This is an appeal from the judgment entered in class action litigation involving the Telephone Consumer Protection Act of 1991, 47 USC § 227 (“TCPA”). In October 2003, A Fast Sign Company, Inc. d/b/a Fastsigns (“Fastsigns”) filed a class action complaint against American Home Services, Inc. (“AHS”), alleging that AHS had violated the TCPA by sending unsolicited fаcsimile advertisements to fax machines. The trial court certified the proposed class, and we affirmed that certification. American Home Svcs. v. A Fast Sign Co.,
The trial court then granted partial summary judgment to Fastsigns. The court found that the evidence was undisputed that AHS contracted with Sunbelt Communications, Inc. to send 318,000
The court then conducted a bench trial to determine the number of faxes sent, ultimately determining that AHS had sent 306,000 unsolicited fax advertisements to fax machines. Based on that finding, the court entered judgment against AHS for $459 million, calculating the award by multiplying 306,000 by $1,500, the statutory amount of damаges per knowing or wilful violation of the TCPA. AHS appealed, and in American Home Svcs. v. A Fast Sign Co.,
AHS argues that the evidence does not support thе judgment. We find that some evidence supports the judgment. Nonetheless, the judgment must be vacated and the case remanded because the judgment does not exclude fax recipients who were excluded from the class, and it does not comply with OCGA § 9-11-23 (c) because it does not describe thе class. Since the evidence presented at the bench trial is sufficient to support the judgment, we conclude that any trial court error regarding an alleged admission in judicio and the application of a negative spoliation inference was harmless. We also hold that “willful or knоwing” as used in the TCPA means that the violator knew that he was doing the act in question, even if he did not know his act was a violation of the statute. We hold that the trial court did
1. Evidence supports the judgment, but the judgment does not exclude fax recipients who were excluded from the class, and it does not comply with OCGA § 9-11-23 (c) (3).
(a) Some evidence supports the trial court’s judgment regarding the sending of faxes.
In a bench trial, as here, the trial court sits as the trier of fact and the court’s findings will not be set aside unless clearly erronеous. Since the clearly erroneous test is the same as the any evidence rule, an appellate court will not disturb the factual findings of the trial court when there is any evidence to sustain such findings. .
Brandenburg v. All-Fleet Refinishing,
Fastsigns introduced into evidence the five contracts AHS entered with Sunbelt for Sunbelt to send 318,000 fax advertisements over the course of ten months. It introduced the testimony of Wendell Driver, the founder of AHS, who said that he assumed the faxes had been sent and thаt he had no reason to think otherwise. Driver testified that AHS received business because of the fax advertisements and that he thought the faxes were effective. Driver also testified that AHS paid Sunbelt in accordance with the contracts. Driver testified that AHS never provided Sunbelt with anything in writing from any potential recipients authorizing the sending of the fax advertisements and that he did not deny that all faxes sent on behalf of AHS were unsolicited by the recipients.
Fastsigns’ computer expert testified that he was familiar with Sunbelt’s operations from his work in a number of cases involving Sunbelt. He had examined the hard drives from Sunbelt’s computers in Atlanta, and determined that the fax log files intentionally had been deleted and purged. But he was able to retrieve from the hard drives Sunbelt’s database of fax numbers, and based on his experience with Sunbelt, he was confident that those were the numbers to which Sunbelt sent faxеs on behalf of AHS. The expert testified that
(b) Any trial court error regarding an alleged admission in judicio and the application of a spoliation negative inference was harmless.
AHS argues that the trial court erred in relying on what it found to be an admission in judicio in reaching its judgment. It argues that the trial court also erred in relying on a negative inference because of Sunbelt’s spoliation of evidence. We conclude that any error was harmless.
In the “statement of material facts” section of its brief to this court in the class certification appeal, AHS wrote that, “On behalf of AHS, Sunbelt sent approximately 306,000 fax advertisements tо potential customers in the Atlanta area.” AHS argues that the trial court erred in treating this statement as an admission in judicio and in relying on it in making its factual finding that AHS sent 306,000 faxes. It argues that the trial court also erred in applying to it a negative inference because of Sunbelt’s spoliation of evidence, the fax logs. But given the trial court’s explicit finding that the evidence admitted at trial showed that it was more likely than not the unsolicited faxes had been sent to fax machines, any error in its reference to the alleged admission in judicio and the spoliation inference is harmless. “An appellant must show harm as well as error to prevail on appeal; error to be reversible must be harmful.” In the Interest of S. N. H.,
(c) Nonetheless, the judgment must be vacated because it does not take into account those recipients excluded from the class and it does not comply with OCGA § 9-11-23.
