Huskey v. Birch Telecom of Missouri, Inc. et al
Filing
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ORDER: IT IS HEREBY ORDERED that Plaintiff Richard Huskey's Motion to Certify a Class Pursuant to Federal Rule of Civil Procedure 23 and Missouri Supreme Court Rule 52.08 (Doc. 5 ), is DENIED. However, Plaintiff's individual claim may proceed.. Signed by District Judge John A. Ross on 9/28/18. (KKS)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
RICHARD HUSKEY, et al.,
Plaintiffs,
v.
BIRCH TELECOM OF MISSOURI,
INC., et al.,
Defendants.
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No. 4:17-CV-02415 JAR
ORDER
This matter is before the Court on Plaintiff Richard Huskey’s Motion to Certify a Class
Pursuant to Federal Rule of Civil Procedure 23 and Missouri Supreme Court Rule 52.08. (Doc. 5.)
Defendants Birch Telecom of Missouri, Inc., Ionex Communications, Inc., and Birch
Communications, Inc., oppose certification. (Doc. 2.) Plaintiff did not file a reply.
Background
Plaintiff filed suit on behalf of himself and the “thousands of individuals” allegedly harmed
when Defendants engaged in a deceptive marketing scheme designed to trap consumers in an
unconscionable contract, in violation of the Missouri Merchandising Practices Act (“MMPA”), Mo.
Rev. Stat. ch. 407. (Docs. 5, 35.) Specifically, Plaintiff alleges that the contract is procedurally
unconscionable because the Defendants “cold-called” consumers and used high-pressure sales
tactics and misleading information to induce them into accepting a telephone services contract they
had not, and could not have, reviewed. (Doc. 35.) In addition, Plaintiff alleges that the contract
included substantively unconscionable terms relating to canceling the service and price increases.
He asserts that Defendants’ contract “improperly cause[d] economic damage to him [and class
members] in several various manners”: “a relatively enormous ‘initiation’ fee” totaling “upwards
of $150”; unilateral price increases, which, in Plaintiff’s case, were around $140 1; “exorbitant
‘early termination fee(s),’ upwards of $400 in many cases”; and, “specifically in the case of
[Plaintiff,] . . . attorneys’ fees and expenses in bringing this action.” (Id. at 10-12.)
Plaintiff moves to certify a class defined as “All past or present residential Birch customers
that are citizens of Missouri, and who the Defendant deemed bound by the terms of their Master
Services Agreement, or ‘MSA’ . . . at any time during the Class Period.” (Id. at 2.) Plaintiff states
that the class period runs from August 17, 2012 to August 17, 2017. (Id.)
Analysis
Under Rule 23(a) 2, a plaintiff must establish four elements to maintain a class action:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses
of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.
As noted, Plaintiff alleges that the class “includes thousands of individuals,” but does not otherwise
attempt to enumerate the potential membership. (Id. at 3.) Plaintiff asserts that his claim is “typical
of those of the Class because all Plaintiffs were injured by the Defendants’ uniform wrongful
conduct” but later states that not every potential class member suffered every economic harm. (Id.
at 3, 12.) For instance, Plaintiff states that “only a portion of Plaintiff[s]”—which portion does not
include him—paid a termination fee. (Id. at 12.) Nevertheless, Plaintiff asserts that any individual
differences among class members are outweighed by the questions of law and fact common to all.
(Id. at 3-4.) Likewise, Plaintiff asserts that his interests align with those of the class and that he has
1
Specifically, Plaintiff asserts that his introductory rate of $39.99 was increased to $59.99 in the
second month and $79.99 in the third, but it is unclear to the Court how those numbers support
Plaintiff’s allegations.
2
The elements of Mo. Ct. R. 52.08 mirror Fed. R. Civ. P. 23.
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retained “competent and experienced” counsel, making him an adequate representative of the class.
(Id. at 3.)
Defendants challenge nearly every one of Plaintiff’s assertions. As an initial matter, they
argue that the class definition is so broad that it would include customers who have not suffered any
of the “economic injuries” Plaintiff alleges. (Doc. 2 at 3-4.) Defendants also assert that Plaintiff
failed to adequately establish the numerosity, typicality, or adequacy requirements of Rule 23. (Id.
at 6-11.)
1. Class Definition
Defendants first argue that Plaintiff’s class definition is too broad. “The Eighth Circuit has
held that a proposed class ‘must be adequately defined and clearly ascertainable.’” Cope v. Let’s
Eat Out, Inc., 319 F.R.D. 544, 551 (W.D. Mo. 2017) (quoting Sandusky Wellness Ctr., LLC v.
