Bais Yaakov of Spring Valley v. Peterson’s Nelnet, LLC, No. 11-00011, 2012 WL 4903269 (D.N.J. Oct. 17, 2012)

Plaintiff’s class action complaint placed at issue allegedly unsolicited fax advertisements Defendant purportedly sent in violation of the TCPA. Defendant moved to dismiss the complaint, or in the alternative to dismiss the class action component of the complaint, arguing that New York Civil Practice Law § 901(b), which prohibits maintenance of class actions where statutory penalties are sought unless the statute specifically authorizes class actions, prohibited Plaintiff prosecuting the claims at issue as a class action. According to Defendant, Section 227(b)(3) of the TCPA’s use of the language “[a] person or entity may, if otherwise permitted by the laws or rules of a court of a state” – required application of a choice of law analysis dictated that New York law governed. And, pursuant to New York Civil Practice Law, because the TCPA did not expressly provide for class actions, class action relief was unavailable.

Plaintiff opposed the motion, arguing that Rule 23 of the Federal Rules of Civil Procedure should govern whether or not the case could proceed as a class action. Specifically, Plaintiff argued that Section 227(b)(3) does not require application of state law, and that Rule 23 alone governs whether a claim may be brought as a class action, making application of New York law irrelevant.

Noting that some courts had been persuaded by Defendant’s argument, the court sided with Plaintiff, concluding that the TCPA claims could be maintained as a class action and stating “in light of Mims, a case bolstering the previous Shady Grove opinion favoring application of Rule 23 in federal court unless specifically barred by Congress, this Court does not believe it appropriate to interpret the text of § 227(b)(3) as requiring federal courts to follow state law,” noting that a growing number of lower courts have reached a similar conclusion.

For more information on TCPA regulation and effects, contact Burr & Forman attorney, Joshua Threadcraft, here.