Sparkle Hill, Inc. v. Ursell et al
OPINION. Signed by Judge Noel L. Hillman on 9/23/2014. (drw)
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
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 putative class action for claims concerning an
alleged “junk fax,” presently before the Court is defendant’s
motion to dismiss plaintiff’s complaint.
For the reasons
expressed below, defendant’s motion will be granted in part,
denied in part, and continued in part.
On January 24, 2007, plaintiff, Sparkle Hill, Inc.,
received an unsolicited telephone facsimile on its fax machine
from defendant, Invecor, LLC.
The fax was an advertisement
selling cash register and credit card paper rolls. 1
this fax, plaintiff has filed a three-count complaint for
violations of the Telephone Consumer Protection Act (“TCPA”), 47
U.S.C. § 227, the New Jersey “Junk Fax Statute” (“NJJFS”),
N.J.S.A. 56:8-157 et seq., and the New Jersey Consumer Fraud Act
(“NJCFA”), N.J.S.A. 56:8-1 et seq.
Plaintiff has pleaded these
claims as a putative class action.
Defendant has moved to dismiss all of plaintiff’s claims,
arguing that plaintiff’s claims are not viable because its
Even though plaintiff’s complaint references the fax as
“Exhibit A” to its third amended complaint, the exhibit is not
attached. (See Docket No. 76.) “Exhibit A” is also not
attached to the third amended complaint contained in other
docket entries. (See Docket Nos. 73, 74, 77.) Plaintiff’s
original complaint was transferred from the United States
District Court for the Northern District of Illinois Eastern
Division, having been removed from the Illinois state court.
“Exhibit A” is attached to plaintiff’s first amended complaint
provided as part of the appendix of transferred documents. (See
Docket No. 1, Attachment #4, at page 48.) Even though the Court
will presume that this document is the junk fax at issue, the
content of the fax is not material to the resolution of the
damages are de minimis.
If that request for relief is not
granted, defendant seeks dismissal of plaintiff’s request for
class action treatment of its claims, arguing that TCPA-type
claims are not maintainable under New Jersey law.
also argues that plaintiff’s claims under the New Jersey Junk
Fax Statute and NJCFA are duplicative, and should be merged into
Plaintiff has opposed defendant’s motion.
This Court has jurisdiction over plaintiff’s federal claim
under 28 U.S.C. § 1331, and supplemental jurisdiction over
plaintiff’s state law claims under 28 U.S.C. § 1367.
Standard for Motion to Dismiss
When considering a motion to dismiss a complaint for
failure to state a claim upon which relief can be granted
pursuant to Federal Rule of Civil Procedure 12(b)(6), a court
must accept all well-pleaded allegations in the complaint as
true and view them in the light most favorable to the plaintiff.
Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005).
It is well
settled that a pleading is sufficient if it contains “a short
and plain statement of the claim showing that the pleader is
entitled to relief.”
Fed. R. Civ. P. 8(a)(2).
liberal federal pleading rules, it is not necessary to plead
evidence, and it is not necessary to plead all the facts that
serve as a basis for the claim.
F.2d 434, 446 (3d Cir. 1977).
Bogosian v. Gulf Oil Corp., 562
However, “[a]lthough the Federal
Rules of Civil Procedure do not require a claimant to set forth
an intricately detailed description of the asserted basis for
relief, they do require that the pleadings give defendant fair
notice of what the plaintiff’s claim is and the grounds upon
which it rests.”
Baldwin Cnty. Welcome Ctr. v. Brown, 466 U.S.
147, 149-50 n.3 (1984) (quotation and citation omitted).
A district court, in weighing a motion to dismiss, asks
“‘not whether a plaintiff will ultimately prevail but whether
the claimant is entitled to offer evidence to support the
Bell Atlantic v. Twombly, 550 U.S. 544, 563 n.8 (2007)
(quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also
Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (“Our decision in
Twombly expounded the pleading standard for ‘all civil actions’
. . . .”); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.
2009) (“Iqbal . . . provides the final nail-in-the-coffin for
the ‘no set of facts’ standard that applied to federal
complaints before Twombly.”).
Following the Twombly/Iqbal standard, the Third Circuit has
instructed a two-part analysis in reviewing a complaint under
First, the factual and legal elements of a claim
should be separated; a district court must accept all of the
complaint's well-pleaded facts as true, but may disregard any
S. Ct. at 1950).
Fowler, 578 F.3d at 210 (citing Iqbal, 129
Second, a district court must then determine
whether the facts alleged in the complaint are sufficient to
show that the plaintiff has a “‘plausible claim for relief.’”
