Sparkle Hill, Inc. v. Ursell et al
OPINION. Signed by Judge Noel L. Hillman on 10/24/2017. (tf, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
SPARKLE HILL, INC.,
individually and as the
representative of a class of
Civil No. 13-4172 (NLH/AMD)
doing business as
AMB Business Supply,
JAMES C. SHAH
SHEPHERD, FINKELMAN, MILLER & SHAH, LLP
475 WHITE HORSE PIKE
COLLINGSWOOD, NJ 08107-1909
PHILLIP A. BOCK
BOCK, HATCH, LEWIS &
134 N. LA SALLE ST., STE. 1000
CHICAGO, IL 60603
BRIAN J. WANCA
ANDERSON + WANCA
3701 ALGONQUIN ROAD, SUITE 760
ROLLING MEADOWS, IL 60008
On behalf of Plaintiff
JOHN H. KING
THOMPSON, BECKER & BOTHWELL, LLC
TEN MELROSE AVENUE
CHERRY HILL, NJ 08003
DAVE E. KAWALA
CATHERINE BASQUE WEILER
SWANSON, MARTIN & BELL, LLP
330 NORTH WABASH, SUITE 3300
CHICAGO, IL 60611
On behalf of Defendant
HILLMAN, District Judge
In this class action for claims concerning “junk” faxes,
presently before the Court is Plaintiff’s motion for summary
For the reasons expressed below, Plaintiff’s motion
will be granted as to liability only.
On January 24, 2007, Plaintiff, Sparkle Hill, Inc., a dry
cleaning store, received an unsolicited telephone facsimile on
its fax machine from Defendant, Invecor, LLC, d/b/a AMB Business
Supply, which was in the business of selling cash register and
The fax was an advertisement selling paper
rolls for cash register and credit card machines.
engaged Business to Business Solutions (“B2B”), which sold fax
blasting services, to send out faxes to advertise its business.
B2B gathered a list of targets from a database purchased
from InfoUSA, and after payment from Defendant and Defendant’s
approval of the content of the fax, B2B successfully faxed
34,668 faxes to 28,836 different fax numbers.
The fax did not
contain the proper out-opt information, and Plaintiff claims
that it, as well as the 28,835 other recipients, did not consent
to receiving the fax.
Plaintiff filed a putative class action complaint against
Defendant for violations of the Telephone Consumer Protection
Act (“TCPA”), 47 U.S.C. § 227. 1
On February 25, 2016, the Court
granted Plaintiff’s motion for class certification, which was
unopposed by Defendant.
The Court approved the following class:
All persons with whom Invecor, LLC d/b/a AMB Business
Supply did not have an established business relationship,
who were successfully sent one or more unsolicited faxes
during the period December 10, 2006, through January 24,
2007, stating, “Credit Card & Cash Register Paper Rolls” or
“Cash Register & Credit Card Receipt Paper Rolls” and “AMB
Business Supply 1161 Rankin Dr Troy MI 48083 Toll Free:
(Docket No. 134 at 3, Amended Order Granting Class
Plaintiff, through a claims administrator, mailed the
Plaintiff also lodged claims against Defendant for violations
of the New Jersey “Junk Fax Statute” (“NJJFS”), N.J.S.A. 56:8157 et seq., and the New Jersey Consumer Fraud Act (“NJCFA”),
N.J.S.A. 56:8-1 et seq. During the resolution of Defendant’s
motion to dismiss on September 23, 2014, the Court questioned
whether Plaintiff’s NJJFA claim could proceed as a class action
in federal court. (Docket No. 81.) Pursuant to the Court’s
direction, the parties submitted supplemental briefing on the
issue (Docket No. 83, 84), but the Court has not made a final
determination, as the parties subsequently attempted to resolve
the matter through settlement. A private resolution of the
matter was not been reached, and Plaintiff’s current motion for
summary judgment seeks judgment solely on its TCPA claim.
Plaintiff is directed to inform the Court of its intentions
regarding its state law claims.
Court-approved notice (Docket No. 136) to the class members –
i.e., owners of 28,836 fax numbers that were sent Defendant’s
Plaintiff has now moved for summary judgment in the
class’s favor in the amount of $17,334,000, which is $500 in
statutory damages for each time Defendant’s unsolicited fax
advertisement was successfully sent to a class member’s fax
Defendant has opposed Plaintiff’s motion. 2
This Court has jurisdiction over Plaintiff’s federal claim
under 28 U.S.C. § 1331, and supplemental jurisdiction over
Plaintiff originally filed its motion for summary judgment on
April 29, 2016, but in August 2016, Plaintiff filed a motion to
postpone the Court’s ruling until after class notice had issued
and the time within which class members could opt-out or stay in
had expired. The Court granted that motion. (Docket No. 133.)
