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Holtzman v. Turza

United States Court of Appeals, Seventh Circuit

August 26, 2013

Ira Holtzman, C.P.A., & Associates Limited, individually and as representative of a class, Plaintiff-Appellee,
Gregory P. Turza, Defendant-Appellant

Argued May 22, 2012

Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 08 C 2014 — Robert W. Gettleman, Judge.

Before Easterbrook, Chief Judge, and Williams and Tinder, Circuit Judges.

Easterbrook, Chief Judge.

Believing that CPAs would find his services attractive, attorney Gregory Turza sent more than 200 of them occasional fax sheets containing business advice. The faxes produced more business—but not for Turza. He became the defendant in this suit under the Telephone Consumer Protection Act of 1991, 47 U.S.C. §227, which prohibits any person from sending unsolicited fax advertisements. Even when the Act permits fax ads—as it does to persons who have consented to receive them, or to those who have established business relations with the sender—the fax must tell the recipient how to stop receiving future messages. 47 U.S.C. §227(b)(1)(C)(iii), (2)(D). Turza's faxes did not contain opt-out information, so if they are properly understood as advertising then they violate the Act whether or not the recipients were among Turza's clients.

The faxes bear the masthead The "Daily Plan-It", but they were not produced by Perry White's editorial staff and came every other week rather than daily. Although they carry Turza's byline, and a notice claiming copyright in his name, they had been written by employees of Top of Mind, a marketing firm, which sold the concept (and the copy) to anyone who wanted promotional material. Turza did not edit or even review the faxes before they were sent in his name. But Turza does not contend that Top of Mind is responsible as the "person" who sent the faxes. The district court held that the faxes are "unsolicited advertisements" and entered summary judgment against Turza. 2010 U.S. Dist. Lexis 80756 (N.D. Ill. Aug. 3, 2010).

The court earlier had certified a class of the faxes' recipients. 2009 U.S. Dist. Lexis 95620 (N.D. Ill. Oct. 14, 2009). In 2011 the court denied a motion to reconsider both the class certification and the decision on the merits. 2011 U.S. Dist. Lexis 97666 (N.D. Ill. Aug. 29, 2011). The court ordered Turza to pay $500 in statutory damages for each of 8, 430 faxes. The total comes to $4, 215, 000. In its final order, the district judge allocated this sum as follows: $7, 500 to the representative plaintiff, which received 32 faxed editions of The "Daily Plan-It" (although the judge called this an "incentive award", it is less than the $16, 000 entailed by 32 faxes at $500 a fax); $1, 430, 055.90 to class counsel for attorneys' fees and expenses; and any residue, after payments to class members, to the Legal Assistance Foundation of Metropolitan Chicago "as a cy pres award". Oddly, the judge did not say how much each recipient who submits a claim receives. Is it $500 per fax, on the assumption that enough would go unclaimed to cover the attorneys' fees? Or is it $330.72 per fax, the number appropriate if attorneys' fees (and the award to plaintiff) come off the top? The question may be academic, because Turza has not ponied up the fund and may be unable to do so. But we must reach the procedural and substantive questions before deciding how much Turza owes.

Class certification is normal in litigation under §227, because the main questions, such as whether a given fax is an advertisement, are common to all recipients. See Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005). There can be doubt about whether a particular person is a good representative of the class, and whether class counsel is suitable, see Creative Montessori Learning Centers v. Ashford Gear LLC, 662 F.3d 913 (7th Cir. 2011); CE Design Ltd. v. King Architectural Metals, Inc., 637 F.3d 721 (7th Cir. 2011), but Turza does not question the adequacy of the class representative or its chosen counsel. Because Top of Mind omitted opt-out notices, it does not matter which recipients consented or had an established business relation with Turza. Contrast Gene & Gene LLC v. Biopay LLC, 541 F.3d 318 (5th Cir. 2008). Nonetheless, he contends, class certification is inappropriate because individual issues about who received how many faxes predominate over the common questions.

To the extent Turza contends that each recipient must prove that he printed the fax (wasting paper) or otherwise suffered monetary loss, he is wrong on the law. The statute provides a $500 penalty for the annoyance. 47 U.S.C. §227(b)(3)(B). Even a recipient who gets the fax on a computer and deletes it without printing suffers some loss: the value of the time necessary to realize that the inbox has been cluttered by junk. That loss, and the statutory remedy, are the same for all recipients; the sort of problem that prevented class certification in Comcast Corp. v. Behrend, 133 S.Ct. 1426 (2013), does not arise.

To the extent Turza contends that each recipient must prove that his fax machine or computer received the fax, he is right on the law but wrong on the facts. The record establishes which transmissions were received and which were not. Top of Mind hired Message Vision to send the faxes. It compiled information about which faxes were received, and by whom; no reasonable juror could conclude that these data are inaccurate.

Transmitting a fax requires a sending and a receiving machine to communicate using a standard protocol. If the transmission ends successfully, the receiving machine sends a code indicating this. Message Vision kept a log of the codes received during the process of sending Turza's faxes. This log shows that it tried to send a total of 11, 945 faxes to 221 unique numbers; the receiving fax machines reported that 8, 630 of these were delivered successfully. (Five persons, who collectively received 200 faxes, opted out of the class; that's why the district court used 8, 430 faxes as the basis for calculating damages.) Turza has not offered any reason to think that Message Vision's fax machines recorded the codes inaccurately or that its software maintained the log incorrectly. There is accordingly no need for recipient-by-recipient adjudication, and the district court did not err in concluding "that the questions of law or fact common to class members predominate over any questions affecting only individual members". Fed.R.Civ.P. 23(b)(3).

Turza relies on Laouini v. CLM Freight Lines, Inc., 586 F.3d 473 (7th Cir. 2009), for the proposition that electronic confirmation of a fax's receipt could be refuted by other evidence. That's true enough. The question in Laouini was whether a charge of discrimination had been received by the agency on the last date allowed for filing. Plaintiff produced a record of a successful fax transmission on that date—but perhaps plaintiff had faxed a document other than a charge of discrimination (none was in the agency's records), or perhaps the clock on the sender's fax machine was incorrect and the transmission was too late. We held in Laouini that in the absence of evidence on such matters, however, the electronic confirmation suffices. That's equally true here, because the record would not permit reasonable jurors to reject the fax log. Indeed, this case is easier, because there is no doubt what Message Vision sent out, and when each issue of The "Daily Plan-It" was sent does not matter.

That Ira Holtzman, the principal of the representative plaintiff, retained and remembers only one of the faxes does not call the logs into question. Holtzman testified by deposition that his secretary screened and deleted unwanted faxes. Turza has not demonstrated that even a single entry in Message Vision's log was inaccurate, and its corporate representative explained in detail how the logs were compiled. There is no material dispute requiring trial.

The only question on the merits is whether the faxes contained ads. "Unsolicited advertisement" is a defined term, meaning "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission, in writing or otherwise." 47 U.S.C. ยง227(a)(5). The faxes Top of Mind devised for Turza may not have touted the quality of his ...

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