Id. (quoting Iqbal, 129 S. Ct. at 1950).
A complaint must do
more than allege the plaintiff's entitlement to relief.
see also Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d
Cir. 2008) (stating that the “Supreme Court's Twombly
formulation of the pleading standard can be summed up thus:
‘stating . . . a claim requires a complaint with enough factual
matter (taken as true) to suggest’ the required element.
‘does not impose a probability requirement at the pleading
stage,’ but instead ‘simply calls for enough facts to raise a
reasonable expectation that discovery will reveal evidence of’
the necessary element”).
A court need not credit either “bald
assertions” or “legal conclusions” in a complaint when deciding
a motion to dismiss.
In re Burlington Coat Factory Sec. Litig.,
114 F.3d 1410, 1429-30 (3d Cir. 1997).
The defendant bears the
burden of showing that no claim has been presented.
U.S., 404 F.3d 744, 750 (3d Cir. 2005) (citing Kehr Packages,
Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991)).
Finally, a court in reviewing a Rule 12(b)(6) motion must
only consider the facts alleged in the pleadings, the documents
attached thereto as exhibits, and matters of judicial notice.
S. Cross Overseas Agencies, Inc. v. Kwong Shipping Grp. Ltd.,
181 F.3d 410, 426 (3d Cir. 1999).
A court may consider,
however, “an undisputedly authentic document that a defendant
attaches as an exhibit to a motion to dismiss if the plaintiff’s
claims are based on the document.”
Pension Benefit Guar. Corp.
v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.
If any other matters outside the pleadings are
presented to the court, and the court does not exclude those
matters, a Rule 12(b)(6) motion will be treated as a summary
judgment motion pursuant to Rule 56.
Fed. R. Civ. P. 12(b).
Whether plaintiff’s claims are de minimis
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).
Junk Fax Act provides for similar relief. 2
See Oettinger v.
Stevens Commercial Roofing, LLC, 2013 WL 3811765, *2 (N.J.
As discussed below, plaintiff’s claims premised on the NJCFA
are one-in-the-same as its NJJFA claims.
Super. Ct. App. Div. 2013), cert. denied, 82 A.3d 939 (N.J.
2013) (citing 47 U.S.C. § 227(b)(1)(c), (b)(3); N.J.S.A. 56:8–
158(a), -159(a)) (holding that “absent a more explicit
renunciation of the expansive approach to liability exposure
taken in the TCPA, we believe the NJJFA should be read in
harmony with its federal counterpart”).
The alleged damages here, 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.
Defendant’s primary argument for the
dismissal of plaintiff’s claims, premised under the de minimis
non curat lex maxim, is that the alleged harm caused by a single
junk fax is so insignificant and trivial, the law – and this
Court – should not concern itself with adjudicating such
Even though the Court understands defendant’s position,
neither the TCPA nor the NJJFA provides a de minimis exception
to liability. 3
Under the TCPA, “[i]t shall be unlawful for any
The case law cited by defendant to support its de minimis
argument is inopposite, as those courts dismissed junk fax
claims brought under the common law theory of conversion. See
Stonecrafters, Inc. v. Foxfire Printing and Packaging, Inc., 633
F. Supp. 2d 610, 615 (N.D. Ill. 2009); Old Town Pizza of
Lombard, Inc. v. Corfu-Tasty Gyro's Inc., 2012 WL 638765, *4
(N.D. Ill. 2012).
person . . . to use any telephone facsimile machine, computer,
or other device to send, to a telephone facsimile machine, an
unsolicited advertisement . . .,” and a “person or entity may .
. . bring . . . an action to recover for actual monetary loss
from such a violation, or to receive $500 in damages for each
such violation, whichever is greater . . . .”
227(b)(1)(C), (b)(3) (emphasis added). 4
47 U.S.C. §
Similarly, under the
NJJFA, “[a] person within this State shall not use any telephone
facsimile machine, computer or other device to send an
unsolicited advertisement to a telephone facsimile machine
within this State,” and “[a]ny person aggrieved by a violation
of this act may bring an action in the Superior Court in the
county where the transmission was sent or was received, or in
which the plaintiff resides, for damages . . . .”
Exceptions 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). The NJJFA contains a similar
provision. See N.J.S.A. 56:8-158.
56:8–158(a), -159(a) (emphasis added).