On December 2, 2016, Plaintiff informed the Court that the
notice had issued, and indicated that the opt-out date was
December 26, 2016. (Docket No. 136.) On April 21, 2017,
Plaintiff asked that its motion for summary judgment be reactivated for resolution, but noted that because Defendant’s
insurer had withdrawn its defense and that issue was being
litigated in a declaratory judgment action in federal district
court in Michigan, Defendant wanted this case stayed pending the
resolution of the declaratory judgment action concerning
Defendant’s insurance coverage. (Docket No. 137.) This Court
granted Plaintiff’s request and reactivated the summary judgment
motion. (Docket No. 138.) Plaintiff, however, has not informed
the Court whether any class members have opted out of the class.
Plaintiff is directed to provide that information to the Court,
which may affect the form and amount of judgment that will be
entered in the class’s favor on Plaintiff’s TCPA claims.
Plaintiff’s state law claims under 28 U.S.C. § 1367.
Standard for Summary Judgment
Summary judgment is appropriate where the Court is
satisfied that the materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations, admissions, or
interrogatory answers, demonstrate that there is no genuine
issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.
Celotex Corp. v.
Catrett, 477 U.S. 317, 330 (1986); Fed. R. Civ. P. 56(a).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
A fact is “material” if, under the governing
substantive law, a dispute about the fact might affect the
outcome of the suit.
In considering a motion for summary
judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence;
instead, the non-moving party's evidence “is to be believed and
all justifiable inferences are to be drawn in his favor.”
Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir.
2004)(quoting Anderson, 477 U.S. at 255).
Initially, the moving party has the burden of demonstrating
the absence of a genuine issue of material fact.
v. Catrett, 477 U.S. 317, 323 (1986).
Once the moving party has
met this burden, the nonmoving party must identify, by
affidavits or otherwise, specific facts showing that there is a
genuine issue for trial.
Thus, to withstand a properly
supported motion for summary judgment, the nonmoving party must
identify specific facts and affirmative evidence that contradict
those offered by the moving party.
Anderson, 477 U.S. at 256-
A party opposing summary judgment must do more than just
rest upon mere allegations, general denials, or vague
Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir.
Under the TCPA, it is unlawful “to send, to a telephone
facsimile machine, an unsolicited advertisement.”
47 U.S.C. §
The “person or entity” that receives an
unsolicited fax may seek to enjoin the violations, and the
recipient may recover for its actual monetary loss, or receive
$500 per fax, whichever is greater.
47 U.S.C. § 227(b)(3).
That amount can be trebled if the violation was willful or
47 U.S.C. § 227(b)(1)(C), (b)(3)(B).
The alleged actual damages in this case, as in most other
junk fax cases, concern the cost of the recipient’s paper and
toner, the recipient’s loss of use of its fax machine to conduct
legitimate business, and the recipient’s employees’ wasted time
in considering the junk fax.
Exceptions to liability under the
TCPA are if:
(i) the unsolicited advertisement is from a sender with
an established business relationship with the
recipient; (ii) the sender obtained the number of the
telephone facsimile machine through--(I) the voluntary
communication of such number, within the context of
such established business relationship, from the
recipient of the unsolicited advertisement, or (II) a
directory, advertisement, or site on the Internet to
which the recipient voluntarily agreed to make
available its facsimile number for public distribution
. . . .
47 U.S.C. § 227(b)(1)(C).
However, even if the unsolicited fax meets these
exceptions, a sender is still liable under the TCPA if the fax
fails to include an opt-out statement that enables the recipient
to easily remove itself from any future unsolicited
“[T]he advertisement must clearly and
conspicuously notify a recipient that it may opt out of
receiving any future unsolicited advertisements, must state that
the sender’s failure to comply with a request for removal within
30 days violates applicable law, and must contain a ‘cost-free
mechanism,’ including a domestic phone number and fax machine
number, for the recipient to transmit its removal request.”
City Select Auto Sales, Inc. v. David/Randall Associates, Inc.,
96 F. Supp. 3d 403, 418-19 (D.N.J. 2015) (citing 42 U.S.C. §
227(b)(2)(D)(i)-(v); 47 C.F.R. § 64.1200(a)(4)).
In order to grant summary judgment on a TCPA claim, the
plaintiff must point to specific evidence in the record
sufficient to establish that: (1) the defendant utilized a
“telephone facsimile machine” to send “one or more faxes;” (2)
that the transmissions constituted “‘advertisements;’” and (3)
that the defendant sent the transmissions without the
recipient’s consent, absent application of one of the statutory
City Select, 96 F. Supp. at 416 (citation omitted).