Medtox Sci., Inc., 821 F.3d 992, 996 (8th Cir. 2016)). “The Court’s ascertainability inquiry is
intertwined with its analysis of standing.” Id. at 551–52. “The class definition must enable the
Court to determine objectively who is in the class, and thus, who is bound by the ruling.” Glen v.
Fairway Indep. Mortg. Corp., 265 F.R.D. 474, 477 (E.D. Mo. 2010), order clarified, No.
4:08CV730 RWS, 2010 WL 891621 (E.D. Mo. Mar. 8, 2010) (quoting Walls v. Sagamore Ins.
Co., 2009 WL 890528, *4 (E.D. Ark. March 31, 2009)). “[T]he Court should not have to engage in
lengthy,
individualized
inquiries
in
order
to
identify
members
of
the
class,”
id.
(quoting Walls, 2009 WL 890528 at *4), but “individual inquiries into the amount [of damages]
will not bar certification of the proposed classes” and a class definition is not necessarily overbroad
solely because it would include some member who was not injured, or a member who suffered an
injury different than the representative’s. Let’s Eat Out, 319 F.R.D. at 553.
The Court concludes that Plaintiff’s proposed class definition is not fatally broad. Of
significant weight is Plaintiff’s claim that the MSA is substantively unconscionable, which, if
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proved, would injure anyone bound by the contract.
Whether that injury resulted in an
“ascertainable loss” to each class member would require an individualized inquiry, but, as stated
above, the necessity of an inquiry into damages is not enough to defeat class treatment. Moreover,
the Court agrees with Plaintiff that Defendants likely have in their possession all necessary records
to efficiently complete that inquiry.
2. Numerosity
“A class may not be certified unless the proposed class is so large that joinder of all class
members would be ‘impracticable.’”
Fairway, 265 F.R.D. at 478 (quoting Fed. R. Civ. P.
23(a)(1)). Defendants argue that Plaintiff’s assertion that, “based upon information and belief, the
Class includes thousands of individuals” is too vague and unsupported by any concrete evidence of
numerosity.
Generally speaking, a bare assertion that there are “thousands of persons in the Class” is not
a reasonable estimate. Campbell v. Purdue Pharma, L.P., No. 1:02CV00163 TCM, 2004 WL
5840206, at *4 (E.D. Mo. June 25, 2004). However, “impracticable” only requires “a showing that
it would be extremely difficult or inconvenient to join all members of the class.” Morgan v. United
Parcel Serv. of Am., Inc., 169 F.R.D. 349, 355 (E.D. Mo. 1996) (citing Gentry v. C & D Oil
Co., 102 F.R.D. 490, 493 (W.D. Ark. 1984)). “Relevant factors include the number of persons in
the class, the nature of the action, the size of the individual claims, the inconvenience of trying
individual suits, and any other factor relevant to the practicability of joining all the class members.”
Id. (citing Paxton v. Union National Bank, 688 F.2d 552, 560-61 (8th Cir. 1982)). The Court may
rely on “reasonable inferences drawn from facts before [it]” when evaluating numerosity. Id.
(quoting Wethington v. Purdue Pharma LP, 218 F.R.D. 577, 585 (S.D. Ohio 2003)).
The Court first notes that Defendants do not argue that the number of potential class
members is too small to meet the numerosity requirement; they only argue that Plaintiff’s assertion
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is insufficient. Second, the Court recognizes that courts commonly find numerosity in classes of at
least forty members and have certified classes with fewer than that. See Morgan v. United Parcel
Serv. of Am., Inc., 169 F.R.D. 349, 355 (E.D. Mo. 1996) (considering nineteen identified plaintiffs
sufficient to proceed) (citing Esler v. Northrop Corp., 86 F.R.D. 20 (W.D. Mo.1979) (opining that
classes of forty or more are typically considered numerous enough to proceed)). Given that
Defendants sell telecom services across Missouri, the Court believes it can reasonably infer that the
class includes more than forty potential members.
3. Commonality and Typicality
Defendants next argue that the facts vary too significantly between each class member’s
claim and that the facts underlying Plaintiff’s claim are not typical. (Doc. 2 at 7-8.) Defendants
assert that each telephone call to an individual class member was unique and would require such
intensive fact-finding into each claim that class treatment would be impracticable. (Doc. 2 at 7-8.)
To establish commonality, the Plaintiff must show that “there are questions of law or fact
common to the class.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011) (quoting Fed. R.
Civ. P. 23(a)(2). Although “[a]ny competently crafted class complaint literally raises common
questions,” Plaintiff must “demonstrate that the class members have suffered the same injury.” Id.
at 350-51 (citations and internal quotation marks omitted). “That common contention, moreover,
must be of such a nature that it is capable of classwide resolution—which means that determination
of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in
one stroke.” Id. at 351.
The Court finds that Plaintiff alleges a common question of law, the resolution of which is
central to the validity of every potential class member’s claim, namely: Is Defendant’s MSA
unconscionable? Proving that a contract is unenforceable as unconscionable requires a showing of
both procedural and substantive unconscionability. Davidson & Assocs., Inc. v. Internet Gateway,
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Inc., 334 F. Supp. 2d 1164, 1179 (E.D. Mo. 2004), aff’d sub nom. Davidson & Assocs. v. Jung, 422
F.3d 630 (8th Cir. 2005). Because the class is defined as anyone who was bound by the MSA,
proof that the contract is unconscionable would necessitate a finding that it is unenforceable against
everyone in the class. Defendants’ argument that each class member traveled a different route to
being bound by the MSA is well-taken, especially in light of Plaintiff’s claim that there was
unconscionability in the contracting process, but the Court concludes that those procedural
differences are less relevant than the class-wide determination of the substantive unconscionability
of the MSA. The Court therefore concludes that commonality is present.
However, Plaintiff testified that he is unsure how he himself came to receive Defendants’
telecom services and could not say whether he had ever received a telephone call. (Id. at 8.) On
this basis, Defendants argue that Plaintiff’s claim is not typical. “The typicality requirement as
customarily applied tends to merge with “commonality.’” Paxton v. Union Nat. Bank, 688 F.2d
552, 562 (8th Cir. 1982) (citing General Tel. Co. of Southwest v. Falcon, 457 U.S. 147 (1982).
“Rule 23(a)(3) ‘requires a demonstration that there are other members of the class who have the
same or similar grievances as the plaintiff.’” Id. (quoting Donaldson v. Pillsbury Co., 554 F.2d
825, 830 (8th Cir. 1977). “This requirement is generally considered to be satisfied ‘if the claims or
defenses of the representatives and the members of the class stem from a single event or are based
on the same legal or remedial theory.’” Id. at 561-62 (quoting C. Wright & A. Miller, Federal
Practice and Procedure § 1764 at n.21.1 (Supp. 1982)). “The burden of showing typicality is not
an onerous one. It does, however, require something more than general conclusory allegations.”
Id. at 562.
The Court first notes that Plaintiff’s claim is typical of the class insofar as he is bound by
the allegedly unconscionable MSA, as is every class member. However, that Plaintiff may not
have been induced to accept the MSA through a telephone call goes to the heart of his claim that
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the MSA is procedurally unconscionable, and calls into question whether his claim is similar to
other class members’.
In his deposition, Plaintiff states multiple times that he cannot remember how he came to
acquire Defendants’ telecom services. Plaintiff testified that he received a bill for services he had
never requested. (Doc. 2-1 at 22:4-10.) When opposing counsel asked Plaintiff how he “first came
to do business with Birch Communications,” Plaintiff responded, “I don’t really remember.” (Id. at
22:11-14.) After apparently struggling to recall who had been his telephone service provider before
and after Birch, Plaintiff attempted to describe how he ended up with Birch services, saying,
[I]t got kind of screwy right in there. I can’t really tell you – it seems like there
was some other provider in there as well and I don’t know for sure. It was –
because I was communicating with Southwestern Bell. I was – I was – I was –
they – and they had asked me to sign up with them and then Birch came and got
me to – no, they sent me bills. They didn’t give me – they give me some bills is
what happened. That’s the best I can remember. And that went on for a long
time but it was only because I wasn’t making their payments because I didn’t owe
them any money.
(Id. at 24:3-14.) When opposing counsel tried to clarify, asking, “[D]id you do anything yourself to
cause Birch to become your telephone service carrier for a time?,” Plaintiff responded, “Of course.
They asked me to.” (Id. at 24:20-23.) Opposing counsel asked, “And how did they ask you to?”
(Id. at 24:24.) Plaintiff responded, “That I don’t know.” (Id. at 24:25.) “Was that in a telephone
call?,” opposing counsel asked. (Id. at 25:1.) “Well, I – could have been. “Let’s see. I couldn’t –
no, I can’t tell you,” Plaintiff responded. (Id. at 25:2-3.) Plaintiff further testified that he could not
recall “any conversation with Birch on the subject of switching.” (Id. at 25:9-17.) Later, when
asked again if he could remember how Birch became his telephone service provider, Plaintiff
answered, “I’d say they – they asked me. I don’t know how they asked me, I don’t know how that
ever happened, but they came in my house with the phone service.” (Id. at 27:9-15.) “Did you
speak with someone on the telephone?,” opposing counsel asked. (Id. at 28:7-8.) “I assume it was
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on the phone,” Plaintiff answered, but he then confirmed that he could not remember any telephone
conversation with Birch. (Id. at 28:9-12.)
Plaintiff’s inconsistent deposition testimony and incomplete memory is insufficient to
establish that he was induced to accept the MSA through unconscionable means and the “general
conclusory allegations” of procedural unconscionability made in his complaint are not enough to
overcome that insufficiency. See Paxton, 688 F.2d at 562. If Plaintiff’s contract with Defendants
was not the product of an improper phone call, he cannot establish that his claim is typical of the
alleged injuries to the class—namely the unconscionable inducement to accept and unconscionable
contract beginning with an unsolicited phone call.
Moreover, Plaintiff proffers seven common questions of law or fact that allegedly apply to
every member of the class, four of which concern alleged misconduct by Defendants during
telephone calls:
(a) whether the Defendants’ telephone contacts with the Plaintiffs used
unconscionable terms or unfair business practices and/or whether the
unconscionable terms of the MSA should have been revealed during those initial
calls; (b) whether the Defendants’ failure to divulge the unconscionable terms of
the MSA during their initial calls to Plaintiffs constituted an unconscionable
and/or unfair business practice; (c) whether the Defendants’ failure to divulge the
terms of the MSA during the telephonic verification (“TPV”) calls constituted
an unconscionable and/or unfair business practice; (d) whether the MSA contains
unconscionable terms; (e) whether Defendants’ telephonic contacts violated the
MMPA; (f) whether Defendants’ use of the MSA violated the MMPA; and (g)
whether and to what extent the Class members were injured by Defendants’
conduct.
(Doc. 35 at 3-4 (emphasis added.)) Put simply, when more than half of the questions common to
the class may not apply to the proposed representative, his claim is not typical.
4. Adequacy
Defendants also argue that Plaintiff is not an adequate representative of the class because,
in addition to bringing an atypical claim, he labors under a conflict of interest due to his familial
relationship with proposed class counsel. (Doc. 2 at 8-12.) Class representatives must “vigorously
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prosecute the interests of the class through qualified counsel.” Paxton, 688 F.2d at 563 (citing
Gonzales v. Cassidy, 474 F.2d 67, 72 (6th Cir. 1973)). A court will reject a proposed representative
when there is reason to believe that his or her “interests will be enforced at the expense of other
class members or will, in any other way, be antagonistic to the class’ interests or if counsel is not
competent to pursue the litigation.” Kuenz v. Goodyear Tire & Rubber Co., 104 F.R.D. 474, 477
(E.D. Mo. 1985) (quoting Paxton, 688 F.2d at 563) (internal quotation marks omitted).
Defendants’ primary argument turns on the fact that proposed class counsel is Plaintiff’s
son-in-law. (Doc. 2 at 10.) “Courts have often denied class certification when the proposed class
representative had a close familial relationship to the proposed class counsel.” Irvin E. Schermer
Tr. by Kline v. Sun Equities Corp., 116 F.R.D. 332, 337 (D. Minn. 1987) (collecting cases). The
concern, naturally, is that counsel will enforce the interests of his family at the expense of other
class members.
The Court need not address Defendants’ allegations against class counsel because
Plaintiff’s atypical claim renders him an inadequate class representative.
Given Plaintiff’s
deposition testimony, he may not have a viable claim under the MMPA and therefore cannot
adequately advance the interests of a class of people who do.
Conclusion
For the foregoing reasons, the Court concludes that Plaintiff has failed to meet the
requirements for class certification.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff Richard Huskey’s Motion to Certify a Class
Pursuant to Federal Rule of Civil Procedure 23 and Missouri Supreme Court Rule 52.08 (Doc. 5), is
DENIED. However, Plaintiff’s individual claim may proceed.
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Dated this 28th day of September, 2018.
_______________________________
JOHN A. ROSS
UNITED STATES DISTRICT JUDGE
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