MICHAEL MILLER, ET AL. v. PAINTERS SUPPLY & EQUIPMENT CO.
No. 95614
Court of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
August 11, 2011
2011-Ohio-3976
S. Gallagher, J., Kilbane, A.J., and Jones, J.
Civil Appeal from the Cuyahoga County Court of Common Pleas, Case No. CV-712486
Joseph R. Compoli
James R. Goodluck
612 East 185th Street
Cleveland, OH 44119
ATTORNEY FOR APPELLEE
Forrest A. Norman, III
George H. Carr
Gallagher Sharp
1501 Euclid Avenue
Bulkley Building, 6th Floor
Cleveland, OH 44115
Amicus Curie
Mike DeWine
Ohio Attorney General
BY: Erin B. Leahy
Assistant Attorney General
Consumer Protection Section
30 East Broad Street, 14th Floor
Columbus, OH 43215
BY: Michael R. Sliwinski
Assistant Attorney General
Consumer Protection Section
615 W. Superior Avenue, 11th Floor
Cleveland, OH 44113
{1} Plaintiffs-appellants Michael Miller and The Box Office (collectively “plaintiffs“) appeal the decision of the Cuyahoga County Court of Common Pleas that denied their motion for class certification.1 For the reasons stated herein, we affirm the decision of the trial court.
{2} In December 2009, plaintiffs filed a class action complaint against defendant-appellee Painters Supply & Equipment Company (“Painters Supply“), raising claims under the Telephone Consumer Protection Act (“TCPA“),
{3} The trial court issued an order limiting discovery to class certification issues only. Thereafter, the court denied as premature plaintiffs’ motion for summary judgment on Painters Supply‘s affirmative defense of “prior business relationship.”
{4} During discovery, the court ordered Painters Supply to produce its list of fax recipients with the fax numbers and names of the fax recipients redacted “to protect defendant‘s business interests[.]” Plaintiffs filed a “motion to vacate secrecy order” and requested an unredacted copy of the fax list. The trial court denied the motion as moot
{5} In the meantime, plaintiffs filed a motion for class certification, which was opposed by Painters Supply. The trial court held a hearing on the motion.
{6} At the hearing, plaintiffs’ counsel represented that The Box Office is a small business that sells boxes and packaging materials and is owned by Michael Miller. Plaintiffs allegedly received faxes containing promotional advertising sent from Painters Supply. They asserted their proposed class was premised on the fact that the faxes were sent without an opt-out notice required by the TCPA. As such, they sought to certify a class of everyone to whom Painters Supply sent the fax advertisements in 2008 in which the faxes did not contain an opt-out notice. They asserted the class would have at least 37 members based on the defendant‘s fax list and the AT&T phone records. They further claimed that all of the prerequisites for class certification were met. However, they did not provide any method for determining on a classwide basis whether the faxes sent to other members of the proposed class were unsolicited.
{7} Defense counsel argued that plaintiffs did not offer any evidence to show that any other member of the proposed class was sent an unsolicited advertisement. Painters Supply presented evidence reflecting that the fax advertisements were sent to its customers. The faxes sent to plaintiffs were intended for a customer whose number was apparently reassigned to plaintiffs. It was conceded that almost all of the promotional faxes that were sent by Painters Supply were intended for auto body companies. Thus,
{8} Following the hearing, the trial court denied the motion for class certification. The court recognized that plaintiffs’ proposed definition of the class was premised on the belief that all faxed advertisements contain an opt-out notice; however, the TCPA applies only to unsolicited fax advertisements. Thus, the court modified the class definition to pertain only to unsolicited faxes. More important, the trial court recognized that this case would require a detailed analysis of each proposed class member‘s conduct to ascertain which members were sent unsolicited fax advertisements from Painters Supply. Because plaintiffs offered no method to differentiate between solicited and unsolicited faxes, the court recognized that the actual number of class members could be as few as one. The court found that the class was not readily identifiable and that the predominance and numerosity requirements had not been satisfied.
{9} Plaintiffs timely filed this appeal. They raise two assignments of error for our review. Their first assignment of error provides as follows: “The trial court erred in denying plaintiffs-appellants’ motion for class certification.”
{10} We emphasize that a trial judge has broad discretion in deciding whether to certify a class action, and that determination will not be disturbed absent an abuse of
{11} “[T]he trial court‘s discretion in deciding whether to certify a class action is not unlimited, and indeed is bounded by and must be exercised within the framework of
{12} There are seven prerequisites that must be met before a court may certify a case as a class action pursuant to
{13}
{14} Plaintiffs sought to certify a class defined as follows: “All persons and entities, within the State of Ohio, to whom a facsimile (‘fax‘) was sent, by or on behalf of the Defendant Painters Supply & Equipment Co., anytime during January and February 2008, which contained an advertisement that did not include a notice informing the recipient of the right to opt out of future fax advertisement.” The proposed definition does not distinguish between solicited and unsolicited fax advertisements.