As noted abovе, Fastsigns introduced evidence that AHS sent 318,000 faxes. The trial court found that the evidence showed AHS sent 306,000 faxes. (AHS does not complain about this discrepancy, which is in its favor.) But the trial court’s judgment does not appear to take into account those fax recipients who were excluded from the class: 375 persons with whom AHS had established business relationships, the judges of all trial and appellate courts in the state of
Further, OCGA § 9-11-23 (c) (3) required thе trial court to describe in the judgment the members of the class, but it did not. Accordingly, as Fastsigns concedes, the judgment does not comply with OCGA § 9-11-23 (c).
For these reasons, the judgment must be vacated. The trial court must determine and then exclude from its calculation those fax recipients who were exсluded from the class. It then must re-enter the judgment in accordance with OCGA § 9-11-23 (c) (3). Jones v. Forest Lake Village Homeowners Assn.,
2. The meaning of “willful or knowing” in the TCPA.
The TCPA provides for recovery of either actual damages or $500 per violation, but allows a court “in its discretion” to increase the award up to a maximum of treble damages if the defendant “willfully or knowingly violated” the statute. 47 USC § 227 (b) (3). “Willfully’ and “knowingly’ are not defined in the TCPA.
AHS argues that, in order to impose treble damages, the trial court was required to find that it knew that its actions violated the TCPA, not simply that it wilfully or knowingly sent the faxes. The FCC, in interpreting another provision of the TCPA, has held that “ ‘[wjillful’ in this context means that the violator knew that he was doing the act in question.... A violator need not know that his action or inaction constitutes a violation; ignorance of the law is not a defense or mitigating circumstance.” In re Dynasty Mortgage,
Other courts have held the same. See Stewart v. Regent Asset Mgmt. Solutions, 2011 U. S. Dist. LEXIS 50046 (N.D. Ga. 2011); Sengenberger v. Credit Control Svcs., 2010 U. S. Dist. LEXIS 43874 (N.D. Ill. 2010); Charvat v. Ryan,
We conclude that a plaintiff “need not prove that the defendant had knowledge of the TCPA’s provisions in order to establish that the defendant willfully or knowingly violated the TCPA.” Stewart, 2011 U. S. Dist. LEXIS 50046 at *19. AHS admitted that it hired Sunbelt to send advertising faxes on its behalf. This is sufficient to make the violation “willful” within the meaning of the statute. See Sengenberger, 2010 U. S. Dist. LEXIS 43874 at *17.
3. The burden of proving an established business relationship.
AHS argues that the trial court erred by requiring it to prove that it had an established business relationship with the fax recipients instead of requiring Fastsigns to prove that AHS did not have an established business relationship with the fax recipients. In its order granting Fastsigns partial summary judgment, the trial court found that AHS had not provided any evidence establishing a triable issue on the established business relationship defense, noting that all entities for whom AHS had records or knowledge of an established business relationship had been exсluded from the class.
In its brief to this court in the class certification appeal, AHS argued that class certification was inappropriate because Fastsigns had not excluded all proposed class members who had an established business relationship with AHS, but only those with a documentеd established business relationship. AHS asserted in its brief that this argument did not go to the burden of proof on the issue, but rather only to the issue of class certification. But the issue regarding the burden of proof was encompassed within AHS’s argument: it essentially argued that Fastsigns had the burden of proving with whom AHS had established businеss relationships, so that those individuals could be excluded from the class. Absent such proof, AHS argued, the proposed class lacked commonality and it was error to certify it.
In our opinion affirming the class certification, we rejected that argument. American Home Svcs.,
4. The judgment did not grant a windfall recovery in excess of the statutory maximum amount of damages.
AHS argues that the judgment must be reversed because it awards damages exceeding the statutory maximum of $1,500 per knоwing or wilful violation. 47 USC § 227 (b) (3). We agree that 47 USC § 227 (b) (3) permits a person or entity to recover no more than $1,500 in damages for each wilful and knowing violation. But we do not agree that the judgment, as entered, awards persons or entities, other than the class representative, more than that amount. The triаl court awarded $45,000 to the class representative and then held that, after fees and expenses had been deducted, “[a]ll remaining sums shall be distributed equally to the remaining class members of the certified class.” Contrary to AHS’s argument, the court did not “award[ ] claimants equal shares in a $459,000,000 fund”; it awarded class members an equal share in the class fund after the distribution to the class representative and the payment of attorney fees and costs. In other words, the court did not order that all the remaining sums would be distributed equally among those class members who made a claim, simply that it would be distributed among all membеrs of the class. It is of course likely that not all class members will make a claim, thereby leaving undistributed amounts in the class fund. The trial court’s judgment did not address this contingency — which has not yet occurred — and therefore it is not before us in this appeal.
5. Common law and due process.
AHS argues that the judgment is excessive and violates thе common law. But this is a statutory proceeding, and AHS does not explain how the common law overrides the statute. It also argues that the judgment violates due process. We will not rule on a constitutional question unless it clearly appears in the record that the trial court distinctly ruled on the point. Atlanta Independent School System v. Lane,
Judgment vacated and case remanded.