It is clear from the
plain language of these statutes that each provides a remedy for
a single junk fax. 5
Accordingly, because the language of the TCPA and NJJFA
permits the maintenance of an action for a single unsolicited
fax, and defendant has not provided any authority to support the
imposition of a de minimis exception to that right, defendant’s
motion to dismiss plaintiff’s claims based on the de minimis
nature of plaintiff’s alleged harm must be denied.
The legislative history also supports the ability for the
recipient of an unsolicited fax to pursue his claim for a single
violation. See, e.g., Local Baking Products, Inc. v. Kosher
Bagel Munch, Inc., 23 A.3d 469, 472 (N.J. Super. Ct. App. Div.
2011), cert. denied, 209 N.J. 96 (2011) (“The drafters
recognized that damages from a single violation would ordinarily
amount to only a few pennies worth of ink and paper usage, and
so believed that the $500 minimum damage award would be
sufficient to motivate private redress of a consumer's grievance
through a relatively simple small claims court proceeding,
without an attorney. See 137 Cong. Rec. S16205–06 (daily ed.
Nov. 7, 1991) (statement of Sen. Hollings) (“[I]t would defeat
the purposes of the bill if the attorneys' costs to consumers of
bringing an action were greater than the potential damages.”)”);
Oettinger v. Stevens Commercial Roofing, LLC, 2013 WL 3811765,
*2-3 (N.J. Super. Ct. App. Div. 2013) (“Despite the slight
variation between the language in the NJJFA and the TCPA, our
review of the legislative history, structure, and purposes of
the NJJFA leads us to conclude that the Legislature did not
intend to impose an added requirement of tangible harm upon a
claimant seeking to vindicate his or her rights under the Act.
Instead, the $500 sum for each violation referred to in the
NJJFA represents statutory damages that must be awarded upon
proof of a violation, regardless of whether a plaintiff can
establish discrete harm flowing from that violation.”).
Whether plaintiff’s NJCFA and NJJFA are
Plaintiff has asserted separate counts against defendant
for violations of the New Jersey Consumer Fraud Act and the New
Jersey Junk Fax Act.
Defendant has moved to dismiss plaintiff’s
NJCFA count as duplicative of its NJJFA count because the Junk
Fax Act is simply a subsection of the Consumer Fraud Act.
Court agrees with defendant.
The NJCFA is contained in Chapter 8 of the New Jersey
Statutes, and begins at section 56:8-1 and continues through
Sections 56:8-157 to -160 concern the sending
of unsolicited faxes.
An aggrieved person’s remedy is to bring
an action in court for injunctive relief and for actual or
also provides “additional remedies and penalties,” and states
that a violation of the Junk Fax Act constitutes a violation of
the Consumer Fraud Act, and shall be subject to all remedies and
penalties available under the NJCFA as a whole, in addition to
those under the Junk Fax Act contained in N.J.S.A. 56:8-159.
Consequently, because a violation of the Junk Fax Act is also a
violation of the Consumer Fraud Act, plaintiff’s separate counts
for violations of these provisions must be merged into one.
Whether plaintiff’s TCPA and NJJFA claims may be
pursued as a class action
Defendant argues that plaintiff’s TCPA claims cannot
proceed as a class action.
To support its position, defendant
relies on Local Baking Products, Inc. v. Kosher Bagel Munch,
Inc., 23 A.3d 469, 476-77 (N.J. Super. Ct. App. Div. 2011),
cert. denied, 35 A.3d 679 (N.J. 2011).
In Local Baking
Products, the New Jersey Appellate Division determined that “a
class action suit is not a superior means of adjudicating a TCPA
suit,” and it explained:
The combination of the TCPA's design and New
Jersey's procedures suggests that the benefit of a
class action has been conferred on a litigant by the
very nature of the procedures employed and relief
obtained. The cost of litigating for an individual is
significantly less than the potential recovery.
Ultimately, we note that the same facts required
to prevail on an individual TCPA claim—an unsolicited
fax was received from a sender with whom the recipient
had no prior business relationship—are identical to
the facts that would have to be proven to merely
identify a single class member. We discern no
superiority in such a situation. In sum, the class
action cannot meet the superiority test and is
Local Baking Products, 23 A.3d at 476 (internal citations
Contrary to defendant’s position, however, the Local
Baking Products case does not support the dismissal of
plaintiff’s putative class action for TCPA violations because
state law on that issue is not applicable in this Court.
The TCPA provides that “[a] person or entity may, if
otherwise permitted by the laws or rules of court of a State,
bring in an appropriate court of that State” an action to enjoin
TCPA violations or to recover actual monetary loss.
