Court Certifies TCPA Class Action And Subjects Defendant To Aggregate Liability After Discounting Contrary Authority

Despite a readily available forum for individual suits and the disproportionate and the potentially ruinous liability a TCPA class action presents, a New Jersey District Court nonetheless deemed a class action the superior mechanism for resolving a TCPA suit In A & L Indus., Inc. v. P. Cipollini, Inc., No. 12-7598, 2013 WL 5503303, at *5 (D.N.J. Oct. 2, 2013). The defendant then sought reconsideration, which the District Court recently denied.

The lawsuit arose from a fax advertisement that a marketing company sent to more than 4,000 recipients on behalf of defendant Cipollini, Inc., a roofing company. Id. at *1. Neither Cipollini nor the marketer had obtained prior express consent from these recipients. One of them, plaintiff A & L Industries, Inc., brought a class action alleging violations of the TCPA and other claims. Id.

In opposing certification, Cipollini argued that the case does not satisfy Rule 23(b)'s superiority requirement. Specifically, it argued that individual actions are superior because the TCPA's statutory damages create adequate incentive to pursue individual claims, and that aggregate actions are inferior because, when aggregated, the TCPA's statutory damages far exceed any alleged actual damages. In support of its arguments it cited Local Baking Products v. Kosher Bagel Munch, Inc., 23 A.3d 469 (N.J. App. Div. 2011), a New Jersey state court decision that had concluded that "a class action suit is not a superior means of adjudicating a TCPA suit." Id. at 476.

The District Court disagreed, concluding that a "class action is simply a better available method to fairly and efficiently resolve the claims of potential class members in this case." Cipollini, 2013 WL 5503303, at *5. It offered two principal reasons for declining to follow Local Bakery. First, although it acknowledged that the procedural rules were "essentially similar," it found that it was not obliged to follow a state court decision on a procedural matter. Cipollini, 2013 WL 5503303, at *4.

Second, the District Court rejected Local Baking's conclusion that consumers have incentive to pursue individual claims because the TCPA's statutory damages far exceed any actual damages. Instead, it held that the TCPA's individual statutory damages are minimal even if they do exceed actual damages, making a multiplicity of individual actions an unlikely and therefore inferior method for adjudication. Id. But whether the TCPA's statutory damages adequately incent...