{15} The trial court found that the class definition proposed by plaintiffs was overbroad because it potentially includes conduct outside the scope of the TCPA, which applies only to “unsolicited advertisements.” The court modified the class definition by inserting the word “unsolicited” before facsimile, so as to encompass only those to whom
{16} The TCPA prohibits the use of “any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement,” unless certain statutory exceptions apply. (Emphasis added.)
{17} The term “unsolicited advertisement” is defined as one “which is transmitted to any person without that person‘s prior express invitation or permission, in writing or otherwise.”
{19} “The TCPA prohibits only ‘unsolicited’ advertisements.” Cicero v. U.S. Four, Inc., Franklin App. No. 07AP-310, 2007-Ohio-6600, ¶ 42. Likewise, “the [federal regulation] in question,
{20} In Nack, the court recognized that the TCPA and the federal regulation only apply to fax communications that constitute unsolicited advertisements. Id. Thus, the court found where the recipient gave permission to send the fax that gives rise to the claimed violation, the fax is not unsolicited and an opt-out notice is not required. Id. As in Nack, our concern is with the unsolicited nature of the fax that is required to invoke the TCPA.
{22} We recognize the Ohio Attorney General‘s concern for a uniform construction of the TCPA and the interest in allowing parties to pursue a TCPA lawsuit as a class action. However, we cannot say that every TCPA claim is necessarily suitable for class certification. Even the Attorney General acknowledges that the TCPA “prohibits the transmission of any ‘unsolicited advertisement.‘” While in some cases the unsolicited nature of the fax advertisement may not be in dispute or may be shown by generalized proof, in others, the determination may require individualized inquiry. The concern is with whether the requirements for class certification have been met.
{23} Under the circumstances of this case, which involved sending fax advertisements to numbers in an existing customer base, the trial court found it would be required to review the conduct of each prospective class member to identify those with cognizable claims. The trial court did not disregard the opt-out notice requirement, but rather, recognized a threshold condition for plaintiffs’ TCPA claim, i.e., an unsolicited advertisement. As the trial court found, “the proposed class definition is overly broad because it potentially includes conduct outside the scope of the TCPA.”
{25} We recognize that the term “unsolicited” is not necessarily required in defining a class in all TCPA cases. Rather, when the unsolicited nature of the fax cannot be shown by generalized proof, we can find no abuse of discretion by the trial court in limiting the class to those with a cognizable or “identifiable” claim.
{26} We further find no merit to plaintiffs’ contention that the revised definition was improper because it effectively required the trial court to consider the merits of the claim at the class certification stage. The trial court recognized that only unsolicited fax advertisements are actionable under the TCPA and appropriately considered whether the requirements for class certification were met within the proper framework of the TCPA. Defining the class in this way does not require a determination on the merits of the underlying claim.
{28} Indeed, this is not a case where mass faxes were sent to numbers from a directory, where it may be possible to establish the unsolicited nature of the advertisements with generalized proof focused on the defendant‘s conduct. Instead, this is a case where faxes were sent to an existing customer base and requires a review of each individual class member‘s conduct. Plaintiffs offered no administratively feasible method of determining a cognizable class. Thus, the class definition, even as amended to comport with the TCPA, was not precise enough to permit identification within a reasonable effort. We find no abuse of discretion with the trial court‘s determination. See Vigus, supra; Boehm, Kurtz & Lowry v. Interstate Ins. Servs. Agency, Inc., Hamilton App. No. C-100033, 2010-Ohio-5432; Cicero, 2007-Ohio-6600.
{29} The trial court also found the predominance and numerosity requirements were not met. With regard to predominance,
{30} The trial court concluded that “this action requires a detailed examination of each plaintiff‘s conduct, both as to claims and defenses raised by the parties. As discussed previously, the TCPA applies only to unsolicited faxes * * *. Class certification, therefore, would require substantial discovery and proceedings for each class member to determine if the class member has a cognizable claim.”
{31} Plaintiffs failed to offer any evidence that would establish on a classwide basis that Painters Supply‘s customers were sent unsolicited fax advertisements. Even if we were to accept the class as broadly defined, there is no generalized evidence to establish the purported class members have cognizable claims under the TCPA. The central issue in this case is one of individual consent, and the trial court would be required to examine each class member‘s conduct to determine whether each fax transmission was unsolicited and resulted in a violation of the TCPA. It is apparent that individual issues would predominate the case and that class certification is not the superior method to fairly
{32} For the numerosity requirement to be met, the class must be so numerous that joinder of all members is impracticable.
{33} The trial court recognized plaintiffs’ contention “that the proposed class includes at least 37 persons and/or entities.” However, the court found the actual number could be less because the TCPA only applies to unsolicited fax advertisements. In moving for class certification, plaintiffs presented no evidence that “unsolicited” faxes were sent to any other members of the proposed class. While 37 persons may be a sufficient number to establish a class, in this case, the trial court appropriately recognized that upon individual examination of the facts unique to each plaintiff, the actual number of class members could be as few as one.
{35} The trial court did find that the commonality, typicality, and adequacy requirements were met. These findings have not been challenged on appeal, and we need not address them herein.