47 U.S.C. §
Despite defendant’s argument regarding the
application of New Jersey state law in this case, the stateoriented language of § 227(b)(3) does not require the
application of state law in federal court.
The Supreme Court
has made it clear that through the TCPA, Congress “enacted
detailed, uniform, federal substantive prescriptions and
provided for a regulatory regime administered by a federal
agency,” and that federal law governs in TCPA actions brought in
Mims v. Arrow Financial Services, LLC, 132 S.
Ct. 740, 753 (2012)).
Mims explained that § 227(b)(3) “speaks
to state courts, and is an invitation to them to open their
doors to aggrieved consumers who have been harassed by
unsolicited phone calls and facsimiles, but without requiring
them to do so.”
Landsman & Funk, P.C. v. Skinder-Strauss
Associates, 2012 WL 6622120, *6 (D.N.J. 2012) (citing Mims, 132
S.Ct. at 751).
Federal courts, however, “remain available as
separate and independent fora for plaintiffs to vindicate their
rights under this federal law.”
Id.; see also City Select Auto
Sales, Inc. v. David Randall Associates, Inc., 296 F.R.D. 299,
312 (D.N.J. 2013) (“It follows that § 227(b)(3) recognized a
concurrent jurisdiction for TCPA cases in the state court only
as permitted by state laws or rules, without purporting to limit
TCPA cases in federal court.”).
Thus, the TCPA provides for a federal cause of action, and
federal law, not New Jersey state law, applies to the class
certification question in TCPA cases.
Sales, 296 F.R.D. at 312.
See City Select Auto
Accordingly, because federal law does
not prohibit the maintenance of a TCPA class action in federal
court, see id. (citing cases), 6 plaintiff’s putative class action
for defendant’s alleged violations of the TCPA cannot be
dismissed at this pleading stage. 7
Although at the present time it seems clear that TCPA class
actions are maintainable in federal court but not in New Jersey
state court, this case presents an additional issue of the
interplay between substantive state law and federal procedural
law with regard to plaintiff’s putative class action for NJJFA
A recent Massachusetts’s appeals court surveyed dozens of state
and federal court decisions and found that “the majority of
courts to have discussed the issue under various cognate class
action provisions and hold that the class action mechanism is a
superior avenue for adjudication of claims under 47 U.S.C. §
227.” Hazel's Cup & Saucer, LLC v. Around The Globe Travel,
Inc., 2014 WL 4106870, 3 (Mass. App. Ct. August 22, 2014).
Of course, the issue of whether plaintiff’s TCPA claim can be
certified as a class action must be determined pursuant to a
class action certification motion.
As set forth above, New Jersey disfavors the prosecution of
unsolicited fax violations in the form of a class action.
decision arose in the context of a state court case brought
pursuant to the TCPA.
See Local Baking Products, Inc. v. Kosher
Bagel Munch, Inc., 23 A.3d 469, 476-77 (N.J. Super. Ct. App.
Div. 2011), cert. denied, 35 A.3d 679 (N.J. 2011).
as also discussed above, class action treatment of a TCPA claim
is available if it is brought in federal court.
This is because
the TCPA is considered a federal question which confers federal
See City Select Auto Sales, Inc. v. David Randall
Associates, Inc., 296 F.R.D. 299, 312 (D.N.J. 2013); see also
Fitzgerald v. Gann Law Books, Inc., 956 F. Supp. 2d 581,
586 (D.N.J. 2013) (explaining that Mims held that the federal
courts have direct, federal-question jurisdiction over TCPA
Even though, as argued by the defendant in Fitzgerald
v. Gann Law Books, that a “$500 TCPA case can be transformed
into a federal question national class action claiming millions
of dollars in damages,” simply because the plaintiff chose
federal court over state court, “’Congress passed [the TCPA] as
written, and the federal courts are left with the
Fitzgerald, 956 F. Supp. 2d at 587 (quoting
Bank v. Spark Energy Holdings, LLC, 4:11–cv–4082, 2012 WL
4097749 at *3 (S.D. Tex. Sept. 13, 2012)).
The disparate result of proceeding in federal court instead
of state court for a TCPA claim is relevant to the issue of
whether a class action may be maintained for a New Jersey Junk
Fax Act claim brought in federal court under supplemental
Noted above, the NJJFA provides relief similarly
afforded by the TCPA to recipients of unsolicited faxes, and the
New Jersey courts have instructed that the NJJFA should be read
“in harmony” with the TCPA.
See Oettinger v. Stevens Commercial
Roofing, LLC, 2013 WL 3811765, *2 (N.J. Super. Ct. App. Div.
