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Backer Law Firm v. Costco Wholesale Corp.

District Court, W.D. Missouri
321 F.R.D. 343 (2017)
ELI5:

Rule of Law:

Under the Telephone Consumer Protection Act (TCPA), the statutory injury occurs upon the transmission of an unsolicited facsimile, not its receipt, and therefore a class can be certified under Federal Rule of Civil Procedure 23 if its members are ascertainable through objective criteria like transmission logs.


Facts:

  • The Backer Law Firm, LLC ('Plaintiff Backer') operated a business with a facsimile machine in Jackson County, Missouri.
  • Costco Wholesale Corporation ('Defendant Costco') allegedly sent an unsolicited facsimile advertisement to Plaintiff Backer's business.
  • Between April 2, 2011, and April 2, 2015, Costco's telemarketers allegedly sent facsimile advertisements for its products, services, or memberships to numerous businesses.
  • Costco maintained a Marketing Accountability Program ('MAP') database, which detailed its marketing contacts and included notations about fax transmissions.
  • This MAP database contained entries indicating that faxes such as 'fliers,' 'food court menu,' and 'reception invites' were successfully transmitted to various recipients.
  • Costco did not possess separate, dedicated fax logs that would show all of its outgoing fax traffic during the relevant period.

Procedural Posture:

  • The Backer Law Firm, LLC initially filed suit against Costco Wholesale Corporation in the Circuit Court of Jackson County, Missouri, a state trial court.
  • The complaint alleged violations of the federal Telephone Consumer Protection Act (TCPA) and several related state law claims.
  • On May 1, 2015, Costco removed the case from state court to the U.S. District Court for the Western District of Missouri, a federal trial court.
  • Following a period of discovery, The Backer Law Firm filed a Motion for Class Certification with the district court.

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Issue:

Does a proposed class of plaintiffs allegedly receiving unsolicited facsimiles meet the requirements for class certification under Federal Rule of Civil Procedure 23 when the class is identified through the defendant's business records showing fax transmissions, rather than individual proof of receipt for each member?


Opinions:

Majority - Stephen R. Bough

Yes. A proposed class of plaintiffs meets the requirements for class certification under Rule 23 when identified through business records showing fax transmissions because the statutory violation under the TCPA is the act of sending, not receiving, the unsolicited advertisement. The court reasoned that the plain language of the TCPA prohibits the 'use [of a] device to send' an unsolicited fax. Citing precedent from multiple circuits, the court found that this act of transmission itself constitutes the injury-in-fact required for standing, as it invades the recipient's statutory right to have their phone lines and fax machines free from such intrusions. Therefore, individual proof of receipt, viewing, or printing is not necessary. The court also found that the class was 'ascertainable' using objective criteria, namely Costco's own MAP database which was filtered to create a list of successful transmissions. The court then conducted a 'rigorous analysis' of the Rule 23(a) and (b)(3) factors, finding that the proposed class of approximately 1,552 members satisfied the requirements of numerosity, commonality (the central question being whether Costco's conduct violated the TCPA), typicality, and adequacy. Furthermore, the court held that common questions predominated over individual ones and that a class action was the superior method of adjudication, largely because the small statutory damages ($500 per violation) make individual suits economically unfeasible (a 'negative value suit').



Analysis:

This decision reinforces the prevailing judicial interpretation that a TCPA violation for unsolicited faxes occurs at the point of transmission, thereby lowering the evidentiary bar for plaintiffs at the class certification stage. By accepting a defendant's internal marketing database as sufficient 'objective criteria' to ascertain a class, the ruling provides a clear roadmap for plaintiffs to certify classes without needing traditional fax logs or individual affidavits from every class member. The case signals to potential defendants that their own business records can be used to establish class-wide liability, increasing the risk associated with non-compliant marketing campaigns. This precedent simplifies the process for bringing TCPA class actions and strengthens the statute's effectiveness as a tool against mass unsolicited advertising.

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