Legg v. PTZ Insurance Agency, LTD et al

Filing 287

MEMORANDUM Opinion and Order. Signed by the Honorable Robert W. Gettleman on 8/15/2017. Mailed notice. (jjr, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CHRISTOPHER LEGG and PAGE LOZANO,
individually and on behalf of all other similarly
situated,

)
)
)
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Plaintiffs,
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v.
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PTZ INSURANCE AGENCY, LTD., an Illinois
)
corporation, and PETHEALTH, INC., a
)
Canadian corporation, and FAIRFAX FINANCIAL )
HOLDINGS, LTD., a Canadian corporation,
)
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Defendants.
)

Case No. 14 C 10043
Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER
Plaintiffs Christopher Legg and Page Lozano have brought a three count second amended
putative class action complaint against defendants PTZ Insurance Agency, Ltd., Pethealth Inc.
and Fairfax Financial Holdings, Ltd.,1 alleging that defendants violated the Telephone Consumer
Protection Act (“TCPA”), 47 U.S.C. § 227(b) by: (1) placing unsolicited “advertising robocalls”
to plaintiffs’ cellular phones; (2) placing unsolicited telemarketing calls to plaintiffs’ cellular
phones;2 and (3) placing robocalls to plaintiffs’ cellular phones. Defendants have moved (Doc.
247) to strike the class allegations in the second amended complaint, and plaintiffs have crossmoved (Doc. 252) to certify a class. For the reasons described below, defendants’ motion is
granted and plaintiffs’ motion is denied.

1

Defendants PTZ and Pethealth have moved to drop Fairfax as a defendant as improperly
added in the second amended complaint. That motion will be addressed separately.
2

The court has already held that the calls in question are not telemarketing as defined by
the TCPA (Doc. 223).

BACKGROUND
Defendant Pethealth Inc. (“Pethealth”) is a holding company with numerous subsidiaries
under what can be described as the Pethealth umbrella. Pethealth, through its subsidiaries, offers
consumers various services related to pet adoption and pet insurance. Once such service offered
by defendant PTZ in conjunction with pet adoptions is an initial 30-day free gift of pet health
insurance. The 30-day free gift is actually offered to pet adopters at PTZ’s partner animal
shelters, generally to those adopters of pets that have a microchip implanted for safety. The
shelters used software provided by defendants to gather information from adopters during the
adoption process for the purpose of providing the 30-day free gift. To receive the free gift, the
adopter must provide a valid email address and “opt-in” to receiving communications from
defendants via email.
During the adoption process, the adopters fill out paper work providing the shelter with
their name, address, email address and telephone numbers. The paperwork provides that unless
they opt-out they may be sent information and special offers by mail or email regarding products
or services that may be of interest, and that their personal information may be shared with third
parties so those third parties may “contact you by mail or email for their own marketing
purposes.”
Adopters are sent at least two emails reminding them of the 30-day free gift. In addition,
adopters also receive what plaintiff describes as two pre-recorded robocalls. The first call (the
“Day 2 call”) provides:
Hi from the 24 PetWatch Insurance team. This is a friendly reminder to please
confirm your 30-day gift of insurance if you haven’t done so already. Its easy,
check your inbox for the 24 PetWatch email, click on the link, and confirm your
gift. If you have already confirmed, press 1 now to speak to a representative to
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extend your gift for [] days at absolutely no cost to you. Have a great day and
congratulations on adopting your new best friend.
The second call (the “Day 6 call”): provides:
Hello – we’re calling from 24 PetWatch Pet Insurance to remind you that when
you adopted your pet, you were given a 30 day Gift of Insurance, and you only
have [] day [] to activate it. Protect your pet from the unexpected and press 1 now
to activate it or call 1-877-291-1524.
The calls are made using contact information provided by the adopters to the animal
shelters at the time of the adoption process.
DISCUSSION
Congress enacted the TCPA in 1991 to address telephone marketing calls and certain
telemarketing practices that Congress found to be an invasion of consumer privacy. Section
227(b) of the Act proscribes the use of an automated telephone dialing system or prerecorded
voice calsl to any telephone number assigned to a cellular telephone absent prior express consent
of the called party. 47 U.S.C. § 227(b)(1)(A)(iii). After October 16, 2013, the FCC, the agency
vested with authority to issue regulations implementing the TCPA, has required express signed
written consent to place advertising calls to cellular phones. See In re Rules and Regulations
Implementing the TCPA of 1991, 27 F.C.C.R. 18301831 (2012). Advertising is defined as “any
material advertising the commercial availability or quality of any property, goods, or services.”
47 C.F.R. § 64.1200(f)(1).
Class action suits are governed by Fed. R. Civ. P. 23. Under Rule 23(c)(1)(A), the court
should determine whether to certify an action as a class action “at any early practicable time.”
Motions to strike class allegations are analyzed under Rule 23, not Rule 12(f). See Buonomo v.
Optimum Outcomes, Inc., 301 F.R.D. 292, 295 (N.D. Ill. 2014). The standard for evaluating