2013), cert. denied, 82 A.3d 939 (N.J. 2013).
Unlike the TCPA,
however, the NJJFA provides a specific direction as to the
proper forum for asserting a NJJFA claim:
Any person aggrieved by a violation of this act may
bring an action in the Superior Court in the county
where the transmission was sent or was received, or in
which the plaintiff resides, for damages or to enjoin
further violations of this act. . . . The court shall
proceed in a summary manner. . . .
The language of the NJJFA and the above-discussed case law
present two questions in this case:
(1) Should this Court apply Federal Civil Procedure
Rule 23 to the determination of whether plaintiff can
maintain a class action for violations of the state law
Junk Fax Act when considering that (a) the New Jersey state
courts prohibit class actions in state TCPA cases, and New
Jersey reads the NJJFA in harmony with the TCPA, and (b)
the main reason that Rule 23 applies to a TCPA claim in
federal court is because the TCPA is a federal law
presenting a federal question?
(2) Can plaintiff maintain a NJJFA claim in federal
court at all, since the NJJFA dictates a specific forum?
The court in Fitzgerald was faced with the same issue.
court pondered, “[t]he statutory injunction to proceed ‘in a
summary manner,’ tends to suggest that a class action was not
within the State legislature's contemplation[,] [a]nd after all,
nothing compelled New Jersey to create a substantive right of
action at all; does not that greater power include the lesser
one of setting the conditions under which plaintiffs may obtain
Fitzgerald, 956 F. Supp. 2d at 588.
Nonetheless, the Fitzgerald court followed the Supreme Court’s
decision in Shady Grove Orthopedic Associates, P.A. v. Allstate
Ins. Co., 559 U.S. 393, 415-16 (2010), and determined that the
maintenance of a class action governed by Rule 23 is permissible
for a NJJFA claim. 8 Id.
In the context of determining that a class action was
maintainable in federal court for claims based on a New York
state law that explicitly prohibited the assertion of a class
action, the Supreme Court in Shady Grove concluded,
We must acknowledge the reality that keeping the
federal-court door open to class actions that cannot
proceed in state court will produce forum shopping.
Because, however, neither plaintiff nor defendant squarely
addresses the NJJFA class action issue in its briefs, and
because the Fitzgerald court did not specifically discuss the
forum provision in the NJJFA, the Court will stay its decision
on defendant’s motion to dismiss plaintiff’s NJJFA claims
pending further briefing that answers this Court’s questions
posed above. 9
That is unacceptable when it comes as the consequence
of judge-made rules created to fill supposed “gaps” in
positive federal law. For where neither the
Constitution, a treaty, nor a statute provides the
rule of decision or authorizes a federal court to
supply one, “state law must govern because there can
be no other law.” But divergence from state law, with
the attendant consequence of forum shopping, is the
inevitable (indeed, one might say the intended) result
of a uniform system of federal procedure. Congress
itself has created the possibility that the same case
may follow a different course if filed in federal
instead of state court. The short of the matter is
that a Federal Rule governing procedure is valid
whether or not it alters the outcome of the case in a
way that induces forum shopping. To hold otherwise
would be to “disembowel either the Constitution's
grant of power over federal procedure” or Congress's
exercise of it.
Shady Grove Orthopedic Associates, P.A. v. Allstate Ins.
Co., 559 U.S. 393, 415-416 (2010) (internal citations
The parties may also wish to address whether this Court should
decline to exercise supplemental jurisdiction over plaintiff’s
putative class action for its NJJFA claims. See 28 U.S.C. §
1367(a), (c) (providing that a court may exercise supplemental
jurisdiction over state law claims related to the claims giving
rise to original jurisdiction, but a district court may decline
to exercise supplemental jurisdiction under subsection (a) if,
inter alia, “(1) the claim raises a novel or complex issue of
For the reasons expressed herein, defendant’s motion to
dismiss plaintiff’s complaint is granted as to the dismissal of
plaintiff’s duplicative NJCFA claim.
Defendant’s motion is
denied as to its request to dismiss plaintiff’s TCPA and NJJFA
claims because the damages are de minimis, and it is also denied
as to defendant’s motion to preclude plaintiff from maintaining
a putative class action claims for TCPA violations.
will reserve decision on whether plaintiff’s NJJFA claim can
proceed in this Court, either as a single claim or as a class
An appropriate Order will be entered.
Date: September 23, 2014
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
State law, . . . (4) in exceptional circumstances, there are
other compelling reasons for declining jurisdiction”).
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