In conjunction with this TCPA violation, or in the
alternative, a plaintiff may obtain summary judgment by pointing
to evidence in the record that: (1) the defendant utilized a
“telephone facsimile machine” to send “one or more faxes;” (2)
that the transmissions constituted “‘advertisements;’” and (3)
the advertisements failed to contain a statutorily-compliant
See id. at 418.
Plaintiff has provided the following facts to support its
claim that Defendant violated the TCPA:
Defendant, through B2B, used a fax machine to send
34,668 unsolicited faxes.
Defendant’s fax constituted an advertisement for the
sale of cash register and credit card paper rolls.
Plaintiff, and all others similarly situated, did not
consent to receive Defendant’s fax.
The fax failed to contain the proper opt-out notice.
Based on these facts, Plaintiff argues that it is entitled
to judgment in the class’s favor for statutory damages of $500
for each unsolicited advertisement faxed by Defendant.
Defendant has opposed Plaintiff’s motion on several bases.
First, Defendant argues that because B2B faxed the
advertisements, it cannot be held liable as the “sender” of the
Defendant also argues that Plaintiff has not
provided proof to establish that Defendant directed B2B to
target unconsenting recipients.
The TCPA explicitly rejects
this attempted defense to liability.
“The TCPA prescribes two parallel, and often blended,
theories of ‘sender’ liability . . . : the first applies to ‘the
person or entity’ on ‘whose behalf’ a third party transmits an
unsolicited facsimile advertisement; the other applies to the
person or entity ‘whose goods or services are advertised or
promoted in the unsolicited advertisement.’”
City Select, 96 F.
Supp. 3d at 419 (citing 47 C.F.R. § 64.1200(f)(10)) (other
“[T]he TCPA, by its own terms, creates a
form of vicarious liability making an entity liable when a third
party sends unsolicited communications on its behalf in
violation of the Act.”
Id. at 419-20 (quotations and citation
Additionally, a defendant cannot exculpate itself “from
liability simply by hiring an independent contractor for the
purposes of transmitting unsolicited facsimiles on their
behalf,” and instead “a person whose services are advertised in
an unsolicited fax transmission, and on whose behalf the fax is
transmitted, may be held [strictly] liable under the TCPA's ban
on the sending of faxes, despite not physically transmitting the
Id. (quotations and citations omitted).
Without dispute, the fax at issue here advertised
Defendant’s services, Defendant designed the fax, and Defendant
hired B2B to fax its advertisement.
Simply arguing that
Defendant did not provide B2B with the fax numbers to which B2B
sent the fax does not absolve Defendant from liability under the
Second, Defendant argues that it is not clear whether any
of the fax numbers B2B purchased from InfoUSA, and to which B2B
sent the fax, met the exceptions to liability under the TCPA –
i.e., whether the numbers were of established business
customers, generated from the voluntary communication of such
number, or from a directory, advertisement, or site on the
Internet to which the recipient voluntarily agreed to make
available its facsimile number for public distribution.
As to the named Plaintiff, Defendant has not provided any
evidence to refute that Plaintiff did not consent to the fax.
Thus, because Defendant’s fax to Plaintiff fails to meet the
exceptions to liability under 47 U.S.C. § 227(b)(1)(C),
Plaintiff has established Defendant’s liability for its
The same can be said for any member of the
class who is similarly situated – i.e. any non-consenting member
of the class who received a fax from the Defendant’s agent.
However, how many members of the class, or which members of
the class, actually fit that definition of non-consenting has
not been established in the record.
Plaintiff argues that
Defendant’s fax sent to all of the other 28,335 fax numbers were
similarly unconsenting under § 227(b)(1)(C), but Defendant
argues that some portion of those numbers might actually meet
the exception to liability.
Neither party has provided concrete
proof to support its position.
Moreover, the law is not clear whether on summary judgment
it is Plaintiff’s burden to show as part of its affirmative
claim that the exception to liability provision does not apply,
or whether it is Defendant’s burden as part of its defense to
liability to show that the exception to liability provision does
See, e.g., Evankavitch v. Green Tree Servicing, LLC, 793
F.3d 355, 361 (3d Cir. 2015) (citing Schaffer v. Weast, 546 U.S.
49, 56 (2005)) (where the plain text of a statute is silent on
the allocation of the burden of persuasion, a court begins with
the ordinary default rule that plaintiffs bear the risk of
failing to prove their claims, but another general rule of
statutory construction provides that the burden of proving
justification or exemption under a special exception to the
prohibitions of a statute generally rests on one who claims its
benefits) (other citations and quotations omitted); cf. Zean v.
