New Jersey Federal Courts Brace for Wave of TCPA Class Actions

A recent series of rulings will likely trigger an avalanche of class action lawsuits over unwanted text messages and robocalls, particularly in the State of New Jersey.

The Telephone Consumer Protection Act (TCPA) makes it illegal to send a text message or automated, pre-recorded telephone call (commonly called "robocalls") without the express consent of the recipient. Because the TCPA provides awards of up to $1500 per call regardless of any actual losses, the 1991 statute quickly became a favorite of class action attorneys.

However, some states blocked class actions under the TCPA, including New Jersey, where, in 2011, a state court ruled that plaintiffs must bring TCPA claims individually and cannot use the class action device. This ruling made TCPA lawsuits unattractive to New Jersey attorneys because, without class action status, most individual lawsuits are worth $1500 or less.

However, the ink was barely dry on the New Jersey ruling when, on January 18, 2012, the United States Supreme Court issued a ruling in Mims v. Arrow Financial Services that all TCPA cases could be always brought in federal court under federal question jurisdiction (previously the right to sue in federal court was limited to diversity cases). With plaintiffs now free to file TCPA actions in federal court, the Mims ruling begged the question of whether federal courts in New Jersey would follow the state court no-class action rule. Certain language in the TCPA seemed to require the federal courts to follow the state rule: "[a] person or entity may, if otherwise permitted by the laws or rules of a court of a State, bring [an action] in an appropriate court of that State."

Despite this language, three New Jersey federal courts have now made pro-plaintiff rulings that the state court no-class action rule does not apply in federal court. Thus, federal court plaintiffs can multiply their lawsuits by filing on behalf of others. Those three cases are: Landsman & Funk v. Skinder-Strauss Associates (decided December 19, 2012); Goodrich Management v. Afgo Mechanical Services (decided December 14, 2012) and Bais Yaakov v. Peterson's Nelnet (decided October 17, 2012). Similar rulings have also allowed class actions in the following federal districts: the Eastern and Western Districts of Michigan, Eastern District of Pennsylvania, the Southern District of Texas and the Eastern District of Louisiana.

The state courts of New York also have a no-class action rule, which will no doubt be tested in light of the recent rulings in New Jersey and elsewhere. For now, federal courts in New Jersey should brace themselves for a 2013 full of TCPA actions.

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