{36} Plaintiffs also contend that the trial court failed to “assume the truth of the allegations in the complaint” in considering class certification. It is true that “[w]hen a trial court considers a motion to certify a class, it must assume the truth of the allegations in the complaint, without considering the merits of those allegations and claims.” Nagel v. Huntington Natl. Bank, 179 Ohio App.3d 126, 2008-Ohio-5741, 900 N.E.2d 1060, ¶ 10. However, a court need not accept as true unsupported legal conclusions in the complaint. Pearson v. Warrensville Hts. City Schools, Cuyahoga App. No. 88527, 2008-Ohio-1102, ¶ 35; see, also, Spriggs v. Cleveland (June 6, 1985), Cuyahoga App. No. 49163. It remained plaintiffs’ burden to demonstrate that all factual and legal prerequisites to class certification had been met. Gannon v. Cleveland (1984), 13 Ohio App.3d 334, 335, 469 N.E.2d 1045. From the record before us, we find the trial court could readily find that the prerequisites of an identifiable class, predominance, and numerosity had not been met.
{37} We conclude that the trial court did not abuse its discretion in denying plaintiffs’ motion for class certification. We reiterate the policy behind a class action
{38} Plaintiffs’ second assignment of error provides as follows: “The trial court erred in denying [plaintiffs‘] motions to vacate discovery orders.”
{39} A trial court has broad discretion in the regulation of discovery. Whitt v. ERB Lumber, 156 Ohio App.3d 518, 2004-Ohio-1302, 806 N.E.2d 1034, ¶ 28. Absent an abuse of discretion, a reviewing court must affirm a trial court‘s disposition of discovery issues. State ex rel. The V. Cos. v. Marshall, 81 Ohio St.3d 467, 469, 1998-Ohio-329, 692 N.E.2d 198. Further, “[a] decision which, in effect, bars the requesting party from pursuing discovery cannot be reversed by an appellate court absent a showing of substantial prejudice to that party.” Shaver v. Standard Oil Co. (1990), 68 Ohio App.3d 783, 800, 589 N.E.2d 1348; see, also,
{40} In this case, the trial court limited initial discovery to class certification issues. Following an in camera inspection, the trial court ordered Painters Supply to produce its list of fax recipients with the fax numbers and names of the fax recipients redacted “to protect defendant‘s business interests[.]” Plaintiffs argue that the trial court erred by denying plaintiffs’ requests to obtain an unredacted fax transmission list. Insofar as plaintiffs assert the requested discovery was necessary to its class certification claim, we shall address this issue. See State ex rel. Shelton v. Firemen & Policemen‘s Death Benefit Fund (1997), 125 Ohio App.3d 559, 566, 709 N.E.2d 182, fn.1
{41} We recognize that it is not unusual for a trial court to limit discovery with respect to class certification issues. Plaintiffs were provided with the fax list, which disclosed the fax transmissions sent by Painters Supply during 2008 and included the putative class period. Even if we were to find that the disclosure of the identities of potential class members was warranted at the pre-certification stage, plaintiffs fail to show how this information was pertinent to establishing the class certification requirements. Further, it is evident from plaintiffs’ motion to vacate the secrecy order that plaintiffs subpoenaed telephone company records showing the calls made by Painters Supply during the period the faxes were sent. Plaintiffs were able to identify the names associated with these numbers through an Internet search. In the end, the trial court determined this action was not suitable for class certification because each individual class member‘s conduct would have to be examined to determine whether each was the recipient of an unsolicited fax advertisement with a cognizable claim under the TCPA. Accordingly, we find the trial court acted within its discretion and no prejudice has been shown. We overrule plaintiffs’ second assignment of error.
Judgment affirmed; case remanded.
It is ordered that appellee recover from appellants costs herein taxed.
The court finds there were reasonable grounds for this appeal.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
SEAN C. GALLAGHER, JUDGE
LARRY A. JONES, J., CONCURS;
MARY EILEEN KILBANE, A.J., CONCURS IN PART AND DISSENTS IN PART WITH SEPARATE OPINION
MARY EILEEN KILBANE, A.J., CONCURRING IN PART AND DISSENTING IN PART:
{42} I concur with the majority‘s conclusion overruling the second assignment of error. However, I respectfully dissent from the majority opinion on the first assignment of error. I would reverse the trial court‘s judgment denying plaintiffs’ motion for class certification.
{43} In the instant case, it is undisputed that Painters Supply‘s faxed advertisements did not include an opt-out notice. The trial court ignored the fact that the omission of the opt-out provision precluded Painters Supply from asserting any defense based upon “established business relationships” or “prior express invitation or permission.” Instead, the court revised the original class definition proposed by plaintiffs to include the term “unsolicited.” This required the court to then consider the
{44} While a fax must be “unsolicited” in order to recover under the TCPA,
{46} Therefore, I would find that the trial court abused its discretion, and I would reverse the trial court‘s judgment denying plaintiffs’ motion for class certification.