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whether class allegations should be stricken is the same as for class certification, and the burden
is on the plaintiff to demonstrate that class certification is appropriate. Valentine v. WideOpen
West Finance, LLC, 288 F.R.D. 407, 414 (N.D. Ill. 2012).
The determination of whether class certification is appropriate requires a two step
analysis. First, plaintiffs must satisfy all four requirements of Rule 23(a): (1) numerosity;
(2) commonality; (3) typicality; and (4) adequacy of representation. Harriston v. Chicago
Tribune Co., 992 F.3d 697, 703 (7th Cir. 1993). These requirements are prerequisites to
certification, and failure to meet any one of them precludes certification of the class. Parker v.
Risk Mgmt. Alternatives, Inc. 206 F.R.D. 211, 212 (N.D. Ill. 2002). In addition, plaintiffs must
satisfy one of the conditions of Rule 23(b). In the instant case, plaintiffs rely on Rule 23(b)(3),
which requires them to demonstrate that “the questions of law or fact common to class members
predominate over any questions affecting only individual members, and that a class action is
superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.
R. Civ. P. 23(b)(3).
Plaintiffs propose certification of two classes. The first, the “advertisement class” is
defined as:
(1) all persons in the United States (2) who defendants or some person on
defendants’ behalf (3) called their cell phone using an artificial or prerecorded
voice message to play defendants’ Day 2 or Day 6 message (4) where the person
did not provide signed express written consent to receive automated prerecorded
calls (5) in the period between October 16, 2013 to the present.

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The second, or so-called robocall class, is defined as:
(1) all persons in the United States (2) who defendants or some person on
defendants’ behalf (3) called on their cell phone using an artificial or prerecorded
voice message to play defendants’ Day 2 of Day 6 message (4) where the
recipient did not give prior express consent to defendants to receive automated
calls (5) in the period between October 16, 2013 to the present.
Rule 23(a) Requirements
1.

Numerosity

Under Rule 23(a)(1) plaintiffs must show that the class is so numerous that joinder of all
members is impracticable. The exact number of class members need not be shown, but
impracticability of joinder must. Parker, 206 F.R.D. at 212. In the instant case, discovery has
revealed that the prerecorded messages were sent to at least 341,288 unique cellular telephone
numbers. This is a sufficiently large number to demonstrate impracticability of joinder, and
defendants have not challenged the numerosity requirement.
2.

Commonality

Rule 23(a)(2) required the presence of questions of law or fact common to the class. The
Rule does not mandate absolute commonality; a common nucleus of operative facts is usually
sufficient to satisfy the requirement. Keele v. Wexler, 149 F.3d 589, 594 (7th Cir. 1998).
In the instant case, each potential class member received the same prerecorded calls.
Thus, at least with respect to the specifics of the call and how defendants received the class
members’ telephone numbers, the case presents common questions of fact. Additionally,
whether defendants’ calls violate the TCPA, and whether they constitute advertising are common
questions of law. Thus, plaintiffs have established the commonality requirement of Rule
23(a)(2).

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3.

Typicality

Rule 23(a)(3) requires plaintiffs to establish that “the claims or defenses of the
representative parties are typical of the claims or defenses of the class.” Typicality is closely
related to commonality. Keele, 149 F.3d at 595. “A plaintiff’s claim is typical if it arises from
the same event or practice or course of conduct that gives rise to the claims of other class
members and is based on the same legal theory.” Id.
In the instant case, each class member’s claim arises from defendants’ use of prerecorded
phone calls to their cellular phones. The claims are all based on the same set of facts and legal
theories. Consequently, plaintiffs have satisfied the typicality requirement of Rule 23(a)(3).
4.

Adequacy of Representation

Rule 23(a)(4) requires plaintiffs to demonstrate that the representative parties will fairly
and adequately protect the interests of the class. The requirement has three elements: (1) the
chosen class representatives cannot have antagonistic or conflicting claims with other members
of the class; (2) the named representative must have a sufficient interest in the outcome to insure
vigorous advocacy; and (3) counsel for the named plaintiff must be competent, experienced,
qualified and generally able to conduct the proposed litigation vigorously. Kort v. Diversified
Collection Services, 2001 WL 1617213 *3 (N.D. Ill. Dec. 17, 2001). Defendants have not
challenged the adequacy of representation, and the court concludes that plaintiffs have
established this requirement.
Rule 23(b)(3)
Under Rule 23(b)(3) the questions of law or fact common to the class must “predominate
over any questions affecting only individual members,” and a class action must be superior to

