Ohio District Court Strikes Impermissible "Fail-Safe" Class Allegations


In a Telephone Consumer Protection Act (“TCPA”) case, the United States District Court for the Southern District of Ohio struck plaintiff’s class action allegations because Plaintiff proposed a “fail-safe” class in which membership was dependent on the validity of the putative class member’s claim. A fail-safe class is impermissible because it includes only those who are entitled to relief. Either the class members win on the merits, or by virtue of losing, they are not in the class and shielded from receiving an adverse judgment.

Plaintiff sued CVS for violations of the TCPA. Plaintiff alleged that CVS used an automatic telephonic dialing system (“ATDS”) to call plaintiff’s cell phone without plaintiff’s consent. The TCPA places restrictions on unsolicited ATDS calls without express prior consent of the recipients of such calls. Plaintiff sought to represent a class comprised of all persons within the United States who received calls from CVS through the use of an ATDS without consenting to receive such calls. CVS moved pursuant to Rule 23(d)(1)(D) to strike the class allegations because the complaint proposed a fail-safe class. In particular, CVS argued that plaintiff’s proposed class definition required proof of each putative class member’s TCPA violation based on individualized fact-finding on the issue of consent before the class membership could be established.

The court agreed and granted CVS’s motion to strike with fourteen days leave for plaintiff to file an amended complaint. Reviewing other TCPA class action cases, the court provided guidance to plaintiff as to how to redefine the class in a permissible manner. The court quoted from Seventh Circuit precedent that defining a class so as to avoid, on the one hand, being over-inclusive and, on the other hand, the fail-safe problem is more of an art than a science.

Sauter v. CVS Pharmacy, Inc., Case No. 2:13-cv-846 (S.D. Ohio May 7, 2014).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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