United States District Court, N.D. Illinois, Eastern Division
A CUSTOM HEATING & AIR CONDITIONING, INC., Individually and on Behalf of All Others Similarly Situated, Plaintiff,
KABBAGE, INC.; GULFCO LEASING LLC; MICHAEL HENRY; And JOHN DOES 1-12, Defendants.
MEMORANDUM OPINION AND ORDER
D. LEINENWEBER, JUDGE UNITED STATES DISTRICT COURT.
Kabbage, Inc. moves [ECF No. 104] to strike the class
allegations from Plaintiff's First Amended Complaint (the
“FAC”)[ECF No. 52]. For the reasons stated
herein, Kabbage's Motion is granted, but Plaintiff A
Custom Heating & Air Conditioning, Inc., is granted leave
to amend its Complaint.
opinion presumes familiarity with the factual and procedural
background described at length in this Court's June 16,
2017 opinion. (Ct. Mem. Op. and Order, June 16, 2017, ECF No.
89.) The short version is this: Plaintiff A Custom Heating
& Air Conditioning, Inc. (“Plaintiff”) sued
Defendant Kabbage, Inc. (“Kabbage”), among
others, claiming that Defendants sent or caused to be sent to
Plaintiff fax advertisements in violation of the Telephone
Consumer Protection Act, as amended by the Junk Fax
Protection Act of 2005, 47 U.S.C. § 227 (together,
“the Act” or “the TCPA”). Plaintiff
pursued other causes of action as well, but this Court
dismissed them for failure to state a claim under Rule
12(b)(6). (Ct. Mem. Op. and Order, June 16, 2017.) Now,
Kabbage moves the Court to strike the TCPA class action
allegations from Plaintiff's FAC.
standard for evaluating motions to strike class allegations
is the same as the standard for certifying a class under Rule
23.” Everett v. Baldwin, No. 13 C 04697, 2016
WL 8711476, at *4 (N.D. Ill. Jan. 15, 2016) (citations
omitted). An exhaustive class certification analysis is not
necessary here. Rule 23(c)(1)(A) requires courts to determine
whether to certify an action as a class action “[a]t an
early practicable time.” Cholly v. Uptain Grp.,
Inc., No. 15 C 5030, 2017 WL 449176, at *3 (N.D. Ill.
Feb. 1, 2017). Though a court might often find this
determination not practicable at the pleading stage,
“sometimes the complaint will make it clear that class
certification is inappropriate.” Pumputiena v.
Deutsche Lufthansa, AG, No. 16 C 4868, 2017 WL
66823, at *8 (N.D. Ill. Jan. 6, 2017). That is the case here,
but not for the reason put forth by Kabbage.
addressing the ultimate shortcoming of Plaintiff's
proposed class, however, the Court addresses another issue
raised by the parties. Namely, whether the D.C. Circuit's
recent decision in Bais Yaakov of Spring Valley v.
FCC, 852 F.3d 1078, 1079 (D.C. Cir. 2017) - which opined
that the Act does not impose an opt-out notice requirement on
solicited faxes and further that the Act does not empower the
FCC to impose such a requirement - is binding authority in
the Seventh Circuit. The Court finds that it is.
Whether Yaakov Controls in the Seventh
heart of Kabbage's objection to the class allegations is
Plaintiff's proposed class definition:
All persons who were sent one or more telephone facsimile
messages on or after four years prior to the filing of this
action, that advertised the commercial availability of
property, goods, or services offered by Defendants, that did
not contain an opt-out notice that complied with federal law.
(FAC ¶ 26.) The trouble here is imprecision. Plaintiff
defines its proposed class as a group of persons who received
advertisements lacking TCPA-compliant opt-out notices.
Kabbage cries foul because, as the Court earlier observed,
the definition fails to distinguish between those class
members that gave prior permission to Defendants to receive
such advertisements and those members that did not.
(See, Ct. Mem. Op. and Order, June 16, 2017, at 3.)
to Kabbage, this lack of definition renders Plaintiff's
class “impossible to certify” in the wake of a
recent D.C. Circuit opinion. In Yaakov, the D.C.
Circuit ruled on thirteen consolidated petitions for review
originally filed in multiple courts of appeals seeking to set
aside the FCC's Solicited Fax Rule. Yaakov, 852
F.3d at 1079. Before the FCC issued the Solicited Fax Rule
(the “Rule”) in 2006, the TCPA required opt-out
notices only for unsolicited faxes. The Rule expanded this
requirement to solicited faxes as well. See, 47
C.F.R. § 64.1200(a)(4)(iv) (codification of the
Solicited Fax Rule). But months ago, Yaakov stated
that the Act does not empower the FCC to impose an opt-out
notice requirement on solicited faxes and that the TCPA
itself does not impose that requirement. Yaakov, 852
F.3d at 1080-83. Plaintiff claims Yaakov is not
controlling here. Instead, Plaintiff points to Ira
Holtzman, C.P.A. v. Turza, 728 F.3d 682 (7th Cir. 2013),
in which, according to Plaintiff's telling of the case,
the Seventh Circuit held that the TCPA imposes the opt-out
notice requirement for solicited faxes. (See,
Pl.'s Resp. to Kabagge's Mot. to Strike at 14, ECF
the issue is whether, in the Seventh Circuit, opt-out notices
are required even for those advertisements that are
solicited. If Yaakov controls, then those members of
Plaintiff's proposed class (if any) who ...