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other available methods for the fair and efficient adjudication of the controversy. It is the
establishment of this condition that defendants challenge and where plaintiffs’ class certification
petition runs into trouble.
Predominance under Rule 23(b)(3) is similar to the commonality requirement of Rule
23(a)(2), but requires a “far more demanding” inquiry. Amchen Products, Inc. v. Windsor, 521
U.S. 591, 624 (1997). There is no mathematical or mechanical test for evaluating predominance,
but the “‘inquiry trains on the legal or factual questions that qualify each class member’s case as
a genuine controversy’ with the purpose being to determine whether a proposed class is
‘sufficiently coesive to warrant adjudication by representation.’” Messner v. NorthShore
University HealthSystem, 669 F.3d 802, 814 (7th Cir. 2012) (quoting Amchen, 521 U.S. at 623).
Rule 23(b)(3)’s predominance requirement is satisfied when “common questions represent a
significant aspect of a case and . . . can be resolved for all members of a class in a single
adjudication.” Id. at 815. If, however, “to make a prima facie showing on a given question, the
members of a proposed class will need to present evidence that varies from member to member,
then it is an individual question,” and if that question predominates over the common questions,
certification should be denied. Id.
In the instant case, defendants argue that individualized questions of consent predominate
over any common questions. Plaintiffs counter that the question of whether by giving their cell
phone numbers to the shelters constitutes consent to receive calls from defendants about the free
gift can be resolved class-wide as a matter of law . That may be true, but defendants have argued
more than that. Defendants argue that during the adoption process adopters agree to receive
communications from defendants and are told and agree and expect to receive such

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communications by phone in addition to email. Thus, defendants argue that the question centers
around what happens during each individual adoption process.
To avoid these individual issues, plaintiff argues that the calls in question are
“advertising,” which requires express written consent of the recipient pursuant to FTC rules. See
27 F.C.C.R. 18301831. They thus argue that certification of the advertising class is proper,
because there is no question that none of the proposed class members signed a form specifically
agreeing to receive calls on their cellular phones from defendant.
As defendants point out, however, if an adopter has expressly agreed and expected to
receive calls from defendant, and did receive those calls, the adopter has not been injured in any
way, even if defendants technically violated a procedural requirement of the TCPA. Thus, under
Spokeo, Inc. v. Robbins, 136 S.Ct. 1540 (2016), those adopters would not have suffered a
concrete injury. True, most courts that have addressed Spokeo’s influence on TCPA claims have
held that a violation of the TCPA gives rise to a concrete injury. See Wilkes v. CareSource
Management Group Co., 2016 WL 7179298 (N.D. Ill. Dec. 9, 2016) (listing cases). The
reasoning behind those cases, however, is that the Act “prohibits making certain kinds of
telephonic contact with customers without first obtaining their consent. Aranda v. Caribbean
Cruise Line, Inc., 2016 WL 4439935, *5-6 (N.D. Ill. Aug. 23, 2016). Thus, receiving the call
itself constitutes an injury. Id.
In the instant case, defendants argue that adopters have expressly agreed to receive the
calls, that they just did not do so in writing. The lack of a writing does not make the calls
unsolicited. If the class members agreed to receive the calls, they lack a “genuine controversy.”
Messner, 669 F.3d at 814.

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Whether issues of individualized consent defeat the predominance requirement in a
TCPA case is made on a case-by-case basis after evaluating the specific evidence available to
prove consent. See Jamison v. First Credit Servs., Inc., 290 F.R.D. 92, 106-07 (N.D. Ill. 2013)
(collecting cases). Generally, when the defendant provides specific evidence showing that a
significant percentage of the putative class consented to receiving calls, issues of individualized
consent predominate.3 Id. If, however, “the defendants fail to set forth this specific evidence
and instead only make vague assertions about consent, then individualized issues regarding
consent will not predominate over common questions of law or fact so as to prevent class
certification.” Id.
In the instant case, there is nothing vague about defendants’ assertions of consent. They
have supplied affidavits from a number of adopters who state that they agreed to and expected to
receive calls on their cellular phones from defendants about the offered pet insurance. In
addition, defendants have submitted affidavits from shelter employees who conducted the
adoption processes. Those employees state that after taking the adopters’ cell phone numbers,
the employees told the adopters to expect to receive “communications” from defendants.
Whether such “communications” included cell phone calls as well as e-mail messages would
depend on the nature of the conversations between the shelter employees and the adopters, and
the adopters’ expectations resulting from the conversations. This evidence convinces the court
that the trial in this case will be consumed and overwhelmed by testimony from each individual
class member, and the shelter employee who assisted that member in the adoption process, to

3

It matters not for the predominance requirement whether the issue of consent is an
element of plaintiffs’ claim or an affirmative defense. Gene and Gene LLC v. BioPay LLC, 541
F.3d 318, 327 (7th Cir. 2008).
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determine whether the class member consented to receive the calls in question. In short, the trial
will involve hundreds, if not thousands, of mini-trials on the issue of consent alone. Given the
evidence presented by defendants, there is simply no way for plaintiff to establish a lack of
consent with generalized evidence. Gene & Gene, LLC, 541 F.3d at 329. Consequently,
certification is denied.
CONCLUSION
For the reasons described above, defendants’ motion to strike class allegations (Doc. 247)
is granted. Plaintiffs’ motion to certify a class (Doc. 252) is denied. This case must proceed on
an individual basis. This matter is set for a report on status on August 24, 2017, at 9:00 a.m.
ENTER:

August 15, 2017

__________________________________________
Robert W. Gettleman
United States District Judge

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