make available its facsimile number for public distribution." 47 U.S.C. § 227(b)(1)(C). It provides for $500 of statutory damages for each violation. 47 U.S.C. § 227(b)(3)(B). GM Sign proposes a class comprised of "All persons who, on or about October 6-7, 2005, were sent faxes in the form attached as Exhibit 1 [a Finish Thompson advertisement] on behalf of defendant Finish Thompson promoting its goods and services for sale."

Applicable Law

Finish argues that this Court has jurisdiction based on diversity of citizenship and that therefore Illinois choice of law provisions apply and that those provisions counsel that New York state law applies to this case. As such, it argues, this Court cannot certify a class because New York Civil Practice Law Rule 901(b) precludes certification of a class for recovery of statutory damages unless the statute at issue specifically authorizes class action recovery. See McKinney's CPLR § 901(b) ("unless a statute creating or imposing a penalty, or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute cannot be maintained as a class action").

First, this Court has jurisdiction over this action not only because the parties are diverse but also because GM Sign's TCPA claim arises under federal law. See Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 451 (7th Cir. 2005) (removal of TCPA case authorized under ยง 1441 because the claim arises under federal law). Regardless of the bases for this Court's jurisdiction, federal procedural rules govern cases once they are removed to federal court. See Alonzi v. Budget Const. Co., 55 F.3d 331, 333 (7th Cir. 1995) ("once a case is removed from state to federal court, federal procedure governs") citing Fed.R.Civ.P. 81(c) ("[the Federal Rules of Civil Procedure] apply to a civil action after it is removed from a state court"). Thus, the Federal ...


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