'Fail Safe' Class Definitions Are Improper Under The Telephone Consumer Protection Act

Companies faced with Telephone Consumer Protection Act ("TCPA") class action claims should consider whether the plaintiff's proffered class definition is subject to attack as being an improper "fail-safe" class, i.e., a class in which the class is (impermissibly) defined so that the class includes only members whose claims would be successful on the merits. See generally Zarichny v. Complete Payment Recovery Servs., Inc., No. 14-3197, 2015 BL 14031, at *5 (E.D. Pa. Jan. 21, 2015) (rejecting proffered fail-safe class definition).

The law has long recognized the impropriety of so-called fail-safe class actions. As summarized in a leading Sixth Circuit decision, "a class definition is impermissible where it is a 'fail-safe' class, that is, a class that cannot be defined until the case is resolved on its merits." Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 538 (6th Cir. 2012)(citing Randleman v. Fidelity Nat'l Title Ins. Co., 646 F.3d 347, 352 (6th Cir. 2011)). A "fail-safe" class "includes only those who are entitled to relief." Young, 693 F.3d at 538. "Such a class is prohibited because it would allow putative class members to seek a remedy but not be bound by an adverse judgment—either those 'class members win or, by virtue of losing, they are not in the class' and are not bound." Id. (quoting Randleman, 646 F.3d at 352).

The importance of that settled rule was recently underscored in the Zarichny matter, a putative class action under the TCPA.

The plaintiff in Zarichny alleged that she had received 11 debt-collection calls from the defendant debt-collection service. The plaintiff also alleged that these calls "appear[ed] to have been initiated by an automatic telephone dialing system." Id. at 3. Plaintiff then filed a putative TCPA class action on behalf of all persons "who received one or more telephone calls from [d]efendants on the individual's cellular telephone that was initiated using an automatic telephone dialing system without prior consent." Id. at 11 (internal quotation marks omitted).

The defendant moved to strike the class allegation, arguing that the proffered class definition was an impermissible...