Fairview Health Services, 858 F.3d 520, 526 n.3 (8th Cir. 2017)
(citing Schaffer, 546 U.S. at 60; Van Patten v. Vertical Fitness
Group, LLC, 847 F.3d 1037, 1044 (9th Cir. 2017); Murphy v. DCI
Biologicals Orlando, LLC, 797 F.3d 1302, 1305 (11th Cir. 2015);
NLRB v. Seedorff Masonry, Inc., 812 F.3d 1158, 1168 (8th Cir.
2016)) (noting that (1) the ordinary default rule is that
plaintiffs bear the risk of failing to prove their claims, (2)
other circuits have interpreted an FCC ruling to mean that
consent is an affirmative defense under the TCPA, but (3) the
FCC's 2015 Order did not use the term “affirmative defense” and
did not address the “important distinction between [a
defendant's] burden of going forward with evidence establishing
a prima facie case for [a defense or exception], and [a
plaintiff's] ultimate burden of persuasion”); Booth v. Appstack,
Inc., 2016 WL 3620798, at *4 (W.D. Wash. 2016) (assessing the
law in the Ninth Circuit and finding that the exception to
liability under the TCPA is not part of a plaintiff’s
The Court does not have to reach that issue, however,
because even if one or all of the 34,866 faxes met the exception
to liability provision, none of the sent faxes contained a
complete and statutorily required opt-out statement, which would
have enabled the recipient to easily remove itself from any
future unsolicited advertisements.
Several different versions
of the fax were sent, and many did not contain any opt-out
language at all.
While it is true that a couple of versions
contained the following statement at the bottom of the fax: “If
you received this fax in error and would like to be removed from
our database, call toll free 1-800-511-8261].”, see Docket No.
111-4, this language is not sufficient under the TCPA.
compliant, the fax transmission must also include a statement
that the sender’s failure to comply with a request for removal
within 30 days violates applicable law, and provide a domestic
fax machine number for the recipient to transmit its removal
42 U.S.C. § 227(b)(2)(D)(i)-(v); 47 C.F.R. §
In sum, none of the transmitted faxes satisfied the statute
and accompanying regulations and therefore each violated the
See City Select, 96 F. Supp. 3d at 418 (finding that even
if the defendants’ submission raised a genuine issue of fact as
to whether any class members consented to the advertisement, or
had an existing business relationship with defendant, summary
judgment would still be warranted because the record contained
no genuine dispute that the advertisements failed to contain a
statutorily compliant opt-out notice) (citing Holtzman v. Turza,
728 F.3d 682 (7th Cir. 2013) (“Because [the defendant] omitted
[the required] opt-out notices, it does not matter which
recipients consented or had an established business relation
with [the defendant].”)).
Consequently, the certified class is entitled to judgment
in its favor for each advertisement faxed that failed to contain
the proper opt-out notice to each class member. 3
For the reasons expressed above, Plaintiff’s motion for
summary judgment on its class action complaint that Defendant
violated the TCPA must be granted.
Within 15 days of the date
of this Opinion and accompanying Order, Plaintiff is directed to
(1) inform the Court on the status of its state law claims, (2)
provide documentation to demonstrate class member opt-out
notices, if any; and (3) provide a proposed form of judgment as
to the TCPA claims, along with a justification for its request
Because Plaintiff has not provided the Court with any notices
from class members who have opted out of this litigation, the
Court cannot enter final judgment until the precise number of
unsolicited faxes and class members is established. Moreover,
the assessment of damages is not quantifiable at this time, as
it is possible that class members suffered damages in excess of
the $500 statutory penalty. See 47 U.S.C. § 227(b)(3) (the
recipient may recover for its actual monetary loss, or receive
$500 per fax, whichever is greater). Plaintiff is not seeking
treble damages for willful violations under 47 U.S.C. §
227(b)(1)(C), (b)(3)(B). In addition to the number of class
members who have opted-out, Plaintiff should advise the Court of
its basis to conclude that no class member seeks damages in
excess of $500.
for statutory damages for each violation. 4
An appropriate Order will be entered.
Date: October 24, 2017
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
In City Select, the court granted summary judgment on the
plaintiff’s class action TCPA violation claims, and awarded
judgment in the amount of $22,405,000, which constituted the
statutory damages for the defendant’s “junk fax” violations.
The Court noted, however, “Counsel are requested to confer, as
discussed at oral argument of this motion, whether a judgment in
a significantly smaller sum would likely provide full statutory
recovery to all probable members of the Class who respond and
file claims. For example, if the typical “yield” of the notice
of a class claims process is assumed to be 15%, based on
experience, then a judgment fund of 15% of $22,405,000, which is
$3,360,750, may suffice, subject to future adjustment based on
claims approved. Counsel are invited to discuss the viability
of such a mechanism to implement this judgment in the class
action context.” City Select, 96 F. Supp. 3d at 427 n.20.
Counsel should meet and confer and advise the Court within 30
days as to whether a similar course